Priceline 2010 Annual Report Download - page 126

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lawsuit involving hotel occupancy taxes. Excluding these items, general and administrative expenses increased
during the year ended December 31, 2010, over the same period in 2009, due to professional fees incurred in the
second quarter 2010 related to the acquisition of TravelJigsaw, increased personnel-related expenses and occupancy
expenses to support the growth in our Booking.com and Agoda operations, and the inclusion of TravelJigsaw since
its acquisition in May 2010, partially offset by a decrease in litigation expenses primarily related to hotel occupancy
tax and other tax proceedings.
Information Technology
Year Ended
December 31,
($000)
2010 2009 Change
Information Technology .................. $20,998 $19,139 9.7%
% of Total Gross Profit ................... 1.1% 1.5%
Information technology expenses consist primarily of: (1) system maintenance and software license fees;
(2) outsourced data center costs relating to our domestic and international data centers; (3) data communications and
other expenses associated with operating our Internet sites; and (4) payments to outside consultants. For the year
ended December 31, 2010, information technology expenses increased compared to the same period in 2009,
primarily due to growth in our worldwide operations.
Depreciation and Amortization
Year Ended
December 31,
($000)
2010 2009 Change
Depreciation and
Amortization ................................... $45,763 $39,193 16.8%
% of Total Gross Profit .................. 2.4% 3.1%
Depreciation and amortization expenses consist of: (1) amortization of intangible assets with determinable
lives; (2) amortization of internally developed and purchased software, (3) depreciation of computer equipment; and
(4) depreciation of leasehold improvements, office equipment and furniture and fixtures. For the year ended
December 31, 2010, depreciation and amortization expense increased from the same period in 2009, primarily due to
acquisition-related amortization in connection with our acquisition of TravelJigsaw.
Other Income (Expense)
Year Ended
December 31,
($000)
2010
2009 Change
Interest Income .............................................................. $ 3,857 $ 2,223 73.5%
Interest Expense ............................................................ (29,944) (24,084) 24.3%
Foreign Currency Transactions and Other ................... (14,427) (6,672) 116.2%
Total .............................................................................. $(40,514) $(28,533) 42.0%
For the year ended December 31, 2010, interest income increased over the same period in 2009, primarily
due to an increase in the average balance of cash and marketable securities invested. Interest expense increased for