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Priceline.com Reports Financial Results for 4th Quarter and Full-Year 2009
NORWALK, Conn., Feb 17, 2010 /PRNewswire via COMTEX/ -- Priceline.com Incorporated (Nasdaq: PCLN) today reported its financial results for the 4th quarter and full year 2009. Gross travel bookings for the 4th quarter, which refers to the total dollar value, inclusive of all taxes and fees, of all travel services purchased by consumers, were $2.26 billion, an increase of 52.9% over a year ago.

Priceline.com had revenues in the 4th quarter of $541.8 million, a 33.4% increase over a year ago. The Company's international operations contributed revenues in the 4th quarter of $222.9 million, a 74.9% increase versus a year ago (approximately 63% on a local currency basis). Priceline.com's gross profit for the 4th quarter was $313.2 million, a 52.7% increase from the prior year. The Company's international operations contributed gross profit in the 4th quarter of $222.1 million, a 75.5% increase versus a year ago (approximately 63% growth on a local currency basis). The Company's operating income in 4th quarter 2009 was $117.9 million, a 141.4% increase from the prior year. Priceline.com had GAAP net income for the 4th quarter of $78.5 million or $1.55 per diluted share, which compares to $34.1 million or $0.75 per diluted share in the same period a year ago.

Pro forma EBITDA for the 4th quarter 2009 was $133.2 million, an increase of 75% over the prior year. Pro forma net income in the 4th quarter was $101.6 million or $1.99 per diluted share, compared to $1.29 per share a year ago. First Call analyst consensus for the 4th quarter 2009 was $1.68 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.

For full-year 2009, priceline.com had revenues of $2.34 billion, a 24.1% increase over 2008. Priceline.com's gross profit for 2009 was $1.26 billion, a 31.9% increase from the prior year. The Company's 2009 operating income was $470.8 million, a 62.7% increase from the prior year. Priceline.com had GAAP net income for full-year 2009 of $489.5 million or $9.88 per diluted share, which compares to $182.2 million or $3.74 per diluted share in 2008. GAAP net income for 2009 was positively affected by a $183.3 million non-cash tax benefit from reversing a portion of the valuation allowance related to the Company's net operating loss carry forwards. The valuation allowance was reversed to reflect the amount of deferred tax asset that is estimated to be more likely than not to be realized after taking into consideration current operating results and future estimated taxable income. Pro forma EBITDA for 2009 was $547.7 million, an increase of 45.1% over a year ago. Pro forma net income for 2009 was $425.2 million or $8.52 per diluted share, compared to $5.96 per share a year ago.

"Worldwide gross travel bookings growth accelerated in the 4th quarter due to strong underlying fundamentals, weak results in the prior year period amidst the global recession and improving currency and ADR comparisons," said priceline.com's President and Chief Executive Officer Jeffery H. Boyd. "Hotel room nights booked grew 59.9% on a global basis, representing share gains for Booking.com, priceline.com and Agoda.com. Our international business grew gross travel bookings at 81% (69.5% in local currency) as it continued to benefit from geographic expansion, increased hotel supply and consumer shift to online bookings. Domestic gross bookings grew 20.6% in the quarter and the business seems well positioned to compete in an environment where pricing is more stable and where our competition will soon anniversary the conversion benefit of matching priceline.com's fee cut initiatives."

Looking forward, Mr. Boyd said, "Throughout 2010, we intend to maintain our focus on building our global hotel platform and strengthening our brands by adding hotel supply, expanding in attractive geographic markets, pursuing integration opportunities and adding content and innovative functionality. The business continues to perform well as economic conditions have stabilized; however, we do expect growth rates to decelerate going forward, particularly in the second half, as we begin to compare against periods of relatively stronger business performance."

