<< Back
Priceline.com Reports Financial Results for 2nd Quarter 2009
NORWALK, Conn., Aug 10, 2009 (BUSINESS WIRE) -- Priceline.com Incorporated (Nasdaq: PCLN) today reported its financial results for the 2nd quarter 2009. Gross travel bookings for the 2nd quarter, which refers to the total dollar value, inclusive of all taxes and fees, of all travel services purchased by consumers, were $2.38 billion, an increase of 12.8% over a year ago.

Priceline.com had revenues in the 2nd quarter of $603.7 million, a 17.5% increase over a year ago. The Company's international operations contributed revenues in the 2nd quarter of $197.6 million, a 20.1% increase versus a year ago (approximately 38% growth on a local currency basis). Priceline.com's gross profit for the 2nd quarter was $305.2 million, a 20.3% increase from the prior year. The Company's international operations contributed gross profit in the 2nd quarter of $196.6 million, a 20.2% increase versus a year ago (approximately 38% growth on a local currency basis). The Company's operating income in 2nd quarter 2009 was $109.4 million, a 35.1% increase from the prior year. Priceline.com had GAAP net income for the 2nd quarter of $67.0 million or $1.38 per diluted share, which compares to $49.8 million or $1.00 per diluted share in the same period a year ago.

Pro forma EBITDA for the 2nd quarter 2009 was $126.2 million, an increase of 24.6% over a year ago. Pro forma net income in the 2nd quarter was $99.0 million or $2.02 per diluted share, compared to $1.55 per share a year ago. First Call analyst consensus for the 2nd quarter 2009 was $1.75 per diluted share. The section below entitled "Non-GAAP Financial Measures" provides a definition and information about the use of pro forma financial measures in this press release and the attached financial and statistical supplement reconciles pro forma financial information with priceline.com's financial results under GAAP.

"Despite a difficult economic climate, leisure travel demand for the summer peak season has been stronger than expected, driven in part by the availability of compelling discounts," said priceline.com President and Chief Executive Officer Jeffery H. Boyd. "Priceline.com's 2nd quarter performance reflects the impact of improving demand, but also shows the impact of lower year over year unit prices. Priceline.com continued to gain market share globally in the 2nd quarter as worldwide hotel room night reservations grew 44%, reflecting solid performance in the U.S., Europe and Asia. Airline ticket sales grew 14% despite fee reductions introduced by our competitors during this period to compete with our low price positioning, and growth in rental car days was steady at 15%. Internationally, our hotel business experienced gross travel bookings growth of 14%, or approximately 32% on a local currency basis."

Looking forward, Mr. Boyd said, "Unemployment and the global economic downturn continue to affect travel spending, particularly high yield business travel, which places considerable strain on travel suppliers. Suppliers have responded with promotions and discounts to spur leisure demand and we have offered distribution and advertising support for those efforts, which we believe has helped bolster occupancy and load factors. Despite significant decreases in pricing, priceline.com performed well in the first two quarters of this year and we believe our brands and service offerings have resonated with leisure travelers looking for the best value for their trips. In the 3rd quarter, we intend to continue to invest in expansion of our international hotel platform, integration initiatives and marketing of our brands in an effort to offer consumers the best travel value and to offer suppliers value as a unique and efficient distribution channel."

Forward Guidance

Priceline.com said it was targeting the following for 3rd quarter 2009:

  • Year-over-year increase in total gross travel bookings of approximately 20% - 26%.
  • Year-over-year increase in international gross travel bookings of approximately 21% - 29% (an increase of approximately 30% - 39% on a local currency basis).
  • Year-over-year increase in domestic gross travel bookings of approximately 20%.
  • Year-over-year increase in revenue of approximately 19% to 23%.
  • Year-over-year increase in gross profit of approximately 23% to 27%.
  • Pro forma EBITDA of approximately $178 million to $188 million.
  • Pro forma net income of between $2.70 and $2.85 per diluted share.

