EX-99.1 2 a06-5315_1ex99d1.htm EARNINGS RELEASE

Exhibit 99.1

 

Priceline.com Reports Financial Results

For 4th Quarter and Full-Year 2005

 

Gross travel bookings increase 29% to $537 million in the 4th quarter

Priceline Europe gross travel bookings increase 224% to $158 million in the 4th quarter

 

NORWALK, Conn., February 16, 2005 . . . Priceline.com Incorporated (Nasdaq: PCLN) today reported its financial results for the 4th quarter and full-year 2005.  For the 4th quarter, gross travel bookings, which refers to the total dollar value, inclusive of all taxes and fees, of all travel services purchased by consumers, rose 29% year-over-year to $536.8 million.  Revenues in the 4th quarter were $203.9 million, a 4.6% increase over a year ago.  2005 results include the operating results of Active Hotels Ltd., which was acquired in September 2004, and Bookings B.V., which was acquired in July 2005.

 

Priceline.com’s GAAP gross profit for the 4th quarter 2005 was $64.9 million, up 30.1% from the prior year, and GAAP net income for the 4th quarter was $3.8 million, or $0.09 per diluted share.  Pro forma gross profit for the 4th quarter 2005 was $65.3 million, up 26.9% over the same period a year ago.  Pro forma net income for the 4th quarter 2005 was $11.4 million, or $0.28 per diluted share, which was at the high end of priceline.com’s guidance and exceeded First Call analyst consensus of $0.27 per diluted share and represents an increase of 29% over the prior year quarter. The section below entitled “Non-GAAP Financial Measures” provides a definition and information about the use of pro forma financial measures used in this press release and the attached financial and statistical supplement reconciles historical pro forma financial information with priceline.com’s financial results under GAAP.

 

For full-year 2005, priceline.com reported gross travel bookings of $2.2 billion, a 32% increase over full-year 2004.  Full-year 2005 revenues were $962.7 million versus $914.4 million a year ago.  Priceline.com’s GAAP gross profit for 2005 was $267.9 million, a 35.2% increase over the prior year.  Full-year 2005 GAAP net income was $190.9 million, or $4.21 per diluted share, including a $170.5 million non-cash tax benefit recorded in the 3rd quarter from reversing a portion of priceline.com’s deferred tax asset valuation allowance.  Pro forma gross profit for full-year 2005 was $269.9 million, a 34.2% increase over 2004.  Pro forma net income for 2005 was $56.0 million, or $1.37 per diluted share, representing a 42% increase over the prior year.

 

“With gross travel bookings up 29% year-over-year and pro forma net income at the high end of our guidance range, the 4th quarter 2005 was a solid quarter for priceline.com,” said priceline.com President and Chief Executive Officer Jeffery H. Boyd.  “We were particularly pleased with results from Priceline Europe, where 4th quarter gross travel bookings of $158 million represented an organic growth rate of 88% compared to the same quarter in the prior year (which assumes ownership of Bookings B.V. during the

 

(more)

 


 

entire period), which we believe is roughly twice that of our major European competitors.”  With the combination of Active Hotels Ltd. and Bookings B.V., Priceline Europe’s online hotel reservation services now cover 40 countries with approximately 20,000 participating hotels.

 

Mr. Boyd continued, “Domestically, priceline.com continues to focus on the integration of opaque and published-price travel offerings.   We believe that adding published-price services gives priceline.com the ability to satisfy a much broader spectrum of customers.”

 

Earlier this year, priceline.com launched an enhanced U.S. website that gives customers More Ways To SaveSM than any other major online travel service.  Today, priceline.com customers are greeted with an easy-to-compare, searchable grid of priceline.com’s best published-prices, services and itineraries, along with the option to Name-Your-Own-Price® for a travel service, or save money by purchasing a package.  In addition, priceline.com recommends money-saving travel alternatives, such as traveling on different dates or using a different airport.  Priceline’s new website is being supported by a major advertising campaign and a new Name-Your-Own-Price® best-price and quality guarantee. “Since opening our doors in 1998, priceline.com has saved customers more than $5 billion on their travel purchases,” said Mr. Boyd. “Our goal in 2006 is to build on those savings by offering leisure travelers the number one destination for travel value.”

