Item 15. Exhibits and Financial Statement Schedules.

(a) List of Documents Filed as a Part of this Annual Report on Form 10-K:

The following Consolidated Financial Statements of the Company and the report of our independent registered public accounting firm are filed as part of this Annual Report on Form 10-K: Consolidated Balance Sheets as of December 31, 2016 and 2015; Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Stockholders' Equity and Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014; Notes to the Consolidated Financial Statements; and Report of Independent Registered Public Accounting Firm.

All financial statement schedules have been omitted because they are not applicable, not material or the required information is shown in the Consolidated Financial Statements or the notes thereto.

(b) Exhibits

In reviewing the agreements included as exhibits to this Annual Report on Form 10-K, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. Some agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

•	should not be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

•	may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

•	may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and

•	were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Annual Report on Form 10‑K and the Company's other public filings, which are available without charge through the SEC's website at http://www.sec.gov.

Exhibit Number	Description
3.1(a)	Restated Certificate of Incorporation of the Registrant.
3.2(b)	Amended and Restated By-Laws of the Registrant.
4.1	Reference is hereby made to Exhibits 3.1 and 3.2.
4.2(c)	Specimen Certificate for Registrant's Common Stock.
4.3(d)	Indenture, dated as of March 12, 2012, between the Registrant and American Stock Transfer & Trust Company, LLC as Trustee.
4.4(e)	Indenture, dated as of June 4, 2013, between the Registrant and American Stock Transfer & Trust Company, LLC as Trustee.
4.5(f)	Indenture, dated as of August 20, 2014, between the Registrant and American Stock Transfer & Trust Company, LLC as Trustee.
4.6(g)	Indenture for the 2.375% Senior Notes due 2024, 1.800% Senior Notes due 2027, 3.650% Senior Notes due 2025, 2.15% Senior Notes due 2022 and 3.600% Senior Notes due 2026, between the Registrant and Deutsche Bank Trust Company Americas, as Trustee.
4.7(h)	Form of 2.375% Senior Note due 2024.
4.8(i)	Officers' Certificate, dated September 23, 2014, for the 2.375% Senior Notes due 2024.
4.9(j)	Form of 1.800% Senior Note due 2027.
4.10(k)	Officers' Certificate, dated March 3, 2015, for the 1.800% Senior Notes due 2027.
4.11(l)	Form of 3.650% Senior Note due 2025.
4.12(m)	Officers' Certificate, dated March 13, 2015, for the 3.650% Senior Notes due 2025.
4.13(g)	Form of 2.15% Senior Note due 2022.
4.14(g)	Officers' Certificate, dated November 25, 2015, for the 2.15% Senior Notes due 2022.
4.15(n)	Form of 3.600% Senior Note due 2026.
4.16(n)	Officers' Certificate, dated May 23, 2016, for the 3.600% Senior Notes due 2026.
10.1(o)+	priceline.com Incorporated 1999 Omnibus Plan (As Amended and Restated Effective June 6, 2013).
10.2(p)+	Form of Restricted Stock Unit Award Agreement for Employees in the Netherlands under the 1999 Omnibus Plan.
10.3(q)+	Form of Restricted Stock Unit Agreement for awards under the 1999 Omnibus Plan to non-employee directors.
10.4(r)+	2014 Form of Performance Share Unit Agreement under the 1999 Omnibus Plan.
10.5(s)+	2015 Form of Performance Share Unit Agreement under the 1999 Omnibus Plan.
10.6(t)+	2016 Form of Performance Share Unit Agreement under the 1999 Omnibus Plan.
10.7(u)+	Amended and Restated KAYAK Software Corporation 2012 Equity Incentive Plan.
10.8(v)+	OpenTable, Inc. Amended and Restated 2009 Equity Incentive Award Plan.
10.9(w)+	Buuteeq, Inc. Amended and Restated 2010 Stock Plan.
10.10(x)+	Amended and Restated Rocket Travel, Inc. 2012 Stock Incentive Plan.
10.11(x)+	The Priceline Group Inc. Amended and Restated Annual Bonus Plan.
10.12(y)+	Form of Non-Competition and Non-Solicitation Agreement.
10.13(z)+	Transition Agreement dated November 7, 2013 by and between the Registrant and Jeffery H. Boyd.

Exhibit Number	Description
10.14(t)+	Second Amended and Restated Employment Agreement dated March 5, 2015 by and between the Registrant, Booking.com Holding B.V. and Darren R. Huston.
10.15(z)+	Amended and Restated Non-Competition and Non-Solicitation Agreement dated November 7, 2013 by and between the Registrant and Darren R. Huston.
10.16(aa)+	Indemnification Agreement, dated September 12, 2011 by and between the Registrant and Darren R. Huston.
10.17(bb)+	Letter agreement, dated October 19, 2005 by and between the Registrant and Daniel J. Finnegan.
10.18(cc)+	Letter amendment, dated December 16, 2008, to letter agreement, dated October 19, 2005 by and between the Registrant and Daniel J. Finnegan.
10.19(dd)+	Second Amended and Restated Employment Agreement, dated April 21, 2015 by and between the Registrant and Peter J. Millones.
10.20(ee)+	Amended and Restated Employment contract, dated May 19, 2016 by and between Booking.com Holding B.V. and Gillian Tans.
10.21(ff)+	Separation Letter, dated April 27, 2016 by and between the Registrant and Darren R. Huston.
10.22(ee)+	Employment Letter Agreement, dated May 19, 2016 by and between the Registrant and Jeffery H. Boyd.
10.23(gg)+	Employment Agreement, dated December 15, 2016 by and between the Registrant and Glenn D. Fogel.
10.24(gg)+	Non-Competition and Non-Solicitation Agreement, dated December 15, 2016 by and between the Registrant and Glenn D. Fogel.
10.25(gg)+	Employee Confidentiality and Assignment Agreement, dated December 15, 2016 by and between the Registrant and Glenn D. Fogel.
10.26(gg)+	Letter Agreement, dated December 15, 2016 by and between the Registrant and Jeffery H. Boyd.
10.27(hh)	Credit Agreement, dated as of June 19, 2015, among the Registrant, the lenders from time to time party thereto, and Bank of America, N.A. as Administrative Agent.
12.1	Statement of Ratio of Earnings to Fixed Charges.
21	List of Subsidiaries.
23.1	Consent of Deloitte & Touche LLP.
24.1	Power of Attorney (included in the Signature Page).
31.1	Certification of Glenn D. Fogel, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Daniel J. Finnegan, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1(ii)	Certification of Glenn D. Fogel, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
32.2(ii)	Certification of Daniel J. Finnegan, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
101	The following financial statements from the Company's Annual Report on Form 10‑K for the year ended December 31, 2016 formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Stockholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.

---

+	Indicates a management contract or compensatory plan or arrangement.

(a)	Previously filed as an exhibit to the Current Report on Form 8-K filed on July 18, 2014 (File No. 0-25581).
(b)	Previously filed as an exhibit to the Current Report on Form 8-K filed on November 9, 2015 (File No. 1-36691).
(c)	Previously filed as an exhibit to Amendment No. 2 to Registration Statement on Form S-1 filed on March 18, 1999 (File No. 333-69657).
(d)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 12, 2012 (File No. 0-25581).
(e)	Previously filed as an exhibit to the Current Report on Form 8-K filed on June 4, 2013 (File No. 0-25581).
(f)	Previously filed as an exhibit to the Current Report on Form 8-K filed on August 20, 2014 (File No. 0-25581).
(g)	Previously filed as an exhibit to the Current Report on Form 8-K filed on November 25, 2015 (File No. 1-36691).
(h)	Previously filed as an exhibit to the Current Report on Form 8-K filed on September 22, 2014 (File No. 0-25581).

(i)	Previously filed as an exhibit to the Current Report on Form 8-K filed on September 26, 2014 (File No. 0-25581).
(j)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 2, 2015 (File No. 1-36691).
(k)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 4, 2015 (File No. 1-36691).
(l)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 12, 2015 (File No. 1-36691).
(m)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 13, 2015 (File No. 1-36691).
(n)	Previously filed as an exhibit to the Current Report on Form 8-K filed on May 23, 2016 (File No. 1-36691).
(o)	Previously filed as an exhibit to the Current Report on Form 8‑K filed on June 6, 2013 (File No. 0-25581).
(p)	Previously filed as an exhibit to the Current Report on Form 8‑K filed on November 8, 2005 (File No. 0-25581).
(q)	Previously filed as an exhibit to the Current Report on Form 8‑K filed on March 9, 2011 (File No. 0-25581).
(r)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 7, 2014 (File No. 0-25581).
(s)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 6, 2015 (File No. 1-36691).
(t)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 10, 2016 (File No. 1-36691).
(u)	Previously filed as an exhibit to the Annual Report on Form 10-K filed for the year ended December 31, 2014 (File No. 1-36691).
(v)	Previously filed as an exhibit to the Quarterly Report on Form 10-Q filed for the quarter ended September 30, 2014 (File No. 1-36691).
(w)	Previously filed as an exhibit to the Registration Statement on Form S-8 filed on June 13, 2014 (File No. 333-196756).
(x)	Previously filed as an exhibit to the Annual Report on Form 10-K filed for the year ended December 31, 2015 (File No. 1-36691).
(y)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 4, 2013 (File No. 0-25581).
(z)	Previously filed as an exhibit to the Current Report on Form 8-K filed on November 8, 2013 (File No. 0-25581).
(aa)	Previously filed as an exhibit to the Quarterly Report on Form 10-Q filed for the quarter ended September 30, 2011 (File No. 0-25581).
(bb)	Previously filed as an exhibit to the Current Report on Form 8-K filed on October 21, 2005 (File No. 0-25581).
(cc)	Previously filed as an exhibit to the Annual Report on Form 10-K filed for the year ended December 31, 2008 (File No. 0-25581).
(dd)	Previously filed as an exhibit to our Current Report on Form 8-K filed on April 24, 2015 (File No. 1-36691).
(ee)	Previously filed as an exhibit to the Current Report on Form 8-K filed on May 20, 2016 (File No. 1-36691).
(ff)	Previously filed as an exhibit to the Current Report on Form 8-K filed on April 28, 2016 (File No. 1-36691).
(gg)	Previously filed as an exhibit to the Current Report on Form 8-K filed on December 16, 2016 (File No. 1-36691).
(hh)	Previously filed as an exhibit to our Current Report on Form 8-K filed on June 24, 2015 (File No. 1-36691).
(ii)	This document is being furnished in accordance with SEC Release Nos. 33‑8212 and 34‑47551.

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	THE PRICELINE GROUP INC.
	By:	/s/ Glenn D. Fogel
		Name:	Glenn D. Fogel
		Title:	Chief Executive Officer and President
		Date:	February 27, 2017

Power of Attorney

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Glenn D. Fogel, Daniel J. Finnegan and Peter J. Millones, and each of them severally, his or her true and lawful attorney-in-fact with power of substitution and resubstitution to sign in his or her name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange Act of 1934 and any rules, regulations and requirements of the Securities and Exchange Commission in connection with this Annual Report on Form 10-K and any and all amendments hereto, as fully and for all intents and purposes as he or she might do or could do in person, and hereby ratifies and confirms all said attorneys-in-fact and agents, each acting alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature		Title		Date
/s/ Glenn D. Fogel		Director, Chief Executive Officer and President		February 27, 2017
Glenn D. Fogel
/s/ Jeffery H. Boyd		Director, Executive Chairman of the Board		February 27, 2017
Jeffery H. Boyd
/s/ Daniel J. Finnegan		Chief Financial Officer and Chief Accounting		February 27, 2017
Daniel J. Finnegan		Officer (Principal Financial Officer and Principal Accounting Officer)
/s/ Timothy M. Armstrong		Director		February 27, 2017
Timothy M. Armstrong
/s/ Jan L. Docter		Director		February 27, 2017
Jan L. Docter
/s/ Jeffrey E. Epstein		Director		February 27, 2017
Jeffrey E. Epstein
/s/ James M. Guyette		Director		February 27, 2017
James M. Guyette
/s/ Charles H. Noski		Director		February 27, 2017
Charles H. Noski
/s/ Nancy B. Peretsman		Director		February 27, 2017
Nancy B. Peretsman
/s/ Thomas E. Rothman		Director		February 27, 2017
Thomas E. Rothman
/s/ Craig W. Rydin		Director		February 27, 2017
Craig W. Rydin
/s/ Lynn M. Vojvodich		Director		February 27, 2017
Lynn M. Vojvodich

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page No.
Report of Independent Registered Public Accounting Firm	69
Consolidated Balance Sheets as of December 31, 2016 and 2015	70
Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014	71
Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014	72
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2016, 2015 and 2014	73
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014	74
Notes to Consolidated Financial Statements	75

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

The Priceline Group Inc.

Norwalk, Connecticut

We have audited the accompanying consolidated balance sheets of The Priceline Group Inc. and subsidiaries (the "Company") as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income, changes in stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2016. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of The Priceline Group Inc. and subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2016, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2017 expressed an unqualified opinion on the Company's internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Stamford, Connecticut

February 27, 2017

The Priceline Group Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

		December 31,
		2016				2015
ASSETS
Current assets:
Cash and cash equivalents		$	2,081,075			$	1,477,265
Short-term investments		2,218,880				1,171,246
Accounts receivable, net of allowance for doubtful accounts of $25,565 and $15,014, respectively		860,115				645,169
Prepaid expenses and other current assets		241,449				259,557
Total current assets		5,401,519				3,553,237
Property and equipment, net		347,017				274,786
Intangible assets, net		1,993,885				2,167,533
Goodwill		2,396,906				3,375,000
Long-term investments		9,591,067				7,931,363
Other assets		108,579				118,656
Total assets		$	19,838,973			$	17,420,575
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	419,108			$	322,842
Accrued expenses and other current liabilities		857,467				681,587
Deferred merchant bookings		614,361				434,881
Convertible debt		967,734				—
Total current liabilities		2,858,670				1,439,310
Deferred income taxes		822,334				892,576
Other long-term liabilities		138,767				134,777
Long-term debt		6,170,522				6,158,443
Total liabilities		9,990,293				8,625,106
Commitments and Contingencies (See Note 14)
Convertible debt		28,538				—
Stockholders' equity:
Common stock, $0.008 par value, authorized 1,000,000,000 shares, 62,379,247 and 62,039,516 shares issued, respectively		485				482
Treasury stock, 13,190,929 and 12,427,945 shares, respectively		(6,855,164		)		(5,826,640		)
Additional paid-in capital		5,482,653				5,184,910
Retained earnings		11,326,852				9,191,865
Accumulated other comprehensive income (loss)		(134,684		)		244,852
Total stockholders' equity		9,820,142				8,795,469
Total liabilities and stockholders' equity		$	19,838,973			$	17,420,575

See Notes to Consolidated Financial Statements.

The Priceline Group Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

		Year Ended December 31,
		2016				2015				2014
Agency revenues		$	7,982,116			$	6,527,898			$	5,845,802
Merchant revenues		2,048,005				2,082,973				2,186,054
Advertising and other revenues		712,885				613,116				410,115
Total revenues		10,743,006				9,223,987				8,441,971
Cost of revenues		428,314				632,180				857,841
Gross profit		10,314,692				8,591,807				7,584,130
Operating expenses:
Performance advertising		3,479,287				2,738,218				2,334,453
Brand advertising		295,698				273,704				257,077
Sales and marketing		435,225				353,221				310,910
Personnel, including stock-based compensation of $249,574, $247,395, and $186,425, respectively		1,350,032				1,166,226				950,191
General and administrative		455,909				415,420				352,869
Information technology		142,393				113,617				97,498
Depreciation and amortization		309,135				272,494				207,820
Impairment of goodwill		940,700				—				—
Total operating expenses		7,408,379				5,332,900				4,510,818
Operating income		2,906,313				3,258,907				3,073,312
Other income (expense):
Interest income		94,946				55,729				13,933
Interest expense		(207,900		)		(160,229		)		(88,353		)
Foreign currency transactions and other		(16,913		)		(26,087		)		(9,444		)
Impairment of cost-method investments		(63,208		)		—				—
Total other expense		(193,075		)		(130,587		)		(83,864		)
Earnings before income taxes		2,713,238				3,128,320				2,989,448
Income tax expense		578,251				576,960				567,695
Net income		$	2,134,987			$	2,551,360			$	2,421,753
Net income applicable to common stockholders per basic common share		$	43.14			$	50.09			$	46.30
Weighted-average number of basic common shares outstanding		49,491				50,940				52,301
Net income applicable to common stockholders per diluted common share		$	42.65			$	49.45			$	45.67
Weighted-average number of diluted common shares outstanding		50,063				51,593				53,023

See Notes to Consolidated Financial Statements.

The Priceline Group Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

		Year Ended December 31,
		2016				2015				2014
Net income		$	2,134,987			$	2,551,360			$	2,421,753
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments(1)		(93,984		)		(114,505		)		(187,356		)
Unrealized gain (loss) on marketable securities(2)		(285,552		)		619,259				(157,275		)
Comprehensive income		$	1,755,451			$	3,056,114			$	2,077,122

(1) Foreign currency translation adjustments includes a tax charge of $34,268, $60,418 and $55,597 for the years ended December 31, 2016, 2015 and 2014, respectively, associated with net investment hedges (See Note 12). The remaining balance in foreign currency translation adjustments excludes income taxes as a result of the Company's intention to indefinitely reinvest the earnings of its international subsidiaries outside of the United States (See Note 13).

(2) Net of a tax charge of $15,313 and $1,551 for the years ended December 31, 2016 and 2015, respectively, and net of a tax benefit of $7,621 for the year ended December 31, 2014.

See Notes to Consolidated Financial Statements.

