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Delaware
(State or other Jurisdiction of Incorporation or
Organization)
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06-1528493
(I.R.S. Employer Identification No.)
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800 Connecticut Avenue
Norwalk, Connecticut
(Address of Principal Executive Offices)
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06854
(Zip Code)
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Title of Each Class:
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Name of Each Exchange on which Registered:
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Common Stock, par value $0.008 per share
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The NASDAQ Global Select Market
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2.150% Senior Notes Due 2022
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New York Stock Exchange
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2.375% Senior Notes Due 2024
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New York Stock Exchange
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1.800% Senior Notes Due 2027
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New York Stock Exchange
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Page No.
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•
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Booking.com - the world’s leading brand for booking online accommodation reservations, based on room nights booked.
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•
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priceline.com - a leading hotel, rental car, airline ticket and vacation package reservation service in the United States.
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•
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KAYAK - a leading meta-search service allowing consumers to easily search and compare travel itineraries and prices, including airline ticket, accommodation and rental car reservation information.
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•
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agoda.com - a leading accommodation reservation service catering primarily to consumers in the Asia-Pacific region.
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•
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Rentalcars.com - a leading worldwide rental car reservation service.
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•
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OpenTable - a leading provider of restaurant reservation and information services to consumers and restaurant reservation management services to restaurants.
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•
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Commissions earned from facilitating reservations of accommodations, rental cars, cruises and other travel services on an agency basis;
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•
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Transaction gross profit on a merchant basis and customer processing fees from our accommodation, rental car, airline ticket and vacation package reservation services;
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•
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Advertising revenues primarily earned by KAYAK from sending referrals to online travel companies ("OTCs") and travel service providers, as well as from advertising placements on KAYAK's websites and mobile apps;
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•
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Beginning on July 24, 2014, reservation revenues paid by restaurants for diners seated through OpenTable's online reservation service, subscription fees for restaurant reservation management services provided by OpenTable and other OpenTable revenues; and
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•
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Damage excess waiver fees, travel insurance fees and global distribution system ("GDS") reservation booking fees, in each case related to certain of our travel services.
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•
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Providing the best consumer experience
. We believe that offering consumers an outstanding online experience is essential for our future success. To accomplish this, we focus on providing consumers with: (a) a variety of intuitive, easy-to-use online travel and restaurant reservation and search services; (b) a continually increasing number, location and variety of accommodations and restaurants available through our services: (c) informative and useful content, such as pictures, accommodation and restaurant details and reviews; and (d) excellent customer service. For example, Booking.com increasingly provides reservation services for accommodations other than hotels, such as vacation rentals. Booking.com included over
1,115,000
properties on its website as of December 31, 2016, which included over
568,000
vacation rental properties (updated property counts are available on the Booking.com website). Further, we endeavor to provide excellent customer service in a variety of ways, including through our call centers and websites, so that consumers can be confident that booking reservations through us will lead to a positive experience. We are constantly innovating in order to provide a best-in-class user experience with intuitive, easy-to-use websites and mobile apps to ensure that we are meeting the needs of online consumers while aiming to exceed their expectations.
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•
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Partnering with travel service providers and restaurants.
We aim to establish mutually beneficial relationships with travel service providers and restaurants around the world. We believe that travel service providers and restaurants benefit from participating in our services by increasing their distribution channels, demand and inventory utilization in an efficient and cost-effective manner. Travel service providers and restaurants benefit from our well-known brands and online marketing efforts, expertise in offering an excellent consumer experience through our websites and mobile apps and ability to offer their inventory in markets and to consumers that the travel service provider or restaurant may be unable or unlikely to reach. For example, an independent hotel may not have the means or expertise to market itself to international travelers, including in other languages, to build and operate effective desktop and mobile websites and online reservation services, or to engage in sophisticated online marketing techniques. Further, we are increasingly providing services, other than reservations booked through our websites and mobile apps, designed to help our partners grow their business. For example, Booking.com's BookingSuite services are designed to offer accommodation providers with affordable marketing and business analytics tools to help them attract customers and more effectively manage their properties. Similarly, OpenTable is continuously working to improve its reservation management software services to help restaurants more effectively manage their reservations and more efficiently market their available tables to diners.
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•
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Maintaining multiple, independently managed brands.
We employ a strategy of operating multiple, independently managed brands, which we believe allows us the opportunity to offer our reservation services in ways that appeal to different consumers while maintaining an entrepreneurial, competitive spirit among our brands. We intend to invest resources to support organic growth by all of our brands, whether through increased advertising, geographic expansion, technology innovation or increased access to accommodations, rental cars, restaurants or other services. For example, we spend significant and increasing amounts on performance and brand advertising to acquire customers and establish and strengthen our brands. We also believe that by operating independently managed brands, we encourage innovation and experimentation by our brands, which allows us to more quickly discern and adapt to changing consumer behaviors and market dynamics. Although our brands are independently operated, we intend to continue efforts to share best practices, access to travel service provider offerings and customers across our brands. We believe that by promoting our brands worldwide, sharing accommodation reservation availability and customer demand, and applying our industry experiences across brands and markets, we can more effectively expand our reservation services globally and maintain and grow our position as a leading provider of worldwide online travel and restaurant reservation and related services.
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•
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Investing in profitable and sustainable growth.
We seek to offer online services that meet the needs and the expectations of consumers, travel service providers and restaurants and that we believe will result in long-term profitability and growth. We intend to accomplish this through continuous investment and innovation, growing our businesses in new and current markets, expanding our services and ensuring that we provide an appealing, intuitive and easy-to-use consumer experience through our websites and mobile apps. We also may pursue strategic transactions. For example, in 2013 we entered the meta-search business when we acquired KAYAK and in 2014 we entered the online restaurant reservation market when we acquired OpenTable. We regularly evaluate, and may pursue and consummate, other potential strategic acquisitions, partnerships, joint ventures or investments, whether to expand our businesses into complementary areas, expand our current businesses, acquire innovative technology or for other reasons. For example, we have a commercial relationship with, and have made significant financial investments in, Ctrip, a leading OTC operating primarily in China.
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•
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online travel reservation services such as Expedia, Hotels.com, Hotwire, Orbitz, Travelocity, Wotif, Cheaptickets, ebookers, HotelClub, RatesToGo and CarRentals.com, which are owned by Expedia; Hotel Reservation Service (HRS) and hotel.de, which are owned by Hotel Reservation Service; and AutoEurope, CarTrawler, Ctrip (in which we hold a minority interest), eLong (in which Ctrip has acquired a significant minority ownership interest), Meituan, ezTravel, MakeMyTrip, OYO Rooms, Yatra, Cleartrip, Traveloka, Webjet, Rakuten, Jalan (which is owned by Recruit), ViajaNet, Submarino Viagens, Despegar/Decolar (in which Expedia holds a minority ownership interest), Fliggy (operated by Alibaba), 17u.com, HotelTonight, CheapOair, Mr. and Mrs. Smith and eDreams ODIGEO;
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•
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online accommodation search and/or reservation services, such as Airbnb and HomeAway (which is owned by Expedia), currently focused on vacation rental properties and other non-hotel accommodations, including individually owned properties;
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•
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large online companies, including search, social networking and marketplace companies such as Google, Facebook, Alibaba, Tencent, Amazon, Baidu and Groupon;
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•
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traditional travel agencies, travel management companies, wholesalers and tour operators, many of which combine physical locations, telephone services and online services, such as Carlson Wagonlit, American Express, BCD Travel, Concur, Thomas Cook, TUI, Hotelbeds and Tourico (which have agreed to merge) and Kuoni as well as thousands of individual travel agencies around the world;
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•
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travel service providers such as accommodation providers, rental car companies and airlines, many of which have their own branded websites to which they drive business, including large hotel chains such as Marriott International, Hilton and Hyatt Hotels, as well as joint efforts by travel service providers such as Room Key, an online hotel reservation service owned by several major hotel companies;
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•
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online travel search and price comparison services (generally referred to as "meta-search" services), such as TripAdvisor, trivago (in which Expedia holds a majority ownership interest), Qunar (which is controlled by Ctrip), Skyscanner (in which Ctrip holds a majority ownership interest), Google Flights, Google Hotel Ads and HotelsCombined;
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•
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online restaurant reservation services, such as TripAdvisor's LaFourchette, Yelp's SeatMe, Zomato, Bookatable (which is owned by Michelin), Quandoo (which is owned by Recruit) and Resy (in which Airbnb holds a minority investment); and
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•
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companies offering new rental car business models or car- or ride-sharing services that affect demand for rental cars, some of which have developed innovative technologies to improve efficiency of point-to-point transportation and extensively utilize mobile platforms, such as Uber, Lyft, Gett, Zipcar (which is owned by Avis), BlaBlaCar, Didi Chuxing and Ola.
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•
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online travel reservation services such as Expedia, Hotels.com, Hotwire, Orbitz, Travelocity, Wotif, Cheaptickets, ebookers, HotelClub, RatesToGo and CarRentals.com, which are owned by Expedia; Hotel Reservation Service (HRS) and hotel.de, which are owned by Hotel Reservation Service; and AutoEurope, Car Trawler, Ctrip (in which we hold a minority interest), eLong (in which Ctrip has acquired a significant minority ownership interest), Meituan, ezTravel, MakeMyTrip, OYO Rooms, Yatra, Cleartrip, Traveloka, Webjet, Rakuten, Jalan (which is owned by Recruit), ViajaNet, Submarino Viagens, Despegar/Decolar (in which Expedia holds a minority interest), Fliggy (operated by Alibaba), 17u.com, HotelTonight, CheapOair, Mr. and Mrs. Smith and eDreams ODIGEO;
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•
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online accommodation search and/or reservation services, such as Airbnb and HomeAway (which is owned by Expedia), currently focused on vacation rental properties and other non-hotel accommodations, including individually owned properties;
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•
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large online companies, including search, social networking and marketplace companies such as Google, Facebook, Alibaba, Tencent, Amazon, Baidu and Groupon;
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•
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traditional travel agencies, travel management companies, wholesalers and tour operators, many of which combine physical locations, telephone services and online services, such as Carlson Wagonlit, American Express, BCD Travel, Concur, Thomas Cook, TUI, Hotelbeds and Tourico (which have agreed to merge) and Kuoni, as well as thousands of individual travel agencies around the world;
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•
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travel service providers such as accommodation providers, rental car companies and airlines, many of which have their own branded websites to which they drive business, including large hotel chains such as Marriott International, Hilton and Hyatt Hotels, as well as joint efforts by travel service providers such as Room Key, an online hotel reservation service owned by several major hotel companies;
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•
|
online travel search and price comparison services (generally referred to as "meta-search" services), such as TripAdvisor, trivago (in which Expedia holds a majority ownership interest), Qunar (which is controlled by Ctrip), Skyscanner (in which Ctrip holds a majority interest), Google Flights, Google Hotel Ads and HotelsCombined;
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•
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online restaurant reservation services, such as TripAdvisor's LaFourchette, Yelp's SeatMe, Zomato, Bookatable (which is owned by Michelin), Quandoo (which is owned by Recruit) and Resy (in which Airbnb holds a minority interest); and
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•
|
companies offering new rental car business models or car- or ride-sharing services that affect demand for rental cars, some of which have developed innovative technologies to improve efficiency of point-to-point transportation and extensively utilize mobile platforms, such as Uber, Lyft, Gett, Zipcar (which is owned by Avis), BlaBlaCar, Didi Chuxing and Ola.
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•
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regulatory changes or other government actions;
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•
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additional complexity to comply with regulations in multiple jurisdictions, as well as overlapping or inconsistent legal regimes, in particular with respect to tax, labor, consumer protection, digital content, advertising, promotions, privacy and anti-trust laws;
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•
|
our ability to repatriate funds held by our international subsidiaries to the United States at favorable tax rates;
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•
|
difficulties in transferring funds from or converting currencies in certain countries; and
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•
|
reduced protection for intellectual property rights in some countries.
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•
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requiring the dedication of a portion of our cash flow from operations to service our indebtedness, thereby reducing the amount of cash flow available for other purposes, including capital expenditures, share repurchases and acquisitions;
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•
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increased vulnerability to downturns in our business, to competitive pressures and to adverse changes in general economic and industry conditions;
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•
|
decreased, or loss of, the ability to obtain additional financing on terms acceptable to us for working capital, capital expenditures, acquisitions, share repurchases or other general corporate purposes; and
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•
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decreased flexibility when planning for or reacting to changes in our business and industry.