The Company noted that because of the uncertainty of consumer behavior as a result of the worldwide recession, its actual performance during the 3rd quarter 2009 against the guidance above continued to be subject to greater variability than it had been in the past.

Pro forma guidance for the 3rd quarter 2009:

  • excludes non-cash amortization expense of acquisition-related intangibles,
  • excludes non-cash stock-based compensation expense,
  • excludes non-cash interest expense and gains or losses on debt extinguishment, if any, recorded pursuant to the provisions of FSP APB 14-1,
  • excludes non-cash income tax expense and reflects the impact on income taxes of certain of the pro forma adjustments,
  • includes the anti-dilutive impact of the "Conversion Spread Hedges" (see "Non-GAAP Financial Measures" below) on diluted common shares outstanding related to outstanding convertible notes, and
  • includes the dilutive impact of additional shares of unvested restricted stock, restricted stock units and performance share units because pro forma net income has been adjusted to exclude stock-based compensation.

In addition, pro forma EBITDA excludes depreciation and amortization expense and includes the impact of foreign currency transactions and other expenses.

When aggregated, the foregoing adjustments are expected to increase pro forma EBITDA over GAAP operating income by approximately $20 million in 3rd quarter 2009.

In addition, the foregoing adjustments are expected to increase pro forma net income over GAAP net income by approximately $30 million in the 3rd quarter 2009. On a per share basis, the Company estimates GAAP net income of approximately $2.15 to $2.30 per diluted share for the 3rd quarter 2009.

Effective January 1, 2009, we adopted FASB Staff Position No. APB 14-1, "Accounting for Convertible Debt Instruments that May be Settled in Cash upon Conversion (Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 requires cash settled convertible debt, such as our convertible senior notes, to be separated into debt and equity components at issuance and a value to be assigned to each.

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 and amortized to interest expense over the life of the bond. Although FSP APB 14-1 has no impact on our actual past or future cash flows, it requires us to adjust our previously issued financial statements and to record a significant amount of non-cash interest expense as the debt discount is amortized and may result in gains or losses on extinguishment that would not have occurred under previous GAAP.

The adoption of FSP APB 14-1 increased non-cash interest expense for the years ended December 31, 2008, 2007 and 2006 by approximately $26.1 million ($15.5 million net of tax), $28.2 million ($16.6 million net of tax), and $5.4 million ($3.2 million net of tax), respectively, and is estimated to increase fiscal year 2009 non-cash interest expense by approximately $18.4 million ($10.8 million net of tax), excluding the impact of future debt conversions, if any. The adoption of FSP APB 14-1 increased non-cash interest expense in the three months ended June 30, 2009 and 2008 by $4.8 million ($2.8 million net of tax) and $7.2 million ($4.2 million net of tax), respectively.

Information About Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements reflect the views of the Company's management regarding current expectations and projections about future events and are based on currently available information and current foreign currency exchange rates. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed, implied or forecasted in any such forward-looking statements. Expressions of future goals and similar expressions including, without limitation, "may," "will," "should," "could," "expects," "does not currently expect," "plans," "anticipates," "intends," "believes," "estimates," "predicts," "potential," "targets," or "continue," reflecting something other than historical fact are intended to identify forward-looking statements. The following factors, among others, could cause the Company's actual results to differ materially from those described in the forward-looking statements:

-- adverse changes in general market conditions for leisure and other travel services as a result of, among other things, decreased consumer spending, general economic downturn, terrorist attacks, natural disasters or adverse weather, the bankruptcy or insolvency of a major airline, or the outbreak of an epidemic or pandemic disease, such as the recent swine flu outbreak;

-- adverse changes in the Company's relationships with airlines and other product and service providers and vendors which could include, without limitation, the withdrawal of suppliers from the priceline.com system (either priceline.com's "retail" or "opaque" services, or both) and/or the loss or reduction of global distribution fees;

-- fluctuations in foreign exchange rates and other risks associated with doing business in multiple currencies;

-- the effects of increased competition, including the potential impact of increased pricing competition initiated by other on-line travel agents toward the end of 1st quarter 2009 in the form of reduced booking fees and/or the launch by competitors of an "opaque" travel offering;

