Form 8-K Priceline Group Inc. For: Nov 04
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM�8-K
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CURRENT REPORT
Pursuant to Section�13 or 15(d)�of the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported) November�4, 2014
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The Priceline Group Inc.
(Exact name of registrant as specified in its charter)
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Delaware | 0-25581 | 06-1528493 | ||
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
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800 Connecticut Avenue, Norwalk, Connecticut | 06854 | |
(Address of principal office) | (zip code) | |
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N/A�
(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form�8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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o����������� Written communications pursuant to Rule�425 under the Securities Act (17 CFR 230.425)
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o����������� Soliciting material pursuant to Rule�14a-12� under the Exchange Act (17 CFR 240.14a-12)
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o����������� Pre-commencement communications pursuant to Rule�14d-2(b)�under the Exchange Act (17 CFR 240.14d-2(b))
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o����������� Pre-commencement communications pursuant to Rule�13e-4c� under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02.������������� Results of Operations and Financial Conditions
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On November�4, 2014, The Priceline Group Inc. announced its financial results for the quarter ended September�30, 2014.� The press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. A copy of The Priceline Group's unaudited consolidated balance sheet at September�30, 2014, unaudited consolidated statements of operations for the three and nine months ended September�30, 2014 and unaudited consolidated statement of cash flows for the nine months ended September�30, 2014, are included in the financial and statistical supplement attached to the press release.� The unaudited consolidated balance sheet at September�30, 2014, unaudited consolidated statements of operations for the three and nine months ended September�30, 2014 and unaudited consolidated statement of cash flows for the nine months ended September�30, 2014 shall be treated as "filed" for purposes of the Securities Exchange Act of 1934, as amended, but all other information in the press release shall be treated as "furnished."
Item 9.01.���������� Financial Statements and Exhibits
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(d)����Exhibits
Exhibit����Description
99.1 | Press release (which includes a financial and statistical supplement and related information) issued by The Priceline Group Inc. on November�4, 2014 relating to, among other things, its third quarter 2014 earnings. The unaudited consolidated balance sheet at September�30, 2014 and unaudited consolidated statement of operations for the three and nine months ended September�30, 2014 and unaudited consolidated statement of cash flows for the nine months ended September�30, 2014 shall be treated as "filed" for the purposes of the Securities and Exchange Act of 1934, as amended, and the remaining information shall be treated as "furnished." |
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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� | THE PRICELINE GROUP INC. | ||
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� | � | � | |
� | By: | /s/ Peter J. Millones | |
� | � | Name: | Peter J. Millones |
� | � | Title: | Executive Vice President, General Counsel and Secretary |
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Date:� November�4, 2014
EXHIBIT�INDEX
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Exhibit No.����Description
99.1 | Press release (which includes a financial and statistical supplement and related information) issued by The Priceline Group Inc. on November�4, 2014 relating to, among other things, its third�quarter 2014 earnings. |
The Priceline Group Reports Financial Results for 3rd Quarter 2014
NORWALK, CT November�4, 2014. . . The Priceline Group Inc. (NASDAQ: PCLN) today reported its 3rd quarter 2014 financial results. Third quarter gross travel bookings for The Priceline Group (the "Group"), which refers to the total dollar value, generally inclusive of all taxes and fees, of all travel services purchased by its customers, were $13.8 billion, an increase of 28% over a year ago (approximately 29% on a local currency basis).
The Group's gross profit for the 3rd quarter was $2.6 billion, a 32% increase from the prior year. International operations contributed gross profit in the 3rd quarter of $2.3 billion, a 33% increase versus a year ago (approximately 33% on a local currency basis). The Group had GAAP net income applicable to common shareholders for the 3rd quarter of $1.1 billion, or $20.03 per diluted share, which compares to $833 million or $15.72 per diluted share, in the same period a year ago.
Non-GAAP net income in the 3rd quarter was $1.2 billion, a 29% increase versus the prior year. Non-GAAP net income was $22.16 per diluted share, compared to $17.30 per diluted share a year ago. FactSet consensus for the 3rd quarter 2014 was $21.08 per diluted share. Adjusted EBITDA for the 3rd quarter 2014 was $1.4 billion, an increase of 28% over a year ago. The section below entitled "Non-GAAP Financial Measures" provides definitions 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.
