Priceline.com Reports Financial Results for 4th Quarter and
Tell-a-FriendPriceline.com Reports Financial Results for 4th Quarter and Full-Year 2010
NORWALK, Conn., Feb. 23, 2011 - Priceline.com Incorporated (Nasdaq: PCLN) today reported 4th quarter and full-year 2010 financial results for the Priceline Group of Companies. Fourth 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 $3.26 billion, an increase of 44.2% over a year ago.
The Group had revenues in the 4th quarter of $731 million, a 35.0% increase over a year ago. The Group’s international operations contributed revenues in the 4th quarter of $374.9 million, a 68.2% increase versus a year ago (approximately 75% on a local currency basis). The Group’s gross profit for the 4th quarter was $478.4 million, a 52.8% increase from the prior year. International operations contributed gross profit in the 4th quarter of $374..0 million, a 68.4% increase versus a year ago (approximately 75% growth on a local currency basis). The Group’s operating income in the 4th quarter was $189.0 million, a 60.3% increase from the prior year. The Group had GAAP net income applicable to common shareholders for the 4th quarter of $135.7 million, or $2.66 per diluted share, which compares to $78.4 million or $1..55 per diluted share, in the same period a year ago.
Non-GAAP net income in the 4th quarter was $175.0 million, a 72.2% increase versus the prior year. Non-GAAP net income was $3.40 per diluted share, compared to $1.99 per diluted share a year ago. First Call analyst consensus for the 4th quarter 2010 was $3.10 per diluted share. Non-GAAP EBITDA for the 4th quarter 2010 was $222.9 million, an increase of 67.4% over a year ago. 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.
For full-year 2010, the Group had revenues of $3.08 billion, a 31.9% increase over 2009. International operations contributed full-year revenues of $1..4 billion, a 69.5% increase versus a year ago (approximately 77% on a local currency basis). Gross profit for the Group in 2010 was $1.9 billion, a 51.4% increase from the prior year. International operations contributed full-year gross profit of $1.4 billion, a 69.7% increase versus the prior year (approximately 77% growth on a local currency basis). The Group’s 2010 operating income was $786.8 million, a 67.1% increase from the prior year. The Group had GAAP net income for full-year 2010 of $527.5 million, or $10.35 per diluted share, which compares to $489.5 million or $9.88 per diluted share in 2009. Net income for the full-year 2009 was positively affected by a $183.3 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 EBITDA for 2010 was $901.4 million, an increase of 64.6% over a year ago. Non-GAAP net income for 2010 was $692.7 million or $13.49 per diluted share, compared to $8.52 per diluted share a year ago. First Call analyst consensus for full-year 2010 was $13.22 per diluted share.
“The Group’s worldwide hotel business performed well for the 4th quarter and full year 2010,” said Jeffery H. Boyd, Priceline President and Chief Executive Officer. “High gross travel bookings growth rates were the result of continued penetration of new markets, like Asia-Pacific and South America, where economic growth and rapid online adoption are tailwinds for the business, and solid growth in core markets in Western Europe and North America. The Group’s air and rental car businesses also performed well under challenging market conditions and TravelJigsaw has made good progress with platform and website enhancements to grow our international rental car business.”
“Going forward, Booking.com, priceline.com, Agoda.com and TravelJigsaw intend to continue building their brands, extending the reach of the Group’s global hotel network and working together to achieve benefits of integration where appropriate,” said Mr. Boyd.
Priceline.com said it was targeting the following for 1st quarter 2011:
— Year-over-year increase in total gross travel bookings of approximately
45% - 50%.
— Year-over-year increase in international gross travel bookings of
approximately 64% - 69% (an increase of approximately 66% - 71% on a
local currency basis).
— Year-over-year increase in domestic gross travel bookings of
approximately 7% to 12%.
— Year-over-year increase in revenue of approximately 29% to 34%.
— Year-over-year increase in gross profit of approximately 47% to 52%..
— Non-GAAP EBITDA of approximately $147 million to $157 million.
— Non-GAAP net income of between $2.34 and $2.44 per diluted share.
The Company noted that its first quarter guidance reflected sequentially higher levels of top line growth, and accordingly, higher variable expenses, which should benefit earnings in the second and third quarters when a high proportion of the related stays occur and commission revenue is recognized.