-- an adverse outcome in one or more of the hotel occupancy and other tax proceedings in which the Company is involved;

-- a change by a major search engine to its search engine algorithms that negatively affects the search engine ranking of the company or its 3rd party distribution partners;

-- our ability to expand successfully in international markets;

-- the ability to attract and retain qualified personnel;

-- difficulties integrating recent or future acquisitions, such as the 4th quarter 2007 acquisition of Agoda, including ensuring the effectiveness of the design and operation of internal controls and disclosure controls of acquired businesses;

-- the occurrence of an external or internal security breach of our systems or other Internet based systems involving personal customer information, credit card information or other sensitive data;

-- systems-related failures and/or security breaches, including, without limitation, "denial-of-service" type attacks on our system, any security breach that results in the theft, transfer or unauthorized disclosure of customer information, or the failure to comply with various state laws applicable to the company's obligations in the event of such a breach; and

--legal and regulatory risks.

For a detailed discussion of these and other factors that could cause the Company's actual results to differ materially from those described in the forward-looking statements, please refer to the Company's most recent Form 10-Q, Form 10-K and Form 8-K filings with the Securities and Exchange Commission. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

Pro forma EBITDA represents GAAP operating income excluding depreciation and amortization expense, plus foreign currency transactions and other expense and the pro forma adjustments relating to stock-based compensation expense and payroll taxes related to stock-based compensation described below.

Pro forma EBITDA, pro forma net income and pro forma net income per share are "non-GAAP financial measures," as such term is defined by the Securities and Exchange Commission, and may differ from non-GAAP financial measures used by other companies. Priceline.com believes that pro forma EBITDA, pro forma net income and pro forma net income per share that exclude certain non-cash or non-recurring income or expense items are useful for analysts and investors to evaluate priceline.com's future on-going performance because they enable a more meaningful comparison of priceline.com's projected cash earnings and performance with its historical results from prior periods. These pro forma metrics, in particular pro forma EBITDA and pro forma net income, are not intended to represent funds available for priceline.com's discretionary use and are not intended to represent or to be used as a substitute for operating income, net income or cash flows from operations data as measured under GAAP. The items excluded from these pro forma metrics, but included in the calculation of their closest GAAP equivalent, are significant components of consolidated statements of income and must be considered in performing a comprehensive assessment of overall financial performance. Pro forma financial information is adjusted for the following items:

  • Amortization expense of acquisition-related intangibles is excluded because it does not impact cash earnings.
  • Stock-based compensation expense is excluded because it does not impact cash earnings and is reflected in earnings per share through increased share count.
  • Payroll tax expense related to stock-based compensation is excluded for 2008 because the expense is driven primarily by stock option exercise and share award vesting activity and the market price of priceline.com's common stock and often shows volatility unrelated to operating results. As of January 1, 2009, we no longer exclude payroll tax expense related to stock-based compensation due to its relative insignificance to our consolidated financial statements.
  • Interest expense related to the amortization of debt discount and gains or losses on debt extinguishment recorded in 2009, and in 2008 on a retrospective basis, pursuant to the provisions of FASB Staff Position No. APB 14-1, "Accounting for Convertible Debt Instruments that May be Settled in Cash upon Conversion (Including Partial Cash Settlement)" are excluded because they are non-cash in nature. Pursuant to the provisions of FSP APB 14-1, certain debt issuance costs were reclassified to equity and are therefore no longer amortized in GAAP or pro forma earnings (as of January 1, 2009).
  • Net income attributable to non-controlling interests is adjusted for the impact of certain of the pro forma adjustments described above.
  • For calculating pro forma net income per share:
  • net income is adjusted for the impact of the pro forma adjustments described above.
  • fully diluted share count is adjusted to include the anti-dilutive impact of "Conversion Spread Hedges" related to priceline.com's convertible securities that increase the effective conversion price of the currently outstanding 0.50% convertible notes due 2011 and 0.75% convertible notes due 2013 from their stated $40.38 conversion price to an effective conversion price of $50.47 per share.

