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UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]        
Net income $ 977,372 $ 720,209 $ 1,584,582 $ 1,175,832
Other comprehensive income, net of tax        
Foreign currency translation adjustments, net of tax charge of $36,381, tax benefit of $100,608, tax charge of $20,358 and tax benefit of $120,341, respectively (127,862) 139,883 (66,986) [1] 175,688 [1]
Reclassification of net unrealized gains on marketable equity securities to retained earnings, net of tax charge of $57,597 0 0 (241,088) [2] 0 [2]
Net unrealized (losses) gains on marketable securities, net of tax charge of $430 and $8,076, tax benefit of $998 and tax charge of $15,931, respectively (4,827) 186,977 (5,191) [3] 532,911 [3]
Comprehensive income $ 844,683 $ 1,047,069 $ 1,271,317 $ 1,884,431
[1] (1) Foreign currency translation adjustments result from currency fluctuations on the translation of the Company's international non-U.S. Dollar denominated net assets. Foreign currency translation adjustments were unfavorable for the three and six months ended June 30, 2018 compared to the three and six months ended June 30, 2017 because the U.S. Dollar strengthened against certain currencies in which the Company's net assets are denominated. During the three and six months ended June 30, 2018, the Company recorded deferred tax benefits of $21.0 million and $10.5 million, respectively, related to foreign currency translation adjustments to its one-time deemed repatriation tax liability recorded at December 31, 2017 and current year foreign earnings subject to U.S. federal and state income tax, resulting from the introduction of the U.S. Tax Cuts and Jobs Act (the "Tax Act"). Prior to January 1, 2018, foreign currency translation adjustments excluded U.S. federal and state income taxes as a result of the Company's intention to indefinitely reinvest the earnings of its international subsidiaries outside of the United States. Foreign currency translation adjustments also include tax charges of $57.3 million and $30.8 million for the three and six months ended June 30, 2018, respectively, and tax benefits of $100.6 million and $120.3 million for the three and six months ended June 30, 2017, respectively, associated with the Company's Euro-denominated debt, which is designated as a net investment hedge against the impact of currency fluctuations of the Company's Euro-denominated net assets (see Note 8).
[2] (2) Changes in the fair value of the Company's investment in Ctrip.com International Ltd. ("Ctrip") equity securities for periods beginning after December 31, 2017 are recognized in net income pursuant to the adoption of the accounting update on financial instruments in the first quarter of 2018 (see Note 1). Net unrealized gains, net of tax, on marketable equity securities at December 31, 2017 have been reclassified from accumulated other comprehensive income to retained earnings.
[3] (3) Net unrealized (losses) gains on marketable securities for the three and six months ended June 30, 2018 include net unrealized losses of $4.3 million and $6.1 million before tax, respectively, of which net unrealized losses of $15.6 million and net unrealized gains of $16.8 million, respectively, were exempt from tax in the Netherlands. Net unrealized gains of $11.3 million and net unrealized losses of $22.9 million for the three and six months ended June 30, 2018, respectively, were taxable at a 25% tax rate in the Netherlands, resulting in a tax charge of $2.8 million and a tax benefit of $5.7 million, respectively. The Company also recorded a U.S. tax benefit of $2.4 million and a U.S. tax charge of $4.7 million for the three and six months ended June 30, 2018, respectively, related to these investments. Net unrealized (losses) gains on marketable securities for the three and six months ended June 30, 2017 include net unrealized gains of $195.0 million and $548.8 million before tax, respectively, of which net unrealized gains of $161.4 million and $485.1 million, respectively, were exempt from tax in the Netherlands. Net unrealized gains of $33.6 million and $63.7 million for the three and six months ended June 30, 2017, respectively, were taxable at a 25% tax rate in the Netherlands, resulting in tax charges of $8.0 million and $15.9 million, respectively.