The Priceline Group Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 and 2014

(In thousands)

	Common Stock							Treasury Stock							Additional Paid-in Capital				Retained Earnings				Accumulated Other Comprehensive Income (Loss)				Total
	Shares			Amount				Shares			Amount
Balance, December 31, 2013	61,265			$	476			(9,257	)		$	(1,987,207	)		$	4,592,979			$	4,218,752			$	84,729			$	6,909,729
Net income	—			—				—			—				—				2,421,753				—				2,421,753
Foreign currency translation adjustment, net of tax charge of $55,597	—			—				—			—				—				—				(187,356		)		(187,356		)
Unrealized gain (loss) on marketable securities, net of tax benefit of $7,621	—			—				—			—				—				—				(157,275		)		(157,275		)
Reclassification adjustment for convertible debt	—			—				—			—				8,204				—				—				8,204
Exercise of stock options and vesting of restricted stock units and performance share units	256			2				—			—				16,389				—				—				16,391
Repurchase of common stock	—			—				(631	)		(750,378		)		—				—				—				(750,378		)
Stock-based compensation and other stock-based payments	—			—				—			—				189,292				—				—				189,292
Conversion of debt	300			2				—			—				(1,658		)		—				—				(1,656		)
Issuance of senior convertible notes	—			—				—			—				80,873				—				—				80,873
Stock options and restricted stock units assumed in acquisitions	—			—				—			—				13,751				—				—				13,751
Excess tax benefits on stock-based awards and other equity deductions	—			—				—			—				23,366				—				—				23,366
Balance, December 31, 2014	61,821			$	480			(9,888	)		$	(2,737,585	)		$	4,923,196			$	6,640,505			$	(259,902	)		$	8,566,694
Net income	—			—				—			—				—				2,551,360				—				2,551,360
Foreign currency translation adjustment, net of tax charge of $60,418	—			—				—			—				—				—				(114,505		)		(114,505		)
Unrealized gain (loss) on marketable securities, net of tax charge of $1,551	—			—				—			—				—				—				619,259				619,259
Reclassification adjustment for convertible debt	—			—				—			—				329				—				—				329
Exercise of stock options and vesting of restricted stock units and performance share units	219			2				—			—				20,849				—				—				20,851
Repurchase of common stock	—			—				(2,540	)		(3,089,055		)		—				—				—				(3,089,055		)
Stock-based compensation and other stock-based payments	—			—				—			—				249,133				—				—				249,133
Conversion of debt	—			—				—			—				(110,105		)		—				—				(110,105		)
Excess tax benefits on stock-based awards and other equity deductions	—			—				—			—				101,508				—				—				101,508
Balance, December 31, 2015	62,040			$	482			(12,428	)		$	(5,826,640	)		$	5,184,910			$	9,191,865			$	244,852			$	8,795,469
Net income	—			—				—			—				—				2,134,987				—				2,134,987
Foreign currency translation adjustment, net of tax charge of $34,268	—			—				—			—				—				—				(93,984		)		(93,984		)
Unrealized gain (loss) on marketable securities, net of tax charge of $15,313	—			—				—			—				—				—				(285,552		)		(285,552		)
Reclassification adjustment for convertible debt	—			—				—			—				(28,538		)		—				—				(28,538		)
Exercise of stock options and vesting of restricted stock units and performance share units	339			3				—			—				15,569				—				—				15,572
Repurchase of common stock	—			—				(763	)		(1,028,524		)		—				—				—				(1,028,524		)
Stock-based compensation and other stock-based payments	—			—				—			—				249,726				—				—				249,726
Excess tax benefits on stock-based awards and other equity deductions	—			—				—			—				60,986				—				—				60,986
Balance, December 31, 2016	62,379			$	485			(13,191	)		$	(6,855,164	)		$	5,482,653			$	11,326,852			$	(134,684	)		$	9,820,142

See Notes to Consolidated Financial Statements.

The Priceline Group Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

		Year Ended December 31,
		2016				2015				2014
OPERATING ACTIVITIES:
Net income		$	2,134,987			$	2,551,360			$	2,421,753
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		140,059				101,517				78,241
Amortization		169,076				170,977				129,579
Provision for uncollectible accounts, net		46,241				24,324				22,990
Deferred income tax expense (benefit)		(111,905		)		(61,335		)		31,707
Stock-based compensation expense and other stock-based payments		249,726				249,133				189,292
Amortization of debt issuance costs		7,758				7,578				5,229
Amortization of debt discount		68,974				66,687				54,731
Loss on early extinguishment of debt		—				3				6,270
Impairment of goodwill		940,700				—				—
Impairment of cost-method investments		63,208				—				—
Changes in assets and liabilities:
Accounts receivable		(284,221		)		(68,694		)		(182,209		)
Prepaid expenses and other current assets		5,495				(81,611		)		(48,932		)
Accounts payable, accrued expenses and other current liabilities		516,356				166,201				203,870
Other		(21,757		)		(23,909		)		1,876
Net cash provided by operating activities		3,924,697				3,102,231				2,914,397
INVESTING ACTIVITIES:
Purchase of investments		(6,741,202		)		(8,669,690		)		(10,552,214		)
Proceeds from sale of investments		3,684,103				5,084,238				10,902,500
Additions to property and equipment		(219,889		)		(173,915		)		(131,504		)
Acquisitions and other investments, net of cash acquired		(7,813		)		(140,338		)		(2,496,366		)
Acquisition of land use rights		(48,494		)		—				—
Proceeds from foreign currency contracts		—				453,818				14,354
Payments on foreign currency contracts		—				(448,640		)		(94,661		)
Net cash used in investing activities		(3,333,295		)		(3,894,527		)		(2,357,891		)
FINANCING ACTIVITIES:
Proceeds from revolving credit facility		—				225,000				995,000
Payments related to revolving credit facility		—				(225,000		)		(995,000		)
Proceeds from the issuance of long-term debt		994,705				2,399,034				2,264,753
Payment of debt issuance costs - revolving credit facility		—				(4,005		)		—
Payments related to conversion of senior notes		—				(147,629		)		(125,136		)
Repurchase of common stock		(1,013,526		)		(3,089,055		)		(750,378		)
Payments of contingent consideration		—				(10,700		)		—
Proceeds from exercise of stock options		15,572				20,851				16,389
Excess tax benefits on stock-based awards and other equity deductions		60,986				101,508				23,366
Net cash provided by (used in) financing activities		57,737				(729,996		)		1,428,994
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(45,203		)		(149,131		)		(136,476		)
Net increase (decrease) in cash, cash equivalents and restricted cash		603,936				(1,671,423		)		1,849,024
Cash, cash equivalents and restricted cash, beginning of period		1,478,071				3,149,494				1,300,470
Cash, cash equivalents and restricted cash, end of period		$	2,082,007			$	1,478,071			$	3,149,494
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for income taxes		$	636,550			$	534,105			$	491,530
Cash paid during the period for interest		$	125,912			$	54,299			$	16,950
Non-cash investing activity for contingent consideration		$	—			$	9,170			$	10,700
Non-cash financing activity for acquisitions		$	—			$	—			$	13,751

See Notes to Consolidated Financial Statements.

The Priceline Group Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	BUSINESS DESCRIPTION

The Priceline Group Inc. ("The Priceline Group" or the "Company") helps people experience the world by providing consumers, travel service providers and restaurants with leading travel and restaurant online reservation and related services. Through its online travel companies ("OTCs"), the Company connects consumers wishing to make travel reservations with providers of travel services around the world. The Company is the leader in the worldwide online accommodation reservation market based on room nights booked. The Company offers consumers a broad array of accommodation reservations (including hotels, bed and breakfasts, hostels, apartments, vacation rentals and other properties) through its Booking.com, priceline.com and agoda.com brands. The Company's priceline.com brand also offers consumers reservations for rental cars, airline tickets, vacation packages and cruises. The Company offers rental car reservations worldwide through Rentalcars.com. The Company also allows consumers to easily compare airline ticket, hotel reservation and rental car reservation information from hundreds of travel websites at once through KAYAK. The Company provides restaurants with reservation management services and consumers with the ability to make restaurant reservations at participating restaurants through OpenTable, a leading provider of online restaurant reservations.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation — The Company's Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries, including OpenTable, Inc. ("OpenTable") since its acquisition in July 2014. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results may differ significantly from those estimates. The estimates underlying the Company's Consolidated Financial Statements relate to, among other things, stock-based compensation, the allowance for doubtful accounts, the valuation of goodwill, long-lived assets and intangibles, income taxes, the accrual for loyalty programs and the accrual for travel transaction taxes.

Reclassifications — Certain amounts from prior periods have been reclassified to conform to the current year presentation.

Fair Value of Financial Instruments — The Company's financial instruments, including cash, restricted cash, accounts receivable, accounts payable, accrued expenses and deferred merchant bookings, are carried at cost which approximates their fair value because of the short-term nature of these financial instruments. See Notes 4, 5 and 10 for information on fair value for investments, derivatives, and the Company's outstanding Senior Notes.

Cash and Cash Equivalents — Cash and cash equivalents consists primarily of cash and highly liquid investment grade securities with an original maturity of three months or less. Cash equivalents are recognized based on settlement date.

Restricted Cash — Restricted cash at December 31, 2016 and 2015 collateralizes office leases. In 2016, the Company changed the presentation of restricted cash on the balance sheet to include it in "Prepaid expenses and other current assets." The Consolidated Balance Sheet as of December 31, 2015 was adjusted to conform with this change.

The following table shows a reconciliation of cash, cash equivalent and restricted cash reported in the Consolidated Balance Sheets to the total amount shown in the Consolidated Statements of Cash Flows:

		December 31,
		2016				2015				2014
As included in the Consolidated Balance Sheets:
Cash and cash equivalents		$	2,081,075			$	1,477,265			$	3,148,651
Restricted cash		932				806				843
Total cash, cash equivalents and restricted cash as shown in the Consolidated Statements of Cash Flows		$	2,082,007			$	1,478,071			$	3,149,494

Investments — The Company has classified its investments in debt securities and equity securities with readily determinable fair value as available-for-sale securities. These securities are recognized based on trade date and carried at estimated fair value with the aggregate unrealized gains and losses related to these investments, net of taxes, reflected as a part of "Accumulated other comprehensive income (loss)" within stockholders' equity.

The fair value of the investments is based on the specific quoted market price of the securities or comparable securities at the balance sheet dates. Investments in debt securities are considered to be impaired when a decline in fair value is judged to be other than temporary because the Company either intends to sell or it is more-likely-than not that it will have to sell the impaired security before recovery. Once a decline in fair value is determined to be other than temporary, an impairment charge is recorded and a new cost basis in the investment is established. If the Company does not intend to sell the debt security, but it is probable that the Company will not collect all amounts due, then only the impairment due to the credit risk would be recognized in earnings and the remaining amount of the impairment would be recognized in "Accumulated other comprehensive income (loss)" within stockholders' equity. Marketable securities are presented as current assets on the Company's Consolidated Balance Sheets if they are available to meet short-term working capital needs of the Company. Marketable debt securities not held to meet short-term working capital needs of the Company are classified as short-term or long-term investments on the Company's Consolidated Balance Sheets based on the maturity date of the debt security. See Notes 4 and 5 for further detail of investments.

Equity investments without readily determinable fair values, in companies over which the Company does not have the ability to exercise significant influence, are accounted for using the cost method of accounting and classified within "Other assets" in the Consolidated Balance Sheets. Under the cost method, investments are carried at cost and are adjusted to fair value only for other-than-temporary declines in fair value.

Property and Equipment — Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets or, when applicable, the life of the lease related to leasehold improvements, whichever is shorter.

Building Construction-in-progress — Building construction-in-progress is associated with the construction of an office building in the Netherlands and is included in “Property and equipment, net” in the Consolidated Balance Sheet at December 31, 2016. Depreciation of the building and its related components will commence once it is ready for the Company’s use.

Website and Internal-use Software Capitalization — Certain direct development costs associated with website and internal-use software are capitalized and include external direct costs of services and payroll costs for employees devoting time to the software projects principally related to website and mobile app development, including support systems, software coding, designing system interfaces and installation and testing of the software. These costs are recorded as property and equipment and are generally amortized over a period of two to five years beginning when the asset is substantially ready for use. Costs incurred for enhancements that are expected to result in additional features or functionality are capitalized and amortized over the estimated useful life of the enhancements. Costs incurred during the preliminary project stage, as well as maintenance and training costs, are expensed as incurred. Additions to capitalized costs during the years ended December 31, 2016, 2015 and 2014 were $54.2 million, $44.2 million and $20.9 million, respectively. Costs capitalized in 2016 were higher than in 2015 primarily related to activity for agoda.com. Costs for 2015 reflect a full year of activity for OpenTable compared to a partial year's activity in 2014 and higher development costs for priceline.com.

Land use rights — Land use rights represent prepayments for the lease of land where the Company is constructing an office building in the Netherlands. The land use rights are recorded as rent expense in "General and administrative" expense in the Consolidated Statement of Operations on a straight-line basis over the lease period. At December 31, 2016, the Company had approximately $45.3 million associated with land use rights recorded in “Other assets” in the Consolidated Balance Sheet. See Note 14 for further details.

Goodwill — The Company accounts for acquired businesses using the purchase method of accounting which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. The Company's Consolidated Financial Statements reflect an acquired business starting at the date of the acquisition.

Goodwill is not subject to amortization and is reviewed at least annually for impairment, or earlier if an event occurs or circumstances change and there is an indication of impairment. The Company tests goodwill at a reporting unit level. The fair value of the reporting unit is compared to its carrying value, including goodwill. Fair values are determined using a

combination of standard valuation techniques, including an income approach (discounted cash flows) and market approaches (EBITDA multiples of comparable publicly-traded companies and precedent transactions) and based on market participant assumptions. An impairment is recorded to the extent that the implied fair value of goodwill is less than the carrying value of goodwill. See Note 9 for further information.

Impairment of Long-Lived Assets and Intangible Assets — The Company reviews long-lived assets and amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The assessment of possible impairment is based upon the Company's ability to recover the carrying value of the assets from the estimated undiscounted future net cash flows, before interest and taxes, of the related operations. The amount of impairment loss, if any, is measured as the excess of the carrying value of the asset over the present value of estimated future cash flows, using a discount rate commensurate with the risks involved and based on assumptions representative of market participants.

Agency Revenues

Agency revenues are derived from travel-related transactions where the Company does not facilitate payments for the travel services provided. Agency revenues consist primarily of accommodation reservation commissions, as well as certain global distribution system ("GDS") reservation booking fees and travel insurance fees, and are reported at the net amounts received, without any associated cost of revenue. Such revenues are primarily recognized by the Company when the customer's travel is completed.

Merchant Revenues

Merchant revenues are derived from services where the Company facilitates payments for the travel services provided. Name Your Own Price® travel reservation services are presented in the income statement on a gross basis so merchant revenue and costs of revenues include the reservation price to the customer and the cost charged by the service provider, respectively. For all other merchant transactions, the Company presents merchant revenue on a net basis in the income statement.

Merchant revenue also includes ancillary fees, including damage excess waiver and travel insurance and certain GDS reservation booking fees, customer processing fees associated with priceline.com's opaque reservation services and merchant retail accommodation reservation services at priceline.com and agoda.com and are generally recognized by the Company when the customer completes his/her travel.

Merchant Retail Services: Merchant revenues for the Company's merchant retail services are derived from transactions where customers book accommodation reservations or rental car reservations from travel service providers at disclosed rates which are subject to contractual arrangements. The Company charges the customer at the time of booking and any amounts owed to the travel service provider along with the Company's deferred revenue are included in deferred merchant bookings. Reservations are generally refundable upon cancellation, subject to cancellation penalties in certain cases. Merchant revenue and the cost charged by travel service provider for priceline.com, agoda.com and Rentalcars.com are recognized when the customer completes their travel. Revenue for Booking.com's merchant transactions is comprised of accommodation reservation commissions which are recognized when the customer completes their travel.

Merchant Opaque Services: The Company describes its priceline.com Name Your Own Price® and Express Deals® travel services as "opaque" because certain elements of the service, including the identity of the travel service provider, are not disclosed to the consumer prior to making a reservation. The Name Your Own Price® service connects consumers that are willing to accept a level of flexibility regarding their travel itinerary with travel service providers that are willing to accept a lower price in order to sell their excess capacity without disrupting their existing distribution channels or retail pricing structures. The Company's Name Your Own Price® services use a pricing system that allows consumers to "bid" the price they are prepared to pay when submitting an offer for a particular travel service. The Company accesses databases in which participating travel service providers file secure discounted rates, not generally available to the public, to determine whether it can fulfill the consumer's offer. The Company selects the travel service provider and determines the price it will accept from the consumer. Express Deals® allows consumers to select hotel, rental car and airline ticket reservations with price and certain information regarding amenities disclosed prior to making the reservation. The Company recognizes revenues and costs for these services when it confirms the customer's non-refundable offer. In circumstances where the Company makes certain customer concessions, the Company accrues for such estimated losses.

Pursuant to the terms of the Company's retail and opaque merchant services, its travel service providers are permitted to bill the Company for the underlying cost of the service during a specified period of time. In the event that the Company is not billed by the travel provider within the specified time period, the Company reduces its cost by the unbilled amounts.

Advertising and Other Revenues

Advertising and other revenues are primarily earned by KAYAK and OpenTable and to a lesser extent by priceline.com for advertising placements on its website and Booking.com's BookingSuite branded accommodation marketing and business analytics services. KAYAK earns advertising revenue primarily by sending referrals to OTCs and travel service providers and from advertising placements on its websites and mobile apps. Revenue related to referrals is earned when a customer clicks on a referral placement or upon completion of the travel. Revenue for advertising placements is earned based upon when a customer clicks on an advertisement or when KAYAK displays an advertisement. OpenTable earns reservation fees when diners are seated through its online restaurant reservation service and subscription fees for restaurant management services on a straight-line basis over the contractual period that the service is provided.

Cost of Revenues

Cost of revenues consists primarily of the cost paid to travel service providers for priceline.com's Name Your Own Price® and vacation package reservation services, net of applicable taxes and charges, and fees paid to third parties by KAYAK and priceline.com to return travel itinerary information for consumer search queries.