Under GAAP, the anti-dilutive impact of the Conversion Spread Hedges is not reflected on the outstanding diluted share count until the end of the hedge in 2011 and 2013 if and when shares are delivered.

  • all unvested shares of restricted common stock, restricted stock units and performance share units are included in the calculation of pro forma net income per share because pro forma net income has been adjusted to exclude stock-based compensation expense.

The presentation of this financial information should not be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles in the United States. The attached financial and statistical supplement reconciles pro forma financial information with priceline.com's financial results under GAAP.

About Priceline.com(R) Incorporated

Priceline.com Incorporated (Nasdaq: PCLN) www.priceline.com provides online travel services in 29 languages in 78 countries in Europe, North America, Asia, the Middle East and Africa. Included in the priceline.com family of companies is Booking.com, a leading international online hotel reservation service, priceline.com, a leading U.S. online travel service for value-conscious leisure travelers, and Agoda.com, an Asian online hotel reservation service. Priceline.com believes that Booking.com is Europe's largest and fastest growing hotel reservation service, with a network of affiliated Web sites. Booking.com operates in over 70 countries in 24 languages and offers its customers access to over 71,000 participating hotels worldwide.

In the U.S., priceline.com gives customers more ways to save on their airline tickets, hotel rooms, rental cars, vacation packages and cruises than any other Internet travel service. In addition to getting great published prices, leisure travelers can narrow their searches using priceline.com's TripFilter advanced search technology, customize their search activity through priceline.com's Inside Track features, create packages to save even more money, and take advantage of priceline.com's famous Name Your Own Price(R) service, which can deliver the lowest prices available. Priceline.com operates the following travel websites: Travelweb.com, Lowestfare.com, RentalCars.com and BreezeNet.com. Priceline.com also licenses its business model to independent licensees.

priceline.com Incorporated
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
December 31,
June 30, 2008
ASSETS 2009 As Adjusted
Current assets:
Cash and cash equivalents $ 333,449 $ 364,550
Restricted cash 1,283 2,528
Short-term investments 256,119 98,888

Accounts receivable, net of allowance for doubtful accounts of $7,715 and $8,429, respectively

150,045 92,328
Prepaid expenses and other current assets 37,278 23,463
Deferred income taxes 18,821 12,142
Total current assets 796,995 593,899
Property and equipment, net 29,669 29,404
Intangible assets, net 183,042 193,231
Goodwill 347,221 326,863
Deferred income taxes 130,224 153,955
Other assets 5,186 15,069
Total assets $ 1,492,337 $ 1,312,421
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 77,168 $ 46,290
Accrued expenses and other current liabilities 101,974 77,713
Deferred merchant bookings 41,718 29,664
Convertible debt 297,878 317,910
Total current liabilities 518,738 471,577
Deferred taxes 46,584 48,933
Other long-term liabilities 20,961 18,010
Total liabilities 586,283 538,520
Convertible debt 58,602 75,075
Stockholders' equity:

Common stock, $0.008 par value, authorized 1,000,000,000 shares, 48,937,460, and 47,664,766 shares issued, respectively

377 367
Treasury stock, 6,841,811 and 6,685,048 shares, respectively (506,793 ) (493,555 )
Additional paid-in capital 2,217,085 2,176,556
Accumulated deficit (852,111 ) (944,145 )
Accumulated other comprehensive income (11,106 ) (40,397 )
Total stockholders' equity 847,452 698,826

Total liabilities and stockholders' equity

$ 1,492,337 $ 1,312,421
priceline.com Incorporated
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2008
2009 As Adjusted 2009 As Adjusted
Merchant revenues $ 392,822 $ 336,230 $ 729,856 $ 625,388
Agency revenues 204,485 173,249 324,711 283,181
Other revenues 6,434 4,497 11,232 8,586
Total revenues 603,741 513,976 1,065,799 917,155
Cost of revenues 298,503 260,251 552,231 482,327
Gross profit 305,238 253,725 513,568 434,828
Operating expenses:
Advertising - Offline 11,053 9,928 21,819 21,959
Advertising - Online 90,107 72,860 158,223 130,661
Sales and marketing 20,691 19,930 39,110 36,263

