Priceline 2011 Annual Report Download - page 58

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57
As of December 31, 2011 and 2010, we had outstanding forward currency contracts designated as hedging contracts
for accounting purposes with a notional value of 860 million Euros and 378 million Euros, respectively, to hedge a portion of
our net investment in a foreign subsidiary. These contracts are all short-term in nature. Mark-to-market adjustments on these
net investment hedges are recorded as currency translation adjustments. The fair value of these derivatives at December 31,
2011 was an asset of $60.1 million and was recorded in "Prepaid expenses and other current assets" on the Consolidated
Balance Sheet. The net fair value of these derivatives at December 31, 2010 was a net liability of $2.8 million, with assets of
$4.0 million recorded in "Prepaid expenses and other current assets" and liabilities of $6.8 million recorded in "Accrued
expenses and other current liabilities" in the Consolidated Balance Sheet. A hypothetical 10% strengthening of the foreign
exchange rates relative to the U.S. Dollar, with all other variables held constant, would have resulted in a derivative liability of
approximately $34 million as of December 31, 2011. See Note 5 to the Consolidated Financial Statements for further detail on
our derivative instruments.
Item 8. Financial Statements and Supplementary Data
The following Consolidated Financial Statements of the Company and the report of our independent registered public
accounting firm are filed as part of this Annual Report on Form 10-K (See Item 15).
Consolidated Balance Sheets as of December 31, 2011 and 2010; Consolidated Statements of Operations,
Consolidated Statements of Changes in Stockholders’ Equity and Consolidated Statements of Cash Flows for the years ended
December 31, 2011, 2010 and 2009; Notes to Consolidated Financial Statements and Report of Independent Registered Public
Accounting Firm.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures. Under the supervision and with the participation of our management, including
our principal executive officer and our principal financial officer, we conducted an evaluation of our disclosure controls and
procedures, as such term is defined under Exchange Act Rule 13a-15(e). Based on this evaluation, our principal executive
officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of
the period covered by this annual report.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we include a report of our management's assessment of
the design and effectiveness of our internal controls over financial reporting for the year ended December 31, 2011. Our
independent registered public accounting firm also attested to, and reported on, our management's assessment of the
effectiveness of internal control over financial reporting.
Management's Report on Internal Control Over Financial Reporting. Our management is responsible for establishing
and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).
Under the supervision and with the participation of our management, including our principal executive officer and principal
financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the
framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission.
Based on our evaluation, our management concluded that our internal control over financial reporting was effective as
of December 31, 2011.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Controls. No change in our internal control over financial reporting (as such term is defined in
Exchange Act Rule 13a-15(f)) occurred during the three months ended December 31, 2011 that materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting.