UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2007
	OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
	For the transition period from                    to

Commission File Number 0-25581

PRICELINE.COM INCORPORATED

(Exact name of Registrant as specified in its charter)

Delaware	06-1528493
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

800 Connecticut Avenue

Norwalk, Connecticut 06854

(address of principal executive offices)

(203) 299-8000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed, since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.  YES x.  NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer  x Accelerated filer  o Non-accelerated filer  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).Yes o No x

Number of shares of Common Stock outstanding at February 15, 2008:

Common Stock, par value $0.008 per share	38,472,411
(Class)	(Number of Shares)

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EXPLANATORY NOTE

As disclosed in a Form 8-K filed with the Commission on March 3, 2008, this amendment to the Quarterly Report on Form 10-Q of priceline.com Incorporated (the “Company”) for the quarterly period ended March 31, 2007, is being filed for the purpose of restating the consolidated financial statements to correct a classification error in the presentation of minority interest in the consolidated balance sheet.  Minority interest was previously classified as a liability and is now presented in the mezzanine section of the consolidated balance sheet between liabilities and stockholders’ equity.  The classification error had no impact on the Company’s consolidated assets, the total liabilities and stockholders’ equity line item in the consolidated balance sheet, consolidated statement of operations or consolidated statement of cash flows.

The aforementioned consolidated financial statements should be read in conjunction with the notes to Consolidated Financial Statements included herein and in our 2007 Annual Report on Form 10-K. As permitted by Rule 12b-15 of the Securities Exchange Act, this amended filing includes the complete text of only those items amended. Accordingly, Part I, Items 2, 3 and 4, and Part II, Items 1 through 5, have been omitted from this filing.  All information contained herein is as of March 31, 2007, and does not reflect any changes or events that occurred subsequent to that date. As a result of this amendment, the certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002, filed as exhibits to the original filing, have been re-executed and re-filed as of the date of this Form 10-Q/A.

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INDEX

PART I - FINANCIAL INFORMATION
Item 1. Unaudited Consolidated Financial Statements	3
Consolidated Balance Sheets (unaudited) at March 31, 2007 (as restated) and December 31, 2006	3
Consolidated Statements of Operations (unaudited) For the Three Months Ended March 31, 2007 and 2006	4
Consolidated Statement of Changes in Stockholders' Equity (unaudited) For the Three Months Ended March 31, 2007	5
Consolidated Statements of Cash Flows (unaudited) For the Three Months Ended March 31, 2007 and 2006	6
Notes to Unaudited Consolidated Financial Statements	7
PART II - OTHER INFORMATION
Item 6. Exhibits	22
SIGNATURES	24

2

PART I — FINANCIAL INFORMATION

Item 1.   UnauditedConsolidated Financial Statements

priceline.com Incorporated

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	March 31, 2007
	As Restated(See Note 15)			December 31, 2006
ASSETS
Current assets:
Cash and cash equivalents	$	454,988		$	423,577
Restricted cash	2,624			2,459
Short-term investments	—			7,983
Accounts receivable, net of allowance for doubtful accounts of $2,136 and $1,651, respectively	52,134			48,536
Prepaid expenses and other current assets	46,007			20,534
Total current assets	555,753			503,089
Property and equipment, net	21,400			21,691
Intangible assets, net	148,261			152,925
Goodwill	228,354			226,707
Deferred taxes	190,947			179,392
Other assets	21,024			21,844
Total assets	$	1,165,739		$	1,105,648
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	57,906		$	49,032
Accrued expenses and other current liabilities	96,533			46,872
Deferred merchant bookings	8,769			4,768
Convertible debt	568,980			—
Total current liabilities	732,188			100,672
Deferred taxes	39,160			39,714
Other long-term liabilities	11,466			11,885
Convertible debt	—			568,865
Total liabilities	782,814			721,136
Commitments and Contingencies (see Note 14)
Minority interest	23,218			22,486
Series B mandatorily redeemable preferred stock, $0.01 par value; 80,000 authorized shares; $1,000 liquidation value per share; 80,000 shares issued and 0 and 13,470 shares outstanding, respectively	—			13,470
Stockholders’ equity:
Common stock, $0.008 par value; authorized 1,000,000,000 shares, 44,514,707 and 43,215,712 shares issued, respectively	342			331
Treasury stock, 6,630,313 and 6,603,050 shares, respectively	(487,893		)	(486,468		)
Additional paid-in capital	2,096,021			2,070,379
Accumulated deficit	(1,278,304		)	(1,262,033		)
Accumulated other comprehensive income	29,541			26,347
Total stockholders’ equity	359,707			348,556
Total liabilities and stockholders’ equity	$	1,165,739		$	1,105,648

See Notes to Unaudited Consolidated Financial Statements.

