Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v2.4.0.6
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2012
Income Tax Contingency [Line Items]  
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]
Income tax benefit (expense) differs from the amounts computed by applying the U.S. federal income tax rate of 35% as a result of the following:

 
Years ended December 31,
 
2012
 
2011
 
2010
 
amounts in millions
Computed expected tax benefit (expense)
$
(695
)
 
(329
)
 
(339
)
Nontaxable exchange of investments for subsidiary
—

 
—

 
112

Consolidation of previously held equity method affiliate
294

 
—

 
—

State and local income taxes, net of federal income taxes
(11
)
 
(22
)
 
18

Foreign taxes, net of foreign tax credits
5

 
(3
)
 
48

Impairment of intangibles not deductible for tax purposes
(29
)
 
—

 
—

Dividends received deductions
13

 
5

 
5

Alternative energy tax credits
48

 
3

 
—

Change in valuation allowance affecting tax expense
(8
)
 
(15
)
 
—

Nontaxable gains (losses) related to the Company's common stock
1

 
8

 
27

Other, net
(12
)
 
1

 
1

Income tax benefit (expense)
$
(394
)
 
(352
)
 
(128
)

The tax benefit from the consolidation of a previously held equity method affiliate for the year ended December 31, 2012 is the result of the acquisition of a controlling interest in TripAdvisor in the fourth quarter of 2012. The Company recorded an $800 million dollar gain on the transaction, due to the application of purchase accounting, which was excluded from taxable income. In addition, the difference between the book basis and tax basis of TripAdvisor, as previously accounted for under the equity method, was relieved as a result of the transaction.

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]
The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities are presented below:

 
December 31,
 
2012
 
2011
 
amounts in millions
Deferred tax assets:
 
 
 
Net operating and capital loss carryforwards
$
110

 
70

Foreign tax credit carryforwards
87

 
30

Accrued stock compensation
32

 
44

Other accrued liabilities
80

 
69

Deferred revenue
4

 
5

Other future deductible amounts
116

 
114

Deferred tax assets
429

 
332

Valuation allowance
(52
)
 
(16
)
Net deferred tax assets
377

 
316

 
 
 
 
Deferred tax liabilities:
 
 
 
Investments
492

 
190

Intangible assets
2,751

 
1,661

Discount on exchangeable debentures
890

 
978

Deferred gain on debt retirements
321

 
321

Other
44

 
63

Deferred tax liabilities
4,498

 
3,213

Net deferred tax liabilities
$
4,121

 
2,897


The Company's deferred tax assets and liabilities are reported in the accompanying consolidated balance sheets as follows:

 
December 31,
 
2012
 
2011
 
amounts in millions
Current deferred tax liabilities
$
912

 
851

Long-term deferred tax liabilities
3,209

 
2,046

Net deferred tax liabilities
$
4,121

 
2,897

Summary of Income Tax Contingencies [Table Text Block]
A reconciliation of unrecognized tax benefits is as follows:

 
Years ended December 31,
 
2012
 
2011
 
amounts in millions
Balance at beginning of year
$
123

 
123

Additions based on tax positions related to the current year
12

 
13

Additions for tax positions of prior years
2

 
3

Reductions for tax positions of prior years
(4
)
 
(5
)
Acquisition of TripAdvisor
24

 
—

Lapse of statute and settlements
(11
)
 
(11
)
Balance at end of year
$
146

 
123

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]
Income tax benefit (expense) consists of:

 
Years ended December 31,
 
2012
 
2011
 
2010
 
amounts in millions
Current:
 
 
 
 
 
Federal
$
(214
)
 
(156
)
 
(85
)
State and local
(27
)
 
(32
)
 
6

Foreign
(140
)
 
(120
)
 
(111
)
 
$
(381
)
 
(308
)
 
(190
)
Deferred:
 
 
 
 
 
Federal
$
(31
)
 
(42
)
 
27

State and local
11

 
(6
)
 
21

Foreign
7

 
4

 
14

 
(13
)
 
(44
)
 
62

Income tax benefit (expense)
$
(394
)
 
(352
)
 
(128
)