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•
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operating results that vary from the expectations of securities analysts and investors;
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•
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quarterly variations in our operating results;
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•
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changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors;
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•
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worldwide economic conditions in general and in Europe in particular;
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•
|
fluctuations in currency exchange rates, particularly between the U.S. Dollar and the Euro;
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•
|
announcements of technological innovations or new services by us or our competitors;
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•
|
changes in our capital structure;
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•
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changes in market valuations of other Internet or online service companies;
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•
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announcements by us or our competitors of price reductions, promotions, significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;
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•
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loss of a major travel service provider participant, such as a hotel chain, rental car company or airline, from our services;
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•
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changes in the status of our intellectual property rights;
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•
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lack of success in the expansion of our business models geographically;
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•
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announcements by third parties of significant claims or initiation of litigation proceedings against us or adverse developments in pending proceedings;
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•
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occurrences of a significant security breach;
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•
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additions or departures of key personnel; and
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•
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trading volume fluctuations.
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2016
|
|
High
|
|
Low
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||||
|
|
|
|
|
||||
First Quarter
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|
$
|
1,361.63
|
|
|
$
|
954.02
|
|
Second Quarter
|
|
1,394.00
|
|
|
1,148.06
|
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||
Third Quarter
|
|
1,481.78
|
|
|
1,245.51
|
|
||
Fourth Quarter
|
|
1,600.93
|
|
|
1,422.19
|
|
2015
|
|
High
|
|
Low
|
||||
|
|
|
|
|
||||
First Quarter
|
|
$
|
1,264.00
|
|
|
$
|
990.69
|
|
Second Quarter
|
|
1,280.97
|
|
|
1,103.45
|
|
||
Third Quarter
|
|
1,395.00
|
|
|
1,115.77
|
|
||
Fourth Quarter
|
|
1,476.52
|
|
|
1,212.00
|
|
Measurement Point
December 31
|
|
The Priceline Group Inc.
|
|
NASDAQ
Composite Index
|
|
S&P 500
Index
|
|
RDG Internet
Composite
|
||||
|
|
|
|
|
|
|
|
|
||||
2011
|
|
100.00
|
|
|
100.00
|
|
|
100.00
|
|
|
100.00
|
|
2012
|
|
132.64
|
|
|
116.41
|
|
|
116.00
|
|
|
119.34
|
|
2013
|
|
248.53
|
|
|
165.47
|
|
|
153.58
|
|
|
195.83
|
|
2014
|
|
243.79
|
|
|
188.69
|
|
|
174.60
|
|
|
192.42
|
|
2015
|
|
272.59
|
|
|
200.32
|
|
|
177.01
|
|
|
264.96
|
|
2016
|
|
313.45
|
|
|
216.54
|
|
|
198.18
|
|
|
277.56
|
|
|
||||||||||||||||
Period
|
|
(a) Total Number
of Shares (or
Units) Purchased
|
|
(b) Average
Price Paid per
Share (or Unit)
|
|
(c) Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs
|
|
(d) Maximum
Number (or
Approximate Dollar Value)
of Shares (or Units)
that May
Yet Be Purchased
Under the
Plans or Programs
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
October 1, 2016 —
|
|
8,964
|
|
(1)
|
$
|
1,441.09
|
|
|
8,964
|
|
|
$
|
2,389,097,571
|
|
|
(1)
|
October 31, 2016
|
|
342
|
|
(2)
|
$
|
1,474.99
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||
November 1, 2016 —
|
|
39,030
|
|
(1)
|
$
|
1,500.69
|
|
|
39,030
|
|
|
$
|
2,330,525,514
|
|
|
(1)
|
November 30, 2016
|
|
2,237
|
|
(2)
|
$
|
1,545.39
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
December 1, 2016 —
|
|
128,189
|
|
(1)
|
$
|
1,498.12
|
|
|
128,189
|
|
|
$
|
2,138,483,581
|
|
|
(1)
|
December 31, 2016
|
|
2,394
|
|
(2)
|
$
|
1,484.35
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
Total
|
|
181,156
|
|
|
$
|
1,496.21
|
|
|
176,183
|
|
|
$
|
2,138,483,581
|
|
|
|
(1)
|
Pursuant to a stock repurchase program announced on February 17, 2016, whereby the Company was authorized to repurchase up to $3,000,000,000 of its common stock.
|
(2)
|
Pursuant to a general authorization, not publicly announced, whereby the Company is authorized to repurchase shares of its common stock to satisfy employee withholding tax obligations related to stock-based compensation.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
10,743,006
|
|
|
$
|
9,223,987
|
|
|
$
|
8,441,971
|
|
|
$
|
6,793,306
|
|
|
$
|
5,260,956
|
|
Cost of revenues
|
428,314
|
|
|
632,180
|
|
|
857,841
|
|
|
1,077,420
|
|
|
1,177,275
|
|
|||||
Gross profit
|
10,314,692
|
|
|
8,591,807
|
|
|
7,584,130
|
|
|
5,715,886
|
|
|
4,083,681
|
|
|||||
Total operating expenses
(1)
|
7,408,379
|
|
|
5,332,900
|
|
|
4,510,818
|
|
|
3,303,472
|
|
|
2,253,888
|
|
|||||
Operating income
(1)
|
2,906,313
|
|
|
3,258,907
|
|
|
3,073,312
|
|
|
2,412,414
|
|
|
1,829,793
|
|
|||||
Total other expense
|
193,075
|
|
|
130,587
|
|
|
83,864
|
|
|
115,877
|
|
|
67,924
|
|
|||||
Income tax expense
|
578,251
|
|
|
576,960
|
|
|
567,695
|
|
|
403,739
|
|
|
337,832
|
|
|||||
Net income
(1)
|
2,134,987
|
|
|
2,551,360
|
|
|
2,421,753
|
|
|
1,892,798
|
|
|
1,424,037
|
|
|||||
Net income attributable to noncontrolling interests
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
135
|
|
|
4,471
|
|
|||||
Net income applicable to common stockholders
(1)
|
2,134,987
|
|
|
2,551,360
|
|
|
2,421,753
|
|
|
1,892,663
|
|
|
1,419,566
|
|
|||||
Net income applicable to common stockholders per basic common share
(1)
|
43.14
|
|
|
50.09
|
|
|
46.30
|
|
|
37.17
|
|
|
28.48
|
|
|||||
Net income applicable to common stockholders per diluted common share
(1)
|
42.65
|
|
|
49.45
|
|
|
45.67
|
|
|
36.11
|
|
|
27.66
|
|
|||||
Total assets
|
19,838,973
|
|
|
17,420,575
|
|
|
14,770,977
|
|
|
10,428,543
|
|
|
6,547,771
|
|
|||||
Long-term obligations, redeemable noncontrolling interests
(3)
|
8,127,895
|
|
|
7,185,796
|
|
|
4,862,730
|
|
|
2,289,039
|
|
|
1,710,194
|
|
|||||
Total liabilities
|
9,990,293
|
|
|
8,625,106
|
|
|
6,203,954
|
|
|
3,510,281
|
|
|
2,435,854
|
|
|||||
Total stockholders' equity
|
9,820,142
|
|
|
8,795,469
|
|
|
8,566,694
|
|
|
6,909,729
|
|
|
3,896,975
|
|
(1)
|
t
Includes a non-cash charge related to an impairment of OpenTable goodwill of
$940.7 million
, which is not tax deductible, for the year ended December 31, 2016 (see Note 9 to the Consolidated Financial Statements). The goodwill impairment charge reduced the 2016 basic and diluted net income per share by $19.01 and $18.79, respectively.
|
(2)
|
Redeemable noncontrolling interests relates to the Company's purchase of Rentalcars.com in May 2010. In April 2012, in connection with the exercise of certain call and put options in March 2012, the redeemable noncontrolling interests in Rentalcars.com were reduced from 19.0% to 12.7%. In April 2013, in connection with the exercise of certain call and put options in March 2013, the Company purchased the remaining outstanding shares underlying the redeemable noncontrolling interests.
|
(3)
|
Includes convertible debt which is classified as a current liability from 2011 through 2014 and 2016.
|
•
|
Booking.com - the world’s leading brand for booking online accommodation reservations, based on room nights booked.
|
•
|
priceline.com - a leading hotel, rental car, airline ticket and vacation package reservation service in the United States.
|
•
|
KAYAK - a leading meta-search service allowing consumers to easily search and compare travel itineraries and prices, including airline ticket, accommodation and rental car reservation information.
|
•
|
agoda.com - a leading accommodation reservation service catering primarily to consumers in the Asia-Pacific region.
|
•
|
Rentalcars.com - a leading worldwide rental car reservation service.
|
•
|
OpenTable - a leading provider of restaurant reservation and information services to consumers and restaurant reservation management services to restaurants.
|
•
|
Commissions earned from facilitating reservations of accommodations, rental cars, cruises and other travel services on an agency basis;
|
•
|
Transaction gross profit on a merchant basis and customer processing fees from our accommodation, rental car, airline ticket and vacation package reservation services;
|
•
|
Advertising revenues primarily earned by KAYAK from sending referrals to OTCs and travel service providers, as well as from advertising placements on KAYAK's websites and mobile apps;
|
•
|
Beginning on July 24, 2014, reservation revenues paid by restaurants for diners seated through OpenTable's online reservation services, subscription fees for restaurant reservation management services provided by OpenTable and other OpenTable revenues; and
|
•
|
Damage excess waiver fees, travel insurance fees and global distribution system ("GDS") reservation booking fees, in each case related to certain of our travel services.
|
•
|
Stock-Based Compensation.
We record stock-based compensation expense for equity-based awards over the recipient's service period based upon the grant date fair value of the award. A number of our equity awards have performance targets (a performance "contingency") which, if satisfied, can increase the number of shares issued to the recipients at the end of the performance period or, in certain instances, if not satisfied, reduce the number of shares issued to the recipients, sometimes to zero, at the end of the performance period. The performance periods for our performance based equity awards are typically three years. We record stock-based compensation expense for these performance-based awards based upon our estimate of the probable outcome at the end of the performance period (i.e., the estimated performance against the performance targets). We periodically adjust the cumulative stock-based compensation expense recorded when the probable outcome for these performance-based awards is updated based upon changes in actual and forecasted operating results. Stock-based compensation expense for the years ended
December 31, 2016
,
2015
and
2014
includes charges amounting to
$20.7 million
,
$22.6 million
and
$20.6 million
, respectively, representing the impact of adjusting the estimated probable outcome of unvested performance share units. Our actual performance against the performance targets could differ materially from our estimates.
|
•
|
Valuation of Goodwill, Long-Lived Assets and Intangibles
. The application of the purchase method of accounting for business combinations requires the use of significant estimates and assumptions to determine the fair value of the assets acquired and liabilities assumed. Our estimates of the fair value are based upon assumptions that we believe are reasonable and, when we deem appropriate, include assistance from a third party valuation firm. The purchase price consideration is allocated to the assets acquired and liabilities assumed based on their respective fair values at the acquisition date. The excess of the purchase price consideration over the net of the amounts allocated to the assets acquired and liabilities assumed is recognized as goodwill. Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition date.
|
•
|
Income Taxes.