 

Mr. Boyd added, “In Europe, we believe priceline took meaningful market share from our major competitors in the 4th quarter.  Further, we believe that priceline can increase our full-year 2006 financial performance by driving this trend with marketing investments and further product enhancements in the 1st quarter.  We intend to continue to build out Priceline Europe, which we believe is one of the largest and fastest growing online hotel reservation services in Europe.  We also intend to explore ways to make priceline.com’s global collection of travel services available to customers on both sides of the Atlantic. We expect that the first quarter of 2006 will include an increase of over $10 million compared to the first quarter 2005 in global online marketing expense in support of our retail hotel business.  Relative to our historical trends, we expect that a much higher percentage of the revenue generated from our online marketing expenditures will be recognized in future quarters at the time of the hotel stay.  Given the rapid growth in the retail hotel business, we anticipate a shift in our earnings seasonality, with higher seasonal earnings in the second and third quarters of 2006. With the investments we are making in this business, a supplier- and consumer-friendly service lineup and the efforts of our teams in the United States and Europe, we believe priceline.com is building a leadership position in worldwide online hotel sales.”

 

Forward Guidance

 

For the full-year 2006, priceline.com said that it expects to generate approximately $2.7 to $2.9 billion in gross travel bookings.  The midpoint of this range represents 26% growth compared to full-year 2005.  Gross travel bookings in 2006 from priceline.com’s

 

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European operations are expected to be between $800 and $900 million. Priceline.com said that it expects to earn approximately $1.50 to $1.65 per diluted share of pro forma net income for full year 2006.

 

Priceline.com issued the following guidance for 1st quarter 2006:

 

•                  Year-over-year increases in gross travel bookings of approximately 30%;

•                  Year-over-year increase in revenue of approximately 5%;

•                  Year-over-year increase in pro forma gross profit of approximately 20-25%, and

•                  Pro forma net income of between $0.17 and $0.21 per diluted share.

 

A reconciliation of pro forma financial results to GAAP results is included in the attached financial and statistical supplement.  Pro forma gross profit guidance for the 1st quarter 2006 excludes non-cash amortization expense of acquisition-related intangibles associated with the acquisition of Travelweb LLC.

 

Pro forma net income per diluted share guidance for the 1st quarter 2006 and full-year 2006 excludes non-cash amortization expense of acquisition-related intangibles (primarily associated with the acquisitions of Travelweb LLC, Active Hotels Ltd. and Bookings, B.V.), stock-based compensation expense (including compensation expense related to stock options upon the adoption of SFAS 123(R)), option payroll tax expense and non-cash income tax expense and non-cash preferred stock dividends.  Pro forma net income is also adjusted for the impact on minority interests of the pro forma adjustments described above.   When aggregated the foregoing expenses are expected to total approximately $9 million and approximately $40 million for the 1st quarter 2006 and full-year 2006, respectively.  In addition, pro forma net income per diluted share guidance for 2006 excludes the impact of EITF 04-08 (“Effect of Contingently Convertible Debt on Diluted Earnings per Share”), which revises the method for calculating diluted shares outstanding for purposes of computing GAAP net income per diluted share.

 

About priceline.com

 

Priceline.com is the leading travel service for value-conscious leisure travelers.  No other travel service gives customers more ways to save on their airline tickets, hotel rooms, rental cars, vacation packages and cruises.  In addition to getting all the best published prices, leisure travelers can narrow their searches using priceline.com’s TripFilter™ advanced search technology, create packages to save even more money, and take advantage of priceline.com’s famous Name-Your-Own-Price® service, which delivers the lowest prices available.

 

Priceline.com operates one of Europe’s fastest growing hotel reservation services through Activehotels.com, Activereservations.com, Bookings.net and priceline.co.uk.  The company also operates the following travel websites:  Travelweb.com, Lowestfare.com, RentalCars.com and BreezeNet.com.  Priceline.com also has a personal finance service

 

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that offers home mortgages, refinancing and home equity loans through an independent licensee.  Priceline.com licenses its business model to independent licensees, including priceline mortgage and certain international licensees.

