Priceline.com Reports Financial Results for 3rd Quarter 2010
Priceline.com Reports Financial Results for 3rd Quarter 2010
NORWALK, Conn., Nov. 8, 2010 - Priceline.com Incorporated (Nasdaq: PCLN) today reported 3rd quarter 2010 financial results for the Priceline Group of Companies. Third quarter gross travel bookings for the Group, which refers to the total dollar value, generally inclusive of all taxes and fees, of all travel services purchased by consumers, were $4.0 billion, an increase of 47.1% over a year ago.
The Group had revenues in the 3rd quarter of $1.0 billion, a 37.1% increase over a year ago. International operations contributed revenues in the 3rd quarter of $531.0 million, a 67.6% increase versus a year ago (approximately 80% on a local currency basis). The Group’s gross profit for the 3rd quarter was $666.2 million, a 53.5% increase from the prior year. International operations contributed gross profit in the 3rd quarter of $529.8 million, a 67.6% increase versus a year ago (approximately 80% growth on a local currency basis). The Group’s operating income in the 3rd quarter 2010 was $336.8 million, a 67.8% increase from the prior year. The Group had GAAP net income for the 3rd quarter of $223.0 million or $4.41 per diluted share, which compares to $319.0 million or $6.42 per diluted share in the same period a year ago. Net income for the 3rd quarter 2009 was positively affected by a $181.9 million non-cash tax benefit from reversing a portion of the valuation allowance related to the Group’s net operating loss carry forwards.
Non-GAAP net income in the 3rd quarter was $272.3 million, a 57.1% increase versus the similar period in the prior year. Non-GAAP net income per diluted share was $5.33, compared to $3.45 per diluted share a year ago. First Call analyst consensus for the 3rd quarter 2010 was $4.97 per diluted share. Non-GAAP EBITDA for the 3rd quarter was $362.5 million, an increase of 61.4% over the prior year. The section below entitled “Non-GAAP Financial Measures” provides a definition and information about the use of non-GAAP financial measures in this press release and the attached financial and statistical supplement reconciles non-GAAP financial information with the Group’s financial results under GAAP.
“We are pleased by the Group’s strong performance in the 3rd quarter” said Jeffery H. Boyd, President and CEO. “Increased gross travel bookings were driven primarily by our worldwide hotel business, which had a 54% increase in room nights booked. Transaction growth in core Western European and North American markets, ADR improvement and an increasing contribution from high growth new markets led to a sequential increase in the Group’s gross travel bookings growth.”
Mr. Boyd continued, “Rental car unit sales also contributed to bookings growth with 97% growth in days booked, driven by the strong performance of TravelJigsaw, our recently acquired international rental car business, and a 23% increase in domestic unit sales. Airline ticket sales were down 5% in the quarter as demand was impacted by reduced capacity and higher airfares.”
Looking forward, Mr. Boyd said, “We believe the Group is benefiting from cyclical improvements in the travel economy, including an easing of immediate fears relating to Eurozone sovereign debt, an increasing contribution from fast-growing new markets, particularly non-core Europe and Asia/Pacific, and continued innovation and execution by our teams around the world to build hotel supply, content, distribution and improve the customer experience. We believe the scale of our international hotel business and the talent and commitment of our people position the Group well to continue building share and navigate changes in our markets in the future.”
Priceline.com said the Group was targeting the following for 4th quarter 2010:
— Year-over-year increase in total gross travel bookings of approximately
36% - 41%.
— Year-over-year increase in international gross travel bookings of
approximately 54% - 59% (an increase of approximately 58% - 63% on a
local currency basis).
— Year-over-year increase in domestic gross travel bookings of
approximately 5% - 10%.
— Year-over-year increase in revenue of approximately 31% - 36%.
— Year-over-year increase in gross profit of approximately 49% - 54%.
— Non-GAAP EBITDA of approximately $200 million to $210 million.
— Non-GAAP net income of between $2.91 and $3.06 per diluted share.