Personnel, including stock-based compensation of $11,264, $9,077, $21,858, and $19,016, respectively

44,864 39,644 84,374 76,528
General and administrative 14,728 14,209 29,516 25,995
Information technology 4,697 5,136 9,225 9,286
Depreciation and amortization 9,723 11,064 19,084 21,417
Total operating expenses 195,863 172,771 361,351 322,109
Operating income 109,375 80,954 152,217 112,719
Other income (expense):
Interest income 483 2,905 1,224 7,077
Interest expense (6,505 ) (9,521 ) (13,310 ) (19,582 )
Foreign currency transactions and other (3,880 ) (11 ) (63 ) (5,095 )
Total other income (expense) (9,902 ) (6,627 ) (12,149 ) (17,600 )
Earnings before income taxes and equity in income (loss) of investees 99,473 74,327 140,068 95,119
Income tax expense (32,495 ) (23,258 ) (48,036 ) (29,764 )
Equity in income (loss) of investees 33 (77 ) 2 (166 )
Net income 67,011 50,992 92,034 65,189
Less: net income attributable to noncontrolling interests - 1,154 - 1,575
Net income applicable to common stockholders of priceline.com Incorporated $ 67,011 $ 49,838 $ 92,034 $ 63,614
Net income applicable to common stockholders per basic common share $ 1.61 $ 1.29 $ 2.23 $ 1.65
Weighted average number of basic common shares outstanding 41,661 38,768 41,334 38,496
Net income applicable to common stockholders per diluted common share $ 1.38 $ 1.00 $ 1.92 $ 1.28
Weighted average number of diluted common shares outstanding 48,479 49,948 47,924 49,585
priceline.com Incorporated
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Six Months Ended
June 30,
2008
OPERATING ACTIVITIES: 2009 As Adjusted
Net income $ 92,034 $ 65,189
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 6,969 7,216
Amortization 12,115 14,473
Provision for uncollectible accounts, net 1,810 4,552
Deferred income taxes 18,549 4,296
Stock-based compensation expense 21,858 19,016
Amortization of debt issuance costs 1,002 1,304
Amortization of debt discount 10,236 14,916
(Gain) loss on extinguishment of debt (3,130 ) 41
Equity in (income) loss of investees (2 ) 166
Changes in assets and liabilities:
Accounts receivable (55,322 ) (63,082 )
Prepaid expenses and other current assets (751 ) (600 )
Accounts payable, accrued expenses and other current liabilities 59,668 64,116
Other 3,185 1,681
Net cash provided by operating activities 168,221 133,284
INVESTING ACTIVITIES:
Purchase of investments (310,798 ) (102,855 )
Maturity of investments 162,045 135,203
Additions to property and equipment (8,114 ) (7,027 )
Acquisitions and other equity investments, net of cash acquired - (531 )
Change in restricted cash 1,248 (1,623 )
Purchase of shares held by noncontrolling interest - (30,386 )
Net cash used in investing activities (155,619 ) (7,219 )
FINANCING ACTIVITIES:
Payments related to conversion of senior notes (36,505 ) (49,850 )
Repurchase of common stock (13,238 ) (3,405 )
Proceeds from exercise of stock options 6,498 3,708
Excess tax benefit on stock-based compensation 1,342 1,077
Net cash used in financing activities (41,903 ) (48,470 )
Effect of exchange rate changes on cash and cash equivalents (1,800 ) 8,114
Net increase / (decrease) in cash and cash equivalents (31,101 ) 85,709
Cash and cash equivalents, beginning of period 364,550 385,359
Cash and cash equivalents, end of period $ 333,449 $ 471,068
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for income taxes $ 29,372 $ 15,977
Cash paid during the period for interest $ 2,297 $ 3,698
priceline.com Incorporated
UNAUDITED RECONCILIATION OF GAAP TO PRO FORMA FINANCIAL INFORMATION
(In thousands, except per share data)
Three Months Ended June 30, Six Months Ended June 30,