Non-GAAP guidance for the 1st quarter 2011:
— 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 non-GAAP adjustments are expected to increase non-GAAP EBITDA over GAAP net income by approximately $68 million in the 1st quarter 2011. In addition, the non-GAAP adjustments are expected to increase non-GAAP net income over GAAP net income by approximately $35 million in the 1st quarter 2011. On a per share basis, the Group estimates GAAP net income of approximately $1.66 to $1.76 per diluted share for the 1st quarter 2011.
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 priceline.com 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 is adjusted for 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 and the favorable litigation settlement relating to credit card processing costs 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 and to those of its competitors. 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.
— Cash benefit associated with the favorable settlement of litigation
related to credit card processing costs is excluded because the amount
and timing of this item is 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 full year 2009 was
adjusted to exclude a $183.3 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 over 150,000 participating hotels worldwide and 92.8 million room nights booked in 2010. The Group is composed of four primary brands - Booking.com, priceline.com, Agoda.com and TravelJigsaw. The Priceline Group provides online travel services in Europe, North America, South America, the Asia-Pacific region, the Middle East and Africa.
Based in Amsterdam, Booking.com is a leading international online hotel reservation service operating in 99 countries in 41 languages. Booking.com offers its customers access to over 120,000 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 115 countries. Customer support is provided in 20 languages.
priceline.com Incorporated
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
December December
31, 31,
ASSETS 2010 2009
—— ——
Current assets:
Cash and cash equivalents $358,967 $202,141
Restricted cash 1,050 1,319
Short-term investments 1,303,251 598,014
Accounts receivable, net of allowance for
doubtful accounts of
$6,353 and $5,023, respectively 162,426 118,659
Prepaid expenses and other current assets 61,211 36,828
Deferred income taxes 70,559 65,980
Total current assets 1,957,464 1,022,941
Property and equipment, net 39,739 30,489
Intangible assets, net 232,030 172,080
Goodwill 510,894 350,630
Deferred taxes 151,408 253,700
Other assets 14,418 4,384
——— ——-
Total assets $2,905,953 $1,834,224
========== ==========
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $90,311 $60,568
Accrued expenses and other current
liabilities 243,767 127,561
Deferred merchant bookings 136,915 60,758
Convertible debt 175 159,878
Total current liabilities 471,168 408,765
Deferred income taxes 56,440 43,793
Other long-term liabilities 42,990 24,052
Convertible debt 476,230 -
—-
Total liabilities 1,046,828 476,610
—
Redeemable noncontrolling interests 45,751 -
——— —-
Convertible debt 38 35,985
—- ———
Stockholders’ equity:
Common stock, $0.008 par value, authorized
1,000,000,000 shares,
56,567,236, and 52,446,173 shares issued,
respectively 438 405
Treasury stock 7,421,128 and 6,865,119
shares, respectively (640,415) (510,970)
Additional paid-in capital 2,417,092 2,289,867
Accumulated earnings (deficit) 69,110 (454,673)
Accumulated other comprehensive loss (32,889) (3,000)
Total stockholders’ equity 1,813,336 1,321,629
— —
Total liabilities and stockholders’ equity $2,905,953 $1,834,224
========== ==========
priceline.com Incorporated
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
December 31,
——-
2010 2009
—— ——
Merchant revenues $382,234 $317,407
Agency revenues 345,838 220,496
Other revenues 3,244 3,850
——- ——-
Total revenues 731,316 541,753
Cost of revenues 252,903 228,564
Gross profit 478,413 313,189
Operating expenses:
Advertising - Offline 6,030 5,978
Advertising - Online 133,786 92,054
Sales and marketing 30,641 17,655
Personnel, including stock-based
compensation 75,437 44,819
of $19,650, $7,944, $68,200 and $40,671
for
the three and twelve months ended
December 31, 2010 and 2009, respectively