Loyalty Programs

The Company provides various loyalty programs. Participating customers earn loyalty points on current transactions that can be redeemed for future qualifying transactions. When the points are earned, the Company estimates the amount of loyalty points expected to be redeemed and records a reduction in revenue. At December 31, 2016 and 2015, a liability of $84.4 million and $71.1 million, respectively, for loyalty points programs was included in "Accrued expenses and other current liabilities" in the Consolidated Balance Sheets.

Tax Recovery Charge, Occupancy Taxes and State and Local Taxes

The Company provides an online travel service to facilitate online travel purchases by consumers from travel service providers, including accommodation, rental car and airline ticket reservations, and sometimes as part of a vacation package reservation. For merchant transactions, the Company charges the consumer an amount intended to cover the taxes that the Company anticipates the travel service provider will owe and remit to the local taxing authorities ("tax recovery charge"). Tax rate information for calculating the tax recovery charge is provided to the Company by the travel service providers.

In certain taxing jurisdictions, the Company is required by statute or court order to collect and remit certain taxes (local occupancy tax, general excise and/or sales tax) imposed upon its margin and/or service fee. The tax recovery charge and occupancy and other related taxes collected from customers and remitted to those jurisdictions are reported on a net basis in the Consolidated Statement of Operations. Except in those jurisdictions, the Company does not charge the customer or remit occupancy or other related taxes based on its margin or service fee (see Note 14).

Performance Advertising — Advertising expenses classified as performance advertising are generally managed by the Company by monitoring return on investment. These expenses primarily consist of: (1) search engine keyword purchases; (2) referrals from meta-search and travel research websites; (3) affiliate programs; and (4) other performance-based advertisements. Performance advertising expense is recognized as incurred. Included in "Accrued expenses and other current liabilities" in the Consolidated Balance Sheets are accrued performance advertising liabilities of $267.5 million and $188.2 million at December 31, 2016 and 2015, respectively.

Brand Advertising — Advertising expenses classified as brand advertising are generally managed by the Company to a targeted spending level to drive brand awareness. This includes both online and offline activities such as online videos (for example, on YouTube and Facebook), television advertising, billboards and subway and bus advertisements. Brand advertising expense is generally recognized as incurred with the exception of advertising production costs, which are expensed the first time the advertisement is displayed or broadcast.

In 2016, the Company changed the presentation of advertising expenses from "Advertising - Online" and "Advertising - Offline" to "Performance advertising" and "Brand advertising" in the Consolidated Statements of Operations. This change in presentation had no impact on total advertising expenses, operating income or net income. As a result, for the years ended December 31, 2015 and 2014, brand advertising in online channels of $59.0 million and $25.8 million , respectively, is now recorded in "Brand advertising" rather than "Advertising - Online". The Company believes its new presentation is helpful because it separates performance advertising that is typically managed on a return on investment basis from brand advertising

that is generally spent to build brand awareness and managed to a targeted spending level. See above for the descriptions and accounting policies of performance advertising and brand advertising.

Sales and Marketing — Sales and marketing expenses consist primarily of (1) credit card and other payment processing fees associated with merchant transactions; (2) fees paid to third parties that provide call center, website content translations and other services; (3) customer relations costs; (4) public relations costs; (5) provisions for bad debt, primarily related to agency accommodation commission receivables; and (6) provisions for customer chargebacks.

Personnel — Personnel expenses consist of compensation to the Company's personnel, including salaries, stock-based compensation, bonuses, payroll taxes and employee health benefits. Included in "Accrued expenses and other current liabilities" in the Consolidated Balance Sheets are accrued compensation liabilities of $242.6 million and $186.1 million at December 31, 2016 and 2015, respectively.

Stock-Based Compensation — Stock-based compensation is recognized in the financial statements based upon fair value. The fair value of performance share units and restricted stock units is determined based on the number of units granted and the quoted price of the Company's common stock as of the grant date or acquisition date. Stock-based compensation related to performance share units reflects the estimated probable outcome at the end of the performance period. The fair value of employee stock options assumed in acquisitions was determined using the Black Scholes model and the market value of the Company's common stock at the respective acquisition dates. Fair value is recognized as expense on a straight line basis, net of estimated forfeitures, over the employee requisite service period (see "Recent Accounting Pronouncements" described later in this footnote for accounting changes that are effective January 1, 2017).

The benefits of tax deductions in excess of recognized compensation costs are reported as a credit to additional paid-in capital and as financing cash flows, but only when such excess tax benefits are realized by a reduction to current taxes payable. See Note 3 for further information on stock-based awards.

Information Technology — Information technology expenses consist primarily of: (1) software license and system maintenance fees; (2) data communications and other expenses associated with operating our services; (3) outsourced data center costs; and (4) payments to outside consultants.

Income Taxes — The Company accounts for income taxes under the asset and liability method. The Company records the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the Consolidated Balance Sheets, as well as operating loss and tax credit carryforwards. Deferred taxes are classified as noncurrent on the balance sheet.

The Company records deferred tax assets to the extent it believes these assets will more likely than not be realized. The Company regularly reviews its deferred tax assets for recoverability considering historical profitability, projected future taxable income, the expected timing of the reversals of existing temporary differences, the carryforward periods available for tax reporting purposes, and tax planning strategies. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the period in which related temporary differences become deductible. In determining the future tax consequences of events that have been recognized in the financial statements or tax returns, significant judgments, estimates, and interpretation of statutes are required.

Deferred taxes are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date of such change.

Income taxes are not accrued for unremitted earnings of international subsidiaries that have been or are intended to be indefinitely reinvested outside of the United States.

The Company recognizes liabilities when it believes that uncertain positions may not be fully sustained upon review by the tax authorities. Liabilities recognized for uncertain tax positions are based on a two step approach for recognition and measurement. First, the Company evaluates the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit based on its technical merits. Secondly, the Company measures the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. Interest and penalties attributable to uncertain tax positions, if any, are recognized as a component of income tax expense. See Note 13 for further details on income taxes.

Segment Reporting — The Company determined that its brands constitute its operating segments. The Company's Booking.com brand represents a substantial majority of gross profit and net income. Based on similar economic characteristics and other similar operating factors, the Company has aggregated the operating segments into one reportable segment. For geographic information, see Note 16.

Foreign Currency Translation — The functional currency of the Company's foreign subsidiaries is generally their respective local currency. Assets and liabilities are translated into U.S. Dollars at the rate of exchange existing at the balance sheet date. Income statement amounts are translated at average monthly exchange rates applicable for the period. Translation gains and losses are included as a component of "Accumulated other comprehensive income (loss)" in the Company's Consolidated Balance Sheets. Foreign currency transaction gains and losses are included in "Foreign currency transactions and other" in the Company's Consolidated Statements of Operations.

In November 2015, the Company issued Senior Notes due November 25, 2022 for an aggregate principal amount of 750 million Euros. In March 2015, the Company issued Senior Notes due March 3, 2027 for an aggregate principal amount of 1.0 billion Euros. In September 2014, the Company issued Senior Notes due September 23, 2024 for an aggregate principal amount of 1.0 billion Euros. The Company designated the carrying value, plus accrued interest, of these Euro-denominated Senior Notes as a hedge of the Company's net investment in Euro functional currency subsidiaries. The foreign currency transaction gains or losses on these liabilities and the foreign currency translation gains or losses from translating the Euro-denominated net assets of these subsidiaries into U.S. Dollars are included as a component of "Accumulated other comprehensive income (loss)" in the Company's Consolidated Balance Sheets (see Notes 10 and 12).

Derivative Financial Instruments — As a result of the Company's international operations, it is exposed to various market risks that may affect its consolidated results of operations, cash flow and financial position. These market risks include, but are not limited to, fluctuations in currency exchange rates. The Company's primary foreign currency exposures are in Euros and British Pound Sterling, in which it conducts a significant portion of its business activities. As a result, the Company faces exposure to adverse movements in currency exchange rates as the financial results of its international operations are translated from local currencies into U.S. Dollars upon consolidation. Additionally, foreign exchange rate fluctuations on transactions denominated in currencies other than the functional currency result in gains and losses that are reflected in income.

The Company may enter into derivative instruments to hedge certain net exposures of nonfunctional currency denominated assets and liabilities and the volatility associated with translating earnings for its international businesses into U.S. Dollars, even though it does not elect to apply hedge accounting or hedge accounting does not apply. Gains and losses resulting from a change in fair value for these derivatives are reflected in income in the period in which the change occurs and are recognized in the Consolidated Statements of Operations in "Foreign currency transactions and other." Cash flows related to these contracts are classified within "Net cash provided by operating activities" on the cash flow statement.

The Company, from time to time, utilizes derivative instruments to hedge the impact of changes in currency exchange rates on the net assets of its foreign subsidiaries. These instruments are designated as net investment hedges. Hedge ineffectiveness is assessed and measured based on changes in forward exchange rates. The Company records gains and losses on these derivative instruments as currency translation adjustments, which offset a portion of the translation adjustments related to the foreign subsidiaries' net assets. Gains and losses are recognized in the Consolidated Balance Sheet in "Accumulated other comprehensive income (loss)" and will be realized upon a partial sale or liquidation of the investment. The Company formally documents all derivatives designated as hedging instruments for accounting purposes, both at hedge inception and on an on-going basis. These net investment hedges expose the Company to liquidity risk as the derivatives have an immediate cash flow impact upon maturity, which is not offset by the translation of the underlying hedged equity. The cash flows from these contracts are classified within "Net cash used in investing activities" on the cash flow statement.

The Company does not use derivative instruments for trading or speculative purposes. The Company recognizes all derivative instruments on the balance sheet at fair value and its derivative instruments are generally short-term in duration. The derivative instruments do not contain leverage features.

The Company is exposed to the risk that counterparties to derivative instruments may fail to meet their contractual obligations. The Company regularly reviews its credit exposure as well as assessing the creditworthiness of its counterparties. See Note 5 for further detail on derivatives.

Recent Accounting Pronouncements

Simplifying the Test for Goodwill Impairment

In January 2017, the Financial Accounting Standards Board ("FASB") issued a new accounting update to simplify the test for goodwill impairment by eliminating Step 2, which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill, which requires a hypothetical purchase price allocation, with the carrying amount of that reporting unit’s goodwill. Under this update, an entity would perform its quantitative annual, or interim, goodwill impairment test using the current Step 1 test and recognize an impairment charge for the excess of the carrying value of a reporting unit over its fair value.

For public business entities, this update is effective for their annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests occurring after January 1, 2017. The accounting update will be applied prospectively. The Company is currently evaluating when it will adopt this update and what the impact upon adoption will be, if any.

Definition of a Business

In January 2017, the FASB issued a new accounting update to clarify the definition of a business and provide additional guidance to assist entities with evaluating whether transactions should be accounted for as asset acquisitions (or disposals) or business combinations (or disposals of a business). Under this update, an entity first determines whether substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this criterion is met, the transaction should be accounted for as an asset acquisition as opposed to a business combination. This distinction is important because the accounting for an asset acquisition significantly differs from the accounting for a business combination. This update eliminates the requirement to evaluate whether a market participant could replace missing elements (e.g. inputs or processes), narrows the definition of outputs and requires that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs.

For public business entities, this update is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. The accounting update will be applied prospectively and early adoption is permitted. The Company expects to early adopt this update in the first quarter of 2017 and does not expect a significant impact to its Consolidated Financial Statements.

Restricted Cash

In November 2016, the FASB issued a new accounting update on the classification and presentation of restricted cash in the statement of cash flows to address the diversity in practice. This accounting update requires entities to show changes in cash, cash equivalents and restricted cash on a combined basis in the statement of cash flows. In addition, this accounting guidance requires a reconciliation of the total cash, cash equivalent and restricted cash in the statement of cash flows to the related captions in the balance sheet if cash, cash equivalents and restricted cash are presented in more than one line item in the balance sheet.

This accounting update is effective for public business entities for fiscal years beginning after December 15, 2018, including those interim periods within those fiscal years. The Company early adopted this accounting update in the fourth quarter of 2016 and applied it retrospectively to all prior periods presented, therefore, the Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014 were adjusted. See the section above on accounting policies related to "Restricted Cash" for the reconciliation of cash, cash equivalent and restricted cash reported in the Consolidated Balance Sheets to the total shown in the Consolidated Statements of Cash Flows.

Intra-entity Transfers of Assets Other Than Inventory

In October 2016, the FASB issued new accounting guidance on income tax accounting associated with intra-entity transfers of assets other than inventory. This accounting update, which is part of the FASB's simplification initiative, is intended to reduce diversity in practice and the complexity of tax accounting, particularly for those transfers involving intellectual property. This new guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs.

For public business entities, this update is effective for annual reporting periods beginning after December 15, 2017. Entities are required to apply this accounting update on a modified retrospective basis with a cumulative-effect adjustment to

retained earnings as of the beginning of the period of adoption. The Company expects to early adopt this update in the first quarter of 2017 and the adoption of this accounting update will have an insignificant impact to the Company's Consolidated Financial Statements.

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued new accounting guidance on the measurement of credit losses for financial assets measured at amortized cost, which includes accounts receivable and available-for-sale debt securities. For financial assets measured at amortized cost, this new guidance requires an entity to (1) estimate its lifetime expected credit losses upon recognition of the financial assets and establish an allowance to present the net amount expected to be collected, (2) recognize this allowance and changes in the allowance during subsequent periods through net income and (3) consider relevant information about past events, current conditions and reasonable and supportable forecasts in assessing the lifetime expected credit losses. For available-for-sale debt securities, this new guidance made several targeted amendments to the existing other-than-temporary impairment model, including (1) requiring disclosure of the allowance for credit losses, (2) allowing reversals of the previously recognized credit losses until the entity has the intent to sell, is more-likely-than-not required to sell the securities or the maturity of the securities, (3) limiting impairment to the difference between the amortized cost basis and fair value and (4) not allowing entities to consider the length of time that fair value has been less than amortized cost as a factor in evaluating whether a credit loss exists.

This update is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Entities are required to apply this accounting update on a modified retrospective basis with a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact to its Consolidated Financial Statements of adopting this new guidance.

Share-based Compensation

In March 2016, the FASB issued new accounting guidance to improve the accounting for certain aspects of share-based payment transactions as part of its simplification initiative. The key provisions of this accounting update are: (1) recognizing current excess tax benefits in the income statement in the period the benefits are deducted on the income tax return as opposed to an adjustment to additional paid-in capital in the period the benefits are realized by reducing a current income tax liability; (2) allowing an entity-wide election to account for forfeitures related to service conditions as they occur instead of estimating the total number of awards that will be forfeited because the requisite service period will not be rendered; (3) allowing the net settlement of an equity award for employee statutory tax withholding purposes to not exceed the maximum statutory tax rate by relevant tax jurisdiction instead of withholding taxes for each employee based on a minimum statutory withholding tax rate; and (4) requiring the presentation of excess tax benefits as operating cash flow and cash payments for employee statutory tax withholding related to vested stock awards as financing cash flow in the Consolidated Statements of Cash Flows. Under this new accounting standard, all previously unrecognized equity deductions will be recognized as a deferred tax asset, net of any valuation allowance, with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption of this standard.

For public business entities, this update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods. Early adoption was permitted. The Company will adopt this accounting update in the first quarter of 2017. The Company will record a deferred tax asset of approximately $300 million related to previously unrecognized U.S. equity deductions, with an offsetting cumulative-effect adjustment to retained earnings as of January 1, 2017. The Company will elect to account for forfeitures related to service conditions as they occur, as a result, there will be a cumulative net charge to retained earnings for $7.0 million (forfeiture true-up adjustment less deferred tax benefit) and recognition of deferred tax assets for $2.0 million, with an offsetting credit to additional paid-in capital for $9.0 million. In addition, the Company will elect to change the presentation of excess tax benefits in the consolidated statements of cash flows for periods prior to January 1, 2017 to reflect these excess tax benefits in operating cash flows instead of financing cash flows.

Leases

In February 2016, the FASB issued a new accounting standard intended to improve the financial reporting of lease transactions. The new accounting standard requires lessees to recognize an asset and a liability on the balance sheet for the right and obligation created by entering into a lease transaction for all leases with the exception of short-term leases. The new standard retains the dual-model concept by requiring entities to determine if a lease is an operating or financing lease and the

current "bright line" percentages could be used as guidance in applying the new standard. The lessor accounting model remains largely unchanged. The new standard significantly expands qualitative and quantitative disclosures for lessees.

The update is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is allowed. Entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact to its Consolidated Financial Statements of adopting this new guidance.

Recognition and Measurement of Financial Instruments

In January 2016, the FASB issued a new accounting update which amends the guidance on the recognition and measurement of financial instruments. The update requires (1) an entity to measure equity investments (except those accounted for under the equity method or those that result in consolidation of the investee) at fair value with changes in fair value recognized in net income rather than accumulated other comprehensive income (loss); (2) allows an entity to elect to measure those equity investments that do not have a readily determinable fair value at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer; (3) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; and (4) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s evaluation of their other deferred tax assets.

This update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption, although allowed in certain circumstances, is not applicable to the Company. An entity would apply this update by a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. After the adoption of this new accounting guidance, in the first quarter of 2018, the Company will record fair value changes in its investments in Ctrip equity securities in net income, which could vary significantly quarter to quarter (see Note 4 for their carrying values and fair values of these equity investments). In addition, the Company intends to continue to use the cost method of accounting for equity investments without a readily determinable fair value.

Revenue from Contracts with Customers

In May 2014, the FASB issued a new accounting standard on the recognition of revenue from contracts with customers that was designed to create greater comparability for financial statement users across industries and jurisdictions. The core principle of this standard is that an "entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services." The new standard also requires enhanced disclosures on the nature, amount, timing and uncertainty of revenue from contracts with customers. Since May 2014, the FASB has issued several amendments to this standard, including additional guidance, and deferred the effective date for public business entities to annual and interim periods beginning after December 15, 2017.