Non-GAAP guidance for the 4th 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 early debt
extinguishment, if any, related to cash settled convertible debt,
— excludes the impact, if any, of charges or benefits associated with
judgments, rulings and/or settlements related to hotel occupancy tax
proceedings,
— excludes non-cash income tax expense and reflects the impact on income
taxes of certain of the non-GAAP adjustments,
— includes the additional impact of the non-GAAP adjustments described
above on net income attributable to noncontrolling interests,
— 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
non-GAAP net income has been adjusted to exclude stock-based
compensation.
In addition, non-GAAP EBITDA excludes depreciation and amortization expense, interest income, interest expense, equity in income and loss of investees, net income attributable to noncontrolling interests, income taxes and includes the impact of foreign currency transactions and other expenses.
When aggregated, the foregoing adjustments are expected to increase non-GAAP EBITDA over GAAP net income by approximately $84 million in the 4th quarter 2010. In addition, the foregoing adjustments are expected to increase non-GAAP net income over GAAP net income by approximately $33 million in the 4th quarter 2010. On a per share basis, the Group estimates GAAP net income of approximately $2.29 to $2.44 per diluted share for the 4th quarter 2010.
Information About Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking statements reflect the views of the Group’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 Group’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 Group’s relationships with airlines and other product and service providers and vendors which could include, without limitation, the withdrawal of suppliers from the Group’s systems (either “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 in the form of reduced booking fees and/or the launch by competitors of an “opaque” travel offering and the potential impact of “metasearch” initiatives by Google and other search engines upon which we rely for a significant amount of traffic;
—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 2nd quarter 2010 acquisition of TravelJigsaw, 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 Group’s actual results to differ materially from those described in the forward-looking statements, please refer to the Group’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 Group 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
Non-GAAP EBITDA represents GAAP net income excluding depreciation and amortization expense, interest income, interest expense, equity in income and loss of investees, net income and loss attributable to noncontrolling interests, income taxes and the non-GAAP adjustments relating to stock-based compensation expense, gains and losses on early debt extinguishment and charges or benefits related to judgments, rulings, or settlements of hotel occupancy tax proceedings. Additionally, favorable adjustments to franchise tax and sales and use tax recorded in GAAP net income have been excluded from non-GAAP EBITDA and non-GAAP net income.
Non-GAAP EBITDA, non-GAAP net income and non-GAAP 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. The Group believes that non-GAAP EBITDA, non-GAAP net income and non-GAAP net income per share that exclude certain non-cash or non-recurring income or expense items are useful for analysts and investors to evaluate the Group’s future on-going performance because they enable a more meaningful comparison of the Group’s projected cash earnings and performance with its historical results from prior periods. These non-GAAP metrics, in particular non-GAAP EBITDA and non-GAAP 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 non-GAAP 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.
Non-GAAP financial information is adjusted for the following items:
— Amortization expense of acquisition-related intangibles is excluded
because it does not impact cash earnings.
— Charges or benefits related to judgments, rulings, or settlements of
hotel occupancy tax proceedings and favorable adjustments related to
certain franchise and sales tax issues for our headquarters location 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.
— Interest expense related to the amortization of debt discount and gains
or losses on early debt extinguishment related to convertible debt are
excluded because they are non-cash in nature.
— Income tax expense is adjusted for the tax impact of certain of the
non-GAAP 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 for the 3rd quarter 2009 was
adjusted to exclude a $181.9 million non-cash tax benefit from reversing
a portion of the valuation allowance related to the Group’s net
operating loss carry forwards.
— Net income and loss attributable to non-controlling interest is adjusted
for the impact of certain of the non-GAAP adjustments described above
— For calculating non-GAAP net income per share:
— net income is adjusted for the impact of the non-GAAP adjustments
described above.
— fully diluted share count is adjusted to include the anti-dilutive
impact of “Conversion Spread Hedges” which increases 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
non-GAAP net income per share because non-GAAP 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 non-GAAP financial information with priceline.com’s financial results under GAAP.
About The Priceline Group of Companies
The Priceline Group of Companies (Nasdaq: PCLN) is a leader in global online hotel reservations, with approximately 61 million room nights booked in 2009. The Group is composed of four primary brands - Booking.com, priceline..com, Agoda.com and TravelJigsaw.
The Priceline Group provides online travel services in 38 languages in 100 countries in Europe, North America, Asia, the Middle East and Africa.
