Priceline 2014 Annual Report Download - page 118

Download and view the complete annual report

Please find page 118 of the 2014 Priceline annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 160

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160

Patent Infringement
On February 9, 2015, International Business Machines Corporation ("IBM") filed a complaint in the U.S. District Court for the District
of Delaware against The Priceline Group Inc. and its subsidiaries KAYAK Software Corporation, OpenTable, Inc. and priceline.com LLC (the
"Subject Companies"). In the complaint, IBM alleges that the Subject Companies have infringed and continue to willfully infringe certain IBM
patents that IBM claims relate to the presentation of applications and advertising in an interactive service, preserving state information in online
transactions and single sign-on processes in a computing environment and seeks unspecified damages (including a request that the amount of
compensatory damages be trebled), injunctive relief and costs and reasonable attorneys’ fees. The Company believes the claims to be without
merit and intends to contest them vigorously.
Other
The Company intends to defend vigorously against the claims in all of the proceedings described in this Note 16. The Company has
accrued for certain legal contingencies where it is probable that a loss has been incurred and the amount can be reasonably estimated. Except as
disclosed, such amounts accrued are not material to the Company's consolidated balance sheets and provisions recorded have not been material
to the Company's consolidated results of operations or cash flows. The Company is unable to estimate a reasonably possible range of loss.
From time to time, the Company has been, and expects to continue to be, subject to legal proceedings and claims in the ordinary course
of business, including claims of alleged infringement of third party intellectual property rights. Such claims, even if not meritorious, could result
in the expenditure of significant financial and managerial resources, divert management's attention from the Company's business objectives and
adversely affect the Company's business, results of operations, financial condition and cash flows.
Contingent Consideration for Business Acquisitions (see Note 20)
Employment Contracts
to approximately $26 million , accelerated vesting of equity instruments, including without limitation, restricted stock, restricted stock units and
performance share units upon, among other things, death or termination without "cause" or "good reason," as those terms are defined in the
agreements, and a gross-up for the payment of "golden parachute" excise taxes. In addition, certain of the agreements provide for the extension
of health and insurance benefits after termination for periods up to three years.
Operating Leases
The Company leases certain facilities and equipment through operating leases. Rental expense for leased office space was
approximately $57.2 million , $40.0 million and $30.9 million for the years ended December 31, 2014 , 2013 and 2012 , respectively. Rental
expense for leased facility space was approximately $15 million , $13 million and $11 million for the years ended December 31, 2014 , 2013
and
2012 , respectively.
The Company's headquarters and the headquarters of the priceline.com business are located in Norwalk, Connecticut, United States of
America, where the Company leases approximately 70,000 square feet of office space. The Booking.com business is headquartered in
Amsterdam, Netherlands, where the Company leases approximately 202,000 square feet of office space; the KAYAK business is headquartered
in Stamford, Connecticut, United States of America, where the Company leases approximately 18,000
square feet of office space; the agoda.com
business has significant support operations in Bangkok, Thailand, where the Company leases approximately 118,000 square feet of office space;
the OpenTable business is headquartered in San Francisco, California, United States of America, where the Company leases approximately
51,000 square feet of office space; and the rentalcars.com business is headquartered in Manchester, England, where the Company leases
approximately 63,000 square feet of office space. The Company leases additional office space to support its operations in various locations
around the world, including hosting and data center facilities in the United States, the United Kingdom, Switzerland, the Netherlands and Hong
Kong and sales and support facilities in numerous locations.
113