We determine our tax expense based on our income and statutory tax rates applicable in the various jurisdictions in which we operate. Due to the complex nature of tax legislation and frequent changes with such associated legislation, significant judgment is required in computing our tax expense and determining our tax positions. We regularly review our deferred tax assets for recoverability considering historical profitability, projected future taxable income, the expected timing of the reversals of temporary differences and tax planning strategies and record valuation allowances as required.
|
•
|
Agency revenues are derived from travel-related transactions where we do not facilitate payments for the travel services provided. Agency revenues consist primarily of travel reservation commissions, as well as certain GDS reservation booking fees and travel insurance fees, and are reported at the net amounts received, without any associated cost of revenue. Substantially all of the revenue for Booking.com is agency revenue comprised of accommodation reservation commissions.
|
•
|
Merchant revenues are derived from services where we facilitate payments for the travel services provided. Merchant revenues include (1) transaction net revenues (i.e., the amount charged to a customer, less the amount charged to us by travel service providers) and travel reservation commissions in connection with (a) the accommodation reservations provided through our merchant retail accommodation reservation services at agoda.com, Booking.com and priceline.com and (b) the reservations provided through our merchant rental car service at Rentalcars.com and priceline.com’s
Express Deals
®
reservation services; (2) transaction revenues representing the price of
Name Your Own Price
®
reservations charged to a customer (with a corresponding travel service provider cost recorded in cost of revenues); (3) ancillary fees, including damage excess waiver and travel insurance fees and certain GDS reservation booking fees; and (4) customer processing fees charged in connection with (a) priceline.com's opaque reservation services and (b) the merchant retail accommodation reservation services at priceline.com and agoda.com.
|
•
|
Advertising and other revenues are derived primarily from (1) revenues earned by KAYAK for (a) sending referrals to OTCs and travel service providers and (b) advertising placements on KAYAK's websites and mobile apps; (2) revenues earned by OpenTable for (a) reservation fees (fees paid by restaurants for diners seated through OpenTable's online reservation service) and (b) subscription fees earned by OpenTable for restaurant reservation management services; (3) revenues earned by priceline.com for advertising on its websites; and (4) revenues generated by Booking.com's BookingSuite branded accommodation marketing and business analytics services.
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Agency Revenues
|
$
|
7,982,116
|
|
|
$
|
6,527,898
|
|
|
22.3
|
%
|
Merchant Revenues
|
2,048,005
|
|
|
2,082,973
|
|
|
(1.7
|
)%
|
||
Advertising and Other Revenues
|
712,885
|
|
|
613,116
|
|
|
16.3
|
%
|
||
Total Revenues
|
$
|
10,743,006
|
|
|
$
|
9,223,987
|
|
|
16.5
|
%
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Cost of Revenues
|
$
|
428,314
|
|
|
$
|
632,180
|
|
|
(32.2
|
)%
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Performance Advertising
|
$
|
3,479,287
|
|
|
$
|
2,738,218
|
|
|
27.1
|
%
|
% of Total Gross Profit
|
33.7
|
%
|
|
31.9
|
%
|
|
|
|
||
Brand Advertising
|
$
|
295,698
|
|
|
$
|
273,704
|
|
|
8.0
|
%
|
% of Total Gross Profit
|
2.9
|
%
|
|
3.2
|
%
|
|
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Sales and Marketing
|
$
|
435,225
|
|
|
$
|
353,221
|
|
|
23.2
|
%
|
% of Total Gross Profit
|
4.2
|
%
|
|
4.1
|
%
|
|
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Personnel
|
$
|
1,350,032
|
|
|
$
|
1,166,226
|
|
|
15.8
|
%
|
% of Total Gross Profit
|
13.1
|
%
|
|
13.6
|
%
|
|
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
General and Administrative
|
$
|
455,909
|
|
|
$
|
415,420
|
|
|
9.7
|
%
|
% of Total Gross Profit
|
4.4
|
%
|
|
4.8
|
%
|
|
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Information Technology
|
$
|
142,393
|
|
|
$
|
113,617
|
|
|
25.3
|
%
|
% of Total Gross Profit
|
1.4
|
%
|
|
1.3
|
%
|
|
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Depreciation and Amortization
|
$
|
309,135
|
|
|
$
|
272,494
|
|
|
13.4
|
%
|
% of Total Gross Profit
|
3.0
|
%
|
|
3.2
|
%
|
|
|
|
|
Year Ended December 31,
|
|
|
||||||
|
(in thousands)
|
|
|
||||||
|
2016
|
|
2015
|
|
Change
|
||||
Impairment of Goodwill
|
$
|
940,700
|
|
|
$
|
—
|
|
|
N/A
|
% of Total Gross Profit
|
9.1
|
%
|
|
—
|
%
|
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Interest Income
|
$
|
94,946
|
|
|
$
|
55,729
|
|
|
70.4
|
%
|
Interest Expense
|
(207,900
|
)
|
|
(160,229
|
)
|
|
29.8
|
%
|
||
Foreign Currency Transactions and Other
|
(16,913
|
)
|
|
(26,087
|
)
|
|
(35.2
|
)%
|
||
Impairment of Cost-method Investments
|
(63,208
|
)
|
|
—
|
|
|
N/A
|
|
||
Total
|
$
|
(193,075
|
)
|
|
$
|
(130,587
|
)
|
|
47.9
|
%
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Income Tax Expense
|
$
|
578,251
|
|
|
$
|
576,960
|
|
|
0.2
|
%
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2015
|
|
2014
|
|
Change
|
|||||
Agency Revenues
|
$
|
6,527,898
|
|
|
$
|
5,845,802
|
|
|
11.7
|
%
|
Merchant Revenues
|
2,082,973
|
|
|
2,186,054
|
|
|
(4.7
|
)%
|
||
Advertising and Other Revenues
|
613,116
|
|
|
410,115
|
|
|
49.5
|
%
|
||
Total Revenues
|
$
|
9,223,987
|
|
|
$
|
8,441,971
|
|
|
9.3
|
%
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2015
|
|
2014
|
|
Change
|
|||||
Cost of Revenues
|
$
|
632,180
|
|
|
$
|
857,841
|
|
|
(26.3
|
)%
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2015
|
|
2014
|
|
Change
|
|||||
Performance Advertising
|
$
|
2,738,218
|
|
|
$
|
2,334,453
|
|
|
17.3
|
%
|
% of Total Gross Profit
|
31.9
|
%
|
|
30.8
|
%
|
|
|
|
||
Brand Advertising
|
$
|
273,704
|
|
|
$
|
257,077
|
|
|
6.5
|
%
|
% of Total Gross Profit
|
3.2
|
%
|
|
3.4
|
%
|
|
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2015
|
|
2014
|
|
Change
|
|||||
Sales and Marketing
|
$
|
353,221
|
|
|
$
|
310,910
|
|
|
13.6
|
%
|
% of Total Gross Profit
|
4.1
|
%
|
|
4.1
|
%
|
|
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2015
|
|
2014
|
|
Change
|
|||||
Personnel
|
$
|
1,166,226
|
|
|
$
|
950,191
|
|
|
22.7
|
%
|
% of Total Gross Profit
|
13.6
|
%
|
|
12.5
|
%
|
|
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2015
|
|
2014
|
|
Change
|
|||||
General and Administrative
|
$
|
415,420
|
|
|
$
|
352,869
|
|
|
17.7
|
%
|
% of Total Gross Profit
|
4.8
|
%
|
|
4.7
|
%
|
|
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2015
|
|
2014
|
|
Change
|
|||||
Information Technology
|
$
|
113,617
|
|
|
$
|
97,498
|
|
|
16.5
|
%
|
% of Total Gross Profit
|
1.3
|
%
|
|
1.3
|
%
|
|
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2015
|
|
2014
|
|
Change
|
|||||
Depreciation and Amortization
|
$
|
272,494
|
|
|
$
|
207,820
|
|
|
31.1
|
%
|
% of Total Gross Profit
|
3.2
|
%
|
|
2.7
|
%
|
|
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2015
|
|
2014
|
|
Change
|
|||||
Interest Income
|
$
|
55,729
|
|
|
$
|
13,933
|
|
|
300.0
|
%
|
Interest Expense
|
(160,229
|
)
|
|
(88,353
|
)
|
|
81.4
|
%
|
||
Foreign Currency Transactions and Other
|
(26,087
|
)
|
|
(9,444
|
)
|
|
176.2
|
%
|
||
Total
|
$
|
(130,587
|
)
|
|
$
|
(83,864
|
)
|
|
55.7
|
%
|
|
Year Ended December 31,
|
|
|
|||||||
|
(in thousands)
|
|
|
|||||||
|
2015
|
|
2014
|
|
Change
|
|||||
Income Tax Expense
|
$
|
576,960
|
|
|
$
|
567,695
|
|
|
1.6
|
%
|
|
|
Payments due by Period (in thousands)
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Less than
1 Year
|
|
1 to 3
Years
|
|
3 to 5 Years
|
|
More than 5 Years
|
||||||||||
Operating lease obligations
(1)
|
|
$
|
523,820
|
|
|
$
|
102,339
|
|
|
$
|
193,885
|
|
|
$
|
134,124
|
|
|
$
|
93,472
|
|
Land lease obligation
(1)
|
|
63,851
|
|
|
1,317
|
|
|
2,633
|
|
|
2,633
|
|
|
57,268
|
|
|||||
Building construction obligation
(1)
|
|
233,385
|
|
|
34,860
|
|
|
136,516
|
|
|
62,009
|
|
|
—
|
|
|||||
Senior Notes
(2)
|
|
8,481,228
|
|
|
137,794
|
|
|
1,260,587
|
|
|
2,250,337
|
|
|
4,832,510
|
|
|||||
Revolving credit facility
(3)
|
|
9,447
|
|
|
3,188
|
|
|
5,075
|
|
|
1,184
|
|
|
—
|
|
|||||
Earnout - acquisition
|
|
9,170
|
|
|
—
|
|
|
9,170
|
|
|
—
|
|
|
—
|
|
|||||
Total
(4)
|
|
$
|
9,320,901
|
|
|
$
|
279,498
|
|
|
$
|
1,607,866
|
|
|
$
|
2,450,287
|
|
|
$
|
4,983,250
|
|
(1)
|
See the section on "
Operating Leases
" and "
Building Construction
" section of Note
14
to the Consolidated Financial Statements for more details.
|
(2)
|
Represents the aggregate principal amount of our Senior Notes outstanding as of
December 31, 2016
and cumulative interest to maturity of $1.1 billion. Convertible debt does not reflect the market value in excess of the outstanding
|
(3)
|
Represents fees on uncommitted funds and outstanding letters of credit as of
December 31, 2016
.
|
(4)
|
We reported "Other long-term liabilities" of
$139 million
on the Consolidated Balance Sheet at
December 31, 2016
, of which approximately $53 million related to deferred rents, approximately $30 million related to unrecognized tax benefits (see Note
13
to the Consolidated Financial Statements) and approximately
$27 million
related to our accrual for the potential resolution of issues related to travel transaction taxes (see Note
14
to the Consolidated Financial Statements). A variety of factors could affect the timing of payments for the liabilities related to travel transaction taxes and unrecognized tax benefits. We believe that these matters will likely not be resolved in the next twelve months and accordingly we have classified the estimated liability as non-current in the Consolidated Balance Sheet. Therefore, we have excluded long-term liabilities of $130 million from the contractual obligations table above because we cannot reasonably estimate the timing of such payments or the liability is related to deferred rents, which represents the difference in rent expense recognized in the income statements and rent payments related to operating leases.
|
•
|
should not be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
|
•
|
may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which
disclosures
are
not necessarily reflected in the agreement;
|
•
|
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
|
•
|
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
|
Exhibit Number
|
Description
|
10.14(t)+
|
Second Amended and Restated Employment Agreement dated March 5, 2015 by and between the Registrant, Booking.com Holding B.V. and Darren R. Huston.
|
10.15(z)+
|
Amended and Restated Non-Competition and Non-Solicitation Agreement dated November 7, 2013 by and between the Registrant and Darren R. Huston.
|
10.16(aa)+
|
Indemnification Agreement, dated September 12, 2011 by and between the Registrant and Darren R. Huston.
|
10.17(bb)+
|
Letter agreement, dated October 19, 2005 by and between the Registrant and Daniel J. Finnegan.
|
10.18(cc)+
|
Letter amendment, dated December 16, 2008, to letter agreement, dated October 19, 2005 by and between the Registrant and Daniel J. Finnegan.
|
10.19(dd)+
|
Second Amended and Restated Employment Agreement, dated April 21, 2015 by and between the Registrant and Peter J. Millones.
|
10.20(ee)+
|
Amended and Restated Employment contract, dated May 19, 2016 by and between Booking.com Holding B.V. and Gillian Tans.
|
10.21(ff)+
|
Separation Letter, dated April 27, 2016 by and between the Registrant and Darren R. Huston.
|
10.22(ee)+
|
Employment Letter Agreement, dated May 19, 2016 by and between the Registrant and Jeffery H. Boyd.
|
10.23(gg)+
|
Employment Agreement, dated December 15, 2016 by and between the Registrant and Glenn D. Fogel.
|
10.24(gg)+
|
Non-Competition and Non-Solicitation Agreement, dated December 15, 2016 by and between the Registrant and Glenn D. Fogel.