General and administrative 24,961 19,673
Information technology 6,148 5,137
Depreciation and amortization 12,451 10,011
——— ———
Total operating expenses 289,454 195,327
Operating income 188,959 117,862
Other income (expense):
Interest income 1,144 528
Interest expense (7,578) (4,863)
Foreign currency transactions and other (1,620) (5,389)
——— ———
Total other income (expense) (8,054) (9,724)
——— ———
Earnings before income taxes and equity
in income of investees 180,905 108,138
Income tax (expense) benefit (45,794) (29,683)
Equity in income of investees - -
—- —-
Net income 135,111 78,455
Less: net (loss) income attributable to
noncontrolling interests (618) -
—— —-
Net income applicable to common
stockholders $135,729 $78,455
======== =======
Net income applicable to common
stockholders per basic common share $2.76 $1.77
===== =====
Weighted average number of basic common
shares outstanding 49,111 44,350
====== ======
Net income applicable to common
stockholders per diluted common share $2.66 $1.55
===== =====
Weighted average number of diluted
common shares outstanding 51,035 50,570
====== ======
Twelve Months Ended
December 31,
——-
2010 2009
—— ——
Merchant revenues $1,691,640 $1,447,576
Agency revenues 1,380,603 868,395
Other revenues 12,662 22,241
——— ———
Total revenues 3,084,905 2,338,212
Cost of revenues 1,175,934 1,077,449
— —
Gross profit 1,908,971 1,260,763
— —
Operating expenses:
Advertising - Offline 35,714 36,270
Advertising - Online 552,140 365,381
Sales and marketing 116,303 81,238
Personnel, including stock-based
compensation 270,071 180,152
of $19,650, $7,944, $68,200 and $40,671
for
the three and twelve months ended
December 31, 2010 and 2009, respectively
General and administrative 81,185 68,555
Information technology 20,998 19,139
Depreciation and amortization 45,763 39,193
——— ———
Total operating expenses 1,122,174 789,928
—
Operating income 786,797 470,835
Other income (expense):
Interest income 3,857 2,223
Interest expense (29,944) (24,084)
Foreign currency transactions and other (14,427) (6,672)
———
Total other income (expense) (40,514) (28,533)
Earnings before income taxes and equity
in income of investees 746,283 442,302
Income tax (expense) benefit (218,141) 47,168
Equity in income of investees - 2
—- —-
Net income 528,142 489,472
Less: net (loss) income attributable to
noncontrolling interests 601 -
—- —-
Net income applicable to common
stockholders $527,541 $489,472
======== ========
Net income applicable to common
stockholders per basic common share $11.00 $11.54
====== ======
Weighted average number of basic common
shares outstanding 47,955 42,406
====== ======
Net income applicable to common
stockholders per diluted common share $10.35 $9.88
====== =====
Weighted average number of diluted
common shares outstanding 50,988 49,522
====== ======
priceline.com Incorporated
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Twelve Months Ended
December 31,
——-
OPERATING ACTIVITIES: 2010 2009 2008
—— —— ——
Net income $528,142 $489,472 $185,624
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 16,209 14,491 14,388
Amortization 34,255 24,702 28,680
Provision for uncollectible
accounts, net 7,102 3,227 13,113
Reversal of valuation
allowance on deferred tax
assets - (183,272) -
Other deferred income taxes 37,540 30,990 19,899
Stock-based compensation
and other stock-based
payments 68,396 40,671 40,522
Amortization of debt
issuance costs 3,332 2,465 2,525
Amortization of debt
discount 20,110 18,203 26,669
Loss (gain) on early
extinguishment of debt 11,334 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 (29,275) (22,767) (42,888)
Prepaid expenses and other
current assets (22,373) (979) (5,153)
Accounts payable, accrued
expenses and other current
liabilities 84,750 86,792 32,245
Other 17,775 4,624 4,790
——— ——- ——-
Net cash provided by
operating activities 777,297 509,665 315,553
INVESTING ACTIVITIES:
Purchase of investments (1,813,032) (922,163) (196,308)
Proceeds from sale of
investments 1,071,669 432,184 218,555
Purchase of shares held by
noncontrolling interests - - (154,034)
Additions to property and
equipment (22,593) (15,106) (18,322)
Acquisitions and other
equity investments, net of
cash acquired (112,405) (1,500) (599)
Proceeds from redemption of
equity investment in
