Priceline 2014 Annual Report Download - page 58

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Personnel
Personnel expenses consist of compensation to our personnel, including salaries, stock-based compensation, bonuses, payroll taxes and
employee health benefits. Personnel expenses increased during the year ended December 31, 2014 , compared to the year ended December 31,
2013 , due primarily to increased headcount to support the growth of our businesses. The inclusion of OpenTable and KAYAK in our
consolidated results since their acquisitions on July 24, 2014 and May 21, 2013, respectively, contributed to this increase in personnel expenses.
Stock-based compensation expense was approximately $186.4 million for the year ended December 31, 2014 , compared to $140.5
million for the year ended December 31, 2013 . Stock-based compensation expense for the years ended December 31, 2014 and 2013 includes
charges amounting to $20.6 million and $24.1 million , respectively, representing the impact of adjusting the estimated probable outcome at the
end of the performance period for outstanding unvested performance share units. Stock-based compensation expense for the year ended
December 31, 2014 also includes $26.5 million of compensation expense related to 2014 acquisitions.
In December 2013, the Dutch Government enacted certain amendments to Dutch tax law including a one-time irrevocable levy on an
employer applied to employee earnings, equal to 16% of an employee's earnings in excess of 150,000 Euros. This levy resulted in additional
payroll taxes recorded in personnel expense of approximately $12 million (approximately $9 million after tax) in the fourth quarter of 2013.
There was no similar tax levy in 2014.
General and Administrative
General and administrative expenses consist primarily of: (1) occupancy and office expenses; (2) personnel related expenses such as
travel, recruiting and training expenses; and (3) fees for outside professionals, including litigation expenses. General and administrative expenses
increased during the year ended December 31, 2014 , compared to the year ended December 31, 2013 , due primarily to higher occupancy and
office expenses related to the expansion of our international businesses and higher personnel related expenses related to increased headcount in
all of our businesses. The inclusion of OpenTable and KAYAK in our consolidated results since their acquisitions on July 24, 2014 and May 21,
2013, respectively, contributed to the increase in general and administrative expenses for the year ended December 31, 2014 compared to the
year ended
December 31, 2013 .
General and administrative expenses for the year ended December 31, 2014 included approximately $6.9 million of professional fees
related to consummated acquisitions. General and administrative expenses for the year ended December 31, 2013 included approximately $8.5
million of professional fees related to the acquisition of KAYAK.
54
Year Ended December 31,
(in thousands)
2014
2013
Change
Personnel
$
950,191
$
698,692
36.0
%
% of Total Gross Profit
12.5
%
12.2
%
Year Ended December 31,
(in thousands)
2014
2013
Change
General and Administrative
$
352,869
$
252,994
39.5
%
% of Total Gross Profit
4.7
%
4.4
%