Based in Amsterdam, Booking.com is a leading international online hotel reservation service operating in 92 countries in 38 languages. Booking.com offers its customers access to over 105,000 participating hotels worldwide.
In the U.S., priceline.com gives leisure travelers multiple ways to save on their airline tickets, hotel rooms, rental cars, vacation packages and cruises. In addition to getting compelling published prices, travelers can take advantage of priceline.com’s famous Name Your Own Price® service, which can deliver the lowest prices available. Priceline.com also operates the following travel websites: Travelweb.com, Lowestfare.com, RentalCars.com and BreezeNet.com.
Singapore-based Agoda.com is an Asian online hotel reservation service that offers hotel rooms around the world and is available in 32 languages. With headquarters in Manchester, UK, TravelJigsaw is a multinational car hire service, offering its reservation services in more than 4,000 locations in 80 countries. Customer support is provided in 20 languages.
priceline.com Incorporated
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
September December
30, 31,
ASSETS 2010 2009
—— ——
Current assets:
Cash and cash equivalents $533,121 $202,141
Restricted cash 1,155 1,319
Short-term investments 941,948 598,014
Accounts receivable, net of allowance for
doubtful accounts of
$5,758 and $5,023, respectively 248,946 118,659
Prepaid expenses and other current assets 41,631 36,828
Deferred income taxes 73,257 65,980
Total current assets 1,840,058 1,022,941
Property and equipment, net 35,905 30,489
Intangible assets, net 243,243 172,080
Goodwill 453,618 350,630
Deferred taxes 158,888 253,700
Other assets 14,833 4,384
——— ——-
Total assets $2,746,545 $1,834,224
========== ==========
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $112,753 $60,568
Accrued expenses and other current liabilities 195,936 119,521
Deferred merchant bookings 117,800 60,758
Income taxes payable 79,666 8,040
Convertible debt 174 159,878
Total current liabilities 506,329 408,765
Deferred income taxes 59,402 43,793
Other long-term liabilities 28,481 24,052
Convertible debt 471,071 -
—-
Total liabilities 1,065,283 476,610
—
Convertible debt 41 35,985
—- ———
Redeemable noncontrolling interests 44,222 -
——— —-
Stockholders’ equity:
Common stock, $0.008 par value, authorized
1,000,000,000 shares,
56,498,183, and 52,446,173 shares issued,
respectively 438 405
Treasury stock, 7,410,558 and 6,865,119
shares, respectively (636,623) (510,970)
Additional paid-in capital 2,355,093 2,289,867
Accumulated deficit (62,861) (454,673)
Accumulated other comprehensive loss (19,048) (3,000)
Total stockholders’ equity 1,636,999 1,321,629
— —
Total liabilities and stockholders’ equity $2,746,545 $1,834,224
========== ==========
priceline.com Incorporated
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
September, 30,
2010 2009
—— ——
Merchant revenues $494,473 $400,314
Agency revenues 504,010 323,188
Other revenues 3,274 7,158
——- ——-
Total revenues 1,001,757 730,660
Cost of revenues 335,569 296,654
Gross profit 666,188 434,006
Operating expenses:
Advertising - Offline 7,773 8,474
Advertising - Online 172,727 115,103
Sales and marketing 33,060 24,473
Personnel, including stock-based
compensation
of $21,176, $10,870, $48,550 and $32,727
for the three and nine months ended
September 30, 2010 and 2009, respectively 82,007 50,959
General and administrative 15,730 19,367
Information technology 5,347 4,777
Depreciation and amortization 12,775 10,098
——— ———
Total operating expenses 329,419 233,251
Operating income 336,769 200,755
Other income (expense):
Interest income 918 471
Interest expense (8,293) (5,911)
Foreign currency transactions and other (10,715) (1,220)
———
Total other income (expense) (18,090) (6,660)
———
Earnings before income taxes and equity in
income of investees 318,679 194,095
Income tax (expense) benefit (94,119) 124,887
Equity in income of investees - -
—- —-
Net income 224,560 318,982
Less: net income attributable to
noncontrolling interests 1,580 -