The Company will adopt this new standard in the first quarter of 2018 by applying the modified retrospective transition approach, which means that revenues for 2016 and 2017 will be reported on a historical basis and revenues for 2018 will be reported on the new basis and historical basis. Based on the Company's preliminary analysis, the revenue standard is expected to change the timing of revenue recognition for travel reservation services, but the Company does not currently expect material impacts to its annual gross profit or net income, although the effects on quarterly gross profit and net income may be more significant. In addition, the adoption of the revenue standard is expected to change the presentation of Name Your Own Price® revenue from "gross" to "net" reporting, which will decrease revenue and cost of revenue equally, but have no impact on gross profit or net income.

3.	STOCK-BASED COMPENSATION

The Company's 1999 Omnibus Plan, as amended and restated effective June 6, 2013, (the "1999 Plan") is the primary stock compensation plan from which broad-based employee equity awards may be made. As of December 31, 2016, there were 2,292,522 shares of common stock available for future grant under the 1999 Plan. In addition, under plans assumed in connection with various acquisitions, there were 107,637 shares of common stock available for future grant as of December 31, 2016.

Stock-based compensation issued under the plans generally consists of restricted stock units, performance share units and stock options. Restricted stock units and performance share units generally vest over periods from 1 to 3 years. Stock

options granted to employees generally have a term of 10 years. The Company issues new shares of common stock upon the vesting of restricted stock units and performance share units and the exercise of stock options. See Note 2 for the Company's accounting policy on stock-based compensation.

Stock-based compensation included in personnel expenses in the Consolidated Statements of Operations was approximately $249.6 million, $247.4 million and $186.4 million for the years ended December 31, 2016, 2015 and 2014, respectively. Stock-based compensation for the years ended December 31, 2016, 2015 and 2014 includes charges amounting to $20.7 million, $22.6 million and $20.6 million, respectively, representing the impact of adjusting the estimated probable outcome at the end of the performance period for outstanding unvested performance share units. Included in stock-based compensation are approximately $2.6 million, $2.6 million, and $2.3 million for the years ended December 31, 2016, 2015, and 2014, respectively, for restricted stock units awarded to non-employee directors. The related tax benefit for stock-based compensation is $45.3 million, $52.9 million and $38.4 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Restricted Stock Units and Performance Share Units

The following table summarizes the activity of restricted stock units and performance share units ("share-based awards") during the years ended December 31, 2014, 2015 and 2016:

Share-based Awards		Shares		Weighted-average Grant Date Fair Value
Unvested at December 31, 2013		534,319			$	615.10
Granted		128,484			$	1,308.13
Assumed in an acquisition		43,993			$	1,238.68
Vested		(195,730	)		$	492.22
Performance Shares Adjustment		68,499			$	1,085.94
Forfeited/Canceled		(9,250	)		$	972.19
Unvested at December 31, 2014		570,315			$	912.26
Granted		198,141			$	1,226.41
Vested		(161,862	)		$	757.66
Performance Shares Adjustment		64,328			$	1,238.30
Forfeited/Canceled		(33,665	)		$	1,151.70
Unvested at December 31, 2015		637,257			$	1,070.10
Granted		202,740			$	1,314.93
Vested		(298,753	)		$	858.23
Performance Shares Adjustment		52,224			$	1,294.84
Forfeited/Canceled		(77,862	)		$	1,278.06
Unvested at December 31, 2016		515,606			$	1,287.88

Share-based awards granted by the Company during the years ended December 31, 2016, 2015 and 2014 had aggregate grant date fair values of approximately $266.6 million, $243.0 million and $168.1 million, respectively. Share-based awards that vested during the years ended December 31, 2016, 2015, and 2014 had grant date fair values of $256.4 million, $122.6 million and $96.3 million, respectively.

As of December 31, 2016, there was $320.0 million of total future compensation cost related to unvested share-based awards to be recognized over a weighted-average period of 1.8 years.

During the year ended December 31, 2016, the Company made broad-based grants of 117,005 restricted stock units that generally have a three-year vesting period, subject to certain exceptions for terminations other than for "cause," for "good reason" or on account of death or disability. These share-based awards had a total grant date fair value of $154.9 million based on a weighted-average grant date fair value per share of $1,324.21.

In addition, during the year ended December 31, 2016, the Company granted 85,735 performance share units to executives and certain other employees. The performance share units had a total grant date fair value of $111.7 million based upon a weighted-average grant date fair value per share of $1,302.25. The performance share units are payable in shares of the Company's common stock upon vesting. Subject to certain exceptions for terminations other than for "cause," for "good reason" or on account of death or disability, recipients of these performance share units generally must continue their service through the requisite service period in order to receive any shares. Stock-based compensation related to performance share units reflects the estimated probable outcome at the end of the performance period. The actual number of shares to be issued on the vesting date will be determined upon completion of the performance period which generally ends December 31, 2018, assuming there is no accelerated vesting for, among other things, a termination of employment under certain circumstances. As of December 31, 2016, the estimated number of probable shares to be issued is a total of 118,132 shares, net of performance share units forfeited and vested since the grant date. If the maximum performance thresholds are met at the end of the performance period, a maximum number of 172,930 total shares could be issued. If the minimum performance thresholds are not met, 45,962 shares would be issued at the end of the performance period.

2015 Performance Share Units

During the year ended December 31, 2015, the Company granted 107,623 performance share units with a grant date fair value of $133.2 million, based on a weighted-average grant date fair value per share of $1,237.53. The actual number of shares to be issued will be determined upon completion of the performance period which generally ends December 31, 2017, assuming there is no accelerated vesting for, among other things, a termination of employment under certain circumstances.

At December 31, 2016, there were 75,929 unvested 2015 performance share units outstanding, net of performance share units that were forfeited or vested since the grant date. As of December 31, 2016, the number of shares estimated to be issued pursuant to these performance share units at the end of the performance period is a total of 131,844 shares. If the maximum performance thresholds are met at the end of the performance period, a maximum of 188,240 total shares could be issued pursuant to these performance share units. If the minimum performance thresholds are not met, 43,953 shares would be issued at the end of the performance period.

2014 Performance Share Units

During the year ended December 31, 2014, the Company granted 72,277 performance share units with a grant date fair value of $96.1 million, based on a weighted-average grant date fair value per share of $1,329.11. The actual number of shares to be issued will be determined based upon completion of the performance period which ended December 31, 2016.

At December 31, 2016, there were 43,428 unvested 2014 performance share units outstanding, net of performance share units that were forfeited or vested since the grant date. As of December 31, 2016, the total number of shares expected to be issued pursuant to these performance share units during 2017 is 70,474 shares.

Stock Options

The following table summarizes the activity for stock options during the years ended December 31, 2014, 2015 and 2016:

Employee Stock Options			Number of Shares			Weighted Average Exercise Price					Aggregate Intrinsic Value (000's)					Weighted-average Remaining Contractual Term (in years)
Balance, December 31, 2013			137,708				$	315.36				$	116,686			6.6
Assumed in acquisitions			61,897				$	457.67
Exercised			(51,003	)			$	293.59
Forfeited			(2,217	)			$	517.91
Balance, December 31, 2014			146,385				$	380.05				$	111,277			6.5
Assumed in acquisitions			1,422				$	230.37
Exercised			(52,697	)			$	355.85
Forfeited			(6,006	)			$	511.87
Balance, December 31, 2015			89,104				$	383.03				$	79,474			5.4
Exercised			(38,150	)			$	404.40
Forfeited			(1,971	)			$	241.65
Balance, December 31, 2016			48,983				$	372.07				$	53,587			4.4
Vested and exercisable as of December 31, 2016			46,601				$	351.22				$	51,953			4.3
Vested and exercisable as of December 31, 2016 and expected to vest thereafter, net of estimated forfeitures			48,931				$	372.11				$	53,528			4.4

The aggregate intrinsic value of employee stock options exercised during the years ended December 31, 2016, 2015 and 2014 was $35.1 million, $46.3 million and $49.2 million, respectively. During the years ended December 31, 2016, 2015 and 2014, stock options assumed in acquisitions vested for 12,180, 38,689 and 41,524 shares with an acquisition-date fair value of $7.6 million, $24.4 million and $24.2 million, respectively.

For the years ended December 31, 2016, 2015 and 2014, the Company recorded stock-based compensation expense related to employee stock options of $6.8 million, $24.9 million and $24.7 million, respectively. Employee stock options assumed in acquisitions during the year ended December 31, 2015 had a total acquisition-date fair value of $1.4 million based on a weighted-average acquisition date fair value of $1,015.81 per share. For the year ended December 31, 2014, employee stock options assumed in acquisitions had a total acquisition date fair value of $45.5 million based on a weighted average acquisition date fair value of $734.76 per share. As of December 31, 2016, there was $1.3 million of total future compensation costs related to unvested employee stock options to be recognized over a weighted-average period of 1.0 year.

4.	INVESTMENTS

Short-term and Long-term Investments in Available for Sale Securities

See Note 2 for the Company's accounting policy related to its investments in available-for-sale securities. The following table summarizes, by major security type, the Company's investments as of December 31, 2016 (in thousands):

	Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
Short-term investments:
International government securities	$	249,552			$	221			$	(89	)		$	249,684
U.S. government securities	456,971				57				(140		)		456,888
Corporate debt securities	1,510,119				1,119				(928		)		1,510,310
Commercial paper	1,998				—				—				1,998
Total short-term investments	$	2,218,640			$	1,397			$	(1,157	)		$	2,218,880
Long-term investments:
International government securities	$	655,857			$	4,110			$	(623	)		$	659,344
U.S. government securities	773,718				337				(7,463		)		766,592
Corporate debt securities	6,042,271				9,973				(50,455		)		6,001,789
U.S. government agency securities	4,979				—				(27		)		4,952
Ctrip convertible debt securities	1,275,000				65,800				(47,712		)		1,293,088
Ctrip equity securities	655,311				213,233				(3,242		)		865,302
Total long-term investments	$	9,407,136			$	293,453			$	(109,522	)		$	9,591,067

The Company's investment policy seeks to preserve capital and maintain sufficient liquidity to meet operational and other needs of the business. As of December 31, 2016, the weighted-average life of the Company’s fixed income investment portfolio, excluding the Company's investment in Ctrip convertible debt securities, was approximately 2.0 years with an average credit quality of A+/A1/A+.

The Company invests in international government securities with high credit quality. As of December 31, 2016, investments in international government securities principally included debt securities issued by the governments of the Netherlands, Belgium, France, Germany and Austria.

On August 7, 2014 and May 26, 2015, the Company invested $500 million and $250 million, respectively, in five-year senior convertible notes issued at par by Ctrip.com International Ltd. ("Ctrip"). On December 11, 2015, the Company invested $500 million in a Ctrip ten-year senior convertible note issued at par value, which included a put option allowing the Company to require a prepayment in cash from Ctrip at the end of the sixth year of the note. On September 12, 2016, the Company invested $25 million in a Ctrip six-year senior convertible note issued at par value, which included a put option allowing the Company to require prepayment in cash from Ctrip at the end of the third year of the note. The conversion feature associated with this September 2016 Ctrip convertible note met the definition of an embedded derivative (see Note 5). As of December 31, 2016, the Company had also invested $630.3 million and $25.0 million of its international cash in Ctrip American Depositary Shares ("ADSs") and Ctrip ordinary shares, respectively. The convertible debt and equity securities of Ctrip have been marked-to-market in accordance with the accounting guidance for available-for-sale securities.

In connection with the Company's investments in Ctrip's convertible notes, Ctrip granted the Company the right to appoint an observer to its board of directors and permission to acquire its shares (through the acquisition of Ctrip ADSs in the open market) so that combined with ADSs issuable upon conversion of the August 2014, May 2015 and September 2016 convertible notes and ordinary shares, the Company could hold up to an aggregate of approximately 15% of Ctrip's outstanding equity. As of December 31, 2016, the Company did not have significant influence over Ctrip.

The following table summarizes, by major security type, the Company's investments as of December 31, 2015 (in thousands):

	Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
Short-term investments:
International government securities	$	395,404			$	497			$	(104	)		$	395,797
U.S. government securities	457,001				—				(507		)		456,494
Corporate debt securities	305,654				25				(419		)		305,260
Commercial paper	11,688				—				—				11,688
U.S. government agency securities	2,009				—				(2		)		2,007
Total short-term investments	$	1,171,756			$	522			$	(1,032	)		$	1,171,246
Long-term investments:
International government securities	$	718,947			$	1,367			$	(683	)		$	719,631
U.S. government securities	580,155				277				(1,982		)		578,450
Corporate debt securities	4,294,282				1,273				(18,941		)		4,276,614
U.S. municipal securities	1,080				3				—				1,083
Ctrip convertible debt securities	1,250,000				158,600				(30,050		)		1,378,550
Ctrip equity securities	630,311				346,724				—				977,035
Total long-term investments	$	7,474,775			$	508,244			$	(51,656	)		$	7,931,363

The Company recognized net realized gains of $1.1 million and $2.2 million related to investments for the years ended December 31, 2016 and 2015, respectively. There were no significant realized gains or losses related to investments for the year ended December 31, 2014. As of December 31, 2016, the Company does not consider any of its investments to be other-than-temporarily impaired.

Cost-method Investments

The Company held investments in equity securities of private companies, which are typically at an early stage of development, of approximately $7.6 million and $62.3 million as of December 31, 2016 and December 31, 2015, respectively. These investments are accounted for under the cost method and included in "Other assets" in the Company's Consolidated Balance Sheets. The Company evaluates its investments quarterly to determine if any indicators of other-than-temporary impairment exist.

In March 2016, the Company received an operating performance update from Hotel Urbano, which showed 2015 results significantly below expectations, significantly reduced forecasts and the need for additional funding in the near term. This update combined with increased political turmoil, the declaration of a public health emergency related to the Zika virus and sustained poor macroeconomic conditions in Brazil in the first quarter of 2016 indicated a potential other-than-temporary impairment in the fair value of the Company’s investment. As a result, the Company analyzed all information available and based on the best estimate of the fair value of this investment, recognized an impairment of approximately $50 million for the three months ended March 31, 2016. In the second quarter of 2016, after discussions with Hotel Urbano's management, the Company reviewed their additional funding needs and based on its business prospects, the Company recognized an impairment of approximately $10 million for the three months ended June 30, 2016 to write-off the remainder of its investment in Hotel Urbano. In addition, the Company recognized an impairment of approximately $3 million for an investment in another private company during the three months ended June 30, 2016.

There has been no further identified events or changes in circumstances to indicate a potential impairment with the Company's cost-method investments as of December 31, 2016.

5.	FAIR VALUE MEASUREMENTS

Financial assets and liabilities carried at fair value as of December 31, 2016 are classified in the categories described in the tables below (in thousands):

		Level 1				Level 2				Total
ASSETS:
Cash equivalents:
Money market funds		$	977,468			$	—			$	977,468
International government securities		—				30,266				30,266
U.S. government securities		—				176,140				176,140
Corporate debt securities		—				9,273				9,273
Commercial paper		—				1,998				1,998
Time deposits		49,160				—				49,160
Short-term investments:
International government securities		—				249,684				249,684
U.S. government securities		—				456,888				456,888
Corporate debt securities		—				1,510,310				1,510,310
Commercial paper		—				1,998				1,998
Long-term investments:
International government securities		—				659,344				659,344
U.S. government securities		—				766,592				766,592
Corporate debt securities		—				6,001,789				6,001,789
U.S. government agency securities		—				4,952				4,952
Ctrip convertible debt securities		—				1,293,088				1,293,088
Ctrip equity securities		865,302				—				865,302
Derivatives:
Currency exchange derivatives		—				756				756
Total assets at fair value		$	1,891,930			$	11,163,078			$	13,055,008

		Level 1				Level 2				Total
LIABILITIES:
Currency exchange derivatives		$	—			$	1,015			$	1,015

Financial assets and liabilities carried at fair value as of December 31, 2015 are classified in the categories described in the tables below (in thousands):

		Level 1				Level 2				Total
ASSETS:
Cash equivalents:
Money market funds		$	99,117			$	—			$	99,117
International government securities		—				10,659				10,659
U.S. government securities		—				90,441				90,441
Corporate debt securities		—				1,855				1,855
Commercial paper		—				335,663				335,663
Short-term investments:
International government securities		—				395,797				395,797
U.S. government securities		—				456,494				456,494
Corporate debt securities		—				305,260				305,260
Commercial paper		—				11,688				11,688
U.S. government agency securities		—				2,007				2,007
Long-term investments:
International government securities		—				719,631				719,631
U.S. government securities		—				578,450				578,450
Corporate debt securities		—				4,276,614				4,276,614
U.S. municipal securities		—				1,083				1,083
Ctrip convertible debt securities		—				1,378,550				1,378,550
Ctrip equity securities		977,035				—				977,035
Derivatives:
Currency exchange derivatives		—				363				363
Total assets at fair value		$	1,076,152			$	8,564,555			$	9,640,707

		Level 1				Level 2				Total
LIABILITIES:
Currency exchange derivatives		$	—			$	644			$	644

There are three levels of inputs to measure fair value. The definition of each input is described below:

Level 1:	Quoted prices in active markets that are accessible by the Company at the measurement date for identical assets and liabilities.

Level 2:	Inputs that are observable, either directly or indirectly. Such prices may be based upon quoted prices for identical or comparable securities in active markets or inputs not quoted on active markets, but corroborated by market data.

Level 3:	Unobservable inputs are used when little or no market data is available.

Investments in corporate debt securities, U.S. and international government securities, commercial paper, government agency securities, convertible debt securities and municipal securities are considered "Level 2" valuations because the Company has access to quoted prices, but does not have visibility to the volume and frequency of trading for all of these investments. For the Company's investments, a market approach is used for recurring fair value measurements and the valuation techniques use inputs that are observable, or can be corroborated by observable data, in an active marketplace.

The Company's derivative instruments are valued using pricing models. Pricing models take into account the contract terms as well as multiple inputs where applicable, such as interest rate yield curves, option volatility and currency rates. Derivatives are considered "Level 2" fair value measurements. The Company's derivative instruments are typically short-term in nature.

