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| [November 09, 2009] |
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Priceline.com Reports Financial Results for 3rd Quarter 2009
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® 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® 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 shares issued, respectively
391
367
Treasury stock, 6,848,605 and 6,685,048 shares, respectively
(507,724
)
(493,555
)
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, $32,727, and $29,070, respectively
50,959
45,259
135,333
121,787
General and administrative
19,367
13,524
48,881
39,519
Information technology
4,777
4,402
14,002
13,688
Depreciation and amortization
10,098
10,935
29,182
32,352
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 transactions and other
(1,220
)
3,587
(1,283
)
(1,508
)
Total other income (expense)
(6,660
)
(1,091
)
(18,809
)
(18,691
)
Earnings before income taxes and equity in income (loss) of investees
194,095
126,831
334,164
221,950
Income tax benefit (expense)
124,887
(40,445
)
76,851
(70,209
)
Equity in income (loss) of investees
-
(97
)
2
(263
)
Net income
318,982
86,289
411,017
151,478
Less: net income attributable to noncontrolling interests
-
1,803
-
3,378
Net income applicable to common stockholders of priceline.com Incorporated
$
318,982
$
84,486
$
411,017
$
148,100
Net income applicable to common stockholders per basic common share
$
7.49
$
2.13
$
9.84
$
3.81
Weighted average number of basic common shares outstanding
42,569
39,715
41,750
38,905
Net income applicable to common stockholders per diluted common share
$
6.42
$
1.74
$
8.42
$
3.00
Weighted average number of diluted common shares outstanding
49,670
48,656
48,805
49,344
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 asset
(181,874
)
-
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 liabilities
89,827
58,518
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 cash acquired
-
(593
)
Proceeds from redemption of equity investment in pricelinemortgage.com
8,921
-
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 equivalents
(842
)
(13,123
)
Net increase / (decrease) in cash and cash equivalents
(2,077
)
28,027
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 30,
Nine Months Ended September 30,
RECONCILIATION OF GAAP OPERATING INCOME
2008
2008
TO PRO FORMA EBITDA
2009
As Adjusted
2009
As Adjusted
GAAP Operating income
$
200,755
$
127,922
$
352,973
$
240,641
(a)
Amortization of acquired intangible assets in Cost of revenues
-
-
-
272
(b)
Stock-based compensation
10,870
10,055
32,727
29,070
(c)
Charge related to hotel occupancy tax litigation judgment in General
and administrative expense
3,680
-
3,680
-
(d)
Stock-based compensation payroll taxes
-
36
-
709
(j)
Depreciation and amortization
10,098
10,935
29,182
32,352
(k)
Foreign currency transactions and other
(1,220
)
3,587
(1,283
)
(1,507
)
(g)
(Gain) loss on extinguishment of debt
394
(87
)
(2,735
)
(45
)
Pro Forma EBITDA
$
224,577
$
152,448
$
414,544
$
301,492
Three Months Ended September 30,
Nine Months Ended September 30,
RECONCILIATION OF GAAP TO PRO FORMA NET (News - Alert) INCOME APPLICABLE TO
2008
2008
COMMON STOCKHOLDERS
2009
As Adjusted
2009
As Adjusted
GAAP Net income applicable to common stockholders of priceline.com Incorporated
$
318,982
$
84,486
$
411,017
$
148,100
(a)
Amortization of acquired intangible assets in Cost of revenues
-
-
-
272
(a)
Amortization of acquired intangible assets in Depreciation and amortization
6,427
7,352
18,542
21,553
(b)
Stock-based compensation
10,870
10,055
32,727
29,070
(c)
Charge related to hotel occupancy tax litigation judgment in General
and administrative expense
3,680
-
3,680
-
(d)
Stock-based compensation payroll taxes
-
36
-
709
(e)
Adjustments for the tax impact of certain of the pro forma adjustments and
to exclude non-cash income taxes (including the non-cash benefit of $181.9 million in 3rd quarter 2009 from the reversal of a portion of the valuation allowance on the Company's deferred tax asset)
(171,529
)
9,213
(154,382
)
13,098
(f)
Impact on noncontrolling interests of other pro forma adjustments
-
(243
)
-
(818
)
(g)
Amortization related to FSP APB 14-1
4,516
5,976
14,752
20,534
(g)
(Gain) loss on extinguishment of debt
394
(87
)
(2,735
)
(45
)
Pro Forma Net income applicable to common stockholders of priceline.com Incorporated
$
173,340
$
116,788
$
323,601
$
232,473
Three Months Ended September 30,
Nine Months Ended September 30,
RECONCILIATION OF GAAP TO PRO FORMA NET INCOME APPLICABLE TO
2008
2008
COMMON STOCKHOLDERS PER DILUTED COMMON SHARE
2009
As Adjusted
2009
As Adjusted
GAAP weighted average number of diluted common shares outstanding
49,670
48,656
48,805
49,344
(h)
Adjustment for Conversion Spread Hedges
(449
)
(884
)
(642
)
(767
)
(i)
Adjustment for restricted stock, restricted stock units and performance units
1,019
1,091
1,006
1,002
Pro Forma Weighted average number of diluted common shares outstanding
50,240
48,863
49,169
49,579
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.
(d)
Stock-based compensation payroll taxes are recorded in General and administrative expense. As of January 1, 2009, we no longer exclude payroll tax expense related to stock-based compensation due to its relative insignificance to our consolidated financial statements.
(e)
Adjustments for the tax impact of certain of the pro forma adjustments and to exclude non-cash income taxes (including the non-cash benefit of $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.
(g)
Non-cash interest expense related to the amortization of debt discount and (gain) loss on debt extinguishment, 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 recorded in Interest expense and Foreign currency transactions and other, respectively.
(h)
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.
(i)
All shares of restricted common stock, restricted stock units and performance share units are included in the calculation of pro forma net income per share because pro forma net income has been adjusted to exclude stock-based compensation expense.
(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 impact
79.6%
83.4%
89.9%
75.0%
55.8%
44.7%
27.6%
23.5%
32.4%
48.5%
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 Room-Nights
7,242
7,964
6,616
9,375
10,879
11,434
9,126
12,785
15,665
17,869
Year/Year Growth
45.0%
52.0%
55.1%
57.4%
50.2%
43.6%
38.0%
36.4%
44.0%
56.3%
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 Growth
13.9%
14.4%
11.9%
30.4%
23.6%
-0.2%
11.1%
15.4%
15.0%
11.6%
Airline Tickets
687
819
790
1,169
1,362
1,186
1,135
1,496
1,551
1,544
Year/Year Growth
-16.3%
23.0%
34.4%
83.0%
98.2%
44.8%
43.7%
28.0%
13.9%
30.2%
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 Growth
15.7%
33.1%
28.8%
33.8%
44.4%
34.6%
21.3%
14.6%
17.5%
30.1%
Gross Profit
$157,211
$202,331
$160,152
$181,103
$253,725
$316,078
$205,065
$208,330
$305,238
$434,006
Year/Year Growth
48.6%
63.8%
60.9%
51.3%
61.4%
56.2%
28.0%
15.0%
20.3%
37.3%
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.
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