——- —-
Net income applicable to common stockholders $222,980 $318,982
======== ========
Net income applicable to common stockholders
per basic common share $4.59 $7.49
===== =====
Weighted average number of basic common
shares outstanding 48,570 42,569
====== ======
Net income applicable to common stockholders
per diluted common share $4.41 $6.42
===== =====
Weighted average number of diluted common
shares outstanding 50,559 49,670
====== ======
Nine Months Ended
September, 30,
2010 2009
—— ——
Merchant revenues $1,309,407 $1,130,169
Agency revenues 1,034,765 647,899
Other revenues 9,419 18,391
——- ———
Total revenues 2,353,591 1,796,459
Cost of revenues 923,032 848,885
Gross profit 1,430,559 947,574
—
Operating expenses:
Advertising - Offline 29,684 30,293
Advertising - Online 418,354 273,327
Sales and marketing 85,663 63,583
Personnel, including stock-based
compensation
of $21,176, $10,870, $48,550 and $32,727
for the three and nine months ended
September 30, 2010 and 2009, respectively 194,635 135,333
General and administrative 56,224 48,881
Information technology 14,850 14,002
Depreciation and amortization 33,312 29,182
——— ———
Total operating expenses 832,722 594,601
Operating income 597,837 352,973
Other income (expense):
Interest income 2,713 1,695
Interest expense (22,366) (19,221)
Foreign currency transactions and other (12,806) (1,283)
———
Total other income (expense) (32,459) (18,809)
Earnings before income taxes and equity
in income of investees 565,378 334,164
Income tax (expense) benefit (172,347) 76,851
Equity in income of investees - 2
—- —-
Net income 393,031 411,017
Less: net income attributable to
noncontrolling interests 1,219 -
——- —-
Net income applicable to common
stockholders $391,812 $411,017
======== ========
Net income applicable to common
stockholders per basic common share $8.24 $9.84
===== =====
Weighted average number of basic common
shares outstanding 47,565 41,750
====== ======
Net income applicable to common
stockholders per diluted common share $7.70 $8.42
===== =====
Weighted average number of diluted common
shares outstanding 50,917 48,805
====== ======
priceline.com Incorporated
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended
September 30,
———
OPERATING ACTIVITIES: 2010 2009
—— ——
Net income $393,031 $411,017
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 12,068 10,605
Amortization 24,193 18,577
Provision for uncollectible
accounts, net 5,737 3,379
Reversal of valuation allowance on
deferred tax asset - (181,874)
Other deferred income taxes
excluding valuation allowance
reversal 33,650 27,835
Stock-based compensation expense 48,628 32,727
Amortization of debt issuance costs 2,785 1,620
Amortization of debt discount 14,948 14,752
Loss (gain) on early extinguishment
of debt 11,334 (2,735)
Equity in income of investees - (2)
Changes in assets and liabilities:
Accounts receivable (112,755) (73,932)
Prepaid expenses and other current
assets (8,034) 8,921
Accounts payable, accrued expenses
and other current liabilities 169,898 89,827
Other 1,897 2,683
——- ——-
Net cash provided by operating
activities 597,380 363,400
INVESTING ACTIVITIES:
Purchase of investments (1,030,011) (534,274)
Proceeds from sale of investments 665,925 294,618
Additions to property and equipment (14,471) (9,902)
Acquisitions and other equity
investments, net of cash acquired (110,972) -
Proceeds from foreign currency
contracts 44,564 -
Payments on foreign currency
contracts (4,283) -
Proceeds from redemption of equity
investment in pricelinemortgage.com - 8,921
Change in restricted cash 156 1,234
—- ——-
Net cash used in investing
activities (449,092) (239,403)
- -
FINANCING ACTIVITIES:
Proceeds from the issuance of
convertible senior notes 575,000 -
Payment of debt issuance costs (13,334) -
Payments related to conversion of
convertible senior notes (295,398) (122,047)
Repurchase of common stock (125,653) (14,169)
Proceeds from the sale of subsidiary
shares to noncontrolling interests 4,311 -
Proceeds from exercise of stock
options 24,623 9,404
