Priceline.com Reports Financial Results for 3rd Quarter 2009
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NORWALK, Conn.--(BUSINESS WIRE)-- Priceline.com Incorporated (Nasdaq: PCLN) today reported its financial results for the 3rd quarter 2009. Gross travel bookings for the 3rd quarter, which refers to the total dollar value, inclusive of all taxes and fees, of all travel services purchased by consumers, were $2.7 billion, an increase of 32.8% over a year ago.
Priceline.com had revenues in the 3rd quarter of $730.7 million, a 30.1% increase over a year ago. The Company's international operations contributed revenues in the 3rd quarter of $316.9 million, a 41.7% increase versus a year ago (approximately 50% on a local currency basis). Priceline.com's gross profit for the 3rd quarter was $434.0 million, a 37.3% increase from the prior year. The Company's international operations contributed gross profit in the 3rd quarter of $316.0 million, a 42.0% increase versus a year ago (approximately 50% growth on a local currency basis). The Company's operating income in 3rd quarter 2009 was $200.8 million, a 56.9% increase from the prior year. Priceline.com had GAAP net income for the 3rd quarter of $319.0 million or $6.42 per diluted share, which compares to $84.5 million or $1.74 per diluted share in the same period a year ago. GAAP 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 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 domestic taxable income.
Pro forma EBITDA for the 3rd quarter 2009 was $224.6 million, an increase of 47.3% over a year ago. Pro forma net income in the 3rd quarter was $173.3 million or $3.45 per diluted share, compared to $2.39 per share a year ago. First Call analyst consensus for the 3rd quarter 2009 was $2.90 per diluted share. The section below entitled "Non-GAAP Financial Measures" provides a definition and information about the use of pro forma financial measures in this press release and the attached financial and statistical supplement reconciles pro forma financial information with priceline.com's financial results under GAAP.
"Despite a difficult economic environment, the summer travel season turned out to be an exceptionally strong one for priceline.com, as 3rd quarter growth rates accelerated sequentially for our international and domestic businesses," said priceline.com President and Chief Executive Officer Jeffery H. Boyd. "On a global basis, priceline.com continued to increase its market share as hotel room night reservations grew by 56% in the 3rd quarter, propelled by strong performance in the U.S., Europe and Asia. Internationally, our hotel business experienced gross travel bookings growth of 38%, or approximately 49% on a local currency basis, as we reaped the benefits of outstanding hotel supply, geographic expansion in high-opportunity markets and continued shift by consumers to on-line booking of hotel reservations. Our U.S. business grew gross travel bookings by 25% as consumers continue to respond positively to our money-saving travel services. Airline ticket sales were up 30.2%, despite the fact that competitors' matching fee eliminations were in place for the entire quarter. Rental car days booked increased 11.6%."
"The online travel industry achieved improved year-over-year growth in the third quarter as we comped against weakening demand in the prior-year period and received a boost from industry-wide fee reductions and supplier discounting and promotions." Mr. Boyd continued, "Priceline.com intends to continue to focus on building out our global brands and hotel platform, adding additional supply, integration initiatives and innovation to support the long-term growth of the business."
Priceline.com said it was targeting the following for 4th quarter 2009:
-- Year-over-year increase in total gross travel bookings of approximately
30% - 40%.
-- Year-over-year increase in international gross travel bookings of
approximately 50% - 60% (an increase of approximately 37% - 46% on a
local currency basis).
-- Year-over-year increase in domestic gross travel bookings of
approximately 15%.
-- Year-over-year increase in revenue of approximately 24% to 28%.
-- Year-over-year increase in gross profit of approximately 40% to 45%.
-- Pro forma EBITDA of approximately $98 million to $108 million.
-- Pro forma net income of between $1.52 and $1.62 per diluted share.
Pro forma guidance for the 4th quarter 2009:
-- excludes non-cash amortization expense of acquisition-related
intangibles,
-- excludes non-cash stock-based compensation expense,
-- excludes non-cash interest expense and gains or losses on debt
extinguishment, if any, recorded pursuant to the provisions of FSP APB
14-1,
-- excludes non-cash income tax expense and reflects the impact on income
taxes of certain of the pro forma adjustments,
-- excludes the impact, if any, of charges 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 operating income by approximately $20 million in 4th quarter 2009.