The Priceline Group finished the summer travel season with market leading growth and strong operating performance, said Darren Huston, President and CEO of The Priceline Group. Globally, our accommodation business booked 95 million room nights in the third quarter, up 27% over the same period last year.� Booking.com continues to extend its lead as the worlds largest brand for booking accommodations, with over 540,000 hotels and other accommodations on the platform, up 52% over last year.� Our rental car business grew rental car days by 18% over last year, an acceleration from 14% in the second quarter, led by improving results at both rentalcars.com and priceline.com.
Looking forward, Mr. Huston said: Our brands are performing well in a very competitive marketplace and against a mixed macro-economic backdrop, particularly in Europe. We intend to continue to make the smart investments for future growth, including broadening our offerings, building our brands and providing a superior experience to our customers, pre- and post-reservation, across all devices.
The Priceline Group said it was targeting the following for 4th quarter 2014:
" | Year-over-year increase in total gross travel bookings of approximately 8% - 15% (an increase of approximately 13% - 20% on a local currency basis). |
" | Year-over-year increase in international gross travel bookings of approximately 10% - 17% (an increase of approximately 16% - 23% on a local currency basis). |
" | Year-over-year increase in domestic gross travel bookings of approximately 0% - 5%. |
" | Year-over-year increase in revenue of approximately 11% - 18%. |
" | Year-over-year increase in gross profit of approximately 17% - 24%. |
" | Adjusted EBITDA of approximately $625 million to $665 million. |
" | Non-GAAP net income per diluted share between $9.40 and $10.10. |
Non-GAAP guidance for the 4th quarter 2014:
" | excludes non-cash amortization expense of intangibles, |
" | excludes non-cash stock-based employee compensation expense, |
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" | excludes non-cash interest expense related to the amortization of debt discount and gains or losses on early debt extinguishment, if any, related to cash settled convertible debt, |
" | excludes the impact, if any, of significant charges or benefits associated with judgments, rulings and/or settlements related to travel transaction tax (e.g., hotel occupancy taxes, excise taxes, sales taxes, etc.) proceedings, |
" | excludes non-cash income tax expense and reflects the impact on income taxes of certain of the non-GAAP adjustments, and |
" | includes the dilutive impact of unvested restricted stock units and performance share units because non-GAAP net income has been adjusted to exclude stock-based employee compensation. |
In addition to the adjustments above, adjusted EBITDA excludes depreciation and amortization expense, interest income, interest expense and income taxes and includes the impact of foreign currency transactions and other expenses.
When aggregated, the non-GAAP adjustments are expected to increase adjusted EBITDA over GAAP net income by approximately $235 million in the 4th quarter 2014. In addition, the non-GAAP adjustments are expected to increase non-GAAP net income over GAAP net income by approximately $100 million in the 4th quarter 2014. The Group estimates GAAP net income per diluted share between $7.55 and $8.25 for the 4th quarter 2014.
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 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, "may," "will," "should," "could," "expects," "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;
-- the effects of increased competition;
-- our ability to expand successfully in international markets;
-- our online advertising efficiency;
-- a change by a major search engine in how it presents travel search results or conducts its auction for search placement in a manner that is competitively disadvantageous to us;
-- fluctuations in foreign exchange rates and other risks associated with doing business in multiple currencies;
-- adverse changes in the Group's relationships with travel service providers;
-- systems-related failures and/or security breaches;
-- the ability to attract and retain qualified personnel; 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 Quarterly Report on Form 10-Q and Annual Report on Form 10-K filed 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.
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Non-GAAP Financial Measures
Adjusted EBITDA represents GAAP net income excluding depreciation and amortization expense, interest income, interest expense, net income (loss) attributable to noncontrolling interests and income taxes and is adjusted to exclude stock-based employee compensation expense, gains and losses on early debt extinguishment, significant charges or benefits associated with judgments, rulings and/or settlements related to travel transaction tax (e.g., hotel occupancy taxes, excise taxes, sales taxes, etc.) proceedings and significant acquisition costs.