Priceline.com said it was targeting the following for 1st quarter 2010:

  • Year-over-year increase in total gross travel bookings of approximately 42% - 48%.
  • Year-over-year increase in international gross travel bookings of approximately 65% - 73% (an increase of approximately 56% - 64% on a local currency basis).
  • Year-over-year increase in domestic gross travel bookings of approximately 10% - 15%.
  • Year-over-year increase in revenue of approximately 23% - 27%.
  • Year-over-year increase in gross profit of approximately 50%.
  • Pro forma EBITDA of approximately $97 million to $107 million.
  • Pro forma net income of between $1.54 and $1.64 per diluted share.

Pro forma guidance for the 1st quarter 2010:

  • 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, related to cash settled convertible debt,
  • excludes non-cash income tax expense and reflects the impact on income taxes of certain of the pro forma adjustments,
  • excludes the impact, if any, of charges or benefits associated with judgments, rulings and/or settlements related to hotel occupancy tax proceedings,
  • 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 net income by approximately $50 million in the 1st quarter 2010. In addition, the foregoing adjustments are expected to increase pro forma net income over GAAP net income by approximately $25 million in the 1st quarter 2010. On a per share basis, the Company estimates GAAP net income of approximately $1.04 to $1.14 per diluted share for the 1st quarter 2010.

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 net income excluding depreciation and amortization expense, interest income and expense, equity in income and loss of investees, income attributable to noncontrolling interests and income taxes and the pro forma adjustments relating to stock-based compensation expense and related payroll taxes, gains and losses on debt extinguishment, charges or benefits related to judgments, rulings, or settlements of hotel occupancy tax proceedings and the non-recurring favorable litigation settlement relating to credit card processing costs 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.
  • Cash benefit associated with the favorable resolution of litigation related to credit card processing costs is excluded because of the non-recurring nature of the settlement.
  • Charges or benefits related to judgments, rulings, or settlements of hotel occupancy tax proceedings are excluded because the amount and timing of these items are unpredictable, not driven by core operating results and render comparisons with prior periods less meaningful.
  • 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, related to cash settled convertible debt are excluded because they are non-cash in nature. In accordance with the related accounting standards, 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).
  • Income tax expense is adjusted for the tax impact of certain of the pro forma adjustments described above and to exclude tax expense recorded where no actual tax payments are owed because of available net operating loss carry forwards. Income tax expense is also adjusted to exclude the $183.3 million non-cash tax benefit from reversing a portion of the deferred tax asset valuation allowance primarily in 3rd quarter 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 32 languages in over 90 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 online hotel reservation service. Booking.com operates in 76 countries in 25 languages and offers its customers access to approximately 78,000 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,
                                                  December 31,      2008
    ASSETS                                             2009     As Adjusted
                                                       ----     -----------

     Current assets:
         Cash and cash equivalents                 $202,141      $364,550
         Restricted cash                              1,319         2,528
         Short-term investments                     598,014        98,888
         Accounts receivable, net of
          allowance for doubtful accounts
          of $5,023 and $8,429, respectively        118,659        92,328
          Prepaid expenses and other current
          assets                                     36,828        23,463
         Deferred income taxes                       65,980        12,142
                                                     ------        ------
           Total current assets                   1,022,941       593,899


     Property and equipment, net                     30,489        29,404
     Intangible assets, net                         172,080       193,231
     Goodwill                                       350,630       326,863
     Deferred income taxes                          253,700       153,955
     Other assets                                     4,384        15,069
                                                      -----        ------

         Total assets                            $1,834,224    $1,312,421
                                                 ==========    ==========

     LIABILITIES AND STOCKHOLDERS' EQUITY

     Current liabilities:
         Accounts payable                           $60,568       $46,290
         Accrued expenses and other current
          liabilities                               127,561        77,713
         Deferred merchant bookings                  60,758        29,664
         Convertible debt                           159,878       317,910
                                                    -------       -------
           Total current liabilities                408,765       471,577