In addition, the foregoing adjustments are expected to increase pro forma net income over GAAP net income by approximately $24 million in the 4th quarter 2009. On a per share basis, the Company estimates GAAP net income of approximately $1.06 to $1.16 per diluted share for the 4th quarter 2009.
Effective January 1, 2009, we adopted FASB Staff Position No. APB 14-1, "Accounting for Convertible Debt Instruments that May be Settled in Cash upon Conversion (Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 requires cash settled convertible debt, such as our convertible senior notes, to be separated into debt and equity components at issuance and a value to be assigned to each.
The value assigned to the debt component is the estimated fair value, as of the issuance date, of a similar bond without the conversion feature. The difference between the bond cash proceeds and this estimated fair value, representing the value assigned to the equity component, is recorded as a debt discount and amortized to interest expense over the life of the bond. Although FSP APB 14-1 has no impact on our actual past or future cash flows, it requires us to adjust our previously issued financial statements and to record a significant amount of non-cash interest expense as the debt discount is amortized and may result in gains or losses on extinguishment that would not have occurred under previous GAAP.
The adoption of FSP APB 14-1 increased non-cash interest expense for the years ended December 31, 2008, 2007 and 2006 by approximately $26.1 million ($15.5 million net of tax), $28.2 million ($16.6 million net of tax), and $5.4 million ($3.2 million net of tax), respectively, and is estimated to increase fiscal year 2009 non-cash interest expense by approximately $17.8 million ($10.7 million net of tax), excluding the impact of future debt conversions, if any. The adoption of FSP APB 14-1 increased non-cash interest expense in the three months ended September 30, 2009 and 2008 by $4.3 million ($2.6 million net of tax) and $6.0 million ($3.6 million net of tax), respectively.
Information About Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking statements reflect the views of the Company's management regarding current expectations and projections about future events and are based on currently available information and current foreign currency exchange rates. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed, implied or forecasted in any such forward-looking statements. Expressions of future goals and similar expressions including, without limitation, "may," "will," "should," "could," "expects," "does not currently expect," "plans," "anticipates," "intends," "believes," "estimates," "predicts," "potential," "targets," or "continue," reflecting something other than historical fact are intended to identify forward-looking statements. The following factors, among others, could cause the Company's actual results to differ materially from those described in the forward-looking statements:
-- adverse changes in general market conditions for leisure and other travel services as a result of, among other things, decreased consumer spending, general economic downturn, terrorist attacks, natural disasters or adverse weather, the bankruptcy or insolvency of a major airline, or the outbreak of an epidemic or pandemic disease, such as the recent swine flu outbreak;
-- adverse changes in the Company's relationships with airlines and other product and service providers and vendors which could include, without limitation, the withdrawal of suppliers from the priceline.com system (either priceline.com's "retail" or "opaque" services, or both) and/or the loss or reduction of global distribution fees;
-- fluctuations in foreign exchange rates and other risks associated with doing business in multiple currencies;
-- the effects of increased competition, including the potential impact of increased pricing competition initiated by other on-line travel agents toward the end of 1st quarter 2009 in the form of reduced booking fees and/or the launch by competitors of an "opaque" travel offering;
-- an adverse outcome in one or more of the hotel occupancy and other tax proceedings in which the Company is involved;
-- a change by a major search engine to its search engine algorithms that negatively affects the search engine ranking of the company or its 3rd party distribution partners;
-- our ability to expand successfully in international markets;
-- the ability to attract and retain qualified personnel;
-- difficulties integrating recent or future acquisitions, such as the 4th quarter 2007 acquisition of Agoda, including ensuring the effectiveness of the design and operation of internal controls and disclosure controls of acquired businesses;
-- the occurrence of an external or internal security breach of our systems or other Internet based systems involving personal customer information, credit card information or other sensitive data;
-- systems-related failures and/or security breaches, including without limitation, "denial-of-service" type attacks on our system, any security breach that results in the theft, transfer or unauthorized disclosure of customer information, or the failure to comply with various state laws applicable to the company's obligations in the event of such a breach; and
--legal and regulatory risks.
For a detailed discussion of these and other factors that could cause the Company's actual results to differ materially from those described in the forward-looking statements, please refer to the Company's most recent Form 10-Q, Form 10-K and Form 8-K filings with the Securities and Exchange Commission. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
Pro forma EBITDA represents GAAP operating income excluding depreciation and amortization expense, plus foreign currency transactions and other expense and the pro forma adjustments relating to stock-based compensation expense and payroll taxes related to stock-based compensation described below.