3

priceline.com Incorporated

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended March 31,
	2007			2006
Merchant revenues, including $15,878 excise tax refund in 2007	$	246,011		$	210,438
Agency revenues	54,511			30,381
Other revenues	867			1,095
Total revenues	301,389			241,914
Cost of merchant revenues	181,672			169,683
Cost of agency revenues	—			—
Cost of other revenues	—			—
Total costs of revenues	181,672			169,683
Gross profit	119,717			72,231
Operating expenses:
Advertising — Offline	11,334			9,438
Advertising — Online	31,927			21,861
Sales and marketing	11,410			9,582
Personnel, including stock-based compensation of $3,166 and $3,017, respectively	21,490			16,454
General and administrative, including net cost of litigation settlement of $54,857 in 2007, and option payroll taxes of $438 and $89, respectively	63,875			5,737
Information technology	2,911			2,307
Depreciation and amortization	8,505			7,946
Restructuring charge, net	—			135
Total operating expenses	151,452			73,460
Operating loss	(31,735		)	(1,229		)
Other income (expense):
Interest income, including $2,786 of interest on excise tax refund in 2007	8,203			1,575
Interest expense	(2,470		)	(1,498		)
Other	(214		)	111
Total other income	5,519			188
Loss before income taxes, equity in income (loss) of investees and minority interests	(26,216		)	(1,041		)
Income tax benefit	11,593			741
Equity in income (loss) of investees and minority interests	(93		)	201
Net loss	(14,716		)	(99		)
Preferred stock dividend	(1,555		)	(865		)
Net loss applicable to common stockholders	$	(16,271	)	$	(964	)
Net loss applicable to common stockholders per basic common share	$	(0.44	)	$	(0.02	)
Weighted average number of basic common shares outstanding	37,191			39,380
Net loss applicable to common stockholders per diluted common share	$	(0.44	)	$	(0.02	)
Weighted average number of diluted common shares outstanding	37,191			39,380

See Notes to Unaudited Consolidated Financial Statements.

4

priceline.com Incorporated

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2007

(In thousands)

				Additional						Accumulated Other
	Common Stock			Paid-in			Accumulated			Comprehensive		Treasury Stock
	Shares	Amount		Capital			Deficit			Income (Loss)		Shares		Amount			Total
Balance, January 1, 2007	43,216	$	331	$	2,070,379		$	(1,262,033	)	$	26,347	(6,603	)	$	(486,468	)	$	348,556
Net loss applicable to common stockholders	—	—		—			(16,271		)	—		—		—			(16,271		)
Unrealized gain on marketable securities	—	—		—			—			143		—		—			143
Currency translation adjustment	—	—		—			—			3,051		—		—			3,051
Comprehensive loss																	(13,077		)
Issuance of restricted stock under equity-based compensation plans, net of forfeitures	119	1		(1		)	—			—		—		—			—
Issuance of preferred stock dividend	35	1		1,554			—			—		—		—			1,555
Exercise of stock options and vesting of restricted stock units	389	3		7,586			—			—		—		—			7,589
Repurchase of common stock	—	—		—			—			—		(27	)	(1,425		)	(1,425		)
Stock-based compensation	—	—		2,870			—			—		—		—			2,870
Exercise of warrants	756	6		13,464			—			—		—		—			13,470
Excess tax benefit on stock-based compensation	—	—		169			—			—		—		—			169
Balance, March 31, 2007	44,515	$	342	$	2,096,021		$	(1,278,304	)	$	29,541	(6,630	)	$	(487,893	)	$	359,707

See Notes to Unaudited Consolidated Financial Statements.