RECONCILIATION OF GAAP OPERATING INCOME TO PRO FORMA EBITDA

2008 2008

2009 As Adjusted 2009 As Adjusted
GAAP Operating income $ 109,375 $ 80,954 $ 152,217

$

112,719
(a) Amortization of acquired intangible assets in Cost of revenues - - - 272
(b) Stock-based compensation 11,264 9,077 21,858 19,016
(c) Stock-based compensation payroll taxes - 186 - 673
(i) Depreciation and amortization 9,723 11,064 19,084 21,417
(j) Foreign currency transactions and other (3,880 ) (11 ) (63 ) (5,094 )
(f) (Gain) loss on extinguishment of debt (260 ) 41 (3,130 ) 41
Pro Forma EBITDA $ 126,222 $ 101,311 $ 189,966 $ 149,044
Three Months Ended June 30, Six Months Ended June 30,

RECONCILIATION OF GAAP TO PRO FORMA NET INCOME APPLICABLE TO COMMON STOCKHOLDERS

2008 2008

2009 As Adjusted 2009 As Adjusted
GAAP Net income applicable to common stockholders of priceline.com Incorporated $ 67,011 $ 49,838 $ 92,034 $ 63,614
(a) Amortization of acquired intangible assets in Cost of revenues - - - 272
(a) Amortization of acquired intangible assets in Depreciation and amortization 6,210 7,456 12,115 14,201
(b) Stock-based compensation 11,264 9,077 21,858 19,016
(c) Stock-based compensation payroll taxes - 186 - 673

(d)

Adjustments for the tax impact of certain of the pro forma adjustments and to exclude non-cash income taxes

9,717 4,955 17,148 4,019
(e) Impact on noncontrolling interests of other pro forma adjustments - (252 ) - (575 )
(f) Amortization related to FSP APB 14-1 5,039 7,170 10,236 14,559
(f) (Gain) loss on extinguishment of debt (260 ) 41 (3,130 ) 41
Pro Forma Net income applicable to common stockholders of priceline.com Incorporated $ 98,981 $ 78,471 $ 150,261 $ 115,820
Three Months Ended June 30, Six Months Ended June 30,