     Deferred taxes                                  43,793        48,933
     Other long-term liabilities                     24,052        18,010
                                                     ------        ------
         Total liabilities                          476,610       538,520
                                                    -------       -------

     Convertible debt                                35,985        75,075
                                                     ------        ------

     Stockholders' equity:
         Common stock, $0.008 par value,
          authorized 1,000,000,000 shares,
           52,446,173, and 47,664,766 shares
           issued, respectively                         405           367
         Treasury stock, 6,865,119 and
          6,685,048 shares, respectively           (510,970)     (493,555)
         Additional paid-in capital               2,289,867     2,176,556
         Accumulated deficit                       (454,673)     (944,145)
         Accumulated other comprehensive
          income                                     (3,000)      (40,397)
                                                     ------       -------
           Total stockholders' equity             1,321,629       698,826
                                                  ---------       -------

          Total liabilities and stockholders'
          equity                                 $1,834,224    $1,312,421
                                                 ==========    ==========



                           priceline.com Incorporated
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)

                               Three Months Ended     Twelve Months Ended
                               December 31, 2009       December 31, 2009
                               -----------------       -----------------
                                          2008                     2008
                                 2009  As Adjusted        2009  As Adjusted
                                 ----  -----------        ----  -----------

    Merchant revenues        $317,407     $268,816  $1,447,576   $1,218,162
    Agency revenues           220,496      132,973     868,395      648,792
    Other revenues              3,850        4,252      22,241       17,852
                                -----        -----      ------       ------
         Total revenues       541,753      406,041   2,338,212    1,884,806

    Cost of revenues          228,564      200,976   1,077,449      928,835
                              -------      -------   ---------      -------

    Gross profit              313,189      205,065   1,260,763      955,971
                              -------      -------   ---------      -------


    Operating expenses:
      Advertising - Offline     5,978        7,779      36,270       38,032
      Advertising - Online     92,054       55,761     365,381      270,713
      Sales and marketing      17,655       20,233      81,238       77,948
      Personnel, including
       stock-based
       compensation of
       $7,944, $11,452,
       $40,671, and $40,522,
       respectively            44,819       41,998     180,152      163,785
      General and
       administrative          19,673       15,749      68,555       55,267
      Information technology    5,137        4,268      19,139       17,956
      Depreciation and
       amortization            10,011       10,444      39,193       42,796
                               ------       ------      ------       ------

         Total operating
          expenses            195,327      156,232     789,928      666,497
                              -------      -------     -------      -------

    Operating income          117,862       48,833     470,835      289,474
                              -------       ------     -------      -------

    Other income (expense):
      Interest income             528        1,521       2,223       11,660
      Interest expense         (4,863)      (7,532)    (24,084)     (34,853)
      Foreign currency
       transactions and
       other                   (5,389)      11,333      (6,672)       9,824
                               ------       ------      ------        -----
         Total other
          income (expense)     (9,724)       5,322     (28,533)     (13,369)
                               ------        -----     -------      -------

    Earnings before
     income taxes and
     equity in income
     (loss) of investees      108,138       54,155     442,302      276,105
    Income tax benefit
     (expense)                (29,683)     (19,962)     47,168      (90,171)
    Equity in income
     (loss) of investees            -          (47)          2         (310)
                                  ---          ---         ---         ----
    Net income                 78,455       34,146     489,472      185,624
      Less: net income
       attributable to
       noncontrolling
       interests                    -            -           -        3,378
                                  ---          ---         ---        -----

    Net income applicable
     to common
     stockholders of
     priceline.com
     Incorporated             $78,455      $34,146    $489,472     $182,246
                              =======      =======    ========     ========

    Net income applicable
     to common
     stockholders per
     basic common share         $1.77        $0.84      $11.54        $4.64
                                =====        =====      ======        =====

    Weighted average
     number of basic
     common shares
     outstanding               44,350       40,504      42,406       39,299
                               ======       ======      ======       ======