pricelinemortgage.com - 8,921 -
Proceeds from foreign
currency contracts 44,564 - -
Payments on foreign currency
contracts (9,561) (5,025) -
Change in restricted cash 260 1,229 (1,197)
—- ——- ———
Net cash used in investing
activities (841,098) (501,460) (151,905)
- - -
FINANCING ACTIVITIES:
Proceeds from the issuance
of convertible senior notes 575,000 - -
Payment of debt issuance
costs (13,334) - -
Payments related to
conversion of senior notes (295,401) (197,122) (176,943)
Repurchase of common stock (129,445) (17,415) (4,449)
Proceeds from the sale of
subsidiary shares to
noncontrolling interests 4,311 - -
Proceeds from exercise of
stock options 25,751 43,428 5,507
Proceeds from termination of
conversion spread hedges 42,984 - -
Excess tax benefit on stock-
based compensation 3,091 2,149 7,037
——- ——- ——-
Net cash provided by (used
in) financing activities 212,957 (168,960) (168,848)
- -
Effect of exchange rate
changes on cash and cash
equivalents 7,670 (1,654) (15,609)
——- ———
Net increase (decrease) in
cash and cash equivalents 156,826 (162,409) (20,809)
Cash and cash equivalents,
beginning of period 202,141 364,550 385,359
Cash and cash equivalents,
end of period $358,967 $202,141 $364,550
======== ======== ========
SUPPLEMENTAL CASH FLOW
INFORMATION:
Cash paid during the period
for income taxes $169,320 $95,512 $66,948
======== ======= =======
Cash paid during the period
for interest $4,901 $4,448 $6,353
====== ====== ======
Non-cash fair value
adjustment for redeemable
noncontrolling interests $7,876 $- $-
====== === ===
priceline.com Incorporated
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share data)
Three Months Ended
December 31,
——-
RECONCILIATION OF GAAP NET
INCOME TO NON-GAAP
EBITDA 2010 2009
—— ——
GAAP Net income applicable
to common stockholders $135,729 $78,455
Amortization of acquired intangible
(a) assets in Merchant revenues 1,753 -
Favorable litigation settlement
related to credit card processing
(b) costs - (1,049)
(c) Stock-based compensation 19,650 7,944
Favorable adjustments related to
franchise tax and sales and use tax
(d) for headquarters location - -
Charges related to hotel margin tax
(e) rulings and judgments 1,732 -
(f) Depreciation and amortization 12,451 10,011
(g) Interest income (1,144) (528)
(g) Interest expense 7,578 4,863
(h) Loss on early extinguishment of debt - 3,784
(i) Income tax expense (benefit) 45,794 29,683
(k) Equity in income of investees - -
Net (loss) income attributable to
(l) noncontrolling interests (618) -
Non-GAAP EBITDA $222,925 $133,163
======== ========
Three Months Ended
December 31,
——-
RECONCILIATION OF GAAP NET
INCOME TO NON-GAAP NET
INCOME 2010 2009
—— ——
GAAP Net income applicable
to common stockholders $135,729 $78,455
Amortization of acquired intangible
(a) assets in Merchant revenues 1,753 -
Favorable litigation settlement
related to credit card processing
(b) costs - (1,049)
(c) Stock-based compensation 19,650 7,944
Favorable adjustments related to
franchise tax and sales and use tax
(d) for headquarters location - -
Charges related to hotel margin tax
(e) rulings and judgments 1,732 -
Debt discount amortization related to
(h) convertible debt 5,161 3,451
Loss (gain) on early extinguishment
(h) of debt - 3,784
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 $183.3 million, primarily
in 3rd quarter 2009, from the
reversal of a portion of the
valuation allowance on the Company’s
(j) deferred tax asset) 3,633 2,949
Amortization of acquired intangible
assets in Depreciation and
(a) amortization 8,271 6,115
Impact on noncontrolling interests of
(m) certain other pro forma adjustments (919) -
Non-GAAP Net income
applicable to common
stockholders $175,010 $101,649
======== ========
Three Months Ended
December 31,
——-
RECONCILIATION OF GAAP TO
NON-GAAP NET INCOME
PER DILUTED COMMON SHARE 2010 2009
—— ——
GAAP weighted average
number of diluted common
shares outstanding 51,035 50,570
Adjustment for Conversion Spread
(n) Hedges - (284)
Adjustment for restricted stock,
restricted stock units and
(o) performance units 396 787
Non-GAAP weighted average
number of diluted common
shares outstanding 51,431 51,073
====== ======
Net income applicable to
common stockholders per
diluted common share
GAAP $2.66 $1.55
===== =====