RECONCILIATION OF GAAP TO PRO FORMA NET INCOME APPLICABLE TO COMMON STOCKHOLDERS PER DILUTED COMMON SHARE

2008 2008

2009 As Adjusted 2009 As Adjusted
GAAP weighted average number of diluted common shares outstanding 48,479 49,948 47,924 49,585
(g) Adjustment for Conversion Spread Hedges (677 ) (672 ) (797 ) (719 )
(h) Adjustment for restricted stock, restricted stock units and performance units 1,196 1,229 1,117 1,135
Pro Forma Weighted average number of diluted common shares outstanding 48,998 50,505 48,244 50,001
Net income applicable to common stockholders per diluted common share
GAAP $ 1.38 $ 1.00 $ 1.92 $ 1.28
Pro Forma $ 2.02 $ 1.55 $ 3.11 $ 2.32
(a) Amortization of acquired intangible assets is recorded in Cost of revenues and Depreciation and amortization.
(b) Stock-based compensation is recorded in Personnel expense.
(c) Stock-based compensation payroll taxes are recorded in General and administrative expense. As of January 1, 2009, we no longer exclude payroll tax expense related to stock-based compensation due to its relative insignificance to our consolidated financial statements.
(d) Adjustments for the tax impact of certain of the pro forma adjustments and to exclude non-cash income taxes are recorded in Income tax expense.
(e) Impact on noncontrolling interests of other pro forma adjustments are recorded in Net income attributable to noncontrolling interests.
(f) Non-cash interest expense related to the amortization of debt discount and (gain) loss on debt extinguishment, pursuant to the provisions of FASB Staff Position No. APB 14-1, "Accounting for Convertible Debt Instruments that May be Settled in Cash upon Conversion (Including Partial Cash Settlement)" are recorded in Interest expense and Foreign currency transactions and other, respectively.
(g) Reflects the impact of the Conversion Spread Hedges that increase the effective conversion price of the currently outstanding Convertible Senior Notes due September 30, 2011 and the Convertible Senior Notes due September 30, 2013 from their stated $40.38 conversion price to an effective conversion price of $50.47 per share. Under GAAP, the anti-dilutive impact of the Conversion Spread Hedges is not reflected on the outstanding diluted share count until the end of the hedge when shares are delivered.
(h) All shares of restricted common stock, restricted stock units and performance share units are included in the calculation of pro forma net income per share because pro forma net income has been adjusted to exclude stock-based compensation expense.
(i) Depreciation and amortization are excluded from Operating income to calculate EBITDA.
(j) Foreign currency transactions and other are added to Operating income to calculate EBITDA.
priceline.com Incorporated
Statistical Data
In thousands
(Unaudited)
Gross Bookings 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
Domestic $478,812 $547,787 $602,205 $525,571 $720,968 $872,284 $799,578 $688,923 $851,157 $964,464
International** 519,679 687,124 788,478 679,760 1,037,644 1,237,681 1,250,850 792,190 1,092,427 1,414,714
Total $998,491 $1,234,911 $1,390,683 $1,205,331 $1,758,612 $2,109,965 $2,050,427 $1,481,113 $1,943,584 $2,379,178
Agency $710,528 $919,260 $1,042,619 $912,698 $1,370,119 $1,656,775 $1,603,693 $1,108,024 $1,469,956 $1,824,618
Merchant** 287,963 315,651 348,064 292,633 388,493 453,190 446,734 373,089 473,628 554,560
Total $998,491 $1,234,911 $1,390,683 $1,205,331 $1,758,612 $2,109,965 $2,050,427 $1,481,113 $1,943,584 $2,379,178
Year/Year Growth
Domestic 1.0% -4.0% 19.3% 24.2% 50.6% 59.2% 32.8% 31.1% 18.1% 10.6%
International 90.5% 92.7% 97.9% 113.0% 99.7% 80.1% 58.6% 16.5% 5.3% 14.3%
excluding F/X impact 74.5% 79.6% 83.4% 89.9% 75.0% 55.8% 44.7% 27.6% 23.5% 32.4%
Agency 47.9% 50.9% 73.7% 85.9% 92.8% 80.2% 53.8% 21.4% 7.3% 10.1%
Merchant 8.1% -0.8% 15.0% 16.4% 34.9% 43.6% 28.3% 27.5% 21.9% 22.4%
Total 33.7% 33.2% 54.0% 62.4% 76.1% 70.9% 47.4% 22.9% 10.5% 12.8%
Units Sold 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
Hotel Room-Nights 5,955 7,242 7,964 6,616 9,375 10,879 11,434 9,126 12,785 15,665
Year/Year Growth 43.4% 45.0% 52.0% 55.1% 57.4% 50.2% 43.6% 38.0% 36.4% 44.0%
Rental Car Days 2,003 2,278 2,338 2,002 2,612 2,815 2,333 2,224 3,014 3,237
Year/Year Growth 23.6% 13.9% 14.4% 11.9% 30.4% 23.6% -0.2% 11.1% 15.4% 15.0%
Airline Tickets 639 687 819 790 1,169 1,362 1,186 1,135 1,496 1,551
Year/Year Growth -12.2% -16.3% 23.0% 34.4% 83.0% 98.2% 44.8% 43.7% 28.0% 13.9%
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
Revenue $301,389 $355,880 $417,287 $334,853 $403,180 $513,976 $561,609 $406,041 $462,058 $603,741
Year/Year Growth 24.6% 15.7% 33.1% 28.8% 33.8% 44.4% 34.6% 21.3% 14.6% 17.5%
Gross Profit $119,717 $157,211 $202,331 $160,152 $181,103 $253,725 $316,078 $205,065 $208,330 $305,238
Year/Year Growth 65.7% 48.6% 63.8% 60.9% 51.3% 61.4% 56.2% 28.0% 15.0% 20.3%
Gross Bookings represent the total dollar value of travel booked, inclusive of taxes and fees.