|
10.25(gg)+
|
Employee Confidentiality and Assignment Agreement, dated December 15, 2016 by and between the Registrant and Glenn D. Fogel.
|
10.26(gg)+
|
Letter Agreement, dated December 15, 2016 by and between the Registrant and Jeffery H. Boyd.
|
10.27(hh)
|
Credit Agreement, dated as of June 19, 2015, among the Registrant, the lenders from time to time party thereto, and Bank of America, N.A. as Administrative Agent.
|
12.1
|
Statement of Ratio of Earnings to Fixed Charges.
|
21
|
List of Subsidiaries.
|
23.1
|
Consent of Deloitte & Touche LLP.
|
24.1
|
Power of Attorney (included in the Signature Page).
|
31.1
|
Certification of Glenn D. Fogel, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Daniel J. Finnegan, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1(ii)
|
Certification of Glenn D. Fogel, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
|
32.2(ii)
|
Certification of Daniel J. Finnegan, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
|
101
|
The following financial statements from the Company's Annual Report on Form 10‑K for the year ended December 31, 2016 formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Stockholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.
|
+
|
Indicates a management contract or compensatory plan or arrangement.
|
|
|
(a)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on July 18, 2014 (File No. 0-25581).
|
(b)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on November 9, 2015 (File No. 1-36691).
|
(c)
|
Previously filed as an exhibit to Amendment No. 2 to Registration Statement on Form S-1 filed on March 18, 1999 (File No. 333-69657).
|
(d)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 12, 2012 (File No. 0-25581).
|
(e)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on June 4, 2013 (File No. 0-25581).
|
(f)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on August 20, 2014 (File No. 0-25581).
|
(g)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on November 25, 2015 (File No. 1-36691).
|
(h)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on September 22, 2014 (File No. 0-25581).
|
(i)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on September 26, 2014 (File No. 0-25581).
|
(j)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 2, 2015 (File No. 1-36691).
|
(k)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 4, 2015 (File No. 1-36691).
|
(l)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 12, 2015 (File No. 1-36691).
|
(m)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 13, 2015 (File No. 1-36691).
|
(n)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on May 23, 2016 (File No. 1-36691).
|
(o)
|
Previously filed as an exhibit to the Current Report on Form 8‑K filed on June 6, 2013 (File No. 0-25581).
|
(p)
|
Previously filed as an exhibit to the Current Report on Form 8‑K filed on November 8, 2005 (File No. 0-25581).
|
(q)
|
Previously filed as an exhibit to the Current Report on Form 8‑K filed on March 9, 2011 (File No. 0-25581).
|
(r)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 7, 2014 (File No. 0-25581).
|
(s)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 6, 2015 (File No. 1-36691).
|
(t)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 10, 2016 (File No. 1-36691).
|
(u)
|
Previously filed as an exhibit to the Annual Report on Form 10-K filed for the year ended December 31, 2014 (File No. 1-36691).
|
(v)
|
Previously filed as an exhibit to the Quarterly Report on Form 10-Q filed for the quarter ended September 30, 2014 (File No. 1-36691).
|
(w)
|
Previously filed as an exhibit to the Registration Statement on Form S-8 filed on June 13, 2014 (File No. 333-196756).
|
(x)
|
Previously filed as an exhibit to the Annual Report on Form 10-K filed for the year ended December 31, 2015 (File No. 1-36691).
|
(y)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 4, 2013 (File No. 0-25581).
|
(z)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on November 8, 2013 (File No. 0-25581).
|
(aa)
|
Previously filed as an exhibit to the Quarterly Report on Form 10-Q filed for the quarter ended September 30, 2011 (File No. 0-25581).
|
(bb)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on October 21, 2005 (File No. 0-25581).
|
(cc)
|
Previously filed as an exhibit to the Annual Report on Form 10-K filed for the year ended December 31, 2008 (File No. 0-25581).
|
(dd)
|
Previously filed as an exhibit to our Current Report on Form 8-K filed on April 24, 2015 (File No. 1-36691).
|
(ee)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on May 20, 2016 (File No. 1-36691).
|
(ff)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on April 28, 2016 (File No. 1-36691).
|
(gg)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on December 16, 2016 (File No. 1-36691).
|
(hh)
|
Previously filed as an exhibit to our Current Report on Form 8-K filed on June 24, 2015 (File No. 1-36691).
|
(ii)
|
This document is being furnished in accordance with SEC Release Nos. 33‑8212 and 34‑47551.
|
|
THE PRICELINE GROUP INC.
|
||
|
|
|
|
|
By:
|
/s/ Glenn D. Fogel
|
|
|
|
Name:
|
Glenn D. Fogel
|
|
|
Title:
|
Chief Executive Officer and President
|
|
|
Date:
|
February 27, 2017
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
/s/ Glenn D. Fogel
|
|
Director, Chief Executive Officer and President
|
|
February 27, 2017
|
Glenn D. Fogel
|
|
|
|
|
|
|
|
|
|
/s/ Jeffery H. Boyd
|
|
Director, Executive Chairman of the Board
|
|
February 27, 2017
|
Jeffery H. Boyd
|
|
|
|
|
|
|
|
|
|
/s/ Daniel J. Finnegan
|
|
Chief Financial Officer and Chief Accounting
|
|
February 27, 2017
|
Daniel J. Finnegan
|
|
Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Timothy M. Armstrong
|
|
Director
|
|
February 27, 2017
|
Timothy M. Armstrong
|
|
|
|
|
|
|
|
|
|
/s/ Jan L. Docter
|
|
Director
|
|
February 27, 2017
|
Jan L. Docter
|
|
|
|
|
|
|
|
|
|
/s/ Jeffrey E. Epstein
|
|
Director
|
|
February 27, 2017
|
Jeffrey E. Epstein
|
|
|
|
|
|
|
|
|
|
/s/ James M. Guyette
|
|
Director
|
|
February 27, 2017
|
James M. Guyette
|
|
|
|
|
|
|
|
|
|
/s/ Charles H. Noski
|
|
Director
|
|
February 27, 2017
|
Charles H. Noski
|
|
|
|
|
|
|
|
|
|
/s/ Nancy B. Peretsman
|
|
Director
|
|
February 27, 2017
|
Nancy B. Peretsman
|
|
|
|
|
|
|
|
|
|
/s/ Thomas E. Rothman
|
|
Director
|
|
February 27, 2017
|
Thomas E. Rothman
|
|
|
|
|
|
|
|
|
|
/s/ Craig W. Rydin
|
|
Director
|
|
February 27, 2017
|
Craig W. Rydin
|
|
|
|
|
|
|
|
|
|
/s/ Lynn M. Vojvodich
|
|
Director
|
|
February 27, 2017
|
Lynn M. Vojvodich
|
|
|
|
|
|
Page No.
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014
|
|
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014
|
|
|
|
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2016, 2015 and 2014
|
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
2,081,075
|
|
|
$
|
1,477,265
|
|
Short-term investments
|
|
2,218,880
|
|
|
1,171,246
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $25,565 and $15,014, respectively
|
|
860,115
|
|
|
645,169
|
|
||
Prepaid expenses and other current assets
|
|
241,449
|
|
|
259,557
|
|
||
Total current assets
|
|
5,401,519
|
|
|
3,553,237
|
|
||
Property and equipment, net
|
|
347,017
|
|
|
274,786
|
|
||
Intangible assets, net
|
|
1,993,885
|
|
|
2,167,533
|
|
||
Goodwill
|
|
2,396,906
|
|
|
3,375,000
|
|
||
Long-term investments
|
|
9,591,067
|
|
|
7,931,363
|
|
||
Other assets
|
|
108,579
|
|
|
118,656
|
|
||
Total assets
|
|
$
|
19,838,973
|
|
|
$
|
17,420,575
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
419,108
|
|
|
$
|
322,842
|
|
Accrued expenses and other current liabilities
|
|
857,467
|
|
|
681,587
|
|
||
Deferred merchant bookings
|
|
614,361
|
|
|
434,881
|
|
||
Convertible debt
|
|
967,734
|
|
|
—
|
|
||
Total current liabilities
|
|
2,858,670
|
|
|
1,439,310
|
|
||
Deferred income taxes
|
|
822,334
|
|
|
892,576
|
|
||
Other long-term liabilities
|
|
138,767
|
|
|
134,777
|
|
||
Long-term debt
|
|
6,170,522
|
|
|
6,158,443
|
|
||
Total liabilities
|
|
9,990,293
|
|
|
8,625,106
|
|
||
|
|
|
|
|
|
|
||
Commitments and Contingencies (See Note 14)
|
|
|
|
|
|
|
||
Convertible debt
|
|
28,538
|
|
|
—
|
|
||
|
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
|
|
|
||
Common stock, $0.008 par value, authorized 1,000,000,000 shares, 62,379,247 and 62,039,516 shares issued, respectively
|
|
485
|
|
|
482
|
|
||
Treasury stock, 13,190,929 and 12,427,945 shares, respectively
|
|
(6,855,164
|
)
|
|
(5,826,640
|
)
|
||
Additional paid-in capital
|
|
5,482,653
|
|
|
5,184,910
|
|
||
Retained earnings
|
|
11,326,852
|
|
|
9,191,865
|
|
||
Accumulated other comprehensive income (loss)
|
|
(134,684
|
)
|
|
244,852
|
|
||
Total stockholders' equity
|
|
9,820,142
|
|
|
8,795,469
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
19,838,973
|
|
|
$
|
17,420,575
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Agency revenues
|
|
$
|
7,982,116
|
|
|
$
|
6,527,898
|
|
|
$
|
5,845,802
|
|
Merchant revenues
|
|
2,048,005
|
|
|
2,082,973
|
|
|
2,186,054
|
|
|||
Advertising and other revenues
|
|
712,885
|
|
|
613,116
|
|
|
410,115
|
|
|||
Total revenues
|
|
10,743,006
|
|
|
9,223,987
|
|
|
8,441,971
|
|
|||
Cost of revenues
|
|
428,314
|
|
|
632,180
|
|
|
857,841
|
|
|||
Gross profit
|
|
10,314,692
|
|
|
8,591,807
|
|
|
7,584,130
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|||
Performance advertising
|
|
3,479,287
|
|
|
2,738,218
|
|
|
2,334,453
|
|
|||
Brand advertising
|
|
295,698
|
|
|
273,704
|
|
|
257,077
|
|
|||
Sales and marketing
|
|
435,225
|
|
|
353,221
|
|
|
310,910
|
|
|||
Personnel, including stock-based compensation of $249,574, $247,395, and $186,425, respectively
|
|
1,350,032
|
|
|
1,166,226
|
|
|
950,191
|
|
|||
General and administrative
|
|
455,909
|
|
|
415,420
|
|
|
352,869
|
|
|||
Information technology
|
|
142,393
|
|
|
113,617
|
|
|
97,498
|
|
|||
Depreciation and amortization
|
|
309,135
|
|
|
272,494
|
|
|
207,820
|
|
|||
Impairment of goodwill
|
|
940,700
|
|
|
—
|
|
|
—
|
|
|||
Total operating expenses
|
|
7,408,379
|
|
|
5,332,900
|
|
|
4,510,818
|
|
|||
Operating income
|
|
2,906,313
|
|
|
3,258,907
|
|
|
3,073,312
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|||
Interest income
|
|
94,946
|
|
|
55,729
|
|
|
13,933
|
|
|||
Interest expense
|
|
(207,900
|
)
|
|
(160,229
|
)
|
|
(88,353
|
)
|
|||
Foreign currency transactions and other
|
|
(16,913
|
)
|
|
(26,087
|
)
|
|
(9,444
|
)
|
|||
Impairment of cost-method investments
|
|
(63,208
|
)
|
|
—
|
|
|
—
|
|
|||
Total other expense
|
|
(193,075
|
)
|
|
(130,587
|
)
|
|
(83,864
|
)
|
|||
Earnings before income taxes
|
|
2,713,238
|
|
|
3,128,320
|
|
|
2,989,448
|
|
|||