 

###

 

Press information:   Brian Ek  203-299-8167  (brian.ek@priceline.com)

 

Information About Forward-Looking Statements

 

This press release may contain forward-looking statements. 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, “believe(s),” “intend,” “expect(s),” “will,” “may,” “should,” “could,” “plan(s),” “anticipate(s),” “estimate(s),” “predict(s),” “potential,” “target(s),” 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 the result of, among other things, terrorist attacks, natural disasters, or the outbreak of an epidemic or pandemic disease;

 

• adverse changes in the Company’s relationships with airlines and other product and  service providers which could include, without limitation, the withdrawal of suppliers from the priceline.com system (either priceline.com’s retail or “opaque” services, or both):

 

• the loss or reduction of global distribution fees;

 

• the bankruptcy or insolvency of another major domestic airline;

 

• the effects of increased competition;

 

• systems-related failures and/or security breaches, including without limitation, 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;

 

• difficulties integrating recent acquisitions, such as Active Hotels Ltd. and Bookings B.V., including, ensuring the effectiveness of the design and operation of internal controls and disclosure controls of acquired businesses;

 

• 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;

 

• legal and regulatory risks; and

 

• the ability to attract and retain qualified personnel.

 

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

 

4


 

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 gross profit, 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 gross profit, pro forma net income and pro forma net income per share that exclude certain non-cash or non-recurring revenues or expenses are useful for 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.  Pro forma financial information is adjusted for the following items:

 

•                  Amortization expense of acquisition-related intangibles is excluded from pro forma gross profit and pro forma net income because it does not impact cash earnings.

•                  Stock-based compensation expense and the non-cash expense associated with the payment of preferred stock dividends are excluded from pro forma net income because they do not impact cash earnings and are reflected in earnings per share through increased share counts.

•                  Option payroll tax expense often shows volatility unrelated to operating results since the expense is driven primarily by option exercise activity and the market price of priceline.com’s common stock.

•                  The restructuring charge (reversal) is excluded because it can impact comparability of earnings with historical results from prior periods.

•                  Income tax (expense) benefit 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 carryforwards.

•                  Minority interest is adjusted for the impact of certain of the pro forma adjustments described above.

•                  Finally, for calculating pro forma net income per share:

•                  net income is adjusted for the impact of the pro forma adjustments described above

•                  the impact of EITF 04-08 (“Effect of Contingently Convertible Debt on Diluted Earnings per Share”), which requires that priceline.com use the “if-converted” method of accounting for convertible debt instruments when calculating earnings per share, has been excluded because the common stock that underlie priceline.com’s 1% Convertible Senior Notes and priceline.com’s 2.25% Convertible Senior Notes are generally not issuable unless our common stock trades at prices of $44.00 per share and $45.54 per share, respectively.

•                  All shares of restricted common stock 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.

 

5


 

priceline.com Incorporated

CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands, except per share data)

 

 

 

December 31,

2005

 

December 31,

2004

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

80,341

 

$

101,270

 

Restricted cash

 

22,308

 

23,572

 

Short-term investments

 

72,745

 

122,812

 

Accounts receivable, net of allowance for doubtful accounts of $1,377 and $1,390, respectively

 

30,043

 

18,314

 

Prepaid expenses and other current assets

 

18,245

 

6,578

 

Total current assets

 

223,682

 

272,546

 

 

 

 

 

 

 

Property and equipment, net

 

18,271

 

15,827

 

Intangible assets, net

 

149,675

 

98,908

 

Goodwill

 

198,417

 

138,859

 

Deferred taxes

 

146,553

 

—

 

Other assets

 

17,430

 

15,942

 

 

 

 

 

 

 

Total assets

 

$

754,028

 

$

542,082

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

37,851

 

$

40,612

 

Accrued expenses

 

19,872

 

23,649

 

Deferred merchant bookings

 

3,619

 

5,641

 

Other current liabilities

 

9,673

 

4,475

 

Total current liabilities

 

71,015

 

74,377

 

 

 

 

 

 

 

Deferred taxes

 