Excess tax benefit on stock-based
compensation 4,975 1,580
——- ——-
Net cash provided by (used in)
financing activities 174,524 (125,232)
-
Effect of exchange rate changes on
cash and cash equivalents 8,168 (842)
——- ——
Net increase (decrease) in cash and
cash equivalents 330,980 (2,077)
Cash and cash equivalents, beginning
of period 202,141 364,550
Cash and cash equivalents, end of
period $533,121 $362,473
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for
income taxes $61,568 $60,155
======= =======
Cash paid during the period for
interest $4,639 $4,242
====== ======
Non-cash fair value adjustment for
redeemable noncontrolling interests $4,118 $-
====== ===
priceline.com Incorporated
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share data)
Three Months Ended
September 30,
———
RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP EBITDA 2010 2009
—— ——
GAAP Net income applicable to common
stockholders $222,980 $318,982
(a) Amortization of acquired
intangible assets in Merchant
revenues 2,020 -
(b) Stock-based compensation 21,176 10,870
(c) Favorable adjustments related to
franchise tax and sales and use tax
for headquarters location are
recorded in General and
administrative expense (2,720) -
(d) Charge related to hotel occupancy
tax litigation judgment in General
and administrative expense - 3,680
(e) Depreciation and amortization 12,775 10,098
(f) Interest income (918) (471)
(f) Interest expense 8,293 5,911
(g) Loss (gain) on early
extinguishment of debt 3,226 394
(h) Adjustments for the tax impact of
certain of the pro forma adjustments
and to exclude non-cash income taxes 94,119 (124,887)
(i) Equity in income of investees - -
(j) Net income attributable to
noncontrolling interests 1,580 -
Non-GAAP EBITDA $362,531 $224,577
======== ========
Three Months Ended
September 30,
———
RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP NET INCOME 2010 2009
—— ——
GAAP Net income applicable to common
stockholders $222,980 $318,982
(a) Amortization of acquired
intangible assets in Merchant
revenues 2,020 -
(b) Stock-based compensation 21,176 10,870
(c) Favorable adjustments related to
franchise tax and sales and use tax
for headquarters location are
recorded in General and
administrative expense (2,720) -
(d) Charge related to hotel occupancy
tax litigation judgment in General
and administrative expense - 3,680
(g) Debt discount amortization
related to convertible debt 5,482 4,516
(g) Loss (gain) on early
extinguishment of debt 3,226 394
(h) Adjustments for the tax impact of
certain of the non-GAAP adjustments
and to exclude non-cash income taxes
(including the non-cash benefit of
$181.9 million in 3rd quarter 2009
from the reversal of a portion of the
valuation allowance on the Company’s
deferred tax asset) 12,281 (171,529)
(a) Amortization of acquired
intangible assets in Depreciation and
amortization 8,558 6,427
(j) Impact on noncontrolling
interests of certain other pro forma
adjustments (745) -
Non-GAAP Net income applicable to
common stockholders $272,258 $173,340
======== ========
Three Months Ended
September 30,
———
RECONCILIATION OF GAAP TO NON-GAAP
NET INCOME
PER DILUTED COMMON SHARE 2010 2009
—— ——
GAAP weighted average number of
diluted common shares outstanding 50,559 49,670
(k) Adjustment for Conversion Spread
Hedges (25) (449)
(l) Adjustment for restricted stock,
restricted stock units and
performance units 525 1,019
Non-GAAP weighted average number of
diluted common shares outstanding 51,059 50,240
====== ======
Net income applicable to common
stockholders per diluted common share
GAAP $4.41 $6.42
===== =====
Non-GAAP $5.33 $3.45
===== =====
Nine Months Ended
September 30,
———
RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP EBITDA 2010 2009
—— ——
GAAP Net income applicable to common
stockholders $391,812 $411,017
(a) Amortization of acquired
intangible assets in Merchant revenues 2,949 -
(b) Stock-based compensation 48,550 32,727
(c) Favorable adjustments related to
franchise tax and sales and use tax
for headquarters location are recorded