Income tax expense
|
|
578,251
|
|
|
576,960
|
|
|
567,695
|
|
|||
Net income
|
|
$
|
2,134,987
|
|
|
$
|
2,551,360
|
|
|
$
|
2,421,753
|
|
Net income applicable to common stockholders per basic common share
|
|
$
|
43.14
|
|
|
$
|
50.09
|
|
|
$
|
46.30
|
|
Weighted-average number of basic common shares outstanding
|
|
49,491
|
|
|
50,940
|
|
|
52,301
|
|
|||
Net income applicable to common stockholders per diluted common share
|
|
$
|
42.65
|
|
|
$
|
49.45
|
|
|
$
|
45.67
|
|
Weighted-average number of diluted common shares outstanding
|
|
50,063
|
|
|
51,593
|
|
|
53,023
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
|
$
|
2,134,987
|
|
|
$
|
2,551,360
|
|
|
$
|
2,421,753
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
(1)
|
|
(93,984
|
)
|
|
(114,505
|
)
|
|
(187,356
|
)
|
|||
Unrealized gain (loss) on marketable securities
(2)
|
|
(285,552
|
)
|
|
619,259
|
|
|
(157,275
|
)
|
|||
Comprehensive income
|
|
$
|
1,755,451
|
|
|
$
|
3,056,114
|
|
|
$
|
2,077,122
|
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||||||
Balance, December 31, 2013
|
61,265
|
|
|
$
|
476
|
|
|
(9,257
|
)
|
|
$
|
(1,987,207
|
)
|
|
$
|
4,592,979
|
|
|
$
|
4,218,752
|
|
|
$
|
84,729
|
|
|
$
|
6,909,729
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,421,753
|
|
|
—
|
|
|
2,421,753
|
|
||||||
Foreign currency translation adjustment, net of tax charge of $55,597
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(187,356
|
)
|
|
(187,356
|
)
|
||||||
Unrealized gain (loss) on marketable securities, net of tax benefit of $7,621
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(157,275
|
)
|
|
(157,275
|
)
|
||||||
Reclassification adjustment for convertible debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,204
|
|
|
—
|
|
|
—
|
|
|
8,204
|
|
||||||
Exercise of stock options and vesting of restricted stock units and performance share units
|
256
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
16,389
|
|
|
—
|
|
|
—
|
|
|
16,391
|
|
||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(631
|
)
|
|
(750,378
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(750,378
|
)
|
||||||
Stock-based compensation and other stock-based payments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
189,292
|
|
|
—
|
|
|
—
|
|
|
189,292
|
|
||||||
Conversion of debt
|
300
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(1,658
|
)
|
|
—
|
|
|
—
|
|
|
(1,656
|
)
|
||||||
Issuance of senior convertible notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80,873
|
|
|
—
|
|
|
—
|
|
|
80,873
|
|
||||||
Stock options and restricted stock units assumed in acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,751
|
|
|
—
|
|
|
—
|
|
|
13,751
|
|
||||||
Excess tax benefits on stock-based awards and other equity deductions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,366
|
|
|
—
|
|
|
—
|
|
|
23,366
|
|
||||||
Balance, December 31, 2014
|
61,821
|
|
|
$
|
480
|
|
|
(9,888
|
)
|
|
$
|
(2,737,585
|
)
|
|
$
|
4,923,196
|
|
|
$
|
6,640,505
|
|
|
$
|
(259,902
|
)
|
|
$
|
8,566,694
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,551,360
|
|
|
—
|
|
|
2,551,360
|
|
||||||
Foreign currency translation adjustment, net of tax charge of $60,418
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(114,505
|
)
|
|
(114,505
|
)
|
||||||
Unrealized gain (loss) on marketable securities, net of tax charge of $1,551
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
619,259
|
|
|
619,259
|
|
||||||
Reclassification adjustment for convertible debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
329
|
|
|
—
|
|
|
—
|
|
|
329
|
|
||||||
Exercise of stock options and vesting of restricted stock units and performance share units
|
219
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
20,849
|
|
|
—
|
|
|
—
|
|
|
20,851
|
|
||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(2,540
|
)
|
|
(3,089,055
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,089,055
|
)
|
||||||
Stock-based compensation and other stock-based payments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
249,133
|
|
|
—
|
|
|
—
|
|
|
249,133
|
|
||||||
Conversion of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(110,105
|
)
|
|
—
|
|
|
—
|
|
|
(110,105
|
)
|
||||||
Excess tax benefits on stock-based awards and other equity deductions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101,508
|
|
|
—
|
|
|
—
|
|
|
101,508
|
|
||||||
Balance, December 31, 2015
|
62,040
|
|
|
$
|
482
|
|
|
(12,428
|
)
|
|
$
|
(5,826,640
|
)
|
|
$
|
5,184,910
|
|
|
$
|
9,191,865
|
|
|
$
|
244,852
|
|
|
$
|
8,795,469
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,134,987
|
|
|
—
|
|
|
2,134,987
|
|
||||||
Foreign currency translation adjustment, net of tax charge of $34,268
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93,984
|
)
|
|
(93,984
|
)
|
||||||
Unrealized gain (loss) on marketable securities, net of tax charge of $15,313
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(285,552
|
)
|
|
(285,552
|
)
|
||||||
Reclassification adjustment for convertible debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,538
|
)
|
|
—
|
|
|
—
|
|
|
(28,538
|
)
|
||||||
Exercise of stock options and vesting of restricted stock units and performance share units
|
339
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
15,569
|
|
|
—
|
|
|
—
|
|
|
15,572
|
|
||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(763
|
)
|
|
(1,028,524
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,028,524
|
)
|
||||||
Stock-based compensation and other stock-based payments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
249,726
|
|
|
—
|
|
|
—
|
|
|
249,726
|
|
||||||
Excess tax benefits on stock-based awards and other equity deductions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,986
|
|
|
—
|
|
|
—
|
|
|
60,986
|
|
||||||
Balance, December 31, 2016
|
62,379
|
|
|
$
|
485
|
|
|
(13,191
|
)
|
|
$
|
(6,855,164
|
)
|
|
$
|
5,482,653
|
|
|
$
|
11,326,852
|
|
|
$
|
(134,684
|
)
|
|
$
|
9,820,142
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|||
Net income
|
|
$
|
2,134,987
|
|
|
$
|
2,551,360
|
|
|
$
|
2,421,753
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation
|
|
140,059
|
|
|
101,517
|
|
|
78,241
|
|
|||
Amortization
|
|
169,076
|
|
|
170,977
|
|
|
129,579
|
|
|||
Provision for uncollectible accounts, net
|
|
46,241
|
|
|
24,324
|
|
|
22,990
|
|
|||
Deferred income tax expense (benefit)
|
|
(111,905
|
)
|
|
(61,335
|
)
|
|
31,707
|
|
|||
Stock-based compensation expense and other stock-based payments
|
|
249,726
|
|
|
249,133
|
|
|
189,292
|
|
|||
Amortization of debt issuance costs
|
|
7,758
|
|
|
7,578
|
|
|
5,229
|
|
|||
Amortization of debt discount
|
|
68,974
|
|
|
66,687
|
|
|
54,731
|
|
|||
Loss on early extinguishment of debt
|
|
—
|
|
|
3
|
|
|
6,270
|
|
|||
Impairment of goodwill
|
|
940,700
|
|
|
—
|
|
|
—
|
|
|||
Impairment of cost-method investments
|
|
63,208
|
|
|
—
|
|
|
—
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
|
(284,221
|
)
|
|
(68,694
|
)
|
|
(182,209
|
)
|
|||
Prepaid expenses and other current assets
|
|
5,495
|
|
|
(81,611
|
)
|
|
(48,932
|
)
|
|||
Accounts payable, accrued expenses and other current liabilities
|
|
516,356
|
|
|
166,201
|
|
|
203,870
|
|
|||
Other
|
|
(21,757
|
)
|
|
(23,909
|
)
|
|
1,876
|
|
|||
Net cash provided by operating activities
|
|
3,924,697
|
|
|
3,102,231
|
|
|
2,914,397
|
|
|||
|
|
|
|
|
|
|
||||||
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|||
Purchase of investments
|
|
(6,741,202
|
)
|
|
(8,669,690
|
)
|
|
(10,552,214
|
)
|
|||
Proceeds from sale of investments
|
|
3,684,103
|
|
|
5,084,238
|
|
|
10,902,500
|
|
|||
Additions to property and equipment
|
|
(219,889
|
)
|
|
(173,915
|
)
|
|
(131,504
|
)
|
|||
Acquisitions and other investments, net of cash acquired
|
|
(7,813
|
)
|
|
(140,338
|
)
|
|
(2,496,366
|
)
|
|||
Acquisition of land use rights
|
|
(48,494
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from foreign currency contracts
|
|
—
|
|
|
453,818
|
|
|
14,354
|
|
|||
Payments on foreign currency contracts
|
|
—
|
|
|
(448,640
|
)
|
|
(94,661
|
)
|
|||
Net cash used in investing activities
|
|
(3,333,295
|
)
|
|
(3,894,527
|
)
|
|
(2,357,891
|
)
|
|||
|
|
|
|
|
|
|
||||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|||
Proceeds from revolving credit facility
|
|
—
|
|
|
225,000
|
|
|
995,000
|
|
|||
Payments related to revolving credit facility
|
|
—
|
|
|
(225,000
|
)
|
|
(995,000
|
)
|
|||
Proceeds from the issuance of long-term debt
|
|
994,705
|
|
|
2,399,034
|
|
|
2,264,753
|
|
|||
Payment of debt issuance costs - revolving credit facility
|
|
—
|
|
|
(4,005
|
)
|
|
—
|
|
|||
Payments related to conversion of senior notes
|
|
—
|
|
|
(147,629
|
)
|
|
(125,136
|
)
|
|||
Repurchase of common stock
|
|
(1,013,526
|
)
|
|
(3,089,055
|
)
|
|
(750,378
|
)
|
|||
Payments of contingent consideration
|
|
—
|
|
|
(10,700
|
)
|
|
—
|
|
|||
Proceeds from exercise of stock options
|
|
15,572
|
|
|
20,851
|
|
|
16,389
|
|
|||
Excess tax benefits on stock-based awards and other equity deductions
|
|
60,986
|
|
|
101,508
|
|
|
23,366
|
|
|||
Net cash provided by (used in) financing activities
|
|
57,737
|
|
|
(729,996
|
)
|
|
1,428,994
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
(45,203
|
)
|
|
(149,131
|
)
|
|
(136,476
|
)
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
603,936
|
|
|
(1,671,423
|
)
|
|
1,849,024
|
|
|||
Cash, cash equivalents and restricted cash, beginning of period
|
|
1,478,071
|
|
|
3,149,494
|
|
|
1,300,470
|
|
|||
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
2,082,007
|
|
|
$
|
1,478,071
|
|
|
$
|
3,149,494
|
|
|
|
|
|
|
|
|
||||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
|
|||
Cash paid during the period for income taxes
|
|
$
|
636,550
|
|
|
$
|
534,105
|
|
|
$
|
491,530
|
|
Cash paid during the period for interest
|
|
$
|
125,912
|
|
|
$
|
54,299
|
|
|
$
|
16,950
|
|
Non-cash investing activity for contingent consideration
|
|
$
|
—
|
|
|
$
|
9,170
|
|
|
$
|
10,700
|
|
Non-cash financing activity for acquisitions
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,751
|
|
1.
|
BUSINESS DESCRIPTION
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
|
December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
As included in the Consolidated Balance Sheets:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
2,081,075
|
|
|
$
|
1,477,265
|
|
|
$
|
3,148,651
|
|
Restricted cash
|
|
932
|
|
|
806
|
|
|
843
|
|
|||
Total cash, cash equivalents and restricted cash as shown in the Consolidated
Statements of Cash Flows
|
|
$
|
2,082,007
|
|
|
$
|
1,478,071
|
|
|
$
|
3,149,494
|
|
3.