Non-GAAP gross profit, adjusted EBITDA, non-GAAP operating income, 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 gross profit, adjusted EBITDA, non-GAAP operating income, 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 on-going performance because they provide a useful 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 adjusted EBITDA, non-GAAP operating income, and non-GAAP net income are not intended to represent funds available for the Group'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 for the three and nine months ended September�30, 2014 and 2013 is adjusted for the following items:
" | Amortization expense of intangibles is excluded because it does not impact cash earnings. |
" | Stock-based employee 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. |
" | Significant charges or credits associated with judgments, rulings and/or settlements related to travel transaction tax (e.g., hotel occupancy taxes, excise taxes, sales taxes, etc.) proceedings, including the $20.5 million charge (including estimated interest and penalties) recorded in the 1st quarter 2013, principally related to unfavorable rulings in the State of Hawaii and the District of Columbia, are excluded because the amount and timing of these items are unpredictable, are not driven by core operating results and render comparisons with prior periods less meaningful. |
" | Significant costs related to acquisitions, such as the $6.4 million of acquisition costs recorded in the 2nd quarter of 2013 related to the purchase of KAYAK, are excluded because the expense is not driven by core operating results and render comparisons with prior periods less meaningful. No such costs were excluded in the nine months ended September 30, 2014. |
" | 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 carryforwards. �� |
" | Net income (loss) attributable to noncontrolling interests is adjusted for the impact of certain of the non-GAAP adjustments described above for the nine months ended September 30, 2013. |
" | For calculating non-GAAP net income per share: |
� | net income is adjusted for the impact of the non-GAAP adjustments described above; and |
� | additional unvested 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 employee 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 the Group's financial results under GAAP.
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About The Priceline Group
The Priceline Group Inc. (NASDAQ: PCLN) is the worlds leading provider of online travel and related services, provided to consumers and local partners in over 200 countries through six primary brands:�Booking.com, priceline.com, agoda.com, KAYAK, rentalcars.com and OpenTable.
For more information, visit pricelinegroup.com.
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For Press Information: Leslie Cafferty (203) 299-8128 [email protected]
For Investor Relations: Matthew Tynan (203) 299-8487 [email protected]
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The Priceline Group Inc. UNAUDITED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) | ||||||||
September�30, 2014 | December�31, 2013 | |||||||
ASSETS | � | � | ||||||
Current assets: | � | � | ||||||
Cash and cash equivalents | $ | 5,043,724 | $ | 1,289,994 | ||||
Restricted cash | 903 | 10,476 | ||||||
Short-term investments | 1,193,353 | 5,462,720 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $13,175 and $14,116, respectively | 843,560 | 535,962 | ||||||
Prepaid expenses and other current assets | 166,308 | 107,102 | ||||||