5

priceline.com Incorporated

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three Months Ended March 31,
	2007			2006
OPERATING ACTIVITIES:
Net loss	$	(14,716	)	$	(99	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	2,576			2,359
Amortization	5,929			5,917
Provision for uncollectible accounts, net	1,799			768
Deferred income taxes	(12,451		)	(1,217		)
Stock-based compensation expense	3,166			3,017
Amortization of debt issuance costs	763			369
Equity in (income) loss of investee, net, and minority interests	93			(201		)
Restructuring charge, net	—			135
Changes in assets and liabilities:
Accounts receivable	(5,104		)	(4,197		)
Prepaid expenses and other current assets	(25,355		)	(3,346		)
Accounts payable, accrued expenses and other current liabilities	61,280			17,158
Other	773			(316		)
Net cash provided by operating activities	18,753			20,347
INVESTING ACTIVITIES:
Purchase of short-term investments	—			(27,235		)
Redemption of short-term investments	7,996			14,478
Acquisitions and other equity investments, net of cash acquired	—			(1,210		)
Additions to property and equipment	(2,217		)	(2,075		)
Change in restricted cash	(160		)	1,328
Net cash provided by (used in) investing activities	5,619			(14,714		)
FINANCING ACTIVITIES:
Repurchase of common stock	(1,425		)	(5,616		)
Proceeds from exercise of stock options	7,589			1,142
Excess tax benefit on stock-based compensation	169			—
Net cash provided by (used in) financing activities	6,333			(4,474		)
Effect of exchange rate changes on cash and cash equivalents	706			407
Net increase in cash and cash equivalents	31,411			1,566
Cash and cash equivalents, beginning of period	423,577			80,341
Cash and cash equivalents, end of period	$	454,988		$	81,907
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for income taxes	$	6,645		$	7
Cash paid during the period for interest	$	2,958		$	1,802

See Notes to Unaudited Consolidated Financial Statements.

6

priceline.com Incorporated

Notes to Unaudited Consolidated Financial Statements

1.BASIS OF PRESENTATION

Priceline.com Incorporated (“priceline.com” or the “Company”) is responsible for the Unaudited Consolidated Financial Statements included in this document.  The Unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operating results.  The Company prepared the Unaudited Consolidated Financial Statements following the requirements of the Securities and Exchange Commission for interim reporting.  As permitted under those rules, the Company omitted certain footnotes or other financial information that are normally required by GAAP for annual financial statements.  These statements should be read in combination with the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

The Unaudited Consolidated Financial Statements include the accounts of the Company and its subsidiaries.  All significant intercompany accounts and transactions have been eliminated in consolidation. Investments in affiliates in which the Company does not have control, but has the ability to exercise significant influence, are accounted for by the equity method.

Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year.

2.STOCK-BASED EMPLOYEE COMPENSATION

The Company has adopted stock compensation plans which provide for grants of share based compensation as incentives and rewards to encourage employees, officers, consultants and directors to contribute towards the long-term success of the Company.  Stock-based compensation cost included in personnel expenses in the Unaudited Consolidated Statements of Operations was approximately $3.2 million and $3.0 million for the three months ended March 31, 2007 and 2006, respectively.  These amounts include stock-based compensation for restricted stock and restricted stock units related to shares of priceline.com International.

During the three months ended March 31, 2007, the Company granted 125,550 shares of restricted stock, 83,740 restricted stock units and 75,750 performance share units.  The share based awards generally vest on the third anniversary of the date of grant and had a total grant date fair value of $14.8 million based upon the grant date fair value per share of $51.93.  The actual number of shares of common stock issued in connection with the performance share units, if any, will be determined at the end of the performance period, assuming there is no accelerated vesting for, among other things, a change in control or termination of employment in certain circumstances, and could range from zero to an additional 75,750 shares over the “target” number of shares if the maximum performance threshold associated with the performance share units is met by the Company.

3.NET LOSS PER SHARE

The Company computes basic and diluted net income (loss) per share in accordance with SFAS No. 128, “Earnings per Share.” Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is based upon the weighted average number of common and common equivalent shares outstanding during the period.

Common equivalent shares related to stock options, restricted stock, restricted stock units, performance share units and warrants are calculated using the treasury stock method.   Performance share units are included in the weighted average common equivalent shares based on the number of shares that would be issued if the end of the reporting period were the end of the performance period, if the result would be dilutive.