** Includes $37.5 million, $32.4 million, $24.2 million, $24.6 million and $13.4 million of Agoda gross bookings in 4Q08, 3Q08, 2Q08, 1Q08 and 4Q07, respectively since acquisition on November 6, 2007.

priceline.com Incorporated
Estimated Impact of Share Price Movements on Weighted Average GAAP and Pro Forma Diluted Shares Outstanding
In millions
(Unaudited)

The following table is intended to demonstrate the estimated potential impact of share price movements on the number of equivalent shares included in the fully diluted share count used to calculate diluted earnings per share. Actual results are likely to differ due to the impact of option exercises, equity repurchases, issuances and forfeitures of restricted stock, restricted stock units and performance share units, any conversions of our convertible notes and the elimination of the anti-dilutive impact of our conversion spread hedges associated with the convertible notes converted prior to maturity. The table below is for illustrative purposes only; the Company is unable to predict its future stock price and the Company's stock could trade below or above the per share prices in the table below.

Estimated Weighted Average Number of Diluted Shares Outstanding
GAAP Adjustments(1) Pro Forma
3Q09 2009 3Q09 2009 3Q09 2009
Closing Share Price Assumption(2) $60.00 48.0 47.2 0.4 0.3 48.4 47.5
$65.00 48.2 47.3 0.3 0.3 48.5 47.6
$70.00 48.3 47.4 0.4 0.4 48.7 47.8
$75.00 48.4 47.4 0.4 0.5 48.8 47.9
$80.00 48.5 47.5 0.4 0.4 48.9 47.9
$85.00 48.6 47.6 0.5 0.4 49.1 48.0
$90.00 48.7 47.7 0.5 0.4 49.2 48.1
$95.00 48.8 47.7 0.5 0.5 49.3 48.2
$100.00 48.9 47.8 0.5 0.5 49.4 48.3
$105.00 49.0 47.9 0.5 0.5 49.5 48.4
$110.00 49.0 47.9 0.6 0.6 49.6 48.5
$115.00 49.1 48.0 0.6 0.5 49.7 48.5
$120.00 49.2 48.1 0.5 0.5 49.7 48.6
$125.00 49.2 48.1 0.6 0.6 49.8 48.7
$130.00 49.3 48.2 0.6 0.5 49.9 48.7
$135.00 49.4 48.2 0.6 0.6 50.0 48.8
$140.00 49.4 48.3 0.6 0.5 50.0 48.8
$145.00 49.5 48.3 0.6 0.6 50.1 48.9
$150.00 49.5 48.4 0.7 0.6 50.2 49.0
$155.00 49.6 48.4 0.6 0.6 50.2 49.0
$160.00 49.6 48.5 0.7 0.6 50.3 49.1
(1) Reflects the anti-dilutive impact of the "Conversion Spread Hedges" associated with convertible notes that remain outstanding to maturity and the dilutive impact of additional shares of unvested restricted stock, restricted stock units and performance shares units because pro forma net income has been adjusted to exclude stock-based compensation.
(2) Estimated weighted average number of diluted shares outstanding is estimated as follows:
3Q09: Uses actual daily share prices from July 1, 2009 through August 7, 2009, and the closing share price assumption from August 10, 2009 through September 30, 2009.
2009: Uses actual daily share prices from January 1, 2009 through August 7, 2009, and the closing share price assumption from August 10, 2009 through December 31, 2009.

SOURCE: Priceline.com Incorporated

Priceline.com Incorporated
Press:
Brian Ek, 203-299-8167
brian.ek@priceline.com
OR
Investor Relations:
Matthew Tynan, 203-299-8487
matt.tynan@priceline.com
Could not find file '\\pro.dianum.io\irwebpro\content3\IRXMLDATA\72\72780\Disclaimers.xml'.