    Net income applicable
     to common
     stockholders per
     diluted common share       $1.55        $0.75       $9.88        $3.74
                                =====        =====       =====        =====

    Weighted average
     number of diluted
     common shares
     outstanding               50,570       45,550      49,522       48,671
                               ======       ======      ======       ======



                       priceline.com Incorporated
             UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (In thousands)


                                                         Year Ended
                                                        December 31,
                                                       --------------
                                                                2008
    OPERATING ACTIVITIES:                              2009  As Adjusted
                                                       ----  -----------
    Net income                                     $489,472     $185,624

    Adjustments to reconcile net income to
     net cash provided by operating activities:
      Depreciation                                   14,491       14,388
      Amortization                                   24,702       28,680
      Provision for uncollectible accounts, net       3,227       13,113
      Reversal of valuation allowance on
       deferred tax asset                          (183,272)           -
      Other deferred income taxes                    30,990       19,899
      Stock-based compensation expense               40,671       40,522
      Amortization of debt issuance costs             2,465        2,525
      Amortization of debt discount                  18,203       26,669
      Loss (gain) on extinguishment of debt           1,048       (6,014)
      Equity in (income) loss of investees               (2)         310
      Loss on impairment of investment                    -          843
    Changes in assets and liabilities:
      Accounts receivable                           (22,767)     (42,888)
      Prepaid expenses and other current assets        (979)      (5,153)
      Accounts payable, accrued expenses and
       other current liabilities                     86,792       32,245
      Other                                           4,624        4,790
                                                      -----        -----
    Net cash provided by operating activities       509,665      315,553
                                                    -------      -------
    INVESTING ACTIVITIES:
      Purchase of investments                      (922,163)    (196,308)
      Maturity of investments                       432,184      218,555
      Purchase of shares held by noncontrolling
       interests                                          -     (154,034)
      Additions to property and equipment           (15,106)     (18,322)
      Acquisitions and other equity
       investments, net of cash acquired             (1,500)        (599)
      Proceeds from redemption of equity
       investment in pricelinemortgage.com            8,921            -
      Realized loss on foreign currency
       forward contracts                             (5,025)           -
      Change in restricted cash                       1,229       (1,197)
                                                      -----       ------
    Net cash used in investing activities          (501,460)    (151,905)
                                                   --------     --------
    FINANCING ACTIVITIES:
      Payments related to conversion of
       senior notes                                (197,122)    (176,943)
      Repurchase of common stock                    (17,415)      (4,449)
      Proceeds from exercise of stock options        43,428        5,507
      Excess tax benefit on stock-based
       compensation                                   2,149        7,037
                                                      -----        -----
    Net cash used in financing activities          (168,960)    (168,848)
                                                   --------     --------
    Effect of exchange rate changes on cash
     and cash equivalents                            (1,654)     (15,609)
                                                     ------      -------
    Net decrease in cash and cash equivalents      (162,409)     (20,809)
    Cash and cash equivalents, beginning of
     period                                         364,550      385,359
                                                    -------      -------
    Cash and cash equivalents, end of period       $202,141     $364,550
                                                   --------     --------

    SUPPLEMENTAL CASH FLOW INFORMATION:
      Cash paid during the period for income
       taxes                                        $95,512      $66,948
                                                    =======      =======
      Cash paid during the period for
       interest                                      $4,448       $6,353
                                                     ======       ======



                               priceline.com Incorporated
        UNAUDITED RECONCILIATION OF GAAP TO PRO FORMA FINANCIAL INFORMATION
                           (In thousands, except per share data)

                                      Three Months                Year
                                         Ended                   Ended
                                      December 31,            December 31,
                                     -------------           ------------
    RECONCILIATION OF GAAP                   2008                  2008
     NET INCOME TO PRO FORMA                  As                     As
     EBITDA                        2009    Adjusted (1)    2009  Adjusted (1)
                                   ----    ------------    ----  ------------
      GAAP Net income
       applicable to
       common stockholders of
       priceline.com,
       Incorporated             $78,455       $34,146  $489,472     $182,246