in General and administrative expense (2,720) -
(d) Charge related to hotel occupancy
tax litigation judgment in General and
administrative expense - 3,680
(e) Depreciation and amortization 33,312 29,182
(f) Interest income (2,713) (1,695)
(f) Interest expense 22,366 19,221
(g) Loss (gain) on early
extinguishment of debt 11,334 (2,735)
(h) Adjustments for the tax impact of
certain of the pro forma adjustments
and to exclude non-cash income taxes 172,347 (76,851)
(i) Equity in income of investees - (2)
(j) Net income attributable to
noncontrolling interests 1,219 -
Non-GAAP EBITDA $678,456 $414,544
======== ========
Nine Months Ended
September 30,
———
RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP NET INCOME 2010 2009
—— ——
GAAP Net income applicable to common
stockholders $391,812 $411,017
(a) Amortization of acquired
intangible assets in Merchant revenues 2,949 -
(b) Stock-based compensation 48,550 32,727
(c) Favorable adjustments related to
franchise tax and sales and use tax
for headquarters location are recorded
in General and administrative expense (2,720) -
(d) Charge related to hotel occupancy
tax litigation judgment in General and
administrative expense - 3,680
(g) Debt discount amortization related
to convertible debt 14,948 14,752
(g) Loss (gain) on early
extinguishment of debt 11,334 (2,735)
(h) Adjustments for the tax impact of
certain of the non-GAAP adjustments
and to exclude non-cash income taxes
(including the non-cash benefit of
$181.9 million in 3rd quarter 2009
from the reversal of a portion of the
valuation allowance on the Company’s
deferred tax asset) 30,728 (154,382)
(a) Amortization of acquired
intangible assets in Depreciation and
amortization 21,200 18,542
(j) Impact on noncontrolling interests
of certain other pro forma adjustments (1,154) -
Non-GAAP Net income applicable to
common stockholders $517,647 $323,601
======== ========
Nine Months Ended
September 30,
———
RECONCILIATION OF GAAP TO NON-GAAP NET
INCOME
PER DILUTED COMMON SHARE 2010 2009
—— ——
GAAP weighted average number of diluted
common shares outstanding 50,917 48,805
(k) Adjustment for Conversion Spread
Hedges (87) (642)
(l) Adjustment for restricted stock,
restricted stock units and performance
units 501 1,006
Non-GAAP weighted average number of
diluted common shares outstanding 51,331 49,169
====== ======
Net income applicable to common
stockholders per diluted common share
GAAP $7.70 $8.42
===== =====
Non-GAAP $10.08 $6.58
====== =====
(a) Amortization of acquired intangible assets is recorded in
Merchant revenues and Depreciation and amortization.
(b) Stock-based compensation is recorded in Personnel expense.
(c) Favorable adjustments related to franchise tax and sales and
use tax for headquarters location are recorded in General and
administrative expense.
(d) Charge related to Texas hotel occupancy tax litigation judgment
is recorded in General and administrative expense.
(e) Depreciation and amortization are excluded from Net income to
calculate EBITDA.
(f) Interest income and Interest expense are excluded from Net
income to calculate EBITDA.
(g) Non-cash interest expense related to the amortization of debt
discount and loss (gain) on early debt extinguishment are recorded
in Interest expense and Foreign currency transactions and other,
respectively.
(h) Adjustments for the tax impact of certain of the non-GAAP
adjustments and to exclude non-cash income taxes (including the
non-cash benefit of $181.9 million in 3rd quarter 2009 from the
reversal of a portion of the valuation allowance on the Company’s
deferred tax asset).
(i) Equity in income of investees is excluded from Net income to
calculate EBITDA.
(j) Impact of other non-GAAP adjustments on Net income
attributable to noncontrolling interests.
(k) 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.
(l) All shares of restricted common stock, restricted stock units
and performance share units are included in the calculation of non-
GAAP net income per share because non-GAAP net income has been
adjusted to exclude stock-based compensation expense.