|
STOCK-BASED COMPENSATION
|
Share-based Awards
|
|
Shares
|
Weighted-average Grant
Date Fair Value
|
|||||
|
|
|
|
|
|
|||
Unvested at December 31, 2013
|
|
534,319
|
|
|
$
|
615.10
|
|
|
|
|
|
|
|
|
|||
Granted
|
|
128,484
|
|
|
$
|
1,308.13
|
|
|
Assumed in an acquisition
|
|
43,993
|
|
|
$
|
1,238.68
|
|
|
Vested
|
|
(195,730
|
)
|
|
$
|
492.22
|
|
|
Performance Shares Adjustment
|
|
68,499
|
|
|
$
|
1,085.94
|
|
|
Forfeited/Canceled
|
|
(9,250
|
)
|
|
$
|
972.19
|
|
|
Unvested at December 31, 2014
|
|
570,315
|
|
|
$
|
912.26
|
|
|
|
|
|
|
|
|
|||
Granted
|
|
198,141
|
|
|
$
|
1,226.41
|
|
|
Vested
|
|
(161,862
|
)
|
|
$
|
757.66
|
|
|
Performance Shares Adjustment
|
|
64,328
|
|
|
$
|
1,238.30
|
|
|
Forfeited/Canceled
|
|
(33,665
|
)
|
|
$
|
1,151.70
|
|
|
Unvested at December 31, 2015
|
|
637,257
|
|
|
$
|
1,070.10
|
|
|
|
|
|
|
|
|
|||
Granted
|
|
202,740
|
|
|
$
|
1,314.93
|
|
|
Vested
|
|
(298,753
|
)
|
|
$
|
858.23
|
|
|
Performance Shares Adjustment
|
|
52,224
|
|
|
$
|
1,294.84
|
|
|
Forfeited/Canceled
|
|
(77,862
|
)
|
|
$
|
1,278.06
|
|
|
Unvested at December 31, 2016
|
|
515,606
|
|
|
$
|
1,287.88
|
|
|
Employee Stock Options
|
|
Number of Shares
|
|
Weighted Average
Exercise Price
|
|
Aggregate
Intrinsic Value (000's)
|
|
Weighted-average Remaining Contractual Term (in years)
|
||||||||
Balance, December 31, 2013
|
|
137,708
|
|
|
|
$
|
315.36
|
|
|
|
$
|
116,686
|
|
|
6.6
|
|
Assumed in acquisitions
|
|
61,897
|
|
|
|
$
|
457.67
|
|
|
|
|
|
|
|||
Exercised
|
|
(51,003
|
)
|
|
|
$
|
293.59
|
|
|
|
|
|
|
|||
Forfeited
|
|
(2,217
|
)
|
|
|
$
|
517.91
|
|
|
|
|
|
|
|||
Balance, December 31, 2014
|
|
146,385
|
|
|
|
$
|
380.05
|
|
|
|
$
|
111,277
|
|
|
6.5
|
|
Assumed in acquisitions
|
|
1,422
|
|
|
|
$
|
230.37
|
|
|
|
|
|
|
|||
Exercised
|
|
(52,697
|
)
|
|
|
$
|
355.85
|
|
|
|
|
|
|
|||
Forfeited
|
|
(6,006
|
)
|
|
|
$
|
511.87
|
|
|
|
|
|
|
|||
Balance, December 31, 2015
|
|
89,104
|
|
|
|
$
|
383.03
|
|
|
|
$
|
79,474
|
|
|
5.4
|
|
Exercised
|
|
(38,150
|
)
|
|
|
$
|
404.40
|
|
|
|
|
|
|
|||
Forfeited
|
|
(1,971
|
)
|
|
|
$
|
241.65
|
|
|
|
|
|
|
|||
Balance, December 31, 2016
|
|
48,983
|
|
|
|
$
|
372.07
|
|
|
|
$
|
53,587
|
|
|
4.4
|
|
Vested and exercisable as of December 31, 2016
|
|
46,601
|
|
|
|
$
|
351.22
|
|
|
|
$
|
51,953
|
|
|
4.3
|
|
Vested and exercisable as of December 31, 2016 and expected to vest thereafter, net of estimated forfeitures
|
|
48,931
|
|
|
|
$
|
372.11
|
|
|
|
$
|
53,528
|
|
|
4.4
|
4.
|
INVESTMENTS
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
International government securities
|
$
|
249,552
|
|
|
$
|
221
|
|
|
$
|
(89
|
)
|
|
$
|
249,684
|
|
U.S. government securities
|
456,971
|
|
|
57
|
|
|
(140
|
)
|
|
456,888
|
|
||||
Corporate debt securities
|
1,510,119
|
|
|
1,119
|
|
|
(928
|
)
|
|
1,510,310
|
|
||||
Commercial paper
|
1,998
|
|
|
—
|
|
|
—
|
|
|
1,998
|
|
||||
Total short-term investments
|
$
|
2,218,640
|
|
|
$
|
1,397
|
|
|
$
|
(1,157
|
)
|
|
$
|
2,218,880
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term investments:
|
|
|
|
|
|
|
|
||||||||
International government securities
|
$
|
655,857
|
|
|
$
|
4,110
|
|
|
$
|
(623
|
)
|
|
$
|
659,344
|
|
U.S. government securities
|
773,718
|
|
|
337
|
|
|
(7,463
|
)
|
|
766,592
|
|
||||
Corporate debt securities
|
6,042,271
|
|
|
9,973
|
|
|
(50,455
|
)
|
|
6,001,789
|
|
||||
U.S. government agency securities
|
4,979
|
|
|
—
|
|
|
(27
|
)
|
|
4,952
|
|
||||
Ctrip convertible debt securities
|
1,275,000
|
|
|
65,800
|
|
|
(47,712
|
)
|
|
1,293,088
|
|
||||
Ctrip equity securities
|
655,311
|
|
|
213,233
|
|
|
(3,242
|
)
|
|
865,302
|
|
||||
Total long-term investments
|
$
|
9,407,136
|
|
|
$
|
293,453
|
|
|
$
|
(109,522
|
)
|
|
$
|
9,591,067
|
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
International government securities
|
$
|
395,404
|
|
|
$
|
497
|
|
|
$
|
(104
|
)
|
|
$
|
395,797
|
|
U.S. government securities
|
457,001
|
|
|
—
|
|
|
(507
|
)
|
|
456,494
|
|
||||
Corporate debt securities
|
305,654
|
|
|
25
|
|
|
(419
|
)
|
|
305,260
|
|
||||
Commercial paper
|
11,688
|
|
|
—
|
|
|
—
|
|
|
11,688
|
|
||||
U.S. government agency securities
|
2,009
|
|
|
—
|
|
|
(2
|
)
|
|
2,007
|
|
||||
Total short-term investments
|
$
|
1,171,756
|
|
|
$
|
522
|
|
|
$
|
(1,032
|
)
|
|
$
|
1,171,246
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term investments:
|
|
|
|
|
|
|
|
||||||||
International government securities
|
$
|
718,947
|
|
|
$
|
1,367
|
|
|
$
|
(683
|
)
|
|
$
|
719,631
|
|
U.S. government securities
|
580,155
|
|
|
277
|
|
|
(1,982
|
)
|
|
578,450
|
|
||||
Corporate debt securities
|
4,294,282
|
|
|
1,273
|
|
|
(18,941
|
)
|
|
4,276,614
|
|
||||
U.S. municipal securities
|
1,080
|
|
|
3
|
|
|
—
|
|
|
1,083
|
|
||||
Ctrip convertible debt securities
|
1,250,000
|
|
|
158,600
|
|
|
(30,050
|
)
|
|
1,378,550
|
|
||||
Ctrip equity securities
|
630,311
|
|
|
346,724
|
|
|
—
|
|
|
977,035
|
|
||||
Total long-term investments
|
$
|
7,474,775
|
|
|
$
|
508,244
|
|
|
$
|
(51,656
|
)
|
|
$
|
7,931,363
|
|
5.
|
FAIR VALUE MEASUREMENTS
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
ASSETS:
|
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
|
||||||
Money market funds
|
|
$
|
977,468
|
|
|
$
|
—
|
|
|
$
|
977,468
|
|
International government securities
|
|
—
|
|
|
30,266
|
|
|
30,266
|
|
|||
U.S. government securities
|
|
—
|
|
|
176,140
|
|
|
176,140
|
|
|||
Corporate debt securities
|
|
—
|
|
|
9,273
|
|
|
9,273
|
|
|||
Commercial paper
|
|
—
|
|
|
1,998
|
|
|
1,998
|
|
|||
Time deposits
|
|
49,160
|
|
|
—
|
|
|
49,160
|
|
|||
Short-term investments:
|
|
|
|
|
|
|
||||||
International government securities
|
|
—
|
|
|
249,684
|
|
|
249,684
|
|
|||
U.S. government securities
|
|
—
|
|
|
456,888
|
|
|
456,888
|
|
|||
Corporate debt securities
|
|
—
|
|
|
1,510,310
|
|
|
1,510,310
|
|
|||
Commercial paper
|
|
—
|
|
|
1,998
|
|
|
1,998
|
|
|||
Long-term investments:
|
|
|
|
|
|
|
||||||
International government securities
|
|
—
|
|
|
659,344
|
|
|
659,344
|
|
|||
U.S. government securities
|
|
—
|
|
|
766,592
|
|
|
766,592
|
|
|||
Corporate debt securities
|
|
—
|
|
|
6,001,789
|
|
|
6,001,789
|
|
|||
U.S. government agency securities
|
|
—
|
|
|
4,952
|
|
|
4,952
|
|
|||
Ctrip convertible debt securities
|
|
—
|
|
|
1,293,088
|
|
|
1,293,088
|
|
|||
Ctrip equity securities
|
|
865,302
|
|
|
—
|
|
|
865,302
|
|
|||
Derivatives:
|
|
|
|
|
|
|
||||||
Currency exchange derivatives
|
|
—
|
|
|
756
|
|
|
756
|
|
|||
Total assets at fair value
|
|
$
|
1,891,930
|
|
|
$
|
11,163,078
|
|
|
$
|
13,055,008
|
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
LIABILITIES:
|
|
|
|
|
|
|
||||||
Currency exchange derivatives
|
|
$
|
—
|
|
|
$
|
1,015
|
|
|
$
|
1,015
|
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
ASSETS:
|
|
|
|
|
|
|
|
|
|
|||
Cash equivalents:
|
|
|
|
|
|
|
||||||
Money market funds
|
|
$
|
99,117
|
|
|
$
|
—
|
|
|
$
|
99,117
|
|
International government securities
|
|
—
|
|
|
10,659
|
|
|
10,659
|
|
|||
U.S. government securities
|
|
—
|
|
|
90,441
|
|
|
90,441
|
|
|||
Corporate debt securities
|
|
—
|
|
|
1,855
|
|
|
1,855
|
|
|||
Commercial paper
|
|
—
|
|
|
335,663
|
|
|
335,663
|
|
|||
Short-term investments:
|
|
|
|
|
|
|
||||||
International government securities
|
|
—
|
|
|
395,797
|
|
|
395,797
|
|
|||
U.S. government securities
|
|
—
|
|
|
456,494
|
|
|
456,494
|
|
|||
Corporate debt securities
|
|
—
|
|
|
305,260
|
|
|
305,260
|
|
|||
Commercial paper
|
|
—
|
|
|
11,688
|
|
|
11,688
|
|
|||
U.S. government agency securities
|
|
—
|
|
|
2,007
|
|
|
2,007
|
|
|||
Long-term investments:
|
|
|
|
|
|
|
||||||
International government securities
|
|
—
|
|
|
719,631
|
|
|
719,631
|
|
|||
U.S. government securities
|
|
—
|
|
|
578,450
|
|
|
578,450
|
|
|||
Corporate debt securities
|
|
—
|
|
|
4,276,614
|
|
|
4,276,614
|
|
|||
U.S. municipal securities
|
|
—
|
|
|
1,083
|
|
|
1,083
|
|
|||
Ctrip convertible debt securities
|
|
—
|
|
|
1,378,550
|
|
|
1,378,550
|
|
|||
Ctrip equity securities
|
|
977,035
|
|
|
—
|
|
|
977,035
|
|
|||
Derivatives:
|
|
|
|
|
|
|
||||||
Currency exchange derivatives
|
|
—
|
|
|
363
|
|
|
363
|
|
|||
Total assets at fair value
|
|
$
|
1,076,152
|
|
|
$
|
8,564,555
|
|
|
$
|
9,640,707
|
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|||
Currency exchange derivatives
|
|
$
|
—
|
|
|
$
|
644
|
|
|
$
|
644
|
|
Level
1
:
|
Quoted prices in active markets that are accessible by the Company at the measurement date for identical assets and liabilities.
|
Level
2
:
|
Inputs that are observable, either directly or indirectly. Such prices may be based upon quoted prices for identical or comparable securities in active markets or inputs not quoted on active markets, but corroborated by market data.