Deferred income taxes | 56,017 | 74,687 | ||||||
Total current assets | 7,303,865 | 7,480,941 | ||||||
Property and equipment, net | 203,790 | 135,053 | ||||||
Intangible assets, net | 2,175,214 | 1,019,985 | ||||||
Goodwill | 3,483,144 | 1,767,912 | ||||||
Long-term investments | 1,965,182 | |||||||
Deferred income taxes | 4,714 | 7,055 | ||||||
Other assets | 48,471 | 33,514 | ||||||
Total assets | $ | 15,184,380 | $ | 10,444,460 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | � | � | ||||||
Current liabilities: | � | � | ||||||
Accounts payable | $ | 525,441 | $ | 247,345 | ||||
Accrued expenses and other current liabilities | 609,071 | 545,342 | ||||||
Deferred merchant bookings | 416,852 | 437,127 | ||||||
Convertible debt | 37,781 | 151,931 | ||||||
Total current liabilities | 1,589,145 | 1,381,745 | ||||||
Deferred income taxes | 866,167 | 326,425 | ||||||
Other long-term liabilities | 107,938 | 75,981 | ||||||
Long-term debt | 3,887,243 | 1,742,047 | ||||||
Total liabilities | 6,450,493 | 3,526,198 | ||||||
Convertible debt | 776 | 8,533 | ||||||
Stockholders' equity: | � | � | ||||||
Common stock, $0.008 par value; authorized 1,000,000,000 shares, 61,800,076 and 61,265,160 shares issued, respectively | 480 | 476 | ||||||
Treasury stock, 9,444,868 and 9,256,721 shares, respectively | (2,232,663 | ) | (1,987,207 | ) | ||||
Additional paid-in capital | 4,848,824 | 4,592,979 | ||||||
Accumulated earnings | 6,188,674 | 4,218,752 | ||||||
Accumulated other comprehensive income (loss) | (72,204 | ) | 84,729 | |||||
Total stockholders' equity | 8,733,111 | 6,909,729 | ||||||
Total liabilities and stockholders' equity | $ | 15,184,380 | $ | 10,444,460 | ||||
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The Priceline Group Inc. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
� | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Agency revenues | $ | 2,099,629 | $ | 1,576,434 | $ | 4,615,169 | $ | 3,411,002 | ||||||||
Merchant revenues | 613,535 | 620,904 | 1,707,786 | 1,729,692 | ||||||||||||
Advertising and other revenues | 123,333 | 72,565 | 278,919 | 111,459 | ||||||||||||
Total revenues | 2,836,497 | 2,269,903 | 6,601,874 | 5,252,153 | ||||||||||||
Cost of revenues | 216,519 | 280,838 | 692,429 | 869,568 | ||||||||||||
Gross profit | 2,619,978 | 1,989,065 | 5,909,445 | 4,382,585 | ||||||||||||
Operating expenses: | � | � | � | � | ||||||||||||
Advertising Online | 699,814 | 533,164 | 1,860,317 | 1,399,452 | ||||||||||||
Advertising Offline | 71,593 | 39,891 | 183,093 | 99,750 | ||||||||||||
Sales and marketing | 86,092 | 65,274 | 225,456 | 177,392 | ||||||||||||
Personnel, including stock-based compensation of $46,136, $34,551, $120,108 and $90,996, respectively | 259,471 | 186,443 | 675,854 | 486,658 | ||||||||||||
General and administrative | 97,902 | 63,113 | 261,950 | 178,195 | ||||||||||||
Information technology | 24,802 | 18,536 | 72,068 | 48,717 | ||||||||||||
Depreciation and amortization | 57,599 | 35,747 | 136,262 | 80,854 | ||||||||||||
Total operating expenses | 1,297,273 | 942,168 | 3,415,000 | 2,471,018 | ||||||||||||
Operating income | 1,322,705 | 1,046,897 | 2,494,445 | 1,911,567 | ||||||||||||
Other income (expense): | � | � | � | � | ||||||||||||
Interest income | 2,490 | 867 | 5,165 | 2,882 | ||||||||||||
Interest expense | (22,953 | ) | (24,135 | ) | (57,804 | ) | (61,097 | ) | ||||||||
Foreign currency transactions and other | 3,347 | (3,278 | ) | (4,399 | ) | (7,002 | ) | |||||||||