42,375

 

25,668

 

Other long-term liabilities

 

10,889

 

692

 

Minority interest

 

23,659

 

4,314

 

Long-term debt

 

223,549

 

224,418

 

Total liabilities

 

371,487

 

329,469

 

 

 

 

 

 

 

SERIES B MANDATORILY REDEEMABLE PREFERRED STOCK, $0.01 par value, 80,000 authorized shares; $1,000 liquidation value per share; 80,000 shares issued 13,470 and 13,470 shares outstanding, respectively

 

13,470

 

13,470

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

Common stock, $0.008 par value, authorized 1,000,000,000 shares, 42,195,004 and 41,356,576 shares issued, respectively

 

323

 

317

 

Treasury stock, 2,496,326 shares

 

(350,628

)

(350,628

)

Additional paid-in capital

 

2,069,165

 

2,064,224

 

Deferred compensation

 

(6,810

)

(1,264

)

Accumulated deficit

 

(1,334,572

)

(1,525,447

)

Accumulated other comprehensive income (loss)

 

(8,407

)

11,941

 

Total stockholders' equity

 

369,071

 

199,143

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

754,028

 

$

542,082

 

 


 

priceline.com Incorporated

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(In thousands, except per share data)

 

 

 

Three Months Ended
December 31,

 

For the Year Ended
December 31,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

 

 

 

 

 

 

 

 

Merchant revenues

 

$

173,231

 

$

179,670

 

$

859,404

 

$

872,994

 

Agency revenues

 

29,770

 

14,735

 

99,051

 

38,601

 

Other revenues

 

912

 

565

 

4,205

 

2,777

 

Total revenues

 

203,913

 

194,970

 

962,660

 

914,372

 

 

 

 

 

 

 

 

 

 

 

Cost of merchant revenues

 

138,910

 

143,828

 

694,190

 

714,822

 

Cost of agency revenues

 

84

 

1,244

 

607

 

1,395

 

Cost of other revenues

 

—

 

—

 

—

 

—

 

Total costs of revenues

 

138,994

 

145,072

 

694,797

 

716,217

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

64,919

 

49,898

 

267,863

 

198,155

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Advertising - Offline

 

4,475

 

6,017

 

30,957

 

33,476

 

Advertising - Online

 

16,533

 

8,519

 

58,535

 

27,480

 

Sales and marketing

 

6,328

 

7,578

 

34,295

 

32,091

 

Personnel, including stock based compensation of $1,195 and $294 for the three months ended December 31, 2005 and 2004 and $4,169 and $638 for the year ended December 31, 2005 and 2004, respectively

 

14,855

 

11,176

 

49,659

 

35,574

 

General and administrative, including option payroll taxes of $45 and $13 for the three months ended December 31, 2005 and 2004 and $111 and $357 for the year ended December 31, 2005 and 2004, respectively

 

6,381

 

4,188

 

20,881

 

16,452

 

Information technology

 

2,598

 

1,930

 

10,622

 

9,171

 

Depreciation and amortization

 

7,715

 

5,357

 

25,366

 

13,501

 

Restructuring charge (reversal), net

 

—

 

—

 

1,664

 

(12

)

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

58,885

 

44,765

 

231,979

 

167,733

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

6,034

 

5,133

 

35,884

 

30,422

 

 

 

 

 

 

 

 

 

 

 

Other income:

 

 

 

 

 

 

 

 

 

Interest income

 

1,279

 

1,316

 

5,550

 

5,112

 

Interest expense

 

(1,298

)

(1,291

)

(5,075

)

(3,722

)

Other

 

(98

)

11

 

(656

)

15

 

Total other income (expense)

 

(117

)

36

 

(181

)

1,405

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes, equity in income (loss) of investees and minority interests

 

5,917

 

5,169

 

35,703

 

31,827

 

Income tax (expense) benefit- note (1)

 

(2,250

)

260

 

156,277

 

193

 

Equity in income (loss) of investee and minority interests

 

123

 

(430

)

749

 

(511

)

Net income- note (1)

 

3,790

 

4,999

 

192,729

 

31,509

 

Preferred stock dividend

 