priceline.com Incorporated
——-
Statistical Data
In millions
(Unaudited)
Gross Bookings 2Q08 3Q08 4Q08 1Q09 2Q09
—— —— —— —— ——
Domestic $872 $800 $689 $851 $964
International** 1,238 1,251 792 1,092 1,415
——- ——- —- ——- ——-
Total $2,110 $2,050 $1,481 $1,944 $2,379
Agency $1,657 $1,604 $1,108 $1,470 $1,825
Merchant** 453 447 373 474 555
—- —- —- —- —-
Total $2,110 $2,050 $1,481 $1,944 $2,379
Year/Year Growth
—
Domestic 59.2% 32.8% 31.1% 18.1% 10.6%
International 80.1% 58.6% 16.5% 5.3% 14.3%
excluding F/X
impact 55.8% 44.7% 27.6% 23.5% 32.4%
Agency 80.2% 53.8% 21.4% 7.3% 10.1%
Merchant 43.6% 28.3% 27.5% 21.9% 22.4%
Total 70.9% 47.4% 22.9% 10.5% 12.8%
Units Sold 2Q08 3Q08 4Q08 1Q09 2Q09
—- —— —— —— —— ——
Hotel Room-Nights 10.9 11.4 9.1 12.8 15.7
Year/Year Growth 50.2% 43.6% 38.0% 36.4% 44.0%
Rental Car Days 2.8 2.3 2.2 3.0 3.2
Year/Year Growth 23.6% -0.2% 11.1% 15.4% 15.0%
Airline Tickets 1.4 1.2 1.1 1.5 1.6
Year/Year Growth 98.2% 44.8% 43.7% 28.0% 13.9%
2Q08 3Q08 4Q08 1Q09 2Q09
—— —— —— —— ——
Revenue $514.0 $561.6 $406.0 $462.1 $603.7
Year/Year Growth 44.4% 34.6% 21.3% 14.6% 17.5%
Gross Profit $253.7 $316.1 $205.1 $208.3 $305.2
Year/Year Growth 61.4% 56.2% 28.0% 15.0% 20.3%
Gross Bookings 3Q09 4Q09 1Q10 2Q10 3Q10
—— —— —— —— ——
Domestic $999 $831 $989 $1,154 $1,121
International** 1,724 1,433 1,975 2,256 2,885
——- ——- ——- ——- ——-
Total $2,723 $2,264 $2,965 $3,410 $4,006
Agency $2,131 $1,766 $2,374 $2,683 $3,168
Merchant** 592 498 591 727 838
—- —- —- —- —-
Total $2,723 $2,264 $2,965 $3,410 $4,006
Year/Year Growth
—
Domestic 24.9% 20.6% 16.2% 19.6% 12.2%
International 37.8% 81.0% 80.8% 59.5% 67.3%
excluding F/X
impact 48.5% 69.5% 72.8% 67.1% 78.0%
Agency 32.9% 59.4% 61.5% 47.0% 48.7%
Merchant 32.6% 33.5% 24.8% 31.1% 41.4%
Total 32.8% 52.9% 52.5% 43.3% 47.1%
Units Sold 3Q09 4Q09 1Q10 2Q10 3Q10
—- —— —— —— —— ——
Hotel Room-Nights 17.9 14.6 20.0 23.2 27.5
Year/Year Growth 56.3% 59.9% 56.8% 48.2% 54.1%
Rental Car Days 2.6 2.4 3.0 4.3 5.1
Year/Year Growth 11.6% 6.6% -0.9% 32.0% 97.3%
Airline Tickets 1.5 1.3 1.5 1.6 1.5
Year/Year Growth 30.2% 16.2% 2.8% 4.1% -4.6%
3Q09 4Q09 1Q10 2Q10 3Q10
—— —— —— —— ——
Revenue $730.7 $541.8 $584.4 $767.4 $1,001.8
Year/Year Growth 30.1% 33.4% 26.5% 27.1% 37.1%
Gross Profit $434.0 $313.2 $319.1 $445.3 $666.2
Year/Year Growth 37.3% 52.7% 53.2% 45.9% 53.5%
Gross bookings is an operating and statistical metric that captures
the total dollar value, generally inclusive of taxes and fees, of
all travel services booked by customers.
** Includes $85.8 million and $43.9 million of Travel Jigsaw gross
bookings in 3Q10 and 2Q10 since acquisition on May 18, 2010,
respectively. Includes $37.5 million, $32.4 million and $24.2
million of Agoda gross bookings in 4Q08, 3Q08 and 2Q08,
respectively.
SOURCE Priceline.com Incorporated
Priceline.com Incorporated
CONTACT: Press: Brian Ek, +1-203-299-8167, .(JavaScript must be enabled to view this email address), or Investors: Matthew Tynan, +1-203-299-8487, .(JavaScript must be enabled to view this email address)
Web Site: http://www.Priceline.com