7

The Company’s convertible debt issues  have net share settlement features requiring the Company upon conversion to settle the principal amount of the debt for cash and the conversion premium for cash or shares of the Company’s common stock (See Note 8). Pursuant to EITF 90-19, “Convertible Bonds with Issuer Options to Settle for Cash upon Conversion,” the convertible notes are included in the calculation of diluted net income per share if their inclusion is dilutive under the treasury stock method.

As of March 31, 2007 and 2006, respectively, 17.8 million shares and 11.7 million shares that could potentially dilute earnings per share in the future were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive.  The potentially dilutive share amount at March 31, 2007 includes approximately 14.3 million shares that could be issued under the Company’s convertible debt if the Company experiences substantial increases in its common stock price.  Under the treasury stock method, the convertible notes will generally have a dilutive impact on net income per share if the Company’s average stock price for the period exceeds the conversion price for the convertible notes. As an example, at stock prices of $40 per share, $60 per share and $100 per share, common equivalent shares would include approximately 0.1 million, 4.8 million and 8.6 million equivalent shares, respectively, related to the convertible notes (excluding the offsetting impact of the Convertible Spread Hedges — see Note 8).

4.RESTRUCTURING

At March 31, 2007, the Company had a restructuring liability of $1.3 million for the estimated remaining costs related to leased property vacated by the Company in 2000. During the first quarter of 2006, the Company recorded a $135,000 restructuring charge based upon a re-evaluation of the estimated disposal costs related to the vacated leased property.  The Company estimates that, based on current available information, the remaining net cash outflows associated with its restructuring related commitments will be paid in 2007-2011. The current portion of the restructuring accrual in the amount of $669,000 is recorded in “Accrued expenses and other current liabilities” and the $582,000 non-current portion is recorded in “Other long-term liabilities” on the Company’s Unaudited Consolidated Balance Sheet.

5.SHORT-TERM INVESTMENTS

The Company held no marketable securities as of March 31, 2007.  The Company’s marketable securities as of December 31, 2006 were approximately $8.0 million, comprised of U.S. government agency-discount notes.  The securities were sold in the first quarter 2007 with no significant gain or loss.

8

6.INTANGIBLE ASSETS

The Company’s intangible assets consist of the following (in thousands):

	March 31, 2007							December 31, 2006
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Amortization Period	Weighted Average Useful Life
Supply and distribution agreements	$	149,762	$	(23,798	)	$	125,964	$	151,926	$	(24,237	)	$	127,689	13 years	13 years
Technology	21,622		(14,360		)	7,262		21,454		(12,571		)	8,883		3 years	3 years
Patents	1,489		(1,090		)	399		1,489		(1,076		)	413		15 years	15 years
Customer lists	9,905		(8,828		)	1,077		9,822		(8,049		)	1,773		2 – 3 years	2 years
Internet domain names	6,443		(859		)	5,584		6,443		(698		)	5,745		10 years	10 years
Trade names	10,628		(2,752		)	7,876		10,515		(2,195		)	8,320		5 years	5 years
Other	326		(227		)	99		1,107		(1,005		)	102		3 –  15 years	9 years
Total intangible assets	$	200,175	$	(51,914	)	$	148,261	$	202,756	$	(49,831	)	$	152,925

Intangible assets with determinable lives are primarily amortized on a straight-line basis.  Intangible asset amortization expense was approximately $5.9 million and $5.9 million for the three months ended March 31, 2007 and 2006, respectively.

The annual estimated amortization expense for intangible assets for the remainder of 2007, the next four years and thereafter is expected to be as follows (in thousands):

2007	$	16,041
2008	17,031
2009	14,748
2010	14,172
2011	12,263
Thereafter	74,006
	$	148,261

7.OTHER ASSETS

Other assets at March 31, 2007 and December 31, 2006 consist of the following (in thousands):

	March 31, 2007		December 31, 2006
Investment in pricelinemortgage.com	$	9,593	$	9,550
Deferred debt issuance costs, net	11,136		11,899
Other	295		395
Total	$	21,024	$	21,844

9

Investment in pricelinemortgage.com represents the Company’s 49% equity investment in pricelinemortgage.com and, accordingly, the Company recognizes its pro rata share of pricelinemortgage.com’s operating results, not to exceed an amount that the Company believes represents the investment’s estimated fair value. The Company recognized approximately $43,000 and $11,000 of income from its investment in pricelinemortgage.com in the three months ended March 31, 2007 and 2006, respectively.  The Company earned advertising fees from pricelinemortgage.com of approximately $4,000 and $11,000 in the three months ended March 31, 2007 and 2006, respectively.