    (a)  Amortization of
          acquired intangible
          assets in Cost
          of revenues                 -             -         -          272
    (b)  Favorable litigation
          settlement related
          to credit card
          processing costs       (1,049)            -    (1,049)           -
    (c)  Stock-based
          compensation            7,944        11,452    40,671       40,522
    (d)  Charge related to
          hotel occupancy
          tax litigation
          judgement in General
          and administrative
          expense                     -             -     3,680            -
    (e)  Stock-based
          compensation
          payroll taxes               -            10         -          719
    (f)  Depreciation and
          amortization           10,011        10,444    39,193       42,796
    (g)  Interest expense
          (income)                  884         1,067     3,658       (2,285)
    (h)  Amortization
          related to cash
          settled
          convertible debt        3,451         4,944    18,203       25,478
    (h)  (Gain) loss on
           extinguishment of
           debt                   3,784        (5,970)    1,048       (6,014)
    (i)  Adjustments for the
          tax impact of
          certain of the pro
          forma adjustments
          and to exclude
          non-cash income taxes  29,683        19,962   (47,168)      90,171
    (j)  Equity in (income)
          loss of investee            -            47        (2)         310
    (k)  Impact on
          noncontrolling
          interests of other
          pro forma adjustments       -             -         -        3,378

      Pro Forma EBITDA         $133,163       $76,102  $547,706     $377,593
                               ========       =======  ========     ========


                                       Three Months             Year
                                          Ended                 Ended
                                       December 31,          December 31,
                                      -------------          ------------
    RECONCILIATION OF
     GAAP TO PRO FORMA
     NET INCOME                               2008                    2008
     APPLICABLE TO                             As                      As
     COMMON STOCKHOLDERS          2009    Adjusted (1)     2009  Adjusted (1)
                                  ----    ------------     ----  ------------
      GAAP Net income
       applicable to
       common stockholders
       of priceline.com,
       Incorporated             $78,455       $34,146  $489,472     $182,246

    (a)  Amortization of
          acquired intangible
          assets in Cost
          of revenues                 -             -         -          272
    (a)  Amortization of
          acquired intangible
          assets in Depreciation
          and amortization        6,115         6,855    24,657       28,408
    (b)  Favorable litigation
          settlement related
          to credit card
          processing fees        (1,049)            -    (1,049)           -
    (c)  Stock-based
          compensation            7,944        11,452    40,671       40,522
    (d)  Charge related to
          hotel occupancy
          tax litigation
          judgement in General
          and administrative
          expense                     -             -     3,680            -
    (e)  Stock-based compensation
          payroll taxes               -            10         -          719
    (h)  Amortization related
          to cash settled
          convertible debt        3,451         4,944    18,203       25,478
    (h)  (Gain) loss on
          extinguishment of
          debt                    3,784        (5,970)    1,048       (6,014)
    (i)  Adjustments for the
          tax impact of
          certain of the pro
          forma adjustments
          and to exclude
          non-cash income taxes   2,949         6,792  (151,433)      20,023
    (k)  Impact on
          noncontrolling
          interests of other
          pro forma
          adjustments                 -             -         -         (818)

      Pro Forma Net
       income applicable
       to common
       stockholders of
       priceline.com,
       Incorporated            $101,649       $58,229  $425,249     $290,836
                               ========       =======  ========     ========


                                         Three Months              Year
                                             Ended                Ended
                                          December 31,         December 31,
                                         -------------         ------------
    RECONCILIATION OF
     GAAP TO PRO FORMA
     NET INCOME APPLICABLE
     TO COMMON STOCKHOLDERS                    2008                 2008
     PER DILUTED                                As                   As
     COMMON SHARE                   2009     Adjusted (1)   2009  Adjusted (1)
                                    ----     ------------   ----  ------------
      GAAP weighted
       average number of
       diluted common
       shares outstanding         50,570        45,550    49,522       48,671