As of December 31, 2016 and 2015, the Company's cash consisted of bank deposits. Other financial assets and liabilities, including restricted cash, accounts receivable, accounts payable, accrued expenses and deferred merchant bookings are carried at cost which approximates their fair value because of the short-term nature of these items. As of December 31, 2016 and 2015, the Company held investments in equity securities of private companies of approximately $7.6 million and $62.3 million, respectively, and these investments are accounted for under the cost method of accounting (see Note 4). See Note 4 for information on the carrying value of available-for-sale investments, Note 10 for the estimated fair value of the Company's outstanding Senior Notes and Note 18 for the Company's contingent liabilities associated with business acquisitions.

In the normal course of business, the Company is exposed to the impact of foreign currency fluctuations. The Company limits these risks by following established risk management policies and procedures, including the use of derivatives. See Note 2 for the Company's accounting policy on derivative financial instruments.

Derivatives Not Designated as Hedging Instruments — The Company is exposed to adverse movements in currency exchange rates as the operating results of its international operations are translated from local currency into U.S. Dollars upon consolidation. The Company enters into average-rate derivative contracts to hedge translation risk from short-term foreign exchange rate fluctuations for the Euro, British Pound Sterling and certain other currencies versus the U.S. Dollar. As of December 31, 2016 and 2015, there were no outstanding derivative contracts related to foreign currency translation risk. Foreign exchange gains of $3.4 million for the year ended December 31, 2016, foreign exchange losses of $6.6 million for the year ended December 31, 2015 and foreign exchange gains of $13.7 million for the year ended December 31, 2014, were recorded related to these derivatives in "Foreign currency transactions and other" in the Consolidated Statements of Operations.

The Company also enters into foreign currency forward contracts to hedge its exposure to the impact of movements in currency exchange rates on its transactional balances denominated in currencies other than the functional currency. Currency exchange derivatives outstanding as of December 31, 2016 associated with foreign currency transaction risks resulted in a net liability of $0.3 million, with a liability in the amount of $1.0 million recorded in "Accrued expenses and other current liabilities" and an asset in the amount of $0.7 million recorded in "Prepaid expenses and other current assets" in the Consolidated Balance Sheet. Currency exchange derivatives outstanding as of December 31, 2015 associated with foreign exchange transaction risks resulted in a net liability of $0.3 million, with a liability in the amount of $0.7 million recorded in "Accrued expenses and other current liabilities" and an asset in the amount of $0.4 million recorded in "Prepaid expense and other current assets" in the Consolidated Balance Sheet. Derivatives associated with these transaction risks resulted in foreign exchange losses of $15.8 million, $15.3 million and $21.8 million for the years ended December 31, 2016, 2015 and 2014, respectively. These mark-to-market adjustments on the derivative contracts, offset by the effect of changes in currency exchange rates on transactions denominated in currencies other than the functional currency, resulted in net losses of $13.9 million, $13.8 million and $11.8 million for the years ended December 31, 2016, 2015 and 2014, respectively. These net impacts are reported in “Foreign currency transactions and other” in the Consolidated Statements of Operations.

The settlement of derivative contracts not designated as hedging instruments resulted in a net cash inflow of $4.5 million for the year ended December 31, 2016 and net cash outflows of $33.9 million and $8.9 million for the years ended December 31, 2015 and 2014, respectively, and were reported within "Net cash provided by operating activities" in the Consolidated Statements of Cash Flows.

Derivatives Designated as Hedging Instruments — The Company had no foreign currency forward contracts designated as hedges of its net investment in a foreign subsidiary outstanding as of December 31, 2016 and 2015. A net cash inflow of $5.2 million for the year ended December 31, 2015 and a net cash outflow of $80.3 million for the year ended December 31, 2014 were reported within "Net cash used in investing activities" in the Consolidated Statements of Cash Flows.

Embedded Derivative — In September 2016, the Company invested $25 million in a Ctrip convertible note (see Note 4). The Company determined that the conversion option for this note met the definition of an embedded derivative. At December 31, 2016, the embedded derivative had an estimated fair value of $1.8 million and is reported in the balance sheet with its host contract in "Long-term investments." The embedded derivative is bifurcated for measurement purposes only and the mark-to-market for the year ended December 31, 2016 was $1.1 million loss and included in "Foreign currency transactions and other" in the Company's Consolidated Statement of Operations.

6.	ACCOUNTS RECEIVABLE RESERVES

The Company records a provision for uncollectible agency commissions, principally receivables from accommodations related to agency reservations. The Company also accrues for costs associated with merchant transactions made on its websites by individuals using fraudulent credit cards and for other amounts "charged back" as a result of payment disputes. Changes in accounts receivable reserves consisted of the following (in thousands):

	For the Year Ended December 31,
	2016				2015				2014
Balance, beginning of year	$	15,014			$	14,212			$	14,116
Provision charged to expense	46,241				24,324				22,990
Charge-offs and adjustments	(35,233		)		(22,682		)		(21,546		)
Currency translation adjustments	(457		)		(840		)		(1,348		)
Balance, end of year	$	25,565			$	15,014			$	14,212

7.	NET INCOME PER SHARE

The Company computes basic net income per share by dividing net income applicable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted net income per share is based upon the weighted-average number of common and common equivalent shares outstanding during the period.

Common equivalent shares related to stock options, restricted stock units, and performance share units are calculated using the treasury stock method. Performance share units are included in the weighted-average common equivalent shares based on the number of shares that would be issued if the end of the reporting period were the end of the performance period, if the result would be dilutive.

The Company's convertible notes have net share settlement features requiring the Company upon conversion to settle the principal amount of the debt for cash and the conversion premium for cash or shares of the Company's common stock, at the Company's option. The convertible notes are included in the calculation of diluted net income per share if their inclusion is dilutive under the treasury stock method.

A reconciliation of the weighted-average number of shares outstanding used in calculating diluted earnings per share is as follows (in thousands):

	For the Year Ended December 31,
	2016			2015			2014
Weighted-average number of basic common shares outstanding	49,491			50,940			52,301
Weighted-average dilutive stock options, restricted stock units and performance share units	238			395			340
Assumed conversion of Convertible Senior Notes	334			258			382
Weighted-average number of diluted common and common equivalent shares outstanding	50,063			51,593			53,023
Anti-dilutive potential common shares	2,443			2,563			2,574

Anti-dilutive potential common shares for the years ended December 31, 2016, 2015 and 2014 include approximately 2.0 million shares, 2.1 million shares and 2.1 million shares, respectively, that could be issued under the Company's outstanding convertible notes. Under the treasury stock method, the convertible notes will generally have an anti-dilutive impact on net income per share if the conversion prices for the convertible notes exceed the Company's average stock price.

8.	PROPERTY AND EQUIPMENT

Property and equipment at December 31, 2016 and 2015 consisted of the following (in thousands):

	2016				2015				Estimated Useful Lives (years)
Computer equipment and software	$	522,675			$	396,961			2 to 5 years
Leasehold improvements	143,191				109,724				2 to 11 years
Office equipment, furniture and fixtures	34,176				28,447				2 to 10 years
Building construction-in-progress	5,945				—
Total	705,987				535,132
Less: accumulated depreciation	(358,970		)		(260,346		)
Property and equipment, net	$	347,017			$	274,786

Fixed asset depreciation expense was approximately $140.1 million, $101.5 million and $78.2 million for the years ended December 31, 2016, 2015 and 2014, respectively.

9.	INTANGIBLE ASSETS AND GOODWILL

The Company's intangible assets at December 31, 2016 and 2015 consisted of the following (in thousands):

	December 31, 2016												December 31, 2015
	Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount				Amortization Period		Weighted Average Useful Life
Supply and distribution agreements	$	809,287			$	(270,813	)		$	538,474			$	824,932			$	(227,994	)		$	596,938			10 - 20 years		16 years
Technology	112,141				(80,549		)		31,592				112,639				(61,404		)		51,235				1 - 5 years		5 years
Patents	1,623				(1,598		)		25				1,623				(1,562		)		61				15 years		15 years
Internet domain names	39,495				(25,089		)		14,406				40,352				(20,954		)		19,398				2 - 20 years		8 years
Trade names	1,667,221				(261,412		)		1,405,809				1,671,356				(183,101		)		1,488,255				4-20 years		20 years
Non-compete agreements	21,900				(18,321		)		3,579				22,847				(11,201		)		11,646				3-4 years		3 years
Other	—				—				—				135				(135		)		—
Total intangible assets	$	2,651,667			$	(657,782	)		$	1,993,885			$	2,673,884			$	(506,351	)		$	2,167,533

Intangible assets are amortized on a straight-line basis. Amortization expense was approximately $169.1 million, $171.0 million and $129.6 million for the years ended December 31, 2016, 2015 and 2014, respectively.

The annual estimated amortization expense for intangible assets for the next five years and thereafter is expected to be as follows (in thousands):

2017	$	159,451
2018	141,161
2019	130,997
2020	124,216
2021	119,469
Thereafter	1,318,591
	$	1,993,885

A roll-forward of goodwill for the years ended December 31, 2016 and 2015 consisted of the following (in thousands):

	2016				2015
Balance, beginning of year	$	3,375,000			$	3,326,474
Acquisitions	—				74,584
Impairment	(940,700		)		—
Currency translation adjustments	(37,394		)		(26,058		)
Balance, end of year	$	2,396,906			$	3,375,000

A substantial portion of the intangibles and goodwill relates to the acquisitions of OpenTable in July 2014 and KAYAK in May 2013. See Note 18 for further information on the acquisition of OpenTable.

As of September 30, 2016, the Company performed its annual goodwill impairment testing. Other than OpenTable, the fair values of the Company’s reporting units substantially exceeded their respective carrying values. For OpenTable, the Company recognized a non-cash impairment charge to goodwill of $940.7 million, which is not tax deductible, resulting in an adjusted carrying value of OpenTable goodwill of $580.1 million as of September 30, 2016. The goodwill impairment charge was included in operating expenses in the Consolidated Statement of Operations for the year ended December 31, 2016. OpenTable’s estimated fair value was determined using a combination of standard valuation techniques, including an income approach (discounted cash flows) and market approaches (EBITDA multiples of comparable publicly-traded companies and precedent transactions). Also, the Company tested the recoverability of OpenTable’s other long-lived assets and concluded there was no impairment as of September 30, 2016. Since the annual impairment test, there have been no further events or changes in circumstances to indicate a potential impairment.

The goodwill impairment was primarily the result of a change in OpenTable’s business strategy that occurred during the third quarter 2016. OpenTable’s post-acquisition strategy was premised on significant and rapid investment in international expansion and various other growth initiatives, resulting in near-term reduced earnings and profit margins but with the goal of achieving significantly increased revenues and profitability in the long term. This strategy had resulted in limited progress as of September 30, 2016. As a result, while OpenTable intends to continue to pursue and invest in international expansion and its other growth initiatives, it intends to do so in a more measured and deliberate manner. This change in strategy resulted in OpenTable updating its forecasted financial results to reflect (a) a material reduction in forecasted long-term financial results from these initiatives, partially offset by (b) improved earnings and profit margins in the near term as a result of the reduced investments. Based on the updated forecast, the Company estimated a significant reduction in the fair value of the OpenTable business and recorded the goodwill impairment discussed above.

10.	DEBT

Revolving Credit Facility

In June 2015, the Company entered into a $2.0 billion five-year unsecured revolving credit facility with a group of lenders. Borrowings under the revolving credit facility will bear interest, at the Company’s option, at a rate per annum equal to either (i) the adjusted LIBOR for the interest period in effect for such borrowing plus an applicable margin ranging from 0.875% to 1.50%; or (ii) the greatest of (a) Bank of America, N.A.'s prime lending rate, (b) the federal funds rate plus 0.5%, and (c) an adjusted LIBOR for an interest period of one month plus 1.00%, plus an applicable margin ranging from 0.00% to

0.50%. Undrawn balances available under the revolving credit facility are subject to commitment fees at the applicable rate ranging from 0.085% to 0.20%.

The revolving credit facility provides for the issuance of up to $70.0 million of letters of credit as well as borrowings of up to $50.0 million on same-day notice, referred to as swingline loans. Borrowings under the revolving credit facility may be made in U.S. Dollars, Euros, British Pounds Sterling and any other foreign currency agreed to by the lenders. The proceeds of loans made under the facility would be used for working capital and general corporate purposes, which could include acquisitions, share repurchases or debt repayments. The Company paid $4.0 million in debt issuance costs related to the revolving credit facility during the year ended December 31, 2015. As of December 31, 2016 and 2015, there were no borrowings outstanding and approximately $3.8 million and $2.5 million of letters of credit issued under this facility.

Upon entering into this new revolving credit facility, the Company terminated its $1.0 billion five-year revolving credit facility entered into in October 2011 and recognized interest expense of $1.0 million related to the write-off of the remaining unamortized debt issuance costs in 2015.

Outstanding Debt

Outstanding debt as of December 31, 2016 consisted of the following (in thousands):

December 31, 2016		Outstanding Principal Amount				Unamortized Debt Discount and Debt Issuance Cost				Carrying Value
Short-term debt:
1.0% Convertible Senior Notes due March 2018		$	1,000,000			$	(32,266	)		$	967,734
Long-term debt:
0.35% Convertible Senior Notes due June 2020		$	1,000,000			$	(90,251	)		$	909,749
0.9% Convertible Senior Notes due September 2021		1,000,000				(104,592		)		895,408
2.15% (€750 Million) Senior Notes due November 2022		791,063				(5,336		)		785,727
2.375% (€1 Billion) Senior Notes due September 2024		1,054,750				(12,861		)		1,041,889
3.65% Senior Notes due March 2025		500,000				(3,727		)		496,273
3.6% Senior Notes due June 2026		1,000,000				(7,619		)		992,381
1.8% (€1 Billion) Senior Notes due March 2027		1,054,750				(5,655		)		1,049,095
Total long-term debt		$	6,400,563			$	(230,041	)		$	6,170,522

Outstanding debt as of December 31, 2015 consisted of the following (in thousands):

December 31, 2015		Outstanding Principal Amount				Unamortized Debt Discount and Debt Issuance Cost				Carrying Value
Long-term debt:
1.0% Convertible Senior Notes due March 2018		$	1,000,000			$	(58,929	)		$	941,071
0.35% Convertible Senior Notes due June 2020		1,000,000				(114,898		)		885,102
0.9% Convertible Senior Notes due September 2021		1,000,000				(125,258		)		874,742
2.15% (€750 Million) Senior Notes due November 2022		815,217				(6,555		)		808,662
2.375% (€1 Billion) Senior Notes due September 2024		1,086,957				(14,688		)		1,072,269
3.65% Senior Notes due March 2025		500,000				(4,160		)		495,840
1.8% (€1 Billion) Senior Notes due March 2027		1,086,957				(6,200		)		1,080,757
Total long-term debt		$	6,489,131			$	(330,688	)		$	6,158,443

Based upon the closing price of the Company's common stock for the prescribed measurement periods during the three months ended December 31, 2016, the contingent conversion threshold on the 2018 Notes (as defined below) was exceeded. Therefore, the 2018 Notes are currently convertible at the option of the holders, and, accordingly, the Company reported the carrying value of the 2018 Notes as a current liability in the Company's Consolidated Balance Sheet as of December 31, 2016.

Since these notes are convertible at the option of the holders and the principal amount is required to be paid in cash, the Company reclassified the unamortized debt discount for the 2018 Notes in the amount of $28.5 million before tax as of December 31, 2016 from additional paid-in-capital to convertible debt in the mezzanine section in the Company's Consolidated Balance Sheet. The contingent conversion threshold on the 2018 Notes was not exceeded at December 31, 2015, therefore, the 2018 Notes were reported as a non-current liability in the Consolidated Balance Sheet. The determination of whether or not the 2018 Notes are convertible is performed on a quarterly basis. Consequently, the 2018 Notes may not be convertible in future quarters.

The contingent conversion thresholds on the 2020 Notes (as defined below) and the 2021 Notes (as defined below) were not exceeded at December 31, 2016 and December 31, 2015, and therefore these notes were reported as a non-current liability in the Consolidated Balance Sheets.

Fair Value of Debt

As of December 31, 2016 and 2015, the estimated fair value of the outstanding Senior Notes was approximately $8.4 billion and $7.0 billion, respectively, and was considered a "Level 2" fair value measurement (see Note 5). Fair value was estimated based upon actual trades at the end of the reporting period or the most recent trade available as well as the Company's stock price at the end of the reporting period. A substantial portion of the market value of the Company's debt in excess of the outstanding principal amount relates to the conversion premium on the Convertible Senior Notes.

Convertible Debt

If the note holders exercise their option to convert, the Company delivers cash to repay the principal amount of the notes and delivers shares of common stock or cash, at its option, to satisfy the conversion value in excess of the principal amount. In cases where holders decide to convert prior to the maturity date, the Company charges the proportionate amount of remaining debt issuance costs to interest expense.

Description of Senior Convertible Notes

In August 2014, the Company issued in a private placement $1.0 billion aggregate principal amount of Convertible Senior Notes due September 15, 2021, with an interest rate of 0.9% (the "2021 Notes"). The Company paid $11.0 million in debt issuance costs during the year ended December 31, 2014, related to this offering. The 2021 Notes are convertible, subject to certain conditions, into the Company's common stock at a conversion price of approximately $2,055.50 per share. The 2021 Notes are convertible, at the option of the holder, prior to September 15, 2021, upon the occurrence of specific events, including but not limited to a change in control, or if the closing sales price of the Company's common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is more than 150% of the conversion price in effect for the notes on the last trading day of the immediately preceding quarter. In the event that all or substantially all of the Company's common stock is acquired on or prior to the maturity of the 2021 Notes in a transaction in which the consideration paid to holders of the Company's common stock consists of all or substantially all cash, the Company would be required to make additional payments in the form of additional shares of common stock to the holders of the 2021 Notes in an aggregate value ranging from $0 to approximately $375 million depending upon the date of the transaction and the then current stock price of the Company. As of June 15, 2021, holders will have the right to convert all or any portion of the 2021 Notes. The 2021 Notes may not be redeemed by the Company prior to maturity. The holders may require the Company to repurchase the 2021 Notes for cash in certain circumstances. Interest on the 2021 Notes is payable on March 15 and September 15 of each year.