Deferred debt issuance costs arose from the Company’s issuance of $125 million aggregate principal amount of 1% Notes in August 2003, $100 million aggregate principal amount of 2.25% Notes in June 2004, $172.5 million aggregate principal amount of 0.5% Notes in September 2006 and $172.5 million of aggregate principal amount 0.75% Notes in September 2006.  Deferred debt issuance costs of approximately $4.3 million, $3.8 million, $4.4 million and $4.4 million, respectively, consisting primarily of underwriting commissions and professional service fees, are being amortized using the effective interest rate method over the term of approximately five years, except for the 0.75% Notes, which are amortized over their term of seven years.

8.CONVERTIBLE DEBT

The Company’s convertible debt is convertible into the Company’s common stock subject to certain conditions. Upon conversion, a holder will receive cash for the principal amount of the note and cash or shares of the Company’s common stock for the conversion value in excess of such principal amount.   Based upon the closing price of the Company’s common stock for the prescribed measurement periods during the quarter ended March 31, 2007, the contingent conversion thresholds on each of the Company’s convertible senior note issues were exceeded.  As a result, the notes are convertible at the option of the holder as of March 31, 2007 and, accordingly, have been classified as a current liability in the Unaudited Consolidated Balance Sheets as of that date.  The convertible debt may be classified as long-term debt in future quarters if the contingent conversion thresholds are not met in such quarters.  Convertible debt consists of the following as of March 31, 2007 and December 31, 2006 (in thousands):

	March 31, 2007		December 31, 2006
$125 million aggregate principal amount of 1.00% Convertible Senior Notes due August 2010	$	123,980	$	123,865
$172.5 million aggregate principal amount of 0.50% Convertible Senior Notes due September 2011	172,500		172,500
$172.5 million aggregate principal amount of 0.75% Convertible Senior Notes due September 2013	172,500		172,500
$100 million aggregate principal amount of 2.25% Convertible Senior Notes due January 2025	100,000		100,000
	$	568,980	$	568,865

The $125 million aggregate principal amount of Convertible Senior Notes due August 1, 2010, with an interest rate of 1.00% (the “1% Notes”) are convertible, subject to certain conditions, into the Company’s common stock at a conversion price of approximately $40.00 per share.  Prior to August 1, 2008, the 1% Notes will be convertible if the closing price of the Company’s common stock for at least 20 trading days in the 30 consecutive trading days ending on the first day of a conversion period is more than 110% of the then current conversion price of the 1% Notes, or after August 1, 2008, if the closing price of the Company’s common stock is more than 110% of the then current conversion price of the 1% Notes.  The 1% Notes are also convertible in certain other circumstances, such as a change in control of the Company.  In addition, the 1% Notes will be redeemable at the Company’s option beginning in 2008, and the holders may require the Company to repurchase the 1% Notes on August 1, 2008 or in certain other circumstances.  In the event that all or substantially all of the Company’s common stock is acquired on or prior to August 1, 2008, in a transaction in which the consideration paid to holders of the Company’s common stock consists of all or substantially all cash, the Company would be required to make additional payments in the form of additional shares of common stock to the holders of 1% Notes in aggregate value

10

ranging from $0 to approximately $18.4 million depending upon the date of the transaction and the then current stock price of the Company. Interest on the 1% Notes is payable on February 1 and August 1 of each year.

In November 2003, the Company entered into an interest rate swap agreement whereby it swapped the fixed 1% interest on its 1% Notes for a floating interest rate based on the 3-month U.S. Dollar LIBOR, minus the applicable margin of 221 basis points, on $45 million notional value of debt.  This agreement expires August 1, 2010.  The Company designated this interest rate swap agreement as a fair value hedge.  The changes in the fair value of the interest rate swap agreement and the underlying debt are recorded as offsetting gains and losses in interest expense in the Consolidated Statement of Operations.  Hedge ineffectiveness was not significant in the quarters ended March 31, 2007 and 2006.  The fair value cost to terminate this swap as of March 31, 2007 and December 31, 2006, was approximately $1.0 million and $1.2 million, respectively, and has been recorded as a credit in accrued expenses and other current liabilities at March 31, 2007, and other long-term liabilities at December 31, 2006, with a related adjustment to the carrying value of debt.