    (l)  Adjustment for
          Conversion Spread
          Hedges                    (284)       (1,368)     (505)        (859)
    (m)  Adjustment for
          restricted stock,
          restricted stock
          units and
          performance units          787         1,106       886          989

      Pro Forma Weighted
       average number of
       diluted common
       shares outstanding         51,073        45,288    49,903       48,801
                                  ======        ======    ======       ======

      Net income
       applicable to
       common stockholders
       per diluted
       common share
          GAAP                     $1.55         $0.75     $9.88        $3.74
                                   =====         =====     =====        =====

          Pro Forma                $1.99         $1.29     $8.52        $5.96
                                   =====         =====     =====        =====

    (1)  2008 reported "As Adjusted" for new accounting standards related to
         cash settled convertible debt and noncontrolling interests.

    (a)  Amortization of acquired intangible assets is recorded in Cost of
         revenues and Depreciation and amortization.
    (b)  Cash benefit associated with the favorable resolution of litigation
         related to credit card processing costs is excluded because of the
         nonrecurring nature of the settlement.
    (c)  Stock-based compensation is recorded in Personnel expense.
    (d)  Charge related to Texas hotel occupancy tax litigation judgement is
         recorded in General and administrative expense.
    (e)  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.
    (f)  Depreciation and amortization are excluded from Net income to
         calculate EBITDA.
    (g)  Interest expense (primarily coupon interest paid on our convertible
         notes and amortization of deferred issuance costs) and interest
         income (primarily from cash and marketable securities) are excluded
         from Net income to calculate EBITDA.
    (h)  Non-cash interest expense related to the amortization of debt
         discount and (gain) loss on debt extinguishment are recorded in
         Interest expense and Foreign currency transactions and other,
         respectively.
    (i)  Adjustments for the tax impact of certain of the pro forma
         adjustments and to exclude non-cash income taxes (including the
         non-cash benefit of $183.3 million primarily in 3rd quarter 2009 from
         the reversal of a portion of the valuation allowance on the Company's
         deferred tax asset).
    (j)  Equity in (income) loss of investee is excluded from Net income to
         calculate EBITDA.
    (k)  Impact on noncontrolling interests of other pro forma adjustments are
         recorded in Net income attributable to noncontrolling interests.
    (l)  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.
    (m)  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.



    priceline.com Incorporated
    --------------------------
    Statistical Data
    In thousands
    (Unaudited)

    Gross Bookings            3Q07        4Q07
    --------------            ----        ----

    Domestic              $602,205    $525,571
    International**        788,478     679,760
                           -------     -------
      Total             $1,390,683  $1,205,331

    Agency              $1,042,619    $912,698
    Merchant**             348,064     292,633
                           -------     -------
      Total             $1,390,683  $1,205,331

    Year/Year Growth
    ----------------
      Domestic                19.3%       24.2%
      International           97.9%      113.0%
       excluding F/X
       impact                 83.4%       89.9%


      Agency                  73.7%       85.9%
      Merchant                15.0%       16.4%

      Total                   54.0%       62.4%


    Units Sold                3Q07        4Q07
    ----------                ----        ----

    Hotel Room-Nights        7,964       6,616
      Year/Year Growth        52.0%       55.1%

    Rental Car Days          2,338       2,002
      Year/Year Growth        14.4%       11.9%

    Airline Tickets            819         790
      Year/Year Growth        23.0%       34.4%


                              3Q07        4Q07
                              ----        ----

    Revenue               $417,287    $334,853
      Year/Year Growth        33.1%       28.8%

    Gross Profit          $202,331    $160,152
      Year/Year Growth        63.8%       60.9%



    Gross Bookings            1Q08        2Q08        3Q08        4Q08
    --------------            ----        ----        ----        ----

