Priceline 2010 Annual Report Download - page 187

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center are located in approximately 70,000 square feet of leased office space located in Norwalk, Connecticut. The
Company also leases approximately 49,000 square feet of office space in Grand Rapids, Michigan. Booking.com
Limited leases approximately 16,000 square feet of office space, primarily in Cambridge, England. Booking.com
B.V. leases approximately 198,000 square feet of office space in Amsterdam, Netherlands and in 20 other countries
in support of its international operations. Agoda leases approximately 42,000 square feet of office space in
Bangkok, Thailand and in 14 other countries in support of its international operations. Minimum payments for
operating leases for office space and equipment having initial or remaining non-cancelable terms in excess of one
year have been translated into U.S. Dollars at the December 31, 2010 spot exchange rates, as applicable, and are as
follows (in thousands):
2011 2012 2013 2014 2015
After
2015 Total
$20,400 $16,784 $13,883 $6,461 $5,486 $18,708 $81,722
Contingent Purchase Price
On November 6, 2007, the Company and a newly-formed, indirect wholly-owned subsidiary of the
Company, acquired 100% of the total share capital of priceline.com Mauritius Company Limited (formerly known
as the Agoda Company, Ltd.) (“Agoda”) and AGIP LLC. The purchase price for the acquisition, including
acquisition costs, consisted of an initial purchase price paid by the Company in cash of approximately $16 million
and up to an additional $141.6 million in cash, which was payable by the Company if Agoda achieved specified
“gross bookings” and earnings targets from January 1, 2008 through December 31, 2010. Based upon actual results
for the three year period ended December 31, 2010, we recorded a liability and increased goodwill by $60.1 million.
This treatment did not impact the Consolidated Statement of Cash Flows for 2010. This amount will be reflected as
an investing cash outflow when it is paid in 2011.
On December 21, 2007, the Company acquired 100% of the total issued share capital of an online
advertising company for approximately $4.1 million in cash, including acquisition costs. The Company could be
required to pay an additional amount of up to $3.8 million in cash each year from 2008 through 2010, if the acquired
company achieved certain performance targets. Based upon 2010, 2009 and 2008 results, the Company recorded a
liability and increased goodwill by $1.5 million, $2.5 million and $1.5 million in December 2010, December 2009
and December 2008, respectively, to reflect this purchase price adjustment.
OFT Inquiry
In September 2010, the United Kingdom’s Office of Fair Trading (the “OFT”), the competition authority in
the U.K., announced it was conducting a formal early stage investigation into suspected breaches of competition law
in the hotel online booking sector and had written to a number of parties in the industry to request information.
Specifically, the investigation focuses upon whether there are agreements or concerted practices between hotels and
online travel companies and/or hotel room reservation “wholesalers” relating to the fixed or minimum resale prices
of hotel room reservations. In September 2010, Booking.com B.V. and priceline.com Incorporated, on behalf of
Booking.com, received a Notice of Inquiry from the OFT; the Company and Booking.com are cooperating with the
OFT’s investigation. The Company is unable at this time to predict the outcome of the OFT’s investigation and the
impact, if any, on the Company’s business, financial results and results of operations.
17. BENEFIT PLAN
Priceline.com has a defined contribution 401(k) savings plan (the “Plan”) covering certain U.S. employees
who are at least 21 years old. The Plan allows eligible employees to contribute up to 75% of their eligible earnings,
subject to a statutorily prescribed annual limit. All participants are fully vested in their contributions and investment
earnings. The Company makes a 50% match of employee contributions up to 6% of qualified compensation. The
Company also maintains certain other defined contribution plans outside of the United States for which it provides
50% of the contributions for participating employees. The Company’s matching contributions during the years
ended December 31, 2010, 2009 and 2008 were approximately $1.8 million, $1.5 million and $1.1 million,
respectively.