Total other income (expense) | (17,116 | ) | (26,546 | ) | (57,038 | ) | (65,217 | ) | ||||||||
Earnings before income taxes | 1,305,589 | 1,020,351 | 2,437,407 | 1,846,350 | ||||||||||||
Income tax expense | 243,336 | 187,362 | 467,485 | 331,629 | ||||||||||||
Net income | 1,062,253 | 832,989 | 1,969,922 | 1,514,721 | ||||||||||||
Less: net income attributable to noncontrolling interests | 135 | |||||||||||||||
Net income applicable to common stockholders | $ | 1,062,253 | $ | 832,989 | $ | 1,969,922 | $ | 1,514,586 | ||||||||
Net income applicable to common stockholders per basic common share | $ | 20.27 | $ | 16.22 | $ | 37.65 | $ | 29.88 | ||||||||
Weighted average number of basic common shares outstanding | 52,405 | 51,363 | 52,319 | 50,690 | ||||||||||||
Net income applicable to common stockholders per diluted common share | $ | 20.03 | $ | 15.72 | $ | 37.13 | $ | 29.00 | ||||||||
Weighted average number of diluted common shares outstanding | 53,024 | 52,984 | 53,048 | 52,226 | ||||||||||||
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The Priceline Group Inc. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | ||||||||
Nine Months Ended September 30, | ||||||||
� | 2014 | 2013 | ||||||
OPERATING�ACTIVITIES: | � | � | ||||||
Net income | $ | 1,969,922 | $ | 1,514,721 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | � | � | ||||||
Depreciation | 54,704 | 33,965 | ||||||
Amortization | 81,558 | 46,889 | ||||||
Provision for uncollectible accounts, net | 14,150 | 12,678 | ||||||
Deferred income taxes | 46,451 | 11,450 | ||||||
Stock-based compensation expense and other stock-based payments | 122,120 | 91,810 | ||||||
Amortization of debt issuance costs | 3,818 | 4,352 | ||||||
Amortization of debt discount | 39,079 | 41,225 | ||||||
Loss on early extinguishment of debt | 6,254 | |||||||
Changes in assets and liabilities: | � | � | ||||||
Accounts receivable | (353,357 | ) | (283,961 | ) | ||||
Prepaid expenses and other current assets | (35,341 | ) | (8,514 | ) | ||||
Accounts payable, accrued expenses and other current liabilities | 209,557 | 280,945 | ||||||
Other | 202 | 1,403 | ||||||
Net cash provided by operating activities | 2,159,117 | 1,746,963 | ||||||
INVESTING ACTIVITIES: | ||||||||
Purchase of investments | (7,327,635 | ) | (7,100,081 | ) | ||||
Proceeds from sale of investments | 9,703,032 | 5,341,488 | ||||||
Additions to property and equipment | (90,725 | ) | (56,958 | ) | ||||
Acquisitions and other equity investments, net of cash acquired | (2,496,084 | ) | (331,557 | ) | ||||
Proceeds from foreign currency contracts | 14,354 | 3,266 | ||||||
Payments on foreign currency contracts | (94,661 | ) | (56,045 | ) | ||||
Change in restricted cash | 9,309 | (1,506 | ) | |||||
Net cash used in investing activities | (282,410 | ) | (2,201,393 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Proceeds from revolving credit facility | 995,000 | |||||||
Payments related to revolving credit facility | (995,000 | ) | ||||||
Proceeds from the issuance of long-term debt | 2,282,217 | 980,000 | ||||||
Payment of debt issuance costs | (16,241 | ) | (910 | ) | ||||
Payments related to conversion of senior notes | (121,925 | ) | (8 | ) | ||||
Repurchase of common stock | (245,456 | ) | (883,008 | ) | ||||
Payments to purchase subsidiary shares from noncontrolling interests | (192,530 | ) | ||||||
Payments of stock issuance costs | (1,191 | ) | ||||||
Proceeds from exercise of stock options | 12,434 | 86,310 | ||||||
Excess tax benefit on stock-based compensation | 14,139 | 13,318 | ||||||