|
Level
3
:
|
Unobservable inputs are used when little or no market data is available.
|
6.
|
ACCOUNTS RECEIVABLE RESERVES
|
|
For the Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Balance, beginning of year
|
$
|
15,014
|
|
|
$
|
14,212
|
|
|
$
|
14,116
|
|
Provision charged to expense
|
46,241
|
|
|
24,324
|
|
|
22,990
|
|
|||
Charge-offs and adjustments
|
(35,233
|
)
|
|
(22,682
|
)
|
|
(21,546
|
)
|
|||
Currency translation adjustments
|
(457
|
)
|
|
(840
|
)
|
|
(1,348
|
)
|
|||
Balance, end of year
|
$
|
25,565
|
|
|
$
|
15,014
|
|
|
$
|
14,212
|
|
7.
|
NET INCOME PER SHARE
|
|
For the Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Weighted-average number of basic common shares outstanding
|
49,491
|
|
|
50,940
|
|
|
52,301
|
|
Weighted-average dilutive stock options, restricted stock units and performance share units
|
238
|
|
|
395
|
|
|
340
|
|
Assumed conversion of Convertible Senior Notes
|
334
|
|
|
258
|
|
|
382
|
|
Weighted-average number of diluted common and common equivalent shares outstanding
|
50,063
|
|
|
51,593
|
|
|
53,023
|
|
Anti-dilutive potential common shares
|
2,443
|
|
|
2,563
|
|
|
2,574
|
|
8.
|
PROPERTY AND EQUIPMENT
|
|
2016
|
|
2015
|
|
Estimated
Useful Lives (years) |
||||
Computer equipment and software
|
$
|
522,675
|
|
|
$
|
396,961
|
|
|
2 to 5 years
|
Leasehold improvements
|
143,191
|
|
|
109,724
|
|
|
2 to 11 years
|
||
Office equipment, furniture and fixtures
|
34,176
|
|
|
28,447
|
|
|
2 to 10 years
|
||
Building construction-in-progress
|
5,945
|
|
|
—
|
|
|
|
||
Total
|
705,987
|
|
|
535,132
|
|
|
|
||
Less: accumulated depreciation
|
(358,970
|
)
|
|
(260,346
|
)
|
|
|
||
Property and equipment, net
|
$
|
347,017
|
|
|
$
|
274,786
|
|
|
|
9.
|
INTANGIBLE ASSETS AND GOODWILL
|
|
December 31, 2016
|
|
December 31, 2015
|
|
|
|
|
||||||||||||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
|
Amortization
Period
|
|
Weighted Average Useful
Life
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Supply and distribution agreements
|
$
|
809,287
|
|
|
$
|
(270,813
|
)
|
|
$
|
538,474
|
|
|
$
|
824,932
|
|
|
$
|
(227,994
|
)
|
|
$
|
596,938
|
|
|
10 - 20 years
|
|
16 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Technology
|
112,141
|
|
|
(80,549
|
)
|
|
31,592
|
|
|
112,639
|
|
|
(61,404
|
)
|
|
51,235
|
|
|
1 - 5 years
|
|
5 years
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Patents
|
1,623
|
|
|
(1,598
|
)
|
|
25
|
|
|
1,623
|
|
|
(1,562
|
)
|
|
61
|
|
|
15 years
|
|
15 years
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Internet domain names
|
39,495
|
|
|
(25,089
|
)
|
|
14,406
|
|
|
40,352
|
|
|
(20,954
|
)
|
|
19,398
|
|
|
2 - 20 years
|
|
8 years
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
1,667,221
|
|
|
(261,412
|
)
|
|
1,405,809
|
|
|
1,671,356
|
|
|
(183,101
|
)
|
|
1,488,255
|
|
|
4-20 years
|
|
20 years
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-compete agreements
|
21,900
|
|
|
(18,321
|
)
|
|
3,579
|
|
|
22,847
|
|
|
(11,201
|
)
|
|
11,646
|
|
|
3-4 years
|
|
3 years
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
135
|
|
|
(135
|
)
|
|
—
|
|
|
|
|
|
||||||
Total intangible assets
|
$
|
2,651,667
|
|
|
$
|
(657,782
|
)
|
|
$
|
1,993,885
|
|
|
$
|
2,673,884
|
|
|
$
|
(506,351
|
)
|
|
$
|
2,167,533
|
|
|
|
|
|
2017
|
$
|
159,451
|
|
2018
|
141,161
|
|
|
2019
|
130,997
|
|
|
2020
|
124,216
|
|
|
2021
|
119,469
|
|
|
Thereafter
|
1,318,591
|
|
|
|
$
|
1,993,885
|
|
|
2016
|
|
2015
|
||||
Balance, beginning of year
|
$
|
3,375,000
|
|
|
$
|
3,326,474
|
|
Acquisitions
|
—
|
|
|
74,584
|
|
||
Impairment
|
(940,700
|
)
|
|
—
|
|
||
Currency translation adjustments
|
(37,394
|
)
|
|
(26,058
|
)
|
||
Balance, end of year
|
$
|
2,396,906
|
|
|
$
|
3,375,000
|
|
10
.
|
DEBT
|
December 31, 2016
|
|
Outstanding
Principal
Amount
|
|
Unamortized Debt
Discount and Debt Issuance Cost |
|
Carrying
Value
|
||||||
Short-term debt:
|
|
|
|
|
|
|
||||||
1.0% Convertible Senior Notes due March 2018
|
|
$
|
1,000,000
|
|
|
$
|
(32,266
|
)
|
|
$
|
967,734
|
|
Long-term debt:
|
|
|
|
|
|
|
||||||
0.35% Convertible Senior Notes due June 2020
|
|
$
|
1,000,000
|
|
|
$
|
(90,251
|
)
|
|
$
|
909,749
|
|
0.9% Convertible Senior Notes due September 2021
|
|
1,000,000
|
|
|
(104,592
|
)
|
|
895,408
|
|
|||
2.15% (€750 Million) Senior Notes due November 2022
|
|
791,063
|
|
|
(5,336
|
)
|
|
785,727
|
|
|||
2.375% (€1 Billion) Senior Notes due September 2024
|
|
1,054,750
|
|
|
(12,861
|
)
|
|
1,041,889
|
|
|||
3.65% Senior Notes due March 2025
|
|
500,000
|
|
|
(3,727
|
)
|
|
496,273
|
|
|||
3.6% Senior Notes due June 2026
|
|
1,000,000
|
|
|
(7,619
|
)
|
|
992,381
|
|
|||
1.8% (€1 Billion) Senior Notes due March 2027
|
|
1,054,750
|
|
|
(5,655
|
)
|
|
1,049,095
|
|
|||
Total long-term debt
|
|
$
|
6,400,563
|
|
|
$
|
(230,041
|
)
|
|
$
|
6,170,522
|
|
December 31, 2015
|
|
Outstanding
Principal
Amount
|
|
Unamortized Debt
Discount and Debt Issuance Cost |
|
Carrying
Value
|
||||||
Long-term debt:
|
|
|
|
|
|
|
||||||
1.0% Convertible Senior Notes due March 2018
|
|
$
|
1,000,000
|
|
|
$
|
(58,929
|
)
|
|
$
|
941,071
|
|
0.35% Convertible Senior Notes due June 2020
|
|
1,000,000
|
|
|
(114,898
|
)
|
|
885,102
|
|
|||
0.9% Convertible Senior Notes due September 2021
|
|
1,000,000
|
|
|
(125,258
|
)
|
|
874,742
|
|
|||
2.15% (€750 Million) Senior Notes due November 2022
|
|
815,217
|
|
|
(6,555
|
)
|
|
808,662
|
|
|||
2.375% (€1 Billion) Senior Notes due September 2024
|
|
1,086,957
|
|
|
(14,688
|
)
|
|
1,072,269
|
|
|||
3.65% Senior Notes due March 2025
|
|
500,000
|
|
|
(4,160
|
)
|
|
495,840
|
|
|||
1.8% (€1 Billion) Senior Notes due March 2027
|
|
1,086,957
|
|
|
(6,200
|
)
|
|
1,080,757
|
|
|||
Total long-term debt
|
|
$
|
6,489,131
|
|
|
$
|
(330,688
|
)
|
|
$
|
6,158,443
|
|
11
.
|
TREASURY STOCK
|
12
.
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Foreign currency translation adjustments, net of tax
(1)
|
$
|
(311,247
|
)
|
|
$
|
(217,263
|
)
|
Net unrealized gain on marketable securities, net of tax
(2)
|
176,563
|
|
|
462,115
|
|
||
Accumulated other comprehensive income (loss)
|
$
|
(134,684
|
)
|
|
$
|
244,852
|
|
13
.
|
INCOME TAXES
|
|
Current
|
|
Deferred
|
|
Total
|
||||||
International
|
$
|
627,718
|
|
|
$
|
(14,359
|
)
|
|
$
|
613,359
|
|
U.S. Federal
|
63,613
|
|
|
(32,405
|
)
|
|
31,208
|
|
|||
U.S. State
|
(1,175
|
)
|
|
(65,141
|
)
|
|
(66,316
|
)
|
|||
Total
|
$
|
690,156
|
|
|
$
|
(111,905
|
)
|
|
$
|
578,251
|
|
|
Current
|
|
Deferred
|
|
Total
|
||||||
International
|
$
|
526,052
|
|
|
$
|
(17,789
|
)
|
|
$
|
508,263
|
|
U.S. Federal
|
88,237
|
|
|
(68,696
|
)
|
|
19,541
|
|
|||
U.S. State
|
24,006
|
|
|
25,150
|
|
|
49,156
|
|
|||
Total
|
$
|
638,295
|
|
|
$
|
(61,335
|
)
|
|
$
|
576,960
|
|
|
Current
|
|
Deferred
|
|
Total
|
||||||
International
|
$
|
496,719
|
|
|
$
|
(10,613
|
)
|
|
$
|
486,106
|
|
U.S. Federal
|
10,316
|
|
|
47,847
|
|
|
58,163
|
|
|||
U.S. State
|
28,953
|
|
|
(5,527
|
)
|
|
23,426
|
|
|||
Total
|
$
|
535,988
|
|
|
$
|
31,707
|
|
|
$
|
567,695
|
|
|
2016
|
|
2015
|
||||
Deferred tax assets/(liabilities):
|
|
|
|
|
|
||
Net operating loss carryforward — U.S.
|
$
|
15,977
|
|
|
$
|
59,220
|
|
Net operating loss carryforward — International
|
18,371
|
|
|
18,153
|
|
||
Accrued expenses
|
72,631
|
|
|
61,703
|
|
||
Stock-based compensation and other stock based payments
|
60,937
|
|
|
77,761
|
|
||
Other
|
—
|
|
|
8,001
|
|
||
Subtotal
|
167,916
|
|
|
224,838
|
|
||
|
|
|
|
||||
Discount on convertible notes
|
(77,845
|
)
|
|
(112,886
|
)
|
||
Intangible assets and other
|
(740,329
|
)
|
|
(822,685
|
)
|
||
Euro denominated debt
|
(117,737
|
)
|
|
(92,230
|
)
|
||
Fixed assets
|
(2,245
|
)
|
|
(3,658
|
)
|
||
Other
|
(3,958
|
)
|
|
—
|
|
||
Less valuation allowance on deferred tax assets
|
(24,475
|
)
|
|
(64,845
|
)
|
||
Net deferred tax liabilities
(1)
|
$
|
(798,673
|
)
|
|
$
|
(871,466
|
)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Income tax expense at federal statutory rate
|
$
|
949,633
|
|
|
$
|
1,094,912
|
|
|
$
|
1,046,307
|
|
Adjustment due to:
|
|
|
|
|
|
|
|
|
|||
Foreign rate differential
|
(377,542
|
)
|
|
(316,078
|
)
|
|
(289,692
|
)
|
|||
Innovation Box Tax benefit
|
(324,633
|
)
|
|
(260,193
|
)
|
|
(233,545
|
)
|
|||
Impairment of goodwill and cost-method investment
|
343,484
|
|
|
—
|
|
|
—
|
|
|||
Other
|
(12,691
|
)
|
|
58,319
|
|
|
44,625
|
|
|||
Income tax expense
|
$
|
578,251
|
|
|
$
|
576,960
|
|
|
$
|
567,695
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Unrecognized tax benefit — January 1
|
$
|
42,594
|
|
|
$
|
52,356
|
|
|
$
|
22,104
|
|
Gross increases — tax positions in current period
|
2,468
|
|
|
3,411
|
|
|
9,305
|
|
|||
Gross increases — tax positions in prior periods
|
859
|
|
|
4,305
|
|
|
6,569
|
|
|||
Increase acquired in business combination
|
—
|
|
|
—
|
|
|
17,767
|
|
|||
Gross decreases — tax positions in prior periods
|
(217
|
)
|
|
(10,365
|
)
|
|
(2,164
|
)
|
|||
Reduction due to lapse in statute of limitations
|
(9,077
|
)
|
|
(7,113
|
)
|
|
(346
|
)
|
|||
Reduction due to settlements during the current period
|
(3,912
|
)
|
|
—
|
|
|
(879
|
)
|
|||
Unrecognized tax benefit — December 31
|
$
|
32,715
|
|
|
$
|
42,594
|
|
|
$
|
52,356
|
|
14
.