—

 

—

 

(1,854

)

(1,512

)

 

 

 

 

 

 

 

 

 

 

Net income applicable to common stockholders- note (1)

 

$

3,790

 

$

4,999

 

$

190,875

 

$

29,997

 

 

 

 

 

 

 

 

 

 

 

Net income applicable to common stockholders per basic common share- note (1)

 

$

0.10

 

$

0.13

 

$

4.87

 

$

0.78

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of basic common shares outstanding

 

39,352

 

38,775

 

39,161

 

38,304

 

 

 

 

 

 

 

 

 

 

 

Net income applicable to common stockholders per diluted common share- note (1)

 

$

0.09

 

$

0.12

 

$

4.21

 

$

0.76

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of diluted common shares outstanding

 

40,718

 

40,449

 

46,436

 

42,327

 

 

note (1): Income tax (expense) benefit for 2005 includes a $171 million non-cash tax benefit recorded in the 3rd quarter from a reversal of a portion of the Company’s deferred tax asset valuation allowance.

 


 

priceline.com Incorporated

RECONCILIATION OF GAAP FINANCIAL INFORMATION TO PRO FORMA

FINANCIAL INFORMATION

(unaudited)

(In thousands, except per share data)

 

 

 

Three Months Ended
December 31, 2005

 

 

 

GAAP

 

Adjustments

 

Pro Forma

 

 

 

 

 

 

 

 

 

Merchant revenues

 

$

173,231

 

$

—

 

$

173,231

 

Agency revenues

 

29,770

 

—

 

29,770

 

Other revenues

 

912

 

—

 

912

 

Total revenues

 

203,913

 

—

 

203,913

 

 

 

 

 

 

 

 

 

Cost of merchant revenues

 

138,910

 

(340

)(a)

138,570

 

Cost of agency revenues

 

84

 

(84

)(a)

—

 

Cost of other revenues

 

—

 

—

 

—

 

Total costs of revenues

 

138,994

 

(424

)

138,570

 

 

 

 

 

 

 

 

 

Gross profit

 

64,919

 

424

 

65,343

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Advertising - Offline

 

4,475

 

—

 

4,475

 

Advertising - Online

 

16,533

 

—

 

16,533

 

Sales and marketing

 

6,328

 

—

 

6,328

 

Personnel, including stock based compensation of $1,195

 

14,855

 

(1,195

)(b)

13,660

 

General and administrative, including option payroll taxes of $45

 

6,381

 

(45

)(c)

6,336

 

Information technology

 

2,598

 

—

 

2,598

 

Depreciation and amortization

 

7,715

 

(5,423

)(a)

2,292

 

Restructuring charge (reversal)

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

Total operating expenses

 

58,885

 

(6,663

)

52,222

 

 

 

 

 

 

 

 

 

Operating income

 

6,034

 

7,087

 

13,121

 

 

 

 

 

 

 

 

 

Other income:

 

 

 

 

 

 

 

Interest income

 

1,279

 

—

 

1,279

 

Interest expense

 

(1,298

)

—

 

(1,298

)

Other

 

(98

)

—

 

(98

)

Total other income (expense)

 

(117

)

—

 

(117

)

 

 

 

 

 

 

 

 

Earnings before income taxes, equity in income of investees and minority interests

 

5,917

 

7,087

 

13,004

 

Income tax (expense) benefit

 

(2,250

)

864

(d)

(1,386

)

Equity in income of investee and minority interests

 

123

 

(312

)(e)

(189

)

Net income

 

3,790

 

7,639

 

11,429

 

Preferred stock dividend

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

Net income applicable to common stockholders

 

$

3,790

 

$

7,639

 

$

11,429

 

 

 

 

 

 

 

 

 

Net income applicable to common stockholders per basic common share

 

$

0.10

 

 

 

$

0.29

 

 

 

 

 

 

 

 

 

Weighted average number of basic common shares outstanding

 

39,352

 

 

 

39,352

 

 

 

 

 

 

 

 

 

Net income applicable to common stockholders per diluted common share

 

$

0.09

 

 

 

$

0.28

 

 

 

 

 

 

 

 

 

Weighted average number of diluted common shares outstanding

 

40,718

 

302

(f)

41,020

 

 

(a)        Adjustment for amortization of acquisition-related intangibles, primarily related to Travelweb LLC, Active Hotels Ltd. and Bookings BV.