Net cash provided by financing activities | 1,925,168 | 1,981 | ||||||
Effect of exchange rate changes on cash and cash equivalents | (48,145 | ) | 12,194 | |||||
Net increase (decrease) in cash and cash equivalents | 3,753,730 | (440,255 | ) | |||||
Cash and cash equivalents, beginning of period | 1,289,994 | 1,536,349 | ||||||
Cash and cash equivalents, end of period | $ | 5,043,724 | $ | 1,096,094 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
Cash paid during the period for income taxes | $ | 412,185 | $ | 265,303 | ||||
Cash paid during the period for interest | $ | 14,531 | $ | 18,614 | ||||
Non-cash fair value increase for redeemable noncontrolling interests | $ | $ | 42,522 | |||||
Non-cash investing activity for contingent consideration | $ | 13,310 | $ | |||||
Non-cash financing activity for acquisitions | $ | 13,752 | $ | 1,546,748 | ||||
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The Priceline Group Inc. UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (In thousands, except per share data) | |||||||||||||||||
RECONCILIATION OF GAAP GROSS PROFIT TO NON-GAAP GROSS PROFIT | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
GAAP Gross profit | $ | 2,619,978 | $ | 1,989,065 | $ | 5,909,445 | $ | 4,382,585 | |||||||||
(a) | Charges related to travel transaction tax rulings | 20,550 | |||||||||||||||
Non-GAAP Gross profit | $ | 2,619,978 | $ | 1,989,065 | $ | 5,909,445 | $ | 4,403,135 | |||||||||
RECONCILIATION OF GAAP OPERATING INCOME TO NON-GAAP OPERATING INCOME | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
GAAP Operating income | $ | 1,322,705 | $ | 1,046,897 | $ | 2,494,445 | $ | 1,911,567 | |||||||||
(a) | Charges related to travel transaction tax rulings | 20,550 | |||||||||||||||
(b) | Stock-based employee compensation | 46,136 | 34,551 | 120,108 | 90,996 | ||||||||||||
(c) | Acquisition costs | 6,444 | |||||||||||||||
(d) | Amortization of intangible assets | 35,784 | 22,850 | 81,558 | 46,889 | ||||||||||||
Non-GAAP Operating income | $ | 1,404,625 | $ | 1,104,298 | $ | 2,696,111 | $ | 2,076,446 | |||||||||
Non-GAAP Operating income as a % of Non-GAAP Gross profit | 53.6 | % | 55.5 | % | 45.6 | % | 47.2 | % | |||||||||
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
GAAP Net income applicable to common stockholders | $ | 1,062,253 | $ | 832,989 | $ | 1,969,922 | $ | 1,514,586 | |||||||||
(a) | Charges related to travel transaction tax rulings | 20,550 | |||||||||||||||
(b) | Stock-based employee compensation | 46,136 | 34,551 | 120,108 | 90,996 | ||||||||||||
(c) | Acquisition costs | 6,444 | |||||||||||||||
(e) | Depreciation and amortization | 57,599 | 35,747 | 136,262 | 80,854 | ||||||||||||
(f) | Interest income | (2,490 | ) | (867 | ) | (5,165 | ) | (2,882 | ) | ||||||||
(f) | Interest expense | 22,953 | 24,135 | 57,804 | 61,097 | ||||||||||||
(g) | Loss on early extinguishment of debt | 124 | 6,254 | ||||||||||||||
(h) | Income tax expense | 243,336 | 187,362 | 467,485 | 331,629 | ||||||||||||
(i) | Net income attributable to noncontrolling interests | 135 | |||||||||||||||
Adjusted EBITDA | $ | 1,429,911 | $ | 1,113,917 | $ | 2,752,670 | $ | 2,103,409 | |||||||||
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The Priceline Group Inc. UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (In thousands, except per share data) | |||||||||||||||||
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
GAAP Net income applicable to common stockholders | $ | 1,062,253 | $ | 832,989 | $ | 1,969,922 | $ | 1,514,586 | |||||||||