Pro forma EBITDA, pro forma net income and pro forma net income per share are "non-GAAP financial measures," as such term is defined by the Securities and Exchange Commission, and may differ from non-GAAP financial measures used by other companies. Priceline.com believes that pro forma EBITDA, pro forma net income and pro forma net income per share that exclude certain non-cash or non-recurring income or expense items are useful for analysts and investors to evaluate priceline.com's future on-going performance because they enable a more meaningful comparison of priceline.com's projected cash earnings and performance with its historical results from prior periods. These pro forma metrics, in particular pro forma EBITDA and pro forma net income, are not intended to represent funds available for priceline.com's discretionary use and are not intended to represent or to be used as a substitute for operating income, net income or cash flows from operations data as measured under GAAP. The items excluded from these pro forma metrics, but included in the calculation of their closest GAAP equivalent, are significant components of consolidated statements of income and must be considered in performing a comprehensive assessment of overall financial performance.
Pro forma financial information is adjusted for the following items:
- Amortization expense of acquisition-related intangibles is excluded because it does not impact cash earnings.
- The charge related to the judgment in the Texas hotel occupancy tax litigation is excluded because it impacts comparability with historical operating results from prior periods.
- Stock-based compensation expense is excluded because it does not impact cash earnings and is reflected in earnings per share through increased share count.
- Payroll tax expense related to stock-based compensation is excluded for 2008 because the expense is driven primarily by stock option exercise and share award vesting activity and the market price of priceline.com's common stock and often shows volatility unrelated to operating results. As of January 1, 2009, we no longer exclude payroll tax expense related to stock-based compensation due to its relative insignificance to our consolidated financial statements.
- Interest expense related to the amortization of debt discount and gains or losses on debt extinguishment recorded in 2009, and in 2008 on a retrospective basis, pursuant to the provisions of FASB Staff Position No. APB 14-1, "Accounting for Convertible Debt Instruments that May be Settled in Cash upon Conversion (Including Partial Cash Settlement)" are excluded because they are non-cash in nature. Pursuant to the provisions of FSP APB 14-1, certain debt issuance costs were reclassified to equity and are therefore no longer amortized in GAAP or pro forma earnings (as of January 1, 2009).
- 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 $181.9 million non-cash tax benefit from reversing a portion of the deferred tax asset valuation allowance 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 29 languages in 78 countries in Europe, North America, Asia, the Middle East and Africa. Included in the priceline.com family of companies is Booking.com, a leading international online hotel reservation service, priceline.com, a leading U.S. online travel service for value-conscious leisure travelers, and Agoda.com, an Asian online hotel reservation service. Priceline.com believes that Booking.com is Europe's largest and fastest growing hotel reservation service, with a network of affiliated Web sites. Booking.com operates in over 70 countries in 24 languages and offers its customers access to over 73,000 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,
September 30, 2008
ASSETS 2009 As Adjusted
Current assets:
Cash and cash equivalents $ 362,473 $ 364,550
Restricted cash 1,321 2,528
Short-term investments 356,793 98,888
Accounts receivable, net of allowance for doubtful
accounts of
$7,792 and $8,429, respectively 169,864 92,328
Prepaid expenses and other current assets 19,236 23,463
Deferred income taxes 40,671 12,142
Total current assets 950,358 593,899
Property and equipment, net 29,339 29,404
Intangible assets, net 179,794 193,231
Goodwill 349,981 326,863
Deferred income taxes 282,606 153,955
Other assets 4,958 15,069
Total assets $ 1,797,036 $ 1,312,421
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 62,995 $ 46,290
Accrued expenses and other current liabilities 143,463 77,713
Deferred merchant bookings 50,405 29,664
Convertible debt 220,725 317,910
Total current liabilities 477,588 471,577
Deferred taxes 45,733 48,933
Other long-term liabilities 21,777 18,010
Total liabilities 545,098 538,520
Convertible debt 50,213 75,075
Stockholders' equity:
Common stock, $0.008 par value, authorized
1,000,000,000 shares, 50,656,947, and 47,664,766 391 367
shares issued, respectively
Treasury stock, 6,848,605 and 6,685,048 shares, (507,724 ) (493,555 )
respectively
Additional paid-in capital 2,237,372 2,176,556
Accumulated deficit (533,128 ) (944,145 )
Accumulated other comprehensive income 4,814 (40,397 )
Total stockholders' equity 1,201,725 698,826
Total liabilities and stockholders' equity $ 1,797,036 $ 1,312,421
priceline.com Incorporated
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2008
2009 As Adjusted 2009 As Adjusted
Merchant revenues $ 400,314 $ 323,957 $ 1,130,169 $ 949,345
Agency revenues 323,188 232,638 647,899 515,819
Other revenues 7,158 5,014 18,391 13,600
Total revenues 730,660 561,609 1,796,459 1,478,764
Cost of revenues 296,654 245,531 848,885 727,858
Gross profit 434,006 316,078 947,574 750,906
Operating expenses:
Advertising - Offline 8,474 8,293 30,293 30,252
Advertising - Online 115,103 84,291 273,327 214,952
Sales and marketing 24,473 21,452 63,583 57,715
Personnel, including
stock-based compensation
of $10,870, $10,055, 50,959 45,259 135,333 121,787
$32,727, and $29,070,
respectively
General and 19,367 13,524 48,881 39,519
administrative
Information technology 4,777 4,402 14,002 13,688
Depreciation and 10,098 10,935 29,182 32,352
amortization
Total operating expenses 233,251 188,156 594,601 510,265
Operating income 200,755 127,922 352,973 240,641
Other income (expense):
Interest income 471 3,061 1,695 10,138
Interest expense (5,911 ) (7,739 ) (19,221 ) (27,321 )
Foreign currency (1,220 ) 3,587 (1,283 ) (1,508 )
transactions and other
Total other income (6,660 ) (1,091 ) (18,809 ) (18,691 )
(expense)
Earnings before income
taxes and equity in 194,095 126,831 334,164 221,950
income (loss) of
investees
Income tax benefit 124,887 (40,445 ) 76,851 (70,209 )
(expense)
Equity in income (loss) - (97 ) 2 (263 )
of investees
Net income 318,982 86,289 411,017 151,478
Less: net income
attributable to - 1,803 - 3,378
noncontrolling interests
Net income applicable to
common stockholders of $ 318,982 $ 84,486 $ 411,017 $ 148,100
priceline.com
Incorporated
Net income applicable to
common stockholders per $ 7.49 $ 2.13 $ 9.84 $ 3.81
basic common share
Weighted average number
of basic common shares 42,569 39,715 41,750 38,905
outstanding
Net income applicable to
common stockholders per $ 6.42 $ 1.74 $ 8.42 $ 3.00
diluted common share
Weighted average number
of diluted common shares 49,670 48,656 48,805 49,344
outstanding
priceline.com Incorporated
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended
September 30,
2008
OPERATING ACTIVITIES: 2009 As Adjusted
Net income $ 411,017 $ 151,478
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 10,605 10,799
Amortization 18,577 21,825
Provision for uncollectible accounts, net 3,379 5,351
Reversal of valuation allowance on deferred tax (181,874 ) -
asset
Other deferred income taxes 27,835 14,097
Stock-based compensation expense 32,727 29,070
Amortization of debt issuance costs 1,620 1,819
Amortization of debt discount 14,752 21,040
Gain on extinguishment of debt (2,735 ) (46 )
Equity in (income) loss of investees (2 ) 263
Loss on impairment of investment - 843
Changes in assets and liabilities:
Accounts receivable (73,932 ) (80,960 )
Prepaid expenses and other current assets 8,921 (2,662 )
Accounts payable, accrued expenses and other current 89,827 58,518
liabilities
Other 2,683 3,765
Net cash provided by operating activities 363,400 235,200
INVESTING ACTIVITIES:
Purchase of investments (534,274 ) (115,005 )
Maturity of investments 294,618 185,226
Additions to property and equipment (9,902 ) (12,885 )
Acquisitions and other equity investments, net of - (593 )
cash acquired
Proceeds from redemption of equity investment in 8,921 -
pricelinemortgage.com
Change in restricted cash 1,234 (1,500 )
Purchase of shares held by noncontrolling interests - (153,564 )
Net cash used in investing activities (239,403 ) (98,321 )
FINANCING ACTIVITIES:
Payments related to conversion of senior notes (122,047 ) (102,409 )
Repurchase of common stock (14,169 ) (4,336 )
Proceeds from exercise of stock options 9,404 4,475
Excess tax benefit on stock-based compensation 1,580 6,541
Net cash used in financing activities (125,232 ) (95,729 )
Effect of exchange rate changes on cash and cash (842 ) (13,123 )
equivalents
Net increase / (decrease) in cash and cash (2,077 ) 28,027
equivalents
Cash and cash equivalents, beginning of period 364,550 385,359
Cash and cash equivalents, end of period $ 362,473 $ 413,386
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for income taxes $ 60,155 $ 46,280
Cash paid during the period for interest $ 4,242 $ 6,325
priceline.com Incorporated
UNAUDITED RECONCILIATION OF GAAP TO PRO FORMA FINANCIAL INFORMATION
(In thousands, except per share data)
Three Months Ended September Nine Months Ended September
30, 30,
RECONCILIATION OF
GAAP OPERATING 2008 2008
INCOME
TO PRO FORMA 2009 As Adjusted 2009 As Adjusted
EBITDA
GAAP Operating $ 200,755 $ 127,922 $ 352,973 $ 240,641
income
Amortization
of acquired
(a) intangible - - - 272
assets in Cost
of revenues
(b) Stock-based 10,870 10,055 32,727 29,070
compensation
Charge related
to hotel
(c) occupancy tax
litigation
judgment in
General
and
administrative 3,680 - 3,680 -
expense
Stock-based
(d) compensation - 36 - 709
payroll taxes
Depreciation
(j) and 10,098 10,935 29,182 32,352
amortization
Foreign
(k) currency (1,220 ) 3,587 (1,283 ) (1,507 )
transactions
and other
(Gain) loss on
(g) extinguishment 394 (87 ) (2,735 ) (45 )
of debt
Pro Forma $ 224,577 $ 152,448 $ 414,544 $ 301,492
EBITDA
Three Months Ended September Nine Months Ended September
30, 30,
RECONCILIATION OF
GAAP TO PRO FORMA 2008 2008
NET INCOME
APPLICABLE TO
COMMON 2009 As Adjusted 2009 As Adjusted
STOCKHOLDERS
GAAP Net
income
applicable to
common $ 318,982 $ 84,486 $ 411,017 $ 148,100
stockholders
of
priceline.com
Incorporated
Amortization
of acquired
(a) intangible - - - 272
assets in Cost
of revenues
Amortization
of acquired
intangible
(a) assets in 6,427 7,352 18,542 21,553
Depreciation
and
amortization
(b) Stock-based 10,870 10,055 32,727 29,070
compensation
Charge related
to hotel
(c) occupancy tax
litigation
judgment in
General
and
administrative 3,680 - 3,680 -
expense
Stock-based
(d) compensation - 36 - 709
payroll taxes
Adjustments
for the tax
impact of
(e) certain of the
pro forma
adjustments
and
to exclude
non-cash
income taxes
(including the
non-cash
benefit of
$181.9 million
in 3rd quarter (171,529 ) 9,213 (154,382 ) 13,098
2009 from the
reversal of a
portion of the
valuation
allowance on
the Company's
deferred tax
asset)
Impact on
noncontrolling
(f) interests of - (243 ) - (818 )
other pro
forma
adjustments
Amortization
(g) related to FSP 4,516 5,976 14,752 20,534
APB 14-1
(Gain) loss on
(g) extinguishment 394 (87 ) (2,735 ) (45 )
of debt
Pro Forma Net
income
applicable to
common $ 173,340 $ 116,788 $ 323,601 $ 232,473
stockholders
of
priceline.com
Incorporated
Three Months Ended September Nine Months Ended September
30, 30,
RECONCILIATION OF
GAAP TO PRO FORMA 2008 2008
NET INCOME
APPLICABLE TO
COMMON
STOCKHOLDERS PER 2009 As Adjusted 2009 As Adjusted
DILUTED COMMON
SHARE
GAAP weighted
average number
of diluted 49,670 48,656 48,805 49,344
common shares
outstanding
Adjustment for
(h) Conversion (449 ) (884 ) (642 ) (767 )
Spread Hedges
Adjustment for
restricted
stock,
(i) restricted 1,019 1,091 1,006 1,002
stock units
and
performance
units
Pro Forma
Weighted
average number 50,240 48,863 49,169 49,579
of diluted
common shares
outstanding
Net income
applicable to
common
stockholders
per diluted
common share
GAAP $ 6.42 $ 1.74 $ 8.42 $ 3.00
Pro Forma $ 3.45 $ 2.39 $ 6.58 $ 4.69
(a) Amortization of acquired intangible assets is recorded in Cost of revenues
and Depreciation and amortization.