|
COMMITMENTS AND CONTINGENCIES
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
After
2021
|
|
Total
|
||||||||||||||
$
|
103,656
|
|
|
$
|
103,561
|
|
|
$
|
92,958
|
|
|
$
|
79,340
|
|
|
$
|
57,418
|
|
|
$
|
150,738
|
|
|
$
|
587,671
|
|
15
.
|
BENEFIT PLANS
|
16
.
|
GEOGRAPHIC INFORMATION
|
|
United
States
|
|
International
|
|
Total
Company
|
||||||||||
|
|
The
Netherlands
|
|
Other
|
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
$
|
1,680,446
|
|
|
$
|
7,783,376
|
|
|
$
|
1,279,184
|
|
|
$
|
10,743,006
|
|
Intangible assets, net
|
1,918,095
|
|
|
51,317
|
|
|
24,473
|
|
|
1,993,885
|
|
||||
Goodwill
|
1,801,835
|
|
|
228,670
|
|
|
366,401
|
|
|
2,396,906
|
|
||||
Other long-lived assets
|
102,457
|
|
|
195,669
|
|
|
123,485
|
|
|
421,611
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
$
|
1,817,360
|
|
|
$
|
6,205,116
|
|
|
$
|
1,201,511
|
|
|
$
|
9,223,987
|
|
Intangible assets, net
|
2,052,351
|
|
|
78,027
|
|
|
37,155
|
|
|
2,167,533
|
|
||||
Goodwill
|
2,742,535
|
|
|
232,982
|
|
|
399,483
|
|
|
3,375,000
|
|
||||
Other long-lived assets
|
89,656
|
|
|
138,329
|
|
|
103,142
|
|
|
331,127
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
$
|
1,798,484
|
|
|
$
|
5,519,207
|
|
|
$
|
1,124,280
|
|
|
$
|
8,441,971
|
|
Intangible assets, net
|
2,183,957
|
|
|
108,650
|
|
|
42,154
|
|
|
2,334,761
|
|
||||
Goodwill
|
2,712,479
|
|
|
224,731
|
|
|
389,264
|
|
|
3,326,474
|
|
||||
Other long-lived assets
|
80,668
|
|
|
97,056
|
|
|
77,915
|
|
|
255,639
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
(In thousands, except per share data)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
2,148,119
|
|
|
$
|
2,555,902
|
|
|
$
|
3,690,552
|
|
|
$
|
2,348,433
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
2,019,450
|
|
|
2,429,818
|
|
|
3,589,063
|
|
|
2,276,361
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income
(1)
|
374,424
|
|
|
580,638
|
|
|
506,017
|
|
|
673,908
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income applicable to common stockholders per basic common share
(1)
|
$
|
7.54
|
|
|
$
|
11.71
|
|
|
$
|
10.24
|
|
|
$
|
13.66
|
|
|
|
|
|
|
|
|
|
||||||||
Net income applicable to common stockholders per diluted common share
(1)
|
$
|
7.47
|
|
|
$
|
11.60
|
|
|
$
|
10.13
|
|
|
$
|
13.47
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
(In thousands, except per share data)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
1,840,694
|
|
|
$
|
2,280,397
|
|
|
$
|
3,102,901
|
|
|
$
|
1,999,995
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
1,672,236
|
|
|
2,092,906
|
|
|
2,947,282
|
|
|
1,879,383
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income
|
333,327
|
|
|
517,032
|
|
|
1,196,732
|
|
|
504,269
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income applicable to common stockholders per basic common share
|
$
|
6.42
|
|
|
$
|
10.02
|
|
|
$
|
23.67
|
|
|
$
|
10.14
|
|
|
|
|
|
|
|
|
|
||||||||
Net income applicable to common stockholders per diluted common share
|
$
|
6.36
|
|
|
$
|
9.94
|
|
|
$
|
23.41
|
|
|
$
|
10.00
|
|
Current assets
(1)
|
|
$
|
203
|
|
Identifiable intangible assets
(2)
|
|
1,435
|
|
|
Goodwill
(3)
|
|
1,500
|
|
|
Other long-term assets
|
|
38
|
|
|
Total liabilities
(4)
|
|
(647
|
)
|
|
Total consideration
|
|
$
|
2,529
|
|
•
|
should not be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
|
•
|
may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which
disclosures
are
not necessarily reflected in the agreement;
|
•
|
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
|
•
|
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
|
+
|
Indicates a management contract or compensatory plan or arrangement.
|
|
|
(a)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on July 18, 2014 (File No. 0-25581).
|
(b)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on November 9, 2015 (File No. 1-36691).
|
(c)
|
Previously filed as an exhibit to Amendment No. 2 to Registration Statement on Form S-1 filed on March 18, 1999 (File No. 333-69657).
|
(d)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 12, 2012 (File No. 0-25581).
|
(e)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on June 4, 2013 (File No. 0-25581).
|
(f)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on August 20, 2014 (File No. 0-25581).
|
(g)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on November 25, 2015 (File No. 1-36691).
|
(h)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on September 22, 2014 (File No. 0-25581).
|
(i)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on September 26, 2014 (File No. 0-25581).
|
(j)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 2, 2015 (File No. 1-36691).
|
(k)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 4, 2015 (File No. 1-36691).
|
(l)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 12, 2015 (File No. 1-36691).
|
(m)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 13, 2015 (File No. 1-36691).
|
(n)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on May 23, 2016 (File No. 1-36691).
|
(o)
|
Previously filed as an exhibit to the Current Report on Form 8‑K filed on June 6, 2013 (File No. 0-25581).
|
(p)
|
Previously filed as an exhibit to the Current Report on Form 8‑K filed on November 8, 2005 (File No. 0-25581).
|
(q)
|
Previously filed as an exhibit to the Current Report on Form 8‑K filed on March 9, 2011 (File No. 0-25581).
|
(r)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 7, 2014 (File No. 0-25581).
|
(s)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 6, 2015 (File No. 1-36691).
|
(t)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 10, 2016 (File No. 1-36691).
|
(u)
|
Previously filed as an exhibit to the Annual Report on Form 10-K filed for the year ended December 31, 2014 (File No. 1-36691).
|
(v)
|
Previously filed as an exhibit to the Quarterly Report on Form 10-Q filed for the quarter ended September 30, 2014 (File No. 1-36691).
|
(w)
|
Previously filed as an exhibit to the Registration Statement on Form S-8 filed on June 13, 2014 (File No. 333-196756).
|
(x)
|
Previously filed as an exhibit to the Annual Report on Form 10-K filed for the year ended December 31, 2015 (File No. 1-36691).
|
(y)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on March 4, 2013 (File No. 0-25581).
|
(z)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on November 8, 2013 (File No. 0-25581).
|
(aa)
|
Previously filed as an exhibit to the Quarterly Report on Form 10-Q filed for the quarter ended September 30, 2011 (File No. 0-25581).
|
(bb)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on October 21, 2005 (File No. 0-25581).
|
(cc)
|
Previously filed as an exhibit to the Annual Report on Form 10-K filed for the year ended December 31, 2008 (File No. 0-25581).
|
(dd)
|
Previously filed as an exhibit to our Current Report on Form 8-K filed on April 24, 2015 (File No. 1-36691).
|
(ee)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on May 20, 2016 (File No. 1-36691).
|
(ff)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on April 28, 2016 (File No. 1-36691).
|
(gg)
|
Previously filed as an exhibit to the Current Report on Form 8-K filed on December 16, 2016 (File No. 1-36691).
|
(hh)
|
Previously filed as an exhibit to our Current Report on Form 8-K filed on June 24, 2015 (File No. 1-36691).
|
(ii)
|
This document is being furnished in accordance with SEC Release Nos. 33‑8212 and 34‑47551.
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Earnings Computation:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings before income taxes
(1)
|
|
$
|
2,713,238
|
|
|
$
|
3,128,320
|
|
|
$
|
2,989,448
|
|
|
$
|
2,296,537
|
|
|
$
|
1,761,869
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to noncontrolling interests, before tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(175
|
)
|
|
(5,922
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Add:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
|
241,069
|
|
|
189,033
|
|
|
112,399
|
|
|
100,798
|
|
|
75,964
|
|
|||||
Total earnings as adjusted
|
|
$
|
2,954,307
|
|
|
$
|
3,317,353
|
|
|
$
|
3,101,847
|
|
|
$
|
2,397,160
|
|
|
$
|
1,831,911
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges Computation
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
$
|
207,900
|
|
|
$
|
160,229
|
|
|
$
|
88,353
|
|
|
$
|
83,289
|
|
|
$
|
62,064
|
|
Assumed interest element included in rent expense
|
|
33,169
|
|
|
28,804
|
|
|
24,046
|
|
|
17,509
|
|
|
13,900
|
|
|||||
Total fixed charges
|
|
$
|
241,069
|
|
|
$
|
189,033
|
|
|
$
|
112,399
|
|
|
$
|
100,798
|
|
|
$
|
75,964
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
|
12.3
|
|
|
17.5
|
|
|
27.6
|
|
|
23.8
|
|
|
24.1
|
|
Name
|
|
Jurisdiction of Incorporation
|
|
Percent
Ownership
|
|
|
|
|
|
Agoda Company Pte. Ltd.
|
|
Singapore
|
|
100%
|
Booking.com B.V.
|
|
The Netherlands
|
|
100%
|
Booking.com Holding B.V.
|
|
The Netherlands
|
|
100%
|
KAYAK Software Corporation
|
|
Delaware
|
|
100%
|
OpenTable, Inc.
|
|
Delaware
|
|
100%
|
Priceline.com Bookings Acquisition Company Limited
|
|
United Kingdom
|
|
100%
|
Priceline.com Europe Holdco, Inc.
|
|
Delaware
|
|
100%
|
Priceline.com Holdco U.K. Limited
|
|
United Kingdom
|
|
100%
|
priceline.com International Ltd.
|
|
United Kingdom
|
|
100%
|
priceline.com LLC
|
|
Delaware
|
|
100%
|
Agoda Holding Company Limited
|
|
Mauritius
|
|
100%
|
Priceline Group Treasury Company B.V.
|
|
The Netherlands
|
|
100%
|
TravelJigsaw Holdings Limited
|
|
United Kingdom
|
|
100%
|
TravelJigsaw Limited
|
|
United Kingdom
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
*
|
Subsidiaries which, when considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary as of December 31, 2016, have been excluded.
|
/s/ DELOITTE & TOUCHE LLP
|
|
|
|
Stamford, Connecticut
|
|
February 27, 2017
|
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Dated: February 27, 2017
|
|
/s/ Glenn D. Fogel
|
|
Name:
|
Glenn D. Fogel
|
|
Title:
|
Chief Executive Officer and President
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Dated: February 27, 2017
|
|
/s/ Daniel J. Finnegan
|
|
Name:
|
Daniel J. Finnegan
|
|
Title:
|
Chief Financial Officer and Chief
Accounting Officer
|
February 27, 2017
|
|
/s/ Glenn D. Fogel
|
|
Name:
|
Glenn D. Fogel
|
|
Title:
|
Chief Executive Officer and President
|
February 27, 2017
|
|
/s/ Daniel J. Finnegan
|
|
Name:
|
Daniel J. Finnegan
|
|
Title:
|
Chief Financial Officer and Chief Accounting Officer
|