Priceline 2015 Annual Report Download - page 12

We are also subject to anti-trust and competition laws, and the competition authorities in various jurisdictions have begun investigations into competitive
practices within the online travel industry, including with respect to our business. See " Risk Factors - As the size of our business grows, we may become
increasingly subject to the scrutiny of anti-trust and competition regulators. "
In addition, our strategy involves rapid geographic expansion around the world, including in Asia, South America and elsewhere, many of which regions
and countries have different legislation, regulatory environments and tax laws. Compliance with legal, regulatory and tax requirements around the world places
demands on our time and resources, and we may nonetheless experience unforeseen and potentially adverse legal, regulatory or tax consequences, which may have
an adverse effect on our business. See " Risk Factors - We face risks related to the growth rate and expansion of our international business " and " Risk Factors -
Regulatory and legal requirements and uncertainties could harm our business. "
Seasonality
A meaningful amount of our gross bookings are generated early in the year, as customers plan and reserve their spring and summer vacations in Europe
and North America. From a cost perspective, we expense the substantial majority of our advertising activities as the expense is incurred, which is typically in the
quarter in which reservations are booked. However, we generally do not recognize associated revenue until future quarters when the travel occurs. As a result, we
have historically experienced our highest levels of profitability in the second and third quarters of the year, which is when we experience the highest levels of
accommodation checkouts for the year for our European and North American businesses. We experience the highest levels of booking and travel consumption for
our Asia-Pacific and South American businesses in the first and fourth quarters. Therefore, if these businesses grow faster than our European and North American
businesses, our operating results for the first and fourth quarters of the year may become more significant over time as a percentage of full-year operating results.
In addition, the date on which certain holidays fall can have an impact on our quarterly results. For example, in 2013 our second quarter year-over-year
growth rates in revenue, gross profit, operating income and operating margins were adversely affected by Easter falling in the first quarter instead of the second
quarter, as it did in 2012. Conversely, our second quarter 2014 year-over-year growth rates in revenue, gross profit, operating income and operating margins were
favorably impacted by Easter falling in the second quarter instead of the first quarter, as it did in 2013. Similarly to 2013, in 2016 Easter will fall in the first quarter
instead of the second quarter, and will therefore likely have a positive effect on our first quarter 2016 year-over-year growth rates and a negative effect on our
second quarter 2016 year-over-year growth rates as compared to the same periods in 2015 when Easter fell in the second quarter.
The impact of seasonality can be exaggerated in the short term by the gross bookings growth rate of the business. For example, in periods where our gross
bookings growth rate decelerates, such as the third quarter of 2015, our operating margins typically benefit from relatively less variable advertising expense. In
addition, gross profit growth is typically less impacted in the near term due to the benefit of revenue related to reservations booked in previous quarters.
Employees
As of December 31, 2015 , we employed approximately 15,500 employees, of which approximately 3,200 are based in the United States and
approximately 12,300 are based outside the United States. We also retain independent contractors to support our customer service, website content translation and
system support functions.
We have never had a work stoppage and we consider our relations with our employees to be good. Although we have works councils or employee
representatives in certain countries, our U.S. employees are not represented by a labor union and are not covered by a collective bargaining agreement. Our future
success will depend, in part, on our ability to continue to attract, integrate, retain and motivate highly qualified technical and managerial personnel, for whom
competition is intense. See " Risk Factors - We rely on the performance of highly skilled personnel; and, if we are unable to retain or motivate key personnel or
hire, retain and motivate qualified personnel, our business would be harmed. "
The Priceline Group Websites
We maintain websites with the addresses www.pricelinegroup.com, www.booking.com, www.priceline.com, www.kayak.com, www.agoda.com,
www.rentalcars.com and www.opentable.com, among others. We are not including the information contained on our websites as a part of, or incorporating it by
reference into, this Annual Report on Form 10-K. We make available free of charge through the www.pricelinegroup.com website our Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to
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