In May 2013, the Company issued in a private placement $1.0 billion aggregate principal amount of Convertible Senior Notes due June 15, 2020, with an interest rate of 0.35% (the "2020 Notes"). The 2020 Notes were issued with an initial discount of $20.0 million. The Company paid $1.0 million in debt issuance costs during the year ended December 31, 2013, related to this offering. The 2020 Notes are convertible, subject to certain conditions, into the Company's common stock at a conversion price of approximately $1,315.10 per share. The 2020 Notes are convertible, at the option of the holder, prior to June 15, 2020, upon the occurrence of specific events, including but not limited to a change in control, or if the closing sales price of the Company's common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is more than 150% of the conversion price in effect for the notes on the last trading day of the immediately preceding quarter. In the event that all or substantially all of the Company's common stock is acquired on or prior to the maturity of the 2020 Notes in a transaction in which the consideration paid to holders of the Company's common stock consists of all or substantially all cash, the Company would be required to make additional payments in the form of additional shares of common stock to the holders of the 2020 Notes in an aggregate value ranging from $0 to approximately $397 million depending upon the date of the transaction and the then current stock price of the Company. As of

March 15, 2020, holders will have the right to convert all or any portion of the 2020 Notes. The 2020 Notes may not be redeemed by the Company prior to maturity. The holders may require the Company to repurchase the 2020 Notes for cash in certain circumstances. Interest on the 2020 Notes is payable on June 15 and December 15 of each year.

In March 2012, the Company issued in a private placement $1.0 billion aggregate principal amount of Convertible Senior Notes due March 15, 2018, with an interest rate of 1.0% (the "2018 Notes"). The Company paid $20.9 million in debt issuance costs during the year ended December 31, 2012, related to this offering. The 2018 Notes are convertible, subject to certain conditions, into the Company's common stock at a conversion price of approximately $944.61 per share. The 2018 Notes are convertible, at the option of the holder, prior to March 15, 2018, upon the occurrence of specific events, including but not limited to a change in control, or if the closing sales price of the Company's common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is more than 150% of the conversion price in effect for the notes on the last trading day of the immediately preceding quarter. In the event that all or substantially all of the Company's common stock is acquired on or prior to the maturity of the 2018 Notes in a transaction in which the consideration paid to holders of the Company's common stock consists of all or substantially all cash, the Company would be required to make additional payments in the form of additional shares of common stock to the holders of the 2018 Notes in aggregate value ranging from $0 to approximately $344 million depending upon the date of the transaction and the then current stock price of the Company. As of December 15, 2017, holders will have the right to convert all or any portion of the 2018 Notes. The 2018 Notes may not be redeemed by the Company prior to maturity. The holders may require the Company to repurchase the 2018 Notes for cash in certain circumstances. Interest on the 2018 Notes is payable on March 15 and September 15 of each year.

In March 2010, the Company issued in a private placement $575.0 million aggregate principal amount of Convertible Senior Notes due March 15, 2015, with an interest rate of 1.25% (the "2015 Notes"). The Company paid $13.3 million in debt issuance costs associated with the 2015 Notes for the year ended December 31, 2010. The 2015 Notes were convertible, subject to certain conditions, into the Company's common stock at a conversion price of approximately $303.06 per share. In March 2015, in connection with the maturity or conversion prior to maturity of the 2015 Notes, the Company paid $37.5 million to satisfy the aggregate principal amount due and paid an additional $110.1 million in satisfaction of the conversion value in excess of the principal amount, which was charged to additional paid-in capital. During the year ended December 31, 2014, the Company delivered cash of $122.9 million to repay the aggregate principal amount and issued 300,256 shares of its common stock and paid cash of $2.2 million in satisfaction of the conversion value in excess of the principal amount associated with the 2015 Notes that were converted prior to maturity.

Cash-settled convertible debt, such as the Company's Convertible Senior Notes, is separated into debt and equity components at issuance and each component is assigned a value. The value assigned to the debt component is the estimated fair value, as of the issuance date, of a similar bond without the conversion feature. The difference between the bond cash proceeds and this estimated fair value, representing the value assigned to the equity component, is recorded as a debt discount. Debt discount is amortized using the effective interest rate method over the period from the origination date through the stated maturity date. The Company estimated the straight debt borrowing rates at debt origination to be 3.50% for the 2018 Notes, 3.13% for the 2020 Notes and 3.18% for the 2021 Notes. The yield to maturity was estimated at an at-market coupon priced at par.

Debt discount after tax of $82.5 million ($142.9 million before tax) less financing costs associated with the equity component of convertible debt of $1.6 million after tax was recorded in additional paid-in capital related to the 2021 Notes at December 31, 2014. Debt discount after tax of $92.4 million ($154.3 million before tax) less financing costs associated with the equity component of convertible debt of $0.1 million after tax was recorded in additional paid-in capital related to the 2020 Notes at June 30, 2013. Debt discount after tax of $80.9 million ($135.2 million before tax) less financing costs associated with the equity component of convertible debt of $2.8 million after tax was recorded in additional paid-in capital related to the 2018 Notes at March 31, 2012. Debt discount after tax of $69.1 million ($115.2 million before tax) less financing costs associated with the equity component of convertible debt of $1.6 million after tax was recorded in additional paid-in capital related to the 2015 Notes at March 31, 2010.

For the years ended December 31, 2016, 2015 and 2014, the Company recognized interest expense of $94.5 million, $92.7 million and $75.3 million, respectively, related to convertible notes, comprised of $22.5 million, $22.6 million and $17.1 million, respectively, for the contractual coupon interest, $67.5 million, $65.6 million and $54.4 million, respectively, related to the amortization of debt discount and $4.5 million, $4.5 million and $3.8 million, respectively, related to the amortization of debt issuance costs. For the years ended December 31, 2016, 2015 and 2014, included in the amortization of debt discount mentioned above was $2.8 million, $2.7 million and $2.6 million, respectively, of original issuance discount amortization related to the 2020 Notes. In addition, the Company incurred interest expense for the write-off of unamortized debt issuance costs related to debt conversions of $0.5 million for the year ended December 31, 2014. The remaining period for amortization

of debt discount and debt issuance costs is the period until the stated maturity date for the respective debt. The weighted-average effective interest rates for the years ended December 31, 2016, 2015, and 2014 are 3.4%, 3.4% and 3.5%, respectively.

In addition, if the Company's convertible debt is redeemed or converted prior to maturity, a gain or loss on extinguishment is recognized. The gain or loss is the difference between the fair value of the debt component immediately prior to extinguishment and its carrying value. To estimate the fair value of the debt at the conversion date, the Company estimated its straight debt borrowing rate, considering its credit rating and straight debt of comparable corporate issuers. For the year ended December 31, 2014 the Company recognized non-cash losses of $6.3 million ($3.8 million after tax) in "Foreign currency transactions and other" in the Consolidated Statement of Operations in connection with the conversion of the 2015 Notes.

Other Long-term Debt

In May 2016, the Company issued Senior Notes due June 1, 2026, with an interest rate of 3.6% (the "2026 Notes") for an aggregate principal amount of $1.0 billion. The 2026 Notes were issued with an initial discount of $1.9 million. In addition, the Company paid $6.2 million in debt issuance costs during the year ended December 31, 2016. Interest on the 2026 Notes is payable semi-annually on June 1 and December 1, beginning December 1, 2016.

In November 2015, the Company issued Senior Notes due November 25, 2022, with an interest rate of 2.15% (the "2022 Notes") for an aggregate principal amount of 750 million Euros. The 2022 Notes were issued with an initial discount of 2.2 million Euros. In addition, the Company paid $3.7 million in debt issuance costs during the year ended December 31, 2015. Interest on the 2022 Notes is payable annually on November 25. Subject to certain limited exceptions, all payments of interest and principal, including payments made upon any redemption of the 2022 Notes will be made in Euros.

In March 2015, the Company issued Senior Notes due March 15, 2025, with an interest rate of 3.65% (the "2025 Notes") for an aggregate principal amount of $500 million. The 2025 Notes were issued with an initial discount of $1.3 million. In addition, the Company paid $3.2 million in debt issuance costs during the year ended December 31, 2015. Interest on the 2025 Notes is payable semi-annually on March 15 and September 15.

In March 2015, the Company issued Senior Notes due March 3, 2027, with an interest rate of 1.8% (the "2027 Notes") for an aggregate principal amount of 1.0 billion Euros. The 2027 Notes were issued with an initial discount of 0.3 million Euros. In addition, the Company paid $6.3 million in debt issuance costs during the year ended December 31, 2015. Interest on the 2027 Notes is payable annually on March 3. Subject to certain limited exceptions, all payments of interest and principal for the 2027 Notes will be made in Euros.

In September 2014, the Company issued Senior Notes due September 23, 2024, with an interest rate of 2.375% (the "2024 Notes") for an aggregate principal amount of 1.0 billion Euros. The 2024 Notes were issued with an initial discount of 9.4 million Euros. In addition, the Company paid $6.5 million in debt issuance costs during the year ended December 31, 2014. Interest on the 2024 Notes is payable annually on September 23. Subject to certain limited exceptions, all payments of interest and principal, including payments made upon any redemption of the 2024 Notes, will be made in Euros.

The aggregate principal value of the 2022 Notes, 2024 Notes and 2027 Notes and accrued interest thereon are designated as a hedge of the Company's net investment in certain Euro functional currency subsidiaries. The foreign currency transaction gains or losses on these liabilities are measured based upon changes in spot rates and are recorded in "Accumulated other comprehensive income (loss)" in the Consolidated Balance Sheets. The Euro-denominated net assets of these subsidiaries are translated into U.S. Dollars at each balance sheet date, with effects of foreign currency changes also reported in "Accumulated other comprehensive income (loss)" in the Consolidated Balance Sheets. Since the notional amount of the recorded Euro-denominated debt and related interest are not greater than the notional amount of the Company's net investment, the Company does not expect to incur any ineffectiveness on this hedge.

Debt discount is amortized using the effective interest rate method over the period from the origination date through the stated maturity date. The Company estimated the effective interest rates at debt origination to be 3.62% for the 2026 Notes, 2.20% for the 2022 Notes, 3.68% for the 2025 Notes, 1.80% for the 2027 Notes and 2.48% for the 2024 Notes.

For the years ended December 31, 2016 and 2015, the Company recognized interest expense of $108.0 million and $61.5 million, respectively, related to other long-term debt which was comprised of $104.1 million and $59.0 million, respectively, for the contractual coupon interest, $1.5 million and $1.1 million, respectively, related to the amortization of debt discount and $2.4 million and $1.4 million, respectively, related to the amortization of debt issuance costs. The remaining

period for amortization of debt discount and debt issuance costs is the period until the stated maturity dates for the respective debt.

In March 2016, the Company received a ten-year loan from the State of Connecticut in the amount of $2.5 million with an interest rate of 1% in connection with the construction of office space in Connecticut. As of December 31, 2016, the loan is reported in "Other long-term liabilities" in the Consolidated Balance Sheet. The loan will be forgiven if certain employment and salary conditions are met in 2017 for a portion of the loan and in 2019 for the remaining balance of the loan.

11.	TREASURY STOCK

In the first quarter of 2016, the Company's Board of Directors authorized a program to repurchase up to $3.0 billion of the Company's common stock, in addition to amounts previously authorized. In the year ended December 31, 2016, the Company repurchased 635,877 shares of its common stock in the open market for an aggregate cost of $861.5 million, which included stock repurchases in December 2016 of 10,215 shares for an aggregate cost of $15.0 million that were settled in January 2017. As a result, the Consolidated Balance Sheet at December 31, 2016 includes $15.0 million in "Accrued expenses and other current liabilities" for these unsettled stock repurchases. The Consolidated Statement of Cash Flows for the year ended December 31, 2016 excludes the impact of these stock repurchases settled in January 2017.

As of December 31, 2016, the Company had a remaining authorization of $2.1 billion to purchase its common stock. In the first quarter of 2017, the Company's Board of Directors authorized a program to repurchase up to $2.0 billion of the Company's common stock, in addition to amounts previously authorized. The Company may make additional repurchases of shares under its stock repurchase program, depending on prevailing market conditions, alternate uses of capital and other factors. Whether and when to initiate and/or complete any purchase of common stock and the amount of common stock purchased will be determined at the Company's discretion.

In the first quarter of 2015, the Company's Board of Directors authorized the repurchase of up to $3.0 billion of the Company's common stock, in addition to amounts previously authorized. In the year ended December 31, 2015, the Company repurchased 2,468,259 shares of its common stock in the open market for an aggregate cost of $3.0 billion related to this authorization and 5,813 shares for an aggregate cost of $7.2 million covered under the remaining authorization as of December 31, 2014 to repurchase common stock.

In 2014, the Company repurchased 114,645 share of its common stock in privately negotiated, off-market transactions and 438,897 shares of its common stock in the open market for aggregate costs of $147.3 million and $500.0 million, respectively. All these shares were covered under the Company's remaining authorizations as of December 31, 2013 to repurchase common stock.

The Board of Directors has given the Company the general authorization to repurchase shares of its common stock to satisfy employee withholding tax obligations related to stock-based compensation. In the years ended December 31, 2016, 2015 and 2014, the Company repurchased 127,107, 65,849, and 77,761 shares at an aggregate cost of $167.0 million, $81.9 million and $103.1 million, respectively, to satisfy employee withholding taxes related to stock-based compensation.

As of December 31, 2016, there were 13,190,929 shares of the Company's common stock held in treasury.

12.	ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The table below provides the balances for each classification of accumulated other comprehensive income (loss) as of December 31, 2016 and 2015 (in thousands):

	December 31, 2016				December 31, 2015
Foreign currency translation adjustments, net of tax (1)	$	(311,247	)		$	(217,263	)
Net unrealized gain on marketable securities, net of tax (2)	176,563				462,115
Accumulated other comprehensive income (loss)	$	(134,684	)		$	244,852

(1) Foreign currency translation adjustments, net of tax, include net losses from fair value adjustments of $35.0 million after tax ($52.6 million before tax) and $34.8 million after tax ($52.6 million before tax) at December 31, 2016 and 2015, respectively, associated with settled derivatives that previously had been designated as net investment hedges (see Note 5).

Foreign currency translation adjustments, net of tax, include foreign currency transaction gains of $182.6 million after tax ($310.4 million before tax) and $126.8 million after tax ($220.5 million before tax) at December 31, 2016 and 2015, respectively, associated with the Company's 2022 Notes, 2024 Notes and 2027 Notes. The 2022 Notes, 2024 Notes and 2027 Notes are Euro-denominated debt and are designated as hedges of certain of the Company's Euro-denominated net assets (see Note 10).

The remaining balance in foreign currency translation adjustments excludes income taxes as a result of the Company's intention to indefinitely reinvest the earnings of its international subsidiaries outside of the United States.

(2) The unrealized gains before tax at December 31, 2016 and 2015 were $185.9 million and $456.1 million, respectively, of which unrealized gains of $148.5 million and $481.3 million, respectively, were exempt from tax in the Netherlands and unrealized gains of $37.4 million and unrealized losses of $25.2 million, respectively, were taxable.

13.	INCOME TAXES

International pre-tax income was $3.7 billion, $3.1 billion and $2.9 billion for the years ended December 31, 2016, 2015 and 2014, respectively. U.S. pre-tax loss was $983.1 million for the year ended December 31, 2016 and U.S. pre-tax income was $35.4 million and $98.4 million for the years ended December 31, 2015 and 2014, respectively.

Provision for Income Taxes

The income tax expense (benefit) for the year ended December 31, 2016 is as follows (in thousands):

	Current				Deferred				Total
International	$	627,718			$	(14,359	)		$	613,359
U.S. Federal	63,613				(32,405		)		31,208
U.S. State	(1,175		)		(65,141		)		(66,316		)
Total	$	690,156			$	(111,905	)		$	578,251

The income tax expense (benefit) for the year ended December 31, 2015 is as follows (in thousands):

	Current				Deferred				Total
International	$	526,052			$	(17,789	)		$	508,263
U.S. Federal	88,237				(68,696		)		19,541
U.S. State	24,006				25,150				49,156
Total	$	638,295			$	(61,335	)		$	576,960

The income tax expense (benefit) for the year ended December 31, 2014 is as follows (in thousands):

	Current				Deferred				Total
International	$	496,719			$	(10,613	)		$	486,106
U.S. Federal	10,316				47,847				58,163
U.S. State	28,953				(5,527		)		23,426
Total	$	535,988			$	31,707			$	567,695

The U.S. pre-tax loss for the year ended December 31, 2016 compared to the pre-tax income for the year December 31, 2015 is primarily due to the impairment charge for goodwill of $940.7 million related to OpenTable (see Note 9) and increased interest expense in 2016. Income tax expense on the Company’s U.S. pre-tax loss for the year ended December 31, 2016 includes the impact of the non-deductible impairment charge of OpenTable goodwill, U.S. income tax on the Company’s international interest income, which increased during the year, and the tax benefits arising from U.S. state tax law changes resulting in a net decrease to deferred tax liabilities, mostly associated with acquired intangible assets.

The U.S. pre-tax income for the year ended December 31, 2015, decreased compared to the year ended December 31, 2014, primarily due to higher interest expense and increased intangible amortization from the OpenTable acquisition. Income tax expense on the Company's U.S. pre-tax income for the year ended December 31, 2015, includes the impact of increases in state income tax rates on the Company's deferred tax liabilities and U.S. income tax on the Company's international interest income which increased during the year.

Deferred Income Taxes

At December 31, 2016, the Company had approximately $727.8 million of available net operating loss carryforwards ("NOLs") for U.S. federal income tax purposes, comprised of approximately $22.8 million of NOLs generated from operating losses and approximately $705.0 million of NOLs generated from equity-related transactions, including equity-based compensation and stock warrants. The NOLs mainly expire from December 31, 2019 to December 31, 2021 and an additional $207 million expires at December 31, 2033. The Company also had approximately $583.9 million of U.S. state NOLs, the majority of which were generated from equity related transactions and mainly expire between December 31, 2020 and December 31, 2034. In addition, the Company has $133.5 million of non-U.S. NOLs, of which $66.1 million expire between December 31, 2019 and December 31, 2023. Further at December 31, 2016, the Company had approximately $34.3 million of U.S. research tax credit carryforwards, subject to annual limitation, that mainly expire between December 31, 2028 and December 31, 2034, and $26.0 million of federal alternative minimum tax credit carryforwards, that do not expire, that are available to reduce future tax liabilities.

