Priceline 2015 Annual Report Download - page 34

Our business is exposed to risks associated with processing credit card transactions.
Our results have been negatively impacted by purchases made using fraudulent credit cards. Because we act as the merchant of record in many of our
transactions, including a majority of our priceline.com, agoda.com and rentalcars.com transactions, we may be held liable for accepting fraudulent credit cards on
our websites as well as other payment disputes with our customers. Additionally, we may be held liable for accepting fraudulent credit cards in certain retail
transactions when we do not act as merchant of record. Accordingly, we calculate and record an allowance for the resulting credit card chargebacks. If we are
unable to combat the use of fraudulent credit cards on our websites, our business, results of operations and financial condition could be materially adversely
affected.
In addition, in the event that one of our major travel service providers voluntarily or involuntarily declares bankruptcy, we could experience an increase in
credit card chargebacks from customers with travel reservations with such travel service provider. For example, airlines that participate in our services and declare
bankruptcy or cease operations may be unable or unwilling to honor tickets sold for their flights. Our policy in such event is to direct customers seeking a refund or
exchange to the airline, and not to provide a remedy ourselves. Because we are the merchant-of-record on sales of Name Your Own Price ® and Express Deals ®
airline tickets to our customers, we could experience a significant increase in demands for refunds or credit card chargebacks from customers, which could
materially adversely affect our results of operations and financial condition. We have in the past experienced an increase in credit card chargebacks from customers
with tickets on airlines that ceased operations. Agoda.com and rentalcars.com process credit card transactions and operate in numerous currencies. Credit card
costs are typically higher for foreign currency transactions and in instances where cancellations occur.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Our corporate headquarters and the headquarters of our priceline.com business are located in Norwalk, Connecticut, United States of America, where we
lease approximately 102,000 square feet of office space. Our Booking.com business is headquartered in Amsterdam, Netherlands, where we lease approximately
258,000 square feet of office space; our agoda.com business has significant support operations in Bangkok, Thailand, where we lease approximately 95,000 square
feet of office space; our KAYAK business is headquartered in Stamford, Connecticut, United States of America, where we lease approximately 18,000 square feet
of office space; our OpenTable business is headquartered in San Francisco, California, United States of America, where we lease approximately 51,000 square feet
of office space; and our rentalcars.com business is headquartered in Manchester, England, where we lease approximately 45,000 square feet of office space. We
lease additional office space to support our operations in various locations around the world, including hosting and data center facilities in the United States, the
United Kingdom, Switzerland, the Netherlands, Germany, Singapore and Hong Kong and sales and support facilities in numerous locations. We do not own any
real estate as of December 31, 2015 .
We believe that our existing facilities are adequate to meet our current requirements, and that suitable additional or substitute space will be available as
needed to accommodate any further expansion of corporate operations.
31