The $172.5 million aggregate principal amount of Convertible Senior Notes due September 30, 2011, with an interest rate of 0.50% (the “2011 Notes”), and $172.5 million aggregate principal amount of Convertible Senior Notes due September 30, 2013, with an interest rate of 0.75% (the “2013 Notes”) are convertible, subject to certain conditions, into the Company’s common stock at a conversion price of approximately $40.38 per share.  The 2011 Notes and the 2013 Notes are convertible, at the option of the holder, prior to June 30, 2011 in the case of the 2011 Notes, and prior to June 30, 2013 in the case of the 2013 Notes, upon the occurrence of specified events, including, but not limited to a change in control, or if the closing sale price of the Company’s common stock for at least 20 trading days in the period of the 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is more than 120% of the applicable conversion price in effect for the notes on the last trading day of the immediately preceding quarter.  In the event that all or substantially all of the Company’s common stock is acquired on or prior to the maturity of the 2011 Notes or the 2013 Notes, in a transaction in which the consideration paid to holders of the Company’s common stock consists of all or substantially all cash, the Company would be required to make additional payments in the form of additional shares of common stock to the holders of the 2011 Notes and the 2013 Notes, collectively, in aggregate value ranging from $0 to approximately $57.5 million depending upon the date of the transaction and the then current stock price of the Company.   As of June 30, 2011, with respect to the 2011 Notes, and as of June 30, 2013, with respect to the 2013 Notes, holders shall have the right to convert all or any portion of such security.  Neither the 2011 Notes nor the 2013 Notes may be redeemed by the Company prior to maturity.  The holders may require the Company to repurchase the 2011 Notes and the 2013 Notes for cash in certain circumstances.  Interest on the 2011 Notes and the 2013 Notes is payable on March 30 and September 30 of each year, starting March 30, 2007.

The Company entered into hedge transactions relating to potential dilution of the Company’s common stock upon conversion of the 2011 Notes and the 2013 Notes (the “Conversion Spread Hedges”).  Under the Conversion Spread Hedges, the Company is entitled to purchase from the counterparties approximately 8.5 million shares of the Company’s common stock (the number of shares underlying the 2011 Notes and the 2013 Notes) at a strike price of $40.38 per share (subject to adjustment in certain circumstances) and the counterparties are entitled to purchase from the Company approximately 8.5  million shares of the Company’s common stock at a strike price of $50.47 per share (subject to adjustment in certain circumstances).   The Conversion Spread Hedges increase the effective conversion price of the 2011 Notes and the 2013 Notes to $50.47 per share from the Company’s perspective and are designed to reduce the potential dilution upon conversion of the 2011 Notes and the 2013 Notes.  If the market value per share of the Company’s common stock at the time of any exercise is above $40.38, the Conversion Spread Hedge will entitle the Company to receive from the counterparties net shares of the Company’s common stock based on the excess of the then current market price of the Company’s common stock over the strike price of the purchased call options.  Holders of the 2011 Notes and the 2013 Notes do not have any rights with respect to the Conversion Spread Hedges.  The Conversion Spread Hedges are separate transactions entered into by the Company with the counterparties, are not part of the terms of the Notes and will not affect the holders’ rights under the 2011 Notes and the 2013 Notes.  The Conversion Spread Hedges are exercisable at dates coinciding with the scheduled maturities of the 2011 Notes and 2013 Notes.

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The $100 million aggregate principal amount of Convertible Senior Notes due January 15, 2025, with an interest rate of 2.25% (the “2.25% Notes”) are convertible, subject to certain conditions, into the Company’s common stock at a conversion price of approximately $37.95 per share.  The 2.25% Notes will be convertible if, on or prior to January 15, 2020, the closing sale price of our common stock for at least 20 consecutive trading days in the period of 30 consecutive trading days ending on the first day of a conversion period is more than 120% of the then current conversion price of the 2.25% Notes.  The 2.25% Notes are also convertible in certain other circumstances, such as a change in control of the Company.  In the event that all or substantially all of the Company’s common stock is acquired on or prior to January 15, 2010, in a transaction in which the consideration paid to holders of the Company’s common stock consists of all or substantially all cash, the Company would be required to make additional payments in the form of common shares to the holders of the 2.25% Notes of amounts ranging from $0 to $15.6 million depending upon the date of the transaction and the then current stock price of the Company.  In addition, the 2.25% Notes will be redeemable at the Company’s option beginning January 20, 2010, and the holders may require the Company to repurchase the 2.25% Notes on January 15, 2010, 2015 or 2020, or in certain other circumstances.  Interest on the 2.25% Notes is payable on January 15 and July 15 of each year.