    Domestic              $720,968    $872,284    $799,578    $688,923
    International**      1,037,644   1,237,681   1,250,850     792,190
                         ---------   ---------   ---------     -------
      Total             $1,758,612  $2,109,965  $2,050,427  $1,481,113

    Agency              $1,370,119  $1,656,775  $1,603,693  $1,108,024
    Merchant**             388,493     453,190     446,734     373,089
                           -------     -------     -------     -------
      Total             $1,758,612  $2,109,965  $2,050,427  $1,481,113

    Year/Year Growth
    ----------------
      Domestic                50.6%       59.2%       32.8%       31.1%
      International           99.7%       80.1%       58.6%       16.5%
       excluding F/X
       impact                 75.0%       55.8%       44.7%       27.6%


      Agency                  92.8%       80.2%       53.8%       21.4%
      Merchant                34.9%       43.6%       28.3%       27.5%

      Total                   76.1%       70.9%       47.4%       22.9%


    Units Sold                1Q08        2Q08        3Q08        4Q08
      ----------              ----        ----        ----        ----

    Hotel Room-Nights        9,375      10,879      11,434       9,126
      Year/Year Growth        57.4%       50.2%       43.6%       38.0%

    Rental Car Days          2,612       2,815       2,333       2,224
      Year/Year Growth        30.4%       23.6%       -0.2%       11.1%

    Airline Tickets          1,169       1,362       1,186       1,135
      Year/Year Growth        83.0%       98.2%       44.8%       43.7%


                              1Q08        2Q08        3Q08        4Q08
                              ----        ----        ----        ----

    Revenue               $403,180    $513,976    $561,609    $406,041
      Year/Year Growth        33.8%       44.4%       34.6%       21.3%

    Gross Profit          $181,103    $253,725    $316,078    $205,065
      Year/Year Growth        51.3%       61.4%       56.2%       28.0%



    Gross Bookings            1Q09        2Q09        3Q09        4Q09
    --------------            ----        ----        ----        ----

    Domestic              $851,157    $964,464    $998,715    $830,983
    International**      1,092,427   1,414,714   1,724,131   1,433,471
                         ---------   ---------   ---------   ---------
      Total             $1,943,584  $2,379,178  $2,722,846  $2,264,454

    Agency              $1,469,956  $1,824,618  $2,130,571  $1,766,295
    Merchant**             473,628     554,560     592,275     498,159
                           -------     -------     -------     -------
      Total             $1,943,584  $2,379,178  $2,722,846  $2,264,454

    Year/Year Growth
    ----------------
      Domestic                18.1%       10.6%       24.9%       20.6%
      International            5.3%       14.3%       37.8%       81.0%
       excluding F/X
       impact                 23.5%       32.4%       48.5%       69.5%


      Agency                   7.3%       10.1%       32.9%       59.4%
      Merchant                21.9%       22.4%       32.6%       33.5%

      Total                   10.5%       12.8%       32.8%       52.9%


    Units Sold                1Q09        2Q09        3Q09        4Q09
    ----------                ----        ----        ----        ----

    Hotel Room-Nights       12,785      15,665      17,869      14,593
      Year/Year Growth        36.4%       44.0%       56.3%       59.9%

    Rental Car Days          3,014       3,237       2,604       2,370
      Year/Year Growth        15.4%       15.0%       11.6%        6.6%

    Airline Tickets          1,496       1,551       1,544       1,318
      Year/Year Growth        28.0%       13.9%       30.2%       16.2%


                              1Q09        2Q09        3Q09        4Q09
                              ----        ----        ----        ----

    Revenue               $462,058    $603,741    $730,660    $541,753
      Year/Year Growth        14.6%       17.5%       30.1%       33.4%

    Gross Profit          $208,330    $305,238    $434,006    $313,189
      Year/Year Growth        15.0%       20.3%       37.3%       52.7%

    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.


SOURCE Priceline.com

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