Non-GAAP $3.40 $1.99
===== =====
Twelve Months Ended
December 31,
——-
RECONCILIATION OF GAAP NET
INCOME TO NON-GAAP EBITDA 2010 2009
—— ——
GAAP Net income applicable
to common stockholders $527,541 $489,472
Amortization of acquired intangible
(a) assets in Merchant revenues 4,702 -
Favorable litigation settlement
related to credit card processing
(b) costs - (1,049)
(c) Stock-based compensation 68,200 40,671
Favorable adjustments related to
franchise tax and sales and use tax
(d) for headquarters location (2,720) -
Charges related to hotel margin tax
(e) rulings and judgments 1,732 3,680
(f) Depreciation and amortization 45,763 39,193
(g) Interest income (3,857) (2,223)
(g) Interest expense 29,944 24,084
(h) Loss on early extinguishment of debt 11,334 1,048
(i) Income tax expense (benefit) 218,141 (47,168)
(k) Equity in income of investees - (2)
Net (loss) income attributable to
(l) noncontrolling interests 601 -
Non-GAAP EBITDA $901,381 $547,706
======== ========
Twelve Months Ended
December 31,
———
RECONCILIATION OF GAAP NET
INCOME TO NON-GAAP NET
INCOME 2010 2009
—— ——
GAAP Net income applicable
to common stockholders $527,541 $489,472
Amortization of acquired intangible
(a) assets in Merchant revenues 4,702 -
Favorable litigation settlement
related to credit card processing
(b) costs - (1,049)
(c) Stock-based compensation 68,200 40,671
Favorable adjustments related to
franchise tax and sales and use tax
(d) for headquarters location (2,720) -
Charges related to hotel margin tax,
(e) rulings and judgments 1,732 3,680
Debt discount amortization related to
(h) convertible debt 20,110 18,203
Loss (gain) on early extinguishment
(h) of debt 11,334 1,048
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 $183.3 million, primarily
in 3rd quarter 2009, from the
reversal of a portion of the
valuation allowance on the Company’s
(j) deferred tax asset) 34,361 (151,433)
Amortization of acquired intangible
assets in Depreciation and
(a) amortization 29,472 24,657
Impact on noncontrolling interests of
(m) certain other pro forma adjustments (2,073) -
Non-GAAP Net income
applicable to common
stockholders $692,659 $425,249
======== ========
Twelve Months Ended
December 31,
———
RECONCILIATION OF GAAP TO
NON-GAAP NET INCOME
PER DILUTED COMMON SHARE 2010 2009
—— ——
GAAP weighted average
number of diluted common
shares outstanding 50,988 49,522
Adjustment for Conversion Spread
(n) Hedges (56) (505)
Adjustment for restricted stock,
restricted stock units and
(o) performance units 397 886
Non-GAAP weighted average
number of diluted common
shares outstanding 51,329 49,903
====== ======
Net income applicable to
common stockholders per
diluted common share
GAAP $10.35 $9.88
====== =====
Non-GAAP $13.49 $8.52
====== =====
(a) Amortization of acquired intangible assets is recorded in
Merchant 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) Favorable adjustments related to franchise tax and sales and
use tax for headquarters location are recorded in General and
administrative expense.
(e) Charges related to South Carolina hotel margin tax ruling in
fourth quarter 2010 and Texas hotel margin tax litigation judgment
in 3rd quarter 2009 are recorded in General and administrative
expense.
(f) Depreciation and amortization are excluded from Net income to
calculate non-GAAP EBITDA.
(g) Interest income and Interest expense are excluded from Net
income to calculate non-GAAP EBITDA.
(h) Non-cash interest expense related to the amortization of debt
discount and loss on early debt extinguishment are recorded in
Interest expense and Foreign currency transactions and other,
respectively.
(i) Income tax expense (benefit) is excluded from Net income to
calculate non-GAAP EBITDA.
(j) 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 $183.3 million in 2009 from the reversal of a
portion of the valuation allowance on the Company’s deferred tax
asset).
(k) Equity in income of investees is excluded from Net income to
calculate non-GAAP EBITDA.
(l) Net (loss) income attributable to noncontrolling interests is
excluded from Net income to calculate non-GAAP EBITDA.
(m) Impact of other non-GAAP adjustments on Net income
attributable to noncontrolling interests.
(n) 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.