(a) | Charges related to travel transaction tax rulings | 20,550 | |||||||||||||||
(b) | Stock-based employee compensation | 46,136 | 34,551 | 120,108 | 90,996 | ||||||||||||
(c) | Acquisition costs | 6,444 | |||||||||||||||
(d) | Amortization of intangible assets | 35,784 | 22,850 | 81,558 | 46,889 | ||||||||||||
(g) | Debt discount amortization related to convertible debt | 14,133 | 16,350 | 37,080 | 40,368 | ||||||||||||
(g) | Loss on early extinguishment of debt | 124 | 6,254 | ||||||||||||||
(j) | Adjustments for the tax impact of certain of the Non-GAAP adjustments and to exclude non-cash income taxes | 24,016 | 13,351 | 51,103 | 6,184 | ||||||||||||
(k) | Impact on noncontrolling interests of certain other Non-GAAP adjustments | (440 | ) | ||||||||||||||
Non-GAAP Net income applicable to common stockholders | $ | 1,182,446 | $ | 920,091 | $ | 2,266,025 | $ | 1,725,577 | |||||||||
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME PER DILUTED COMMON SHARE | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
GAAP weighted average number of diluted common shares outstanding | 53,024 | 52,984 | 53,048 | 52,226 | |||||||||||||
(l) | Adjustment for unvested restricted stock units and performance share units | 338 | 209 | 293 | 182 | ||||||||||||
Non-GAAP weighted average number of diluted common shares outstanding | 53,362 | 53,193 | 53,341 | 52,408 | |||||||||||||
Net income applicable to common stockholders per diluted common share | |||||||||||||||||
GAAP | $ | 20.03 | $ | 15.72 | $ | 37.13 | $ | 29.00 | |||||||||
Non-GAAP | $ | 22.16 | $ | 17.30 | $ | 42.48 | $ | 32.93 | |||||||||
�(a) | Adjustment for an accrual for travel transaction taxes (including estimated interest and penalties), principally related to unfavorable rulings in the State of Hawaii and the District of Columbia. |
�(b) | Stock-based employee compensation is recorded in Personnel expense. |
�(c) | Adjustment for KAYAK acquisition costs is recorded in General and administrative expense. |
�(d) | Amortization of intangible assets is recorded in Depreciation and amortization. |
�(e) | Depreciation and amortization are excluded from Net income to calculate Adjusted EBITDA. |
�(f) | Interest income and Interest expense are excluded from Net income to calculate Adjusted EBITDA. |
�(g) | 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. |
�(h) | Income tax expense is excluded from Net income to calculate Adjusted EBITDA. |
�(i) | Net income attributable to noncontrolling interests is excluded from Net income to calculate Adjusted EBITDA. |
�(j) | Adjustments for the tax impact of certain of the non-GAAP adjustments and to exclude non-cash income taxes. |
�(k) | Impact of other non-GAAP adjustments on Net income attributable to noncontrolling interests. |
(l) | Additional shares related to unvested 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. |
For a more detailed discussion of the adjustments described above, please see the section in our press release entitled "Non-GAAP Financial Measures" which provides a definition and information about the use of non-GAAP financial measures. | |
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The Priceline Group Inc. Statistical Data In millions (Unaudited) | ||||||||||||||||||||||||||||||||||||
Gross Bookings | 3Q12 | 4Q12 | 1Q13 | 2Q13 | 3Q13 | 4Q13 | 1Q14 | 2Q14 | 3Q14 | |||||||||||||||||||||||||||
International | $ | 6,473 | $ | 5,494 | $ | 7,783 | $ | 8,579 | $ | 9,179 | $ | 7,758 | $ | 10,643 | $ | 11,682 | $ | 12,080 | ||||||||||||||||||