The utilization of these NOLs, allowances and credits is dependent upon the Company's ability to generate sufficient future taxable income and the tax laws in the jurisdictions where the losses were generated. Because of a 2016 change in state tax law, the Company estimates that approximately $230 million of unrecognized state NOLs ($20.7 million tax-effected) generated from equity-related transactions will expire before the Company has the capacity to utilize them. The Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of these deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. The Company considers many factors when assessing the likelihood of future realization of the deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future income, tax planning strategies, the carryforward periods available for tax reporting purposes, and other relevant factors.

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities at December 31, 2016 and 2015 are as follows (in thousands):

	2016				2015
Deferred tax assets/(liabilities):
Net operating loss carryforward — U.S.	$	15,977			$	59,220
Net operating loss carryforward — International	18,371				18,153
Accrued expenses	72,631				61,703
Stock-based compensation and other stock based payments	60,937				77,761
Other	—				8,001
Subtotal	167,916				224,838
Discount on convertible notes	(77,845		)		(112,886		)
Intangible assets and other	(740,329		)		(822,685		)
Euro denominated debt	(117,737		)		(92,230		)
Fixed assets	(2,245		)		(3,658		)
Other	(3,958		)		—
Less valuation allowance on deferred tax assets	(24,475		)		(64,845		)
Net deferred tax liabilities (1)	$	(798,673	)		$	(871,466	)

(1) Includes deferred tax assets of $23.7 million and $21.1 million as of December 31, 2016 and 2015, respectively, reported in "Other assets" in the Consolidated Balance Sheets.

The valuation allowance on deferred tax assets of $24.5 million at December 31, 2016 includes $4.1 million related to U.S. federal net operating loss carryforwards derived from equity transactions, $18.5 million related to international operations and $1.9 million related to U.S. research credits and capital loss carryforwards. During the year ended December 31, 2016, the Company utilized the majority of its pre-2006 federal equity NOLs resulting in a $40 million decrease in the valuation allowance. Additionally, since January 1, 2006, the Company has generated tax benefits arising from equity transactions that are not included in the deferred tax table above in accordance with current accounting principles. Pursuant to the adoption of an accounting update issued in March 2016, the Company will record a deferred tax asset for approximately $300 million, net of valuation allowances, with a corresponding credit to retained earnings on January 1, 2017, representing the previously unrecognized tax benefit related to equity transactions (see Note 2).

It is the practice and intention of the Company to indefinitely reinvest the unremitted earnings of its international subsidiaries outside of the United States, therefore, at December 31, 2016, no provision has been made for U.S. taxes on approximately $13.0 billion of cumulative unremitted international earnings. The Company estimates that the deferred tax liability it would record if such earnings were not indefinitely reinvested internationally is approximately $2.3 billion as of December 31, 2016.

Reconciliation of U.S. Federal Statutory Income Tax Rate to Effective Income Tax Rate

A significant portion of the Company's taxable earnings are generated in the Netherlands. According to Dutch corporate income tax law, income generated from qualifying innovative activities is taxed at a rate of 5% ("Innovation Box Tax") rather than the Dutch statutory rate of 25%. A portion of Booking.com's earnings during the years ended December 31, 2016, 2015 and 2014 qualifies for Innovation Box Tax treatment, which had a significant beneficial impact on the Company's effective tax rate for those years.

The effective income tax rate of the Company is different from the amount computed using the expected U.S. statutory federal rate of 35% as a result of the following items (in thousands):

	2016				2015				2014
Income tax expense at federal statutory rate	$	949,633			$	1,094,912			$	1,046,307
Adjustment due to:
Foreign rate differential	(377,542		)		(316,078		)		(289,692		)
Innovation Box Tax benefit	(324,633		)		(260,193		)		(233,545		)
Impairment of goodwill and cost-method investment	343,484				—				—
Other	(12,691		)		58,319				44,625
Income tax expense	$	578,251			$	576,960			$	567,695

Uncertain Tax Positions

See Note 2 for the Company's accounting policy on uncertain tax positions. The following is a reconciliation of the total beginning and ending amount of unrecognized tax benefits (in thousands):

	2016				2015				2014
Unrecognized tax benefit — January 1	$	42,594			$	52,356			$	22,104
Gross increases — tax positions in current period	2,468				3,411				9,305
Gross increases — tax positions in prior periods	859				4,305				6,569
Increase acquired in business combination	—				—				17,767
Gross decreases — tax positions in prior periods	(217		)		(10,365		)		(2,164		)
Reduction due to lapse in statute of limitations	(9,077		)		(7,113		)		(346		)
Reduction due to settlements during the current period	(3,912		)		—				(879		)
Unrecognized tax benefit — December 31	$	32,715			$	42,594			$	52,356

The unrecognized tax benefits are included in "Other long-term liabilities" and "Deferred income taxes" in the Consolidated Balance Sheets for the years ended December 31, 2016, 2015 and 2014. The Company does not expect further significant changes in the amount of unrecognized tax benefits during the next twelve months.

The Company's Netherlands, U.S. federal, Connecticut, Singapore, and U.K. income tax returns, constituting the returns of the major taxing jurisdictions, are subject to examination by the taxing authorities as prescribed by applicable statute. The statute of limitations remains open for: the Company's Netherlands returns from 2010 and forward; the Company's Singapore returns from 2012 and forward; the Company's U.S. Federal and Connecticut returns from 2013 and forward; and the Company's U.K. returns for the tax years 2008, 2015, and 2016. No income tax waivers have been executed that would extend the period subject to examination beyond the period prescribed by statute in the major taxing jurisdictions in which the company is a taxpayer. See Note 14 for more information regarding tax contingencies.

14.	COMMITMENTS AND CONTINGENCIES

Competition Reviews

The online travel industry has become the subject of investigations by various national competition authorities ("NCAs"), particularly in Europe. The Company is or has been involved in investigations predominately related to whether Booking.com's contractual parity arrangements with accommodation providers, sometimes also referred to as "most favored nation" or "MFN" provisions, are anti-competitive because they require accommodation providers to provide Booking.com with room rates that are at least as low as those offered to other online travel companies ("OTCs") or through the accommodation provider's website.

In Europe, investigations into Booking.com's price parity provisions were initiated in 2013 and 2014 by NCAs in France, Germany, Italy, Austria, Sweden, Ireland and Switzerland. A number of other NCAs have also looked at these issues. On April 21, 2015, the French, Italian and Swedish NCAs, working in close cooperation with the European Commission, announced that they had accepted "commitments" offered by Booking.com to resolve and close the investigations in France,

Italy and Sweden. Under the commitments, Booking.com replaced its existing price parity agreements with accommodation providers with "narrow" price parity agreements. Under a "narrow" price parity agreement, subject to certain exceptions, an accommodation provider is still required to offer the same or better rates on Booking.com as it offers to a consumer directly online, but it is no longer required to offer the same or better rates on Booking.com as it offers to other OTCs. The commitments also allow an accommodation provider to, among other things, offer different terms and conditions (e.g., free WiFi) and availability to consumers that book with online travel companies that offer lower rates of commission or other benefits, offer lower rates to consumers that book through offline channels and continue to discount through, among other things, accommodation loyalty programs, as long as those rates are not published or marketed online. The commitments apply to accommodations in France, Italy and Sweden and were effective on July 1, 2015. The foregoing description is a summary only and is qualified in its entirety by reference to the commitments published by the NCAs on April 21, 2015.

On July 1, 2015, Booking.com voluntarily implemented the commitments given to the French, Italian and Swedish NCAs throughout the European Economic Area and Switzerland. Nearly all NCAs in the European Economic Area have now closed their investigations following Booking.com's implementation of the commitments in their jurisdictions. Booking.com has also recently resolved the concerns of the NCAs in Australia, New Zealand and Georgia further to agreeing to implement the "narrow" price parity clause in these countries. The Turkish NCA recently imposed fines on Booking.com following an investigation into Booking.com's "wide" parity clauses. Booking.com is in ongoing discussions with various NCAs in other countries regarding their concerns. The Company is currently unable to predict the long-term impact the implementation of these commitments will have on Booking.com's business, on investigations by other countries, or on industry practice more generally.

On December 23, 2015, the German NCA issued a final decision prohibiting Booking.com's "narrow" price parity agreements with accommodations in Germany. The German NCA did not issue a fine, but has reserved its position regarding an order for disgorgement of profits. Booking.com is appealing the German NCA's decision. An Italian hotel association has appealed the Italian NCA's decision to accept the commitments by Booking.com.

A working group of 10 European NCAs (France, Germany, Belgium, Hungary, Ireland, Italy, the Netherlands, Czech Republic, the United Kingdom and Sweden) was established by the European Commission in December 2015 to monitor the effects of the narrow price parity clause in Europe. This working group (the "ECN Working Group") issued questionnaires during 2016 to online travel agencies, including Booking.com and Expedia, meta-search sites and hotels about the narrow price parity clause. On February 17, 2017 the ECN Working Group issued a statement that it would publish its report soon and that it had decided to keep the sector under review and re-assess the competitive situation in due course. Separately, the French NCA, which is conducting its own review of the effects of the narrow price parity clause, on February 9, 2017, issued a report stating that it has not ruled out the possibility of issuing an opinion at its own initiative if a change in competition requires it, and that it would continue to contribute actively to the ECN Working Group process.

The Company is unable to predict how these appeals and the remaining investigations in other countries will ultimately be resolved, or whether further action in Europe will be taken as a result of the working group's findings. Possible outcomes include requiring Booking.com to amend or remove its rate parity clause from its contracts with accommodation providers in those jurisdictions and/or the imposition of fines. The Company is unable to predict the impact these possible outcomes might have on its business.

In August 2015, French legislation known as the "Macron Law" became effective. Among other things, the Macron Law makes price parity agreements illegal, including the "narrow" price parity agreements agreed to by the French NCA in April 2015. Legislation in Austria prohibiting "narrow" price parity agreements (including the narrow parity clause) became effective on December 31, 2016. Similar legislation was approved by the Italian Senate in June 2016 but not ultimately passed, and could be introduced again in 2017. A motion to prohibit the narrow price parity clause has also been proposed in Switzerland. It is not yet clear how the Macron Law and the Austrian legislation or the proposed Italian and Swiss legislation may affect the Company's business in the long term in France, Austria, Italy and Switzerland, respectively.

Competition-related investigations, legislation or issues could also give rise to private litigation. For example, Booking.com is involved in private litigation in Sweden related to its "narrow" price parity provisions. We are unable to predict how this litigation will be resolved, or whether it will impact Booking.com's business in Sweden.

Litigation Related to Travel Transaction Taxes

The Company and certain third-party OTCs are currently involved in approximately thirty lawsuits, including certified and putative class actions, brought by or against U.S. states, cities and counties over issues involving the payment of travel transaction taxes (e.g., hotel occupancy taxes, excise taxes, sales taxes, etc.) related to the priceline.com business. Generally,

the complaints allege, among other things, that the OTCs violated each jurisdiction's respective relevant travel transaction tax ordinance with respect to the charge and remittance of amounts to cover taxes under each law. The Company believes that the laws at issue generally do not apply to the services it provides, namely the facilitation of travel reservations, and, therefore, that it does not owe the taxes that are claimed to be owed. However, the Company has been involved in this type of litigation for many years, and state and local jurisdictions where these issues have not been resolved could assert that the Company is subject to travel transaction taxes and could seek to collect such taxes, retroactively and/or prospectively. From time to time, the Company has found it expedient to settle claims pending in these matters without conceding that the claims at issue are meritorious or that the claimed taxes are in fact due to be paid. The Company may also settle current or future travel transaction tax claims.

On August 5, 2016, the tax appeal court of the State of Hawaii ruled that online travel companies, including the Company, owe General Excise Tax (GET) on the gross amounts collected from consumers on rental car reservations. The tax appeal court rejected the online travel companies’ arguments that GET applies only to amounts retained by online travel companies and does not include amounts paid to rental car company suppliers. The online travel companies argued that GET should not apply to gross amounts charged to consumers for rental car reservations pursuant to the 2015 decision of the Hawaii Supreme Court in Travelocity.com, L.P., et al. v. Director of Taxation that GET applies to amounts retained by online travel companies for hotel reservations and not for gross amounts charged to consumers. The Company intends to appeal the tax appeal court decision to the Hawaii appellate courts. The Company must pay the amount of the judgment, which has not yet been entered and which we believe will be immaterial to our financial condition, results of operations and cash flows, in order to appeal the decision.

Litigation is subject to uncertainty and there could be adverse developments in these pending or future cases and proceedings. An unfavorable outcome or settlement of pending litigation may encourage the commencement of additional litigation, audit proceedings or other regulatory inquiries and also could result in substantial liabilities for past and/or future bookings, including, among other things, interest, penalties, punitive damages and/or attorneys’ fees and costs. An adverse outcome in one or more of these unresolved proceedings could have an adverse effect on the Company's results of operations or cash flows in any given operating period. However, the Company believes that even if the Company were to suffer adverse determinations in the near term in more of the pending proceedings than currently anticipated, given results to date it would not have a material impact on its liquidity or financial condition.

As a result of the travel transaction tax litigation generally and other attempts by U.S. jurisdictions to levy similar taxes, the Company has established an accrual (including estimated interest and penalties) for the potential resolution of issues related to travel transaction taxes in the amount of approximately $27 million at both December 31, 2016 and 2015. The Company's legal expenses for these matters are expensed as incurred and are not reflected in the amount accrued. The actual cost may be less or greater, potentially significantly, than the liabilities recorded. An estimate for a reasonably possible loss or range of loss in excess of the amount accrued cannot be reasonably made.

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 Subject Companies believe the claims to be without merit and are contesting them. The Subject Companies asked the court to dismiss the case due to lack of patentable subject matter in the asserted patents, and on March 30, 2016 that motion was denied without prejudice to refiling later in the case. Concurrently with the litigation, the Subject Companies filed two Inter Partes Review ("IRP") petitions and four Covered Business Method (“CBM”) petitions for the patents-in-suit with the U.S. Patent and Trademark Office (the "PTAB"). The PTAB denied one of the IPR petitions and granted one of the IPR petitions, and denied the four CBM petitions. Expert discovery has concluded and summary judgment briefing has begun. Trial in the District Court is scheduled for August 2017. The Company does not believe a loss contingency is probable or reasonably estimable and therefore has not recorded a liability for this matter.

French and Italian Tax Matters

French tax authorities recently concluded an audit of Booking.com that started in 2013 of the years 2003 through 2012. They are asserting that Booking.com has a permanent establishment in France and are seeking to recover what they claim are unpaid income taxes and value-added taxes. In December 2015, the French tax authorities issued Booking.com assessments for approximately 356 million Euros, the majority of which would represent penalties and interest. The Company believes that Booking.com has been, and continues to be, in compliance with French tax law, and the Company intends to contest the assessments. If the Company is unable to resolve the matter with the French authorities, it would expect to challenge the assessments in the French courts. In order to contest the assessments in court, the Company may be required to pay, upfront, the full amount or a significant part of any such assessments, though any such payment would not constitute an admission by it that it owes the taxes. At the end of 2016, French authorities announced their intention to also audit the tax years 2013 to 2015, which could result in additional assessments.

Italian tax authorities have initiated a process to determine whether Booking.com should be subject to additional tax obligations in Italy. Italian tax authorities may determine that the Company owes additional taxes, and may also assess penalties and interest. The Company believes that it has been, and continues to be, in compliance with Italian tax law.

Other

The Company accrues for certain legal contingencies where it is probable that a loss has been incurred and the amount can be reasonably estimated. Such accrued amounts 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. An estimate for a reasonably possible loss or range of loss in excess of the amount accrued cannot be reasonably made.

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 18)

Employment Contracts

The Company has employment agreements with certain members of senior management that provide for cash severance payments of up to approximately $17.8 million, accelerated vesting of equity instruments, including without limitation, stock options, 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. In addition, certain of the agreements provide for the extension of health and insurance benefits after termination for periods up to two years.

Building Construction

In September 2016, the Company signed a turnkey agreement to construct an office building in the Netherlands, which will be the future headquarters of the Booking.com business. The turnkey agreement provides for payments by Booking.com of approximately 270 million Euros and consists of two components, land use rights and the building to be constructed. Upon signing this agreement, Booking.com paid approximately 48 million Euros to the developer, which included approximately 43 million Euros for the acquired land use rights and approximately 5 million Euros for the building construction. The land use rights are included in “Other assets” and the building construction-in-progress is included in “Property and equipment, net” in the Consolidated Balance Sheet at December 31, 2016, and both are reflected as investing activities in the Company's Consolidated Statement of Cash Flows for the year ended December 31, 2016. The land use rights asset and required future lease payments to the Municipality in Amsterdam of approximately 60 million Euros are recognized as rent expense on a straight-line basis over the remaining 49-year term of the lease and are recorded in general and administrative expense in the statements of operations. In 2017, Booking.com expects to pay approximately 34 million Euros related to the building construction, with the remainder of payments being paid periodically beginning in 2018 until the expected completion of the building in late 2020. The Company utilized its international cash for the September 2016 payment and expects all future payments to be made from its international cash.

Operating Leases

The Company leases certain facilities and equipment through operating leases. Rental expense for leased office space was approximately $77.3 million, $64.8 million and $57.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. Rental expense for data center space was approximately $22.2 million, $21.6 million and $14.9 million for the years ended December 31, 2016, 2015 and 2014, 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 90,000 square feet of office space. The Company leases approximately 258,000 square feet of office space in Amsterdam, Netherlands for the headquarters of the Booking.com business; 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 140,000 square feet of office space; the OpenTable business is headquartered in San Francisco, California, United States of America, where the Company leases approximately 60,000 square feet of office space; and the Rentalcars.com business is headquartered in Manchester, England, where the Company leases approximately 45,000 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, Germany, Singapore, Hong Kong and China and sales and support facilities in numerous locations.