(o) 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 3Q08 4Q08 1Q09
—— —— ——
Domestic $800 $689 $851
International** 1,251 792 1,092
——- —- ——-
Total $2,050 $1,481 $1,944
Agency $1,604 $1,108 $1,470
Merchant** 447 373 474
—- —- —-
Total $2,050 $1,481 $1,944
Year/Year Growth
—
Domestic 32.8% 31.1% 18..1%
International 58.6% 16.5% 5..3%
excluding F/X impact 44.7% 27.6% 23..5%
Agency 53.8% 21.4% 7..3%
Merchant 28.3% 27.5% 21..9%
Total 47.4% 22.9% 10..5%
Units Sold 3Q08 4Q08 1Q09
—- —— —— ——
Hotel Room-Nights 11.4 9.1 12..8
Year/Year Growth 43.6% 38.0% 36..4%
Rental Car Days 2.3 2.2 3..0
Year/Year Growth -0.2% 11.1% 15..4%
Airline Tickets 1.2 1.1 1..5
Year/Year Growth 44.8% 43.7% 28..0%
3Q08 4Q08 1Q09
—— —— ——
Revenue $561.6 $406.0 $462..1
Year/Year Growth 34.6% 21.3% 14..6%
Gross Profit $316.1 $205.1 $208..3
Year/Year Growth 56.2% 28.0% 15..0%
Gross Bookings 2Q09 3Q09 4Q09
—— —— ——
Domestic $964 $999 $831
International** 1,415 1,724 1,433
——- ——- ——-
Total $2,379 $2,723 $2,264
Agency $1,825 $2,131 $1,766
Merchant** 555 592 498
—- —- —-
Total $2,379 $2,723 $2,264
Year/Year Growth
—
Domestic 10.6% 24.9% 20..6%
International 14.3% 37.8% 81..0%
excluding F/X impact 32.4% 48.5% 69..5%
Agency 10.1% 32.9% 59..4%
Merchant 22.4% 32.6% 33..5%
Total 12.8% 32.8% 52..9%
Units Sold 2Q09 3Q09 4Q09
—- —— —— ——
Hotel Room-Nights 15.7 17.9 14..6
Year/Year Growth 44.0% 56.3% 59..9%
Rental Car Days 3.2 2.6 2..4
Year/Year Growth 15.0% 11.6% 6..6%
Airline Tickets 1.6 1.5 1..3
Year/Year Growth 13.9% 30.2% 16..2%
2Q09 3Q09 4Q09
—— —— ——
Revenue $603.7 $730.7 $541..8
Year/Year Growth 17.5% 30.1% 33..4%
Gross Profit $305.2 $434.0 $313..2
Year/Year Growth 20.3% 37.3% 52..7%
Gross Bookings 1Q10 2Q10 3Q10 4Q10
—— —— —— ——
Domestic $989 $1,154 $1,121 $902
International** 1,975 2,256 2,885 2,363
——- ——- ——- ——-
Total $2,965 $3,410 $4,006 $3,265
Agency $2,374 $2,683 $3,168 $2,557
Merchant** 591 727 838 708
—- —- —- —-
Total $2,965 $3,410 $4,006 $3,265
Year/Year Growth
—
Domestic 16.2% 19.6% 12.2% 8.5%
International 80.8% 59.5% 67.3% 64.9%
excluding F/X impact 72.8% 67.1% 78.0% 70.7%
Agency 61.5% 47.0% 48.7% 44.8%
Merchant 24.8% 31.1% 41.4% 42.1%
Total 52.5% 43.3% 47.1% 44.2%
Units Sold 1Q10 2Q10 3Q10 4Q10
—- —— —— —— ——
Hotel Room-Nights 20.0 23.2 27.5 22.0
Year/Year Growth 56.8% 48.2% 54.1% 50.6%
Rental Car Days 3.0 4.3 5.1 3.9
Year/Year Growth -0.9% 32.0% 97.3% 65.4%
Airline Tickets 1.5 1.6 1.5 1.3
Year/Year Growth 2.8% 4.1% -4.6% -2.3%
1Q10 2Q10 3Q10 4Q10
—— —— —— ——
Revenue $584.4 $767.4 $1,001.8 $731.3
Year/Year Growth 26.5% 27.1% 37.1% 35.0%
Gross Profit $319.1 $445.3 $666.2 $478.4
Year/Year Growth 53.2% 45.9% 53.5% 52.8%
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 $55.0 million, $85.8 million and $43.9 million of Travel
Jigsaw gross bookings in 4Q10, 3Q10 and 2Q10 since acquisition on
May 18, 2010, respectively. Includes $37.5 million and $32.4
million of Agoda gross bookings in 4Q08 and 3Q08, respectively.
SOURCE Priceline.com Incorporated
Priceline.com Incorporated
CONTACT: Brian Ek, +1-203-299-8167, .(JavaScript must be enabled to view this email address); Investors, Matthew Tynan, +1-203-299-8487, .(JavaScript must be enabled to view this email address)
Web Site: http://www.Priceline.com