Domestic | 1,359 | 1,090 | 1,370 | 1,538 | 1,586 | 1,379 | 1,637 | 1,856 | 1,743 | |||||||||||||||||||||||||||
Total | $ | 7,831 | $ | 6,584 | $ | 9,153 | $ | 10,118 | $ | 10,765 | $ | 9,138 | $ | 12,280 | $ | 13,538 | $ | 13,823 | ||||||||||||||||||
Agency | $ | 6,423 | $ | 5,302 | $ | 7,648 | $ | 8,425 | $ | 9,023 | $ | 7,576 | $ | 10,516 | $ | 11,581 | $ | 11,821 | ||||||||||||||||||
Merchant | 1,408 | 1,282 | 1,505 | 1,692 | 1,742 | 1,562 | 1,764 | 1,957 | 2,002 | |||||||||||||||||||||||||||
Total | $ | 7,831 | $ | 6,584 | $ | 9,153 | $ | 10,118 | $ | 10,765 | $ | 9,138 | $ | 12,280 | $ | 13,538 | $ | 13,823 | ||||||||||||||||||
Year/Year Growth | ||||||||||||||||||||||||||||||||||||
International | 29.7 | % | 40.4 | % | 42.8 | % | 44.1 | % | 41.8 | % | 41.2 | % | 36.8 | % | 36.2 | % | 31.6 | % | ||||||||||||||||||
excluding F/X impact | 41 | % | 43 | % | 43 | % | 44 | % | 41 | % | 42 | % | 38 | % | 35 | % | 32 | % | ||||||||||||||||||
Domestic | 7.2 | % | 4.4 | % | 8.7 | % | 11.7 | % | 16.7 | % | 26.5 | % | 19.5 | % | 20.6 | % | 9.9 | % | ||||||||||||||||||
Agency | 25.4 | % | 33.1 | % | 38.3 | % | 39.7 | % | 40.5 | % | 42.9 | % | 37.5 | % | 37.4 | % | 31.0 | % | ||||||||||||||||||
Merchant | 24.0 | % | 31.8 | % | 27.1 | % | 30.3 | % | 23.7 | % | 21.8 | % | 17.2 | % | 15.7 | % | 15.0 | % | ||||||||||||||||||
Total | 25.2 | % | 32.9 | % | 36.4 | % | 38.0 | % | 37.5 | % | 38.8 | % | 34.2 | % | 33.8 | % | 28.4 | % | ||||||||||||||||||
excluding F/X impact | 34 | % | 35 | % | 37 | % | 38 | % | 36 | % | 39 | % | 35 | % | 32 | % | 29 | % | ||||||||||||||||||
Units Sold | 3Q12 | 4Q12 | 1Q13 | 2Q13 | 3Q13 | 4Q13 | 1Q14 | 2Q14 | 3Q14 | |||||||||||||||||||||||||||
Hotel Room-Nights | 55.2 | 46.2 | 63.2 | 69.4 | 74.8 | 63.1 | 83.4 | 89.6 | 94.8 | |||||||||||||||||||||||||||
Year/Year Growth | 35.9 | % | 37.6 | % | 37.7 | % | 38.2 | % | 35.6 | % | 36.5 | % | 32.0 | % | 29.2 | % | 26.7 | % | ||||||||||||||||||
Rental Car Days | 9.4 | 7.2 | 9.9 | 12.5 | 12.0 | 9.5 | 12.3 | 14.3 | 14.2 | |||||||||||||||||||||||||||
Year/Year Growth | 34.9 | % | 36.5 | % | 43.3 | % | 46.3 | % | 27.5 | % | 32.3 | % | 24.6 | % | 14.4 | % | 18.1 | % | ||||||||||||||||||
Airline Tickets | 1.7 | 1.4 | 1.7 | 1.7 | 1.8 | 1.8 | 2.0 | 2.1 | 2.0 | |||||||||||||||||||||||||||
Year/Year Growth | 6.1 | % | 1.7 | % | 1.4 | % | 1.8 | % | 8.6 | % | 28.1 | % | 22.6 | % | 22.3 | % | 8.0 | % | ||||||||||||||||||
3Q12 | 4Q12 | 1Q13 | 2Q13 | 3Q13 | 4Q13 | 1Q14 | 2Q14 | 3Q14 | ||||||||||||||||||||||||||||
Revenue | $ | 1,706.3 | $ | 1,190.6 | $ | 1,302.0 | $ | 1,680.2 | $ | 2,269.9 | $ | 1,541.2 | $ | 1,641.8 | $ | 2,123.6 | $ | 2,836.5 | ||||||||||||||||||
Year/Year Growth | 17.4 | % | 20.2 | % | 25.5 | % | 26.6 | % | 33.0 | % | 29.4 | % | 26.1 | % | 26.4 | % | 25.0 | % | ||||||||||||||||||
Gross Profit | $ | 1,396.5 | $ | 939.8 | $ | 1,009.7 | $ | 1,383.9 | $ | 1,989.1 | $ | 1,333.3 | $ | 1,406.5 | $ | 1,883.0 | $ | 2,620.0 | ||||||||||||||||||
Year/Year Growth | 26.9 | % | 29.7 | % | 35.8 | % | 37.8 | % | 42.4 | % | 41.9 | % | 39.3 | % | 36.1 | % | 31.7 | % | ||||||||||||||||||
Amounts may not total due to rounding.
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 our customers. International gross bookings consist of the gross bookings of Booking.com, agoda.com and rentalcars.com, in each case regardless of where the consumer is resident, from where the consumer makes a reservation or where the travel service is provided.
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