9.TREASURY STOCK

In the fourth quarter of 2005, the Company’s Board of Directors authorized the repurchase of up to $50 million of the Company’s common stock from time to time in the open market or in privately negotiated transactions.  In addition, in the third quarter 2006, the Company’s Board of Directors authorized the repurchase of up to an additional $150 million of the Company’s common stock with a portion of the proceeds from the issuance of the 2011 Notes and the 2013 Notes.  The Company’s Board of Directors has also given the Company the general authorization to repurchase shares of its common stock to satisfy employee withholding tax obligations related to stock-based compensation.

Under these programs, the Company repurchased 216,228 shares of its common stock at an aggregate cost of $5.1 million in the three months ended March 31, 2006 at prevailing market prices.  In September 2006, the Company purchased 3.85 million shares of its common stock at an aggregate purchase price of approximately $129.6 million.  Repurchases of 27,263 and 19,847 shares at aggregate costs of $1.4 million and $483,000 were made in the three months ended March 31, 2007 and 2006, respectively, to satisfy employee withholding taxes related to stock-based compensation.

The Company may make additional repurchases of shares under its stock repurchase program, depending on prevailing market conditions, alternate uses of capital and other factors.  Whether and when to initiate and/or complete any purchase of common stock and the amount of common stock purchased will be determined in the Company’s complete discretion.  As of March 31, 2007, there were approximately 6.6 million shares of the Company’s common stock held in treasury.

10.REDEEMABLE PREFERRED STOCK

On January 12, 2007, Delta exercised warrants to purchase 756,199 shares of the Company’s common stock by surrendering 13,470 shares of Series B Preferred Stock, representing all of the remaining outstanding shares of Series B Preferred Stock.  On February 6, 2007, the Company issued a final pro-rated dividend to Delta in the amount of 34,874 shares of common stock, and recorded a non-cash dividend charge of $1.6 million for the three months ended March 31, 2007.

In February 2006, the Company issued Delta Air Lines, Inc. a dividend on the Series B Redeemable Preferred Stock in the amount of 40,240 shares of the Company’s common stock, and recorded a non-cash dividend charge of $865,000 in the three months ended March 31, 2006.

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11.          GOODWILL

A substantial majority of the Company’s goodwill relates to its acquisitions of Travelweb LLC, Booking.com Limited in 2004 and Booking.com B.V. in 2005.

Change in goodwill for the three months ended March 31, 2007 consists of the following (in thousands):

Balance at January 1, 2007	$	226,707
Currency translation adjustments	1,647
Balance at March 31, 2007	$	228,354

12.          TAXES

Income tax benefit includes U.S. and international income taxes, determined using an estimate of the Company’s annual effective tax rate.  A deferred tax liability is recognized for all taxable temporary differences, and a deferred tax asset is recognized for all deductible temporary differences and operating loss and tax credit carryforwards.  A valuation allowance is recognized if it is more likely than not that some portion of the deferred tax asset will not be realized.

The Company recognizes income tax expense related to income generated outside of the United States based upon the applicable tax rates of the foreign countries in which the income is generated.  During the three months ended March 31, 2007 and 2006, the substantial majority of the Company’s foreign-sourced income has been generated in the United Kingdom and the Netherlands. Income tax benefit for the three months ended March 31, 2007 and 2006 differs from the expected tax benefit at the U.S. statutory rate of 35% due to state income taxes and the foreign tax benefit of interest expense on intercompany debt.

The Company has significant deferred tax assets, resulting principally from domestic net operating loss carryforwards (“NOLs”).  As required by SFAS No. 109, “Accounting for Income Taxes,” the Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of these deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. The Company considers many factors when assessing the likelihood of future realization of the deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, the carryforward periods available for tax reporting purposes, and other relevant factors.  The valuation allowance may need to be adjusted in the future if facts and circumstances change, causing a reassessment of the amount of deferred tax assets more likely than not to be realized.  The total deferred tax asset at March 31, 2007 and December 31, 2006 amounted to $203.2 million and $191.7 million, respectively.  The current portion at March 31, 2007 and December 31, 2006 is $12.3 million and is recorded in prepaid expenses and other current assets in the Unaudited Consolidated Balance Sheets.