Other than the office building in the Netherlands that is currently under construction, as discussed above, the Company does not own any real estate as of December 31, 2016. Minimum payments for operating leases for office space, data centers and equipment having initial or remaining non-cancellable terms in excess of one year have been translated into U.S. Dollars at the December 31, 2016 spot exchange rates, as applicable, and are as follows (in thousands):

2017				2018				2019				2020				2021				After 2021				Total
$	103,656			$	103,561			$	92,958			$	79,340			$	57,418			$	150,738			$	587,671

15.	BENEFIT PLANS

The Company maintains a defined contribution 401(k) savings plan (the "Plan") covering certain U.S. employees. In connection with acquisitions, effective as of the date of such acquisitions, the Company assumed defined contribution plans covering the U.S. employees of the acquired companies. The Company also maintains certain other defined contribution plans outside of the United States for which it provides contributions for participating employees. The Company's matching contributions during the years ended December 31, 2016, 2015 and 2014 were approximately $10.2 million, $8.4 million and $6.2 million, respectively.

16.	GEOGRAPHIC INFORMATION

The Company's international information consists of the results of Booking.com, agoda.com and Rentalcars.com and the results of the international businesses of KAYAK and OpenTable since July 24, 2014 (in each case regardless of where the consumer resides, where the consumer is physically located while using our services or the location of the travel service provider or restaurant). The Company's geographic information is as follows (in thousands):

	United States				International								Total Company
		The Netherlands				Other
2016
Revenues	$	1,680,446			$	7,783,376			$	1,279,184			$	10,743,006
Intangible assets, net	1,918,095				51,317				24,473				1,993,885
Goodwill	1,801,835				228,670				366,401				2,396,906
Other long-lived assets	102,457				195,669				123,485				421,611
2015
Revenues	$	1,817,360			$	6,205,116			$	1,201,511			$	9,223,987
Intangible assets, net	2,052,351				78,027				37,155				2,167,533
Goodwill	2,742,535				232,982				399,483				3,375,000
Other long-lived assets	89,656				138,329				103,142				331,127
2014
Revenues	$	1,798,484			$	5,519,207			$	1,124,280			$	8,441,971
Intangible assets, net	2,183,957				108,650				42,154				2,334,761
Goodwill	2,712,479				224,731				389,264				3,326,474
Other long-lived assets	80,668				97,056				77,915				255,639

17. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

	First Quarter				Second Quarter				Third Quarter				Fourth Quarter
	(In thousands, except per share data)
2016
Total revenues	$	2,148,119			$	2,555,902			$	3,690,552			$	2,348,433
Gross profit	2,019,450				2,429,818				3,589,063				2,276,361
Net income(1)	374,424				580,638				506,017				673,908
Net income applicable to common stockholders per basic common share(1)	$	7.54			$	11.71			$	10.24			$	13.66
Net income applicable to common stockholders per diluted common share(1)	$	7.47			$	11.60			$	10.13			$	13.47

(1) tIncludes a non-cash charge in the third quarter of 2016 related to an impairment of OpenTable goodwill of $940.7 million, which is not tax deductible (see Note 9). The goodwill impairment charge reduced basic and diluted net income per share for the third quarter of 2016 by $19.03 and $18.82, respectively.

	First Quarter				Second Quarter				Third Quarter				Fourth Quarter
	(In thousands, except per share data)
2015
Total revenues	$	1,840,694			$	2,280,397			$	3,102,901			$	1,999,995
Gross profit	1,672,236				2,092,906				2,947,282				1,879,383
Net income	333,327				517,032				1,196,732				504,269
Net income applicable to common stockholders per basic common share	$	6.42			$	10.02			$	23.67			$	10.14
Net income applicable to common stockholders per diluted common share	$	6.36			$	9.94			$	23.41			$	10.00

18. ACQUISITIONS

Subsequent Event - Acquisition activity in 2017

On February 7, 2017, the Company signed a definitive agreement to acquire the Momondo Group, which operates the travel meta-search websites Momondo and Cheapflights. The Company will use approximately $550 million of its international cash to fund this acquisition. The deal is expected to close later in the year, subject to regulatory approval.

Acquisition activity in 2015

The Company paid approximately $75 million, net of cash acquired, to acquire certain businesses in 2015. The Company's consolidated financial statements include the accounts of these businesses starting at their respective acquisition dates. Revenues and earnings of these businesses since their respective acquisition date and pro forma results of operations have not been presented separately as such financial information is not material to the Company's results of operations. As of both December 31, 2016 and 2015, the Company's Consolidated Balance Sheets include a long-term liability of approximately $9 million for estimated contingent consideration for a business acquisition. The estimated acquisition-date contingent liability is based upon the probability-weighted average payments for specific performance factors from the acquisition date through the performance period which ends at March 31, 2019. The range of undiscounted outcomes for the estimated contingent payments is approximately $0 to $90 million.

Acquisition activity in 2014

OpenTable, Inc.

On July 24, 2014, the Company acquired OpenTable, Inc., a leading online restaurant reservation business, in a cash transaction. The purchase price of OpenTable was approximately $2.5 billion (approximately $2.4 billion net of cash acquired) or $103.00 per share of OpenTable common stock. The Company funded the acquisition from cash on hand in the United States and $995 million borrowed under the Company's previous revolving credit facility, which the Company repaid during the third quarter of 2014. Also, in connection with this acquisition, the Company assumed unvested employee stock options and restricted stock units with an acquisition fair value of approximately $95 million.

OpenTable has built a strong brand helping diners secure restaurant reservations online across the United States and select non-U.S. markets. OpenTable also helps restaurants manage their reservations and connect directly with their customers. The Company believes that OpenTable has significant global potential and intends to leverage its international experience and capabilities in support of OpenTable's international growth. During the third quarter of 2016, the Company changed its business strategy to pursue and invest in OpenTable international expansion and other growth initiatives in a more measured and deliberate manner. This change in strategy resulted in a material reduction in forecasted long-term financial results for OpenTable. As a result, the Company recognized a non-cash impairment charge for OpenTable goodwill of $940.7 million. See Note 9 for further information.

The purchase price allocations were completed as of December 31, 2014. The aggregate purchase price was allocated to the assets acquired and liabilities assumed as follows (in millions):

Current assets (1)		$	203
Identifiable intangible assets (2)		1,435
Goodwill (3)		1,500
Other long-term assets		38
Total liabilities (4)		(647		)
Total consideration		$	2,529

(1) Includes cash acquired of $126 million.

(2) Acquired definite-lived intangibles, with a weighted-average life of 18.8 years, consisted of trade names of $1.1 billion with an estimated useful life of 20 years, supply and distribution agreements of $290 million with an estimated useful life of 15 years, and technology of $15 million with estimated useful life of 5 years.

(3) Goodwill is not tax deductible.

(4) Includes deferred tax liabilities of $543 million.

The Company's consolidated financial statements include the accounts of OpenTable starting on July 24, 2014. OpenTable's revenues and earnings since the acquisition date and pro forma results of operations have not been presented separately as such financial information is not material to the Company's results of operations.

Other

In the second quarter of 2014, the Company acquired certain businesses that provide hotel marketing services. The Company's consolidated financial statements include the accounts of these businesses starting at their respective acquisition dates. The Company paid approximately $98 million, net of cash acquired, to purchase these businesses. As of December 31, 2014, the Company recognized a liability of $10.7 million for estimated contingent payments related to an acquisition. In 2015, the Company paid $18.4 million to settle this contingent liability. The cash payment related to the acquisition-date estimated fair value of $10.7 million is reported as a financing activity and the remaining cash payment of $7.7 million, which was charged to general and administrative expenses as a fair value adjustment, is included as an operating activity in the Consolidated Statement of Cash Flows for the year ended December 31, 2015.

The Company incurred $6.9 million of professional fees for the year ended December 31, 2014 related to these consummated acquisitions. These acquisition-related expenses were included in general and administrative expenses.

INDEX TO EXHIBITS

In reviewing the agreements included as exhibits to this Annual Report on Form 10-K, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. Some agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

•	should not be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

•	may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

•	may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and

•	were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Annual Report on Form 10‑K and the Company's other public filings, which are available without charge through the SEC's website at http://www.sec.gov.

Exhibit Number	Description
3.1(a)	Restated Certificate of Incorporation of the Registrant.
3.2(b)	Amended and Restated By-Laws of the Registrant.
4.1	Reference is hereby made to Exhibits 3.1 and 3.2.
4.2(c)	Specimen Certificate for Registrant's Common Stock.
4.3(d)	Indenture, dated as of March 12, 2012, between the Registrant and American Stock Transfer & Trust Company, LLC as Trustee.
4.4(e)	Indenture, dated as of June 4, 2013, between the Registrant and American Stock Transfer & Trust Company, LLC as Trustee.
4.5(f)	Indenture, dated as of August 20, 2014, between the Registrant and American Stock Transfer & Trust Company, LLC as Trustee.
4.6(g)	Indenture for the 2.375% Senior Notes due 2024, 1.800% Senior Notes due 2027, 3.650% Senior Notes due 2025, 2.15% Senior Notes due 2022 and 3.600% Senior Notes due 2026, between the Registrant and Deutsche Bank Trust Company Americas, as Trustee.
4.7(h)	Form of 2.375% Senior Note due 2024.
4.8(i)	Officers' Certificate, dated September 23, 2014, for the 2.375% Senior Notes due 2024.
4.9(j)	Form of 1.800% Senior Note due 2027.
4.10(k)	Officers' Certificate, dated March 3, 2015, for the 1.800% Senior Notes due 2027.
4.11(l)	Form of 3.650% Senior Note due 2025.
4.12(m)	Officers' Certificate, dated March 13, 2015, for the 3.650% Senior Notes due 2025.
4.13(g)	Form of 2.15% Senior Note due 2022.
4.14(g)	Officers' Certificate, dated November 25, 2015, for the 2.15% Senior Notes due 2022.
4.15(n)	Form of 3.600% Senior Note due 2026.
4.16(n)	Officers' Certificate, dated May 23, 2016, for the 3.600% Senior Notes due 2026.
10.1(o)+	priceline.com Incorporated 1999 Omnibus Plan (As Amended and Restated Effective June 6, 2013).
10.2(p)+	Form of Restricted Stock Unit Award Agreement for Employees in the Netherlands under the 1999 Omnibus Plan.
10.3(q)+	Form of Restricted Stock Unit Agreement for awards under the 1999 Omnibus Plan to non-employee directors.
10.4(r)+	2014 Form of Performance Share Unit Agreement under the 1999 Omnibus Plan.
10.5(s)+	2015 Form of Performance Share Unit Agreement under the 1999 Omnibus Plan.
10.6(t)+	2016 Form of Performance Share Unit Agreement under the 1999 Omnibus Plan.

10.7(u)+	Amended and Restated KAYAK Software Corporation 2012 Equity Incentive Plan.
10.8(v)+	OpenTable, Inc. Amended and Restated 2009 Equity Incentive Award Plan.
10.9(w)+	Buuteeq, Inc. Amended and Restated 2010 Stock Plan.
10.10(x)+	Amended and Restated Rocket Travel, Inc. 2012 Stock Incentive Plan.
10.11(x)+	The Priceline Group Inc. Amended and Restated Annual Bonus Plan.
10.12(y)+	Form of Non-Competition and Non-Solicitation Agreement.
10.13(z)+	Transition Agreement dated November 7, 2013 by and between the Registrant and Jeffery H. Boyd.
10.14(t)+	Second Amended and Restated Employment Agreement dated March 5, 2015 by and between the Registrant, Booking.com Holding B.V. and Darren R. Huston.
10.15(z)+	Amended and Restated Non-Competition and Non-Solicitation Agreement dated November 7, 2013 by and between the Registrant and Darren R. Huston.
10.16(aa)+	Indemnification Agreement, dated September 12, 2011 by and between the Registrant and Darren R. Huston.
10.17(bb)+	Letter agreement, dated October 19, 2005 by and between the Registrant and Daniel J. Finnegan.
10.18(cc)+	Letter amendment, dated December 16, 2008, to letter agreement, dated October 19, 2005 by and between the Registrant and Daniel J. Finnegan.
10.19(dd)+	Second Amended and Restated Employment Agreement, dated April 21, 2015 by and between the Registrant and Peter J. Millones.
10.20(ee)+	Amended and Restated Employment contract, dated May 19, 2016 by and between Booking.com Holding B.V. and Gillian Tans.
10.21(ff)+	Separation Letter, dated April 27, 2016 by and between the Registrant and Darren R. Huston.
10.22(ee)+	Employment Letter Agreement, dated May 19, 2016 by and between the Registrant and Jeffery H. Boyd.
10.23(gg)+	Employment Agreement, dated December 15, 2016 by and between the Registrant and Glenn D. Fogel.
10.24(gg)+	Non-Competition and Non-Solicitation Agreement, dated December 15, 2016 by and between the Registrant and Glenn D. Fogel.
10.25(gg)+	Employee Confidentiality and Assignment Agreement, dated December 15, 2016 by and between the Registrant and Glenn D. Fogel.
10.26(gg)+	Letter Agreement, dated December 15, 2016 by and between the Registrant and Jeffery H. Boyd.
10.27(hh)	Credit Agreement, dated as of June 19, 2015, among the Registrant, the lenders from time to time party thereto, and Bank of America, N.A. as Administrative Agent.
12.1	Statement of Ratio of Earnings to Fixed Charges.
21	List of Subsidiaries.
23.1	Consent of Deloitte & Touche LLP.
24.1	Power of Attorney (included in the Signature Page).
31.1	Certification of Glenn D. Fogel, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Daniel J. Finnegan, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1(ii)	Certification of Glenn D. Fogel, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
32.2(ii)	Certification of Daniel J. Finnegan, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
101	The following financial statements from the Company's Annual Report on Form 10‑K for the year ended December 31, 2016 formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Stockholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.

---

+	Indicates a management contract or compensatory plan or arrangement.

(a)	Previously filed as an exhibit to the Current Report on Form 8-K filed on July 18, 2014 (File No. 0-25581).
(b)	Previously filed as an exhibit to the Current Report on Form 8-K filed on November 9, 2015 (File No. 1-36691).
(c)	Previously filed as an exhibit to Amendment No. 2 to Registration Statement on Form S-1 filed on March 18, 1999 (File No. 333-69657).
(d)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 12, 2012 (File No. 0-25581).
(e)	Previously filed as an exhibit to the Current Report on Form 8-K filed on June 4, 2013 (File No. 0-25581).
(f)	Previously filed as an exhibit to the Current Report on Form 8-K filed on August 20, 2014 (File No. 0-25581).
(g)	Previously filed as an exhibit to the Current Report on Form 8-K filed on November 25, 2015 (File No. 1-36691).
(h)	Previously filed as an exhibit to the Current Report on Form 8-K filed on September 22, 2014 (File No. 0-25581).
(i)	Previously filed as an exhibit to the Current Report on Form 8-K filed on September 26, 2014 (File No. 0-25581).
(j)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 2, 2015 (File No. 1-36691).
(k)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 4, 2015 (File No. 1-36691).
(l)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 12, 2015 (File No. 1-36691).
(m)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 13, 2015 (File No. 1-36691).
(n)	Previously filed as an exhibit to the Current Report on Form 8-K filed on May 23, 2016 (File No. 1-36691).
(o)	Previously filed as an exhibit to the Current Report on Form 8‑K filed on June 6, 2013 (File No. 0-25581).
(p)	Previously filed as an exhibit to the Current Report on Form 8‑K filed on November 8, 2005 (File No. 0-25581).
(q)	Previously filed as an exhibit to the Current Report on Form 8‑K filed on March 9, 2011 (File No. 0-25581).
(r)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 7, 2014 (File No. 0-25581).
(s)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 6, 2015 (File No. 1-36691).
(t)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 10, 2016 (File No. 1-36691).
(u)	Previously filed as an exhibit to the Annual Report on Form 10-K filed for the year ended December 31, 2014 (File No. 1-36691).
(v)	Previously filed as an exhibit to the Quarterly Report on Form 10-Q filed for the quarter ended September 30, 2014 (File No. 1-36691).
(w)	Previously filed as an exhibit to the Registration Statement on Form S-8 filed on June 13, 2014 (File No. 333-196756).
(x)	Previously filed as an exhibit to the Annual Report on Form 10-K filed for the year ended December 31, 2015 (File No. 1-36691).
(y)	Previously filed as an exhibit to the Current Report on Form 8-K filed on March 4, 2013 (File No. 0-25581).
(z)	Previously filed as an exhibit to the Current Report on Form 8-K filed on November 8, 2013 (File No. 0-25581).
(aa)	Previously filed as an exhibit to the Quarterly Report on Form 10-Q filed for the quarter ended September 30, 2011 (File No. 0-25581).
(bb)	Previously filed as an exhibit to the Current Report on Form 8-K filed on October 21, 2005 (File No. 0-25581).
(cc)	Previously filed as an exhibit to the Annual Report on Form 10-K filed for the year ended December 31, 2008 (File No. 0-25581).
(dd)	Previously filed as an exhibit to our Current Report on Form 8-K filed on April 24, 2015 (File No. 1-36691).
(ee)	Previously filed as an exhibit to the Current Report on Form 8-K filed on May 20, 2016 (File No. 1-36691).
(ff)	Previously filed as an exhibit to the Current Report on Form 8-K filed on April 28, 2016 (File No. 1-36691).
(gg)	Previously filed as an exhibit to the Current Report on Form 8-K filed on December 16, 2016 (File No. 1-36691).
(hh)	Previously filed as an exhibit to our Current Report on Form 8-K filed on June 24, 2015 (File No. 1-36691).
(ii)	This document is being furnished in accordance with SEC Release Nos. 33‑8212 and 34‑47551.