Priceline 2015 Annual Report Download - page 65

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Personnel
Year Ended December 31,
(in thousands)
2014
2013
Change
Personnel $ 950,191
$ 698,692
36.0%
% of Total Gross Profit 12.5%
12.2%
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
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%
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.
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