(b)        Adjustment for stock-based compensation.

(c)        Adjustment for option payroll taxes.

(d)        Adjustment for non-cash income tax provision.  In addition, adjustment to reflect the tax impact of certain other pro forma adjustments.

(e)        Impact on minority interests of pro forma adjustments.

(f)          Adjustment to include shares of restricted stock that were not considered in GAAP calculation of  weighted average number of diluted common shares outstanding.

 


 

priceline.com Incorporated

RECONCILIATION OF GAAP FINANCIAL INFORMATION TO PRO FORMA

FINANCIAL INFORMATION

(unaudited)

(In thousands, except per share data)

 

 

 

Year Ended
December 31, 2005

 

 

 

2005

 

Adjustments

 

Pro Forma

 

 

 

 

 

 

 

 

 

Merchant revenues

 

$

859,404

 

$

—

 

$

859,404

 

Agency revenues

 

99,051

 

—

 

99,051

 

Other revenues

 

4,205

 

—

 

4,205

 

Total revenues

 

962,660

 

—

 

962,660

 

 

 

 

 

 

 

 

 

Cost of merchant revenues

 

694,190

 

(1,381

)(a)

692,809

 

Cost of agency revenues

 

607

 

(607

)(a)

—

 

Cost of other revenues

 

—

 

—

 

—

 

Total costs of revenues

 

694,797

 

(1,988

)

692,809

 

 

 

 

 

 

 

 

 

Gross profit

 

267,863

 

1,988

 

269,851

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Advertising - Offline

 

30,957

 

—

 

30,957

 

Advertising - Online

 

58,535

 

—

 

58,535

 

Sales and marketing

 

34,295

 

—

 

34,295

 

Personnel, including stock based compensation of $4,169

 

49,659

 

(4,169

)(b)

45,490

 

General and administrative, including option payroll taxes of $111

 

20,881

 

(111

)(c)

20,770

 

Information technology

 

10,622

 

—

 

10,622

 

Depreciation and amortization

 

25,366

 

(16,605

)(a)

8,761

 

Restructuring charge (reversal), net

 

1,664

 

(1,664

)(d)

—

 

 

 

 

 

 

 

 

 

Total operating expenses

 

231,979

 

(22,549

)

209,430

 

 

 

 

 

 

 

 

 

Operating income

 

35,884

 

24,537

 

60,421

 

 

 

 

 

 

 

 

 

Other income:

 

 

 

 

 

 

 

Interest income

 

5,550

 

—

 

5,550

 

Interest expense

 

(5,075

)

—

 

(5,075

)

Other

 

(656

)

—

 

(656

)

Total other income (expense)

 

(181

)

—

 

(181

)

 

 

 

 

 

 

 

 

Earnings before income taxes, equity in income of investees and minority interests

 

35,703

 

24,537

 

60,240

 

Income tax (expense) benefit

 

156,277

 

(160,476

)(e)

(4,199

)

Equity in income of investee and minority interests

 

749

 

(827

)(f)

(78

)

Net income

 

192,729

 

(136,766

)

55,963

 

Preferred stock dividend

 

(1,854

)

1,854

(g)

—

 

 

 

 

 

 

 

 

 

Net income applicable to common stockholders

 

$

190,875

 

$

(134,912

)

$

55,963

 

 

 

 

 

 

 

 

 

Net income applicable to common stockholders per basic common share

 

$

4.87

 

 

 

$

1.43

 

 

 

 

 

 

 

 

 

Weighted average number of basic common shares outstanding

 

39,161

 

 

 

39,161

 

 

 

 

 

 

 

 

 

Net income applicable to common stockholders per diluted common share

 

$

4.21

 

 

 

$

1.37

 

 

 

 

 

 

 

 

 

Weighted average number of diluted common shares outstanding

 

46,436

 

(5,461

)(h)

40,975

 

 

(a)        Adjustment for amortization of acquisition-related intangibles, primarily related to Travelweb LLC, Active Hotels Ltd. and Bookings BV.