(b) Stock-based compensation is recorded in Personnel expense.
(c) Charge related to Texas hotel occupancy tax litigation judgment is recorded
in General and administrative expense.
Stock-based compensation payroll taxes are recorded in General and
(d) 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.
Adjustments for the tax impact of certain of the pro forma adjustments and
(e) 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).
(f) Impact on noncontrolling interests of other pro forma adjustments are
recorded in Net income attributable to noncontrolling interests.
Non-cash interest expense related to the amortization of debt discount and
(gain) loss on debt extinguishment, pursuant to the provisions of FASB Staff
(g) Position No. APB 14-1, "Accounting for Convertible Debt Instruments that May
be Settled in Cash upon Conversion (Including Partial Cash Settlement)" are
recorded in Interest expense and Foreign currency transactions and other,
respectively.
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
(h) 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.
All shares of restricted common stock, restricted stock units and
(i) 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.
(j) Depreciation and amortization are excluded from Operating income to
calculate EBITDA.
(k) Foreign currency transactions and other are added to Operating income to
calculate EBITDA.
priceline.com Incorporated
Statistical Data
In thousands
(Unaudited)
Gross Bookings 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
Domestic $547,787 $602,205 $525,571 $720,968 $872,284 $799,578 $688,923 $851,157 $964,464 $998,715
International** 687,124 788,478 679,760 1,037,644 1,237,681 1,250,850 792,190 1,092,427 1,414,714 1,724,131
Total $1,234,911 $1,390,683 $1,205,331 $1,758,612 $2,109,965 $2,050,427 $1,481,113 $1,943,584 $2,379,178 $2,722,846
Agency $919,260 $1,042,619 $912,698 $1,370,119 $1,656,775 $1,603,693 $1,108,024 $1,469,956 $1,824,618 $2,130,571
Merchant** 315,651 348,064 292,633 388,493 453,190 446,734 373,089 473,628 554,560 592,275
Total $1,234,911 $1,390,683 $1,205,331 $1,758,612 $2,109,965 $2,050,427 $1,481,113 $1,943,584 $2,379,178 $2,722,846
Year/Year
Growth
Domestic -4.0% 19.3% 24.2% 50.6% 59.2% 32.8% 31.1% 18.1% 10.6% 24.9%
International 92.7% 97.9% 113.0% 99.7% 80.1% 58.6% 16.5% 5.3% 14.3% 37.8%
excluding F/X 79.6% 83.4% 89.9% 75.0% 55.8% 44.7% 27.6% 23.5% 32.4% 48.5%
impact
Agency 50.9% 73.7% 85.9% 92.8% 80.2% 53.8% 21.4% 7.3% 10.1% 32.9%
Merchant -0.8% 15.0% 16.4% 34.9% 43.6% 28.3% 27.5% 21.9% 22.4% 32.6%
Total 33.2% 54.0% 62.4% 76.1% 70.9% 47.4% 22.9% 10.5% 12.8% 32.8%
Units Sold 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
Hotel 7,242 7,964 6,616 9,375 10,879 11,434 9,126 12,785 15,665 17,869
Room-Nights
Year/Year 45.0% 52.0% 55.1% 57.4% 50.2% 43.6% 38.0% 36.4% 44.0% 56.3%
Growth
Rental Car Days 2,278 2,338 2,002 2,612 2,815 2,333 2,224 3,014 3,237 2,604
Year/Year 13.9% 14.4% 11.9% 30.4% 23.6% -0.2% 11.1% 15.4% 15.0% 11.6%
Growth
Airline Tickets 687 819 790 1,169 1,362 1,186 1,135 1,496 1,551 1,544
Year/Year -16.3% 23.0% 34.4% 83.0% 98.2% 44.8% 43.7% 28.0% 13.9% 30.2%
Growth
2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
Revenue $355,880 $417,287 $334,853 $403,180 $513,976 $561,609 $406,041 $462,058 $603,741 $730,660
Year/Year 15.7% 33.1% 28.8% 33.8% 44.4% 34.6% 21.3% 14.6% 17.5% 30.1%
Growth
Gross Profit $157,211 $202,331 $160,152 $181,103 $253,725 $316,078 $205,065 $208,330 $305,238 $434,006
Year/Year 48.6% 63.8% 60.9% 51.3% 61.4% 56.2% 28.0% 15.0% 20.3% 37.3%
Growth
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 Incorporated
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