Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Components of Income (Loss) Before Income Taxes

The geographical sources of (loss) income before income taxes were as follows (in millions):

				Year Ended December 31,
	2016			2015			2014
United States	$	(120	)	$	(288	)	$	(122	)
Outside United States	(9		)	108			139
Total	$	(129	)	$	(180	)	$	17

Components of Provision (Benefit) for Income Taxes

ncome tax expense (benefit) consists of the following (in millions):

				Year Ended December 31,
	2016			2015			2014
Current:
Federal	$	14		$	84		$	6
State	6			4			4
Foreign	31			32			19
Total current	51			120			29
Deferred:
Federal	(31		)	(117		)	(38		)
State	(6		)	(24		)	(5		)
Foreign	(6		)	(1		)	(1		)
Total deferred	(43		)	(142		)	(44		)
Total expense (benefit)	$	8		$	(22	)	$	(15	)

Reconciliation of Provision for Income Taxes

The Company’s effective tax rate was lower than the federal statutory rate of 35% primarily due to the following items:

	Year Ended December 31,
	2016		2015		2014
Provision computed at statutory rate	35.0	%	35.0	%	35.0	%
State income tax, net of federal tax benefit	(1.0	)	1.1		(5.9	)
Foreign rate differential	(16.0	)	13.9		(176.5	)
Change in valuation allowance	(1.0	)	(8.3	)	17.6
US impact of Enterprise acquisition	(14.1	)	(26.7	)	41.2
Return to provision and other true ups	(3.7	)	0.0		(17.6	)
Tax credits	9.5		6.1		(17.6	)
Foreign earnings subject to US taxation	(6.6	)	(3.9	)	17.6
Change in contingent income tax reserves	(1.6	)	(3.3	)	17.6
Other	(6.7	)	(1.7	)	0.0
Provision for income taxes	(6.2	)%	12.2	%	(88.6	)%

Components of Deferred Tax Assets and Liabilities

Tax effects of temporary differences that resulted in deferred tax assets and liabilities are as follows (in millions):

	December 31,
	2016			2015
Deferred tax assets:
Capitalized research expenditures	$	58		$	46
Deferred revenue	57			59
Tax credits	33			32
Net operating loss carryforwards	35			65
Other accruals	35			47
Inventory items	27			27
Capitalized software costs	25			43
Sales return/rebate reserve	23			22
Share-based compensation expense	15			15
Accrued bonus	11			16
Unrealized gains and losses on securities and investments	4			10
Valuation allowance	(47		)	(48		)
Total deferred tax assets	276			334
Deferred tax liabilities:
Unrealized loss on other investments	—			—
Depreciation and amortization	165			265
Undistributed earnings	1			—
Total deferred tax liabilities	$	166		$	265

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):

	Year ended December 31,
	2016			2015
Balance at beginning of year	$	40		$	19
Additions for tax positions related to the current year	2			6
Additions for tax positions related to prior years	2			18
Reductions for tax positions related to prior years	(2		)	(2		)
Settlements for tax positions	-			(1		)
Balance at end of year	$	42		$	40