(b)        Adjustment for stock-based compensation.

(c)        Adjustment for option payroll taxes.

(d)        Adjustment for restructuring expense activity.

(e)        Adjustment for net non-cash income tax provision (including the tax benefit resulting from a $171 million reversal of a portion of the Company’s deferred tax asset valuation allowance, partly offset by non-cash income tax provision) and to reflect the tax impact of certain other pro forma adjustments.

(f)          Impact on minority interest of pro forma adjustments.

(g)       Adjustment for preferred stock dividend.

(h)       Adjustment for the impact of EITF 04-08. Also, adjustment to include shares of restricted stock that were not considered in GAAP calculation of weighted average number of diluted common shares outstanding.

 


 

priceline.com Incorporated

Statistical Data

 

In thousands

 

Gross Bookings

 

1Q04

 

2Q04

 

3Q04

 

4Q04

 

1Q05

 

2Q05

 

3Q05

 

4Q05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agency

 

$

116,611

 

$

176,248

 

$

156,946

 

$

197,634

 

$

241,935

 

$

266,447

 

$

343,214

 

$

323,901

 

Merchant

 

246,339

 

297,094

 

278,339

 

218,541

 

267,815

 

303,017

 

267,840

 

212,861

 

Total

 

$

362,950

 

$

473,342

 

$

435,285

 

$

416,175

 

$

509,750

 

$

569,464

 

$

611,054

 

$

536,761

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

$

360,179

 

$

470,375

 

$

424,815

 

$

367,199

 

$

437,848

 

$

491,949

 

$

446,232

 

$

378,301

 

International

 

2,771

 

2,967

 

10,470

 

48,976

 

71,902

 

77,515

 

164,822

 

158,460

 

Total

 

$

362,950

 

$

473,342

 

$

435,285

 

$

416,175

 

$

509,750

 

$

569,464

 

$

611,054

 

$

536,761

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year/Year Growth

 

45.3

%

58.0

%

43.7

%

61.1

%

40.4

%

20.3

%

40.4

%

29.0

%

 

Units Sold

 

1Q04

 

2Q04

 

3Q04

 

4Q04

 

1Q05

 

2Q05

 

3Q05

 

4Q05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Airline Tickets

 

622

 

822

 

725

 

644

 

747

 

789

 

680

 

582

 

Year/Year Growth

 

28.7

%

60.3

%

65.5

%

61.5

%

20.0

%

-4.1

%

-6.2

%

-9.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel Room-Nights

 

1,682

 

1,995

 

2,087

 

2,007

 

2,556

 

2,736

 

3,499

 

2,968

 

Year/Year Growth

 

35.9

%

31.6

%

26.2

%

51.1

%

52.0

%

37.1

%

67.7

%

47.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental Car Days

 

1,214

 

1,409

 

1,364

 

1,065

 

1,278

 

1,535

 

1,692

 

1,315

 

Year/Year Growth

 

83.1

%

62.4

%

12.1

%

15.4

%

5.3

%

8.9

%

24.0

%

23.4

%

 

 

 

1Q04

 

2Q04

 

3Q04

 

4Q04

 

1Q05

 

2Q05

 

3Q05

 

4Q05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

224,131

 

$

259,389

 

$

235,882

 

$

194,970

 

$

233,392

 

$

266,557

 

$

258,797

 

$

203,913

 

Year/Year Growth

 

11.8

%

8.3

%

-3.1

%

8.2

%

4.1

%

2.8

%

9.7

%

4.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

$

43,374

 

$

53,779

 

$

51,104

 

$

49,898

 

$

57,707

 

$

65,234

 

$

80,002

 

$

64,919

 

Year/Year Growth

 

31.5

%

32.8

%

25.7

%

56.8

%

33.0

%

21.3

%

56.5

%

30.1

%

 

Gross Bookings represent the total dollar value of travel booked, inclusive of taxes and fees.

The gross bookings and units sold information reflects results from Active Hotels and Bookings since acquisition.