The Company has recorded a deferred tax liability in the amount of $39.2 million at March 31, 2007, and $39.7 million at December 31, 2006, primarily related to the assignment of estimated fair value to certain purchased identifiable intangible assets associated with the acquisitions of Booking.com Limited and Booking.com B.V.

In July 2006, the FASB issued Interpretation No. 48, “Uncertainty in Income Taxes” (“FIN 48”). FIN 48 applies to all tax positions and clarifies the recognition of tax benefits in the financial statements by providing for a two-step approach of recognition and measurement.  The first step involves assessing whether the tax position is more likely than not to be sustained upon examination based upon its technical merits. The second step involves measurement of the amount to recognize.  Tax positions that meet the more likely than not threshold are measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate finalization with the taxing authority.  The Company adopted FIN 48 effective January 1, 2007.  The adoption of FIN 48 did not have a material impact on the Company’s consolidated results of operations and financial position.  The Company’s Federal and Connecticut tax returns, constituting the returns of the major taxing jurisdictions, are subject to examination by the taxing authorities for all open years as prescribed by applicable statute.  No waivers have been executed that would extend the period subject to examination beyond the period prescribed by statute.

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13.          MINORITY INTERESTS

In connection with the Company’s acquisitions of Booking.com B.V. in July 2005 and Booking.com Limited in September 2004 and the reorganization of its European operations, key managers of Booking.com B.V. and Booking.com Limited purchased shares of priceline.com International.  In addition, these key managers were granted restricted stock and restricted stock units in priceline.com International shares that vest over time.  As of March 31, 2007, the total minority interest in priceline.com International on a fully diluted basis was approximately 6.4%.

The holders of the minority interest in priceline.com International have the right to put their shares to the Company and the Company has the right to call their shares at a purchase price reflecting the fair market value of the shares at the time of the exercise of the put or call right.  Subject to certain exceptions, (a) certain of the shares are subject to the put and call options in March 2007 and 2008 and (b) certain of the shares are subject to the put and call options in August 2007 and 2008.  In April 2007 (in connection with the March 2007 put and call options), the Company repurchased 92,125 shares underlying minority interest with a carrying value of $3.7 million for an aggregate purchase price of approximately $15.0 million based upon fair value.  As a result of the purchase, the minority interest in priceline.com International was reduced on a fully diluted basis to 5.4%.

All purchased securities and vested granted securities described above can be put by the holders of the securities or called by the Company shortly after the consummation of a “change in control” of the Company.  The aggregate fair value of the minority interest in priceline.com International is estimated to be approximately $97.2 million at March 31, 2007, including unvested restricted stock and restricted stock units.

14.          COMMITMENTS AND CONTINGENCIES

Litigation Related to Hotel Occupancy and Other Taxes

Statewide Putative Class Actions

A number of cities and counties have filed putative class actions on behalf of themselves and other allegedly similarly situated cities and counties within the same respective state against the Company and other defendants, including, but not in all cases, Lowestfare.com Incorporated and Travelweb LLC, both of which are subsidiaries of the Company, and Hotels.com, L.P.; Hotels.com GP, LLC; Hotwire, Inc.; Cheaptickets, Inc.; Travelport, Inc. (f/k/a Cendant Travel Distribution Services Group, Inc.); Expedia, Inc.; Internetwork Publishing Corp. (d/b/a Lodging.com); Maupintour Holding LLC; Orbitz, Inc.; Orbitz, LLC; Site59.com, LLC; Travelocity.com, Inc.; Travelocity.com LP; and Travelnow.com, Inc.  Each complaint alleges, among other things, that the defendants violated each jurisdiction’s respective hotel occupancy tax ordinance with respect to the charges and remittance of amounts to cover taxes under each ordinance.  Each complaint typically seeks compensatory damages, disgorgement, penalties available by law, attorneys’ fees and other relief.  Such actions include:

·City of Los Angeles v. Hotels.com, Inc., et al