STOCK-BASED EMPLOYEE COMPENSATION

Stock-based compensation expense included in personnel expenses in the Unaudited Consolidated Statements of Operations was approximately $38.8 million and $21.7 million for the three months ended March 31, 2014 and 2013, respectively.

The cost of stock-based transactions is recognized in the financial statements based upon fair value. Fair value is recognized as expense on a straight line basis, net of estimated forfeitures, over the employee requisite service period. The fair value of performance share units and restricted stock units is determined based on the number of units or shares, as applicable, granted and the quoted price of the Company's common stock as of the grant 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 the acquisition of KAYAK was determined using the Black-Scholes model and the market value of the Company's common stock at the merger date.

Restricted Stock Units and Performance Share Units

The following table summarizes the activity of unvested restricted stock units and performance share units ("share-based awards") during the three months ended March 31, 2014:



Share-Based Awards	Shares		Weighted Average Grant Date Fair Value
Unvested at December 31, 2013	534,319			$	615.10
Granted	95,476			$	1,338.24
Vested	(180,616	)		$	469.32
Performance Share Units Adjustment	25,822			$	800.59
Forfeited	(1,438	)		$	838.94
Unvested at March 31, 2014	473,563			$	825.92

As of March 31, 2014, there was $262.9 million of total future compensation cost related to unvested share-based awards to be recognized over a weighted-average period of 2.1 years.

During the three months ended March 31, 2014, the Company made broad-based grants of 31,980 restricted stock units that generally vest after three years. These share-based awards had a total grant date fair value of $42.8 million based on a weighted average grant date fair value per share of $1,338.24.

In addition, during the three months ended March 31, 2014, the Company granted 63,496 performance share units to executives and certain other employees. The performance share units had a total grant date fair value of $85.0 million based upon a weighted average grant date fair value per share of $1,338.24. 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 must continue their service through the three year 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 ends December 31, 2016, assuming there is no accelerated vesting for, among other things, a termination of employment under certain circumstances. As of March 31, 2014, the estimated number of probable shares to be issued is a total of 63,496 shares. If the maximum performance thresholds are met at the end of the performance period, a maximum number of 126,992 total shares could be issued. If the minimum performance thresholds are not met, 44,067 shares would be issued at the end of the performance period.

2013 Performance Share Units

During the year ended December 31, 2013, the Company granted 104,865 performance share units with a grant date fair value of $74.4 million, based on a weighted average grant date fair value per share of $709.74. The actual number of shares to be issued will be determined upon completion of the performance period which ends December 31, 2015.

At March 31, 2014, there were 103,162 unvested 2013 performance share units outstanding, net of performance share units that were forfeited or vested since the grant date. As of March 31, 2014, 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 194,403 shares. If the maximum thresholds are met at the end of the performance period, a maximum of 225,894 total shares could be issued pursuant to these performance share units. If the minimum performance thresholds are not met, 40,466 shares would be issued at the end of the performance period.

2012 Performance Share Units

During the year ended December 31, 2012, the Company granted 60,365 performance share units with a grant date fair value of $39.0 million, based on a weighted average grant date fair value per share of $645.86. The actual number of shares to be issued will be determined upon completion of the performance period which ends December 31, 2014.

At March 31, 2014, there were 58,004 unvested 2012 performance share units outstanding, net of performance share units that were forfeited or vested since the grant date. As of March 31, 2014, 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 99,232 shares. If the maximum performance thresholds are met at the end of the performance period, a maximum of 116,008 total shares could be issued pursuant to these performance share units. If the minimum performance thresholds are not met, 36,250 shares would be issued at the end of the performance period.

Stock Options - Other than Stock Options Assumed in the Acquisition of KAYAK

The disclosures in this section do not include employee stock options assumed in the acquisition of KAYAK (described below). During the three months ended March 31, 2014, stock options were exercised for 2,250 shares of common stock with a weighted average exercise price per share of $22.25 and an aggregate intrinsic value of $2.9 million. As of March 31, 2014, the aggregate number of shares subject to stock options outstanding and exercisable was 6,750, with a weighted average exercise price per share of $22.66, a weighted average remaining term of 1 year and an aggregate intrinsic value of $7.9 million.

Employee Stock Options Assumed in the Acquisition of KAYAK

The Company assumed vested and unvested employee stock options as part of the acquisition of KAYAK on May 21, 2013. The following table summarizes the activity of employee stock options assumed in the acquisition of KAYAK during the three months ended March 31, 2014:



Assumed Employee Stock Options	Number of Shares		Weighted Average Exercise Price			Aggregate Intrinsic Value (in thousands)			Weighted Average Remaining Contractual Term (in years)
Balance, December 31, 2013	128,708			$	335.83		$	106,386	6.9
Exercised	(23,809	)		$	313.57
Forfeited	(147	)		$	452.45
Balance, March 31, 2014	104,752			$	340.73		$	89,161	6.7
Vested and exercisable as of March 31, 2014	72,009			$	268.68		$	66,479	6.0
Vested and exercisable as of March 31, 2014 and expected to vest thereafter, net of estimated forfeitures	103,203			$	337.72		$	88,153	6.7

The aggregate intrinsic value of employee stock options assumed in the acquisition of KAYAK that were exercised during the three months ended March 31, 2014 was $23.6 million. During the three months ended March 31, 2014, assumed unvested employee stock options vested for 9,478 shares of common stock with a fair value of $4.1 million.

For the three months ended March 31, 2014, the Company recorded stock-based compensation expense of $4.1 million for the KAYAK unvested assumed employee stock options. As of March 31, 2014, there was $12.7 million of total future compensation costs related to these KAYAK unvested assumed employee stock options to be recognized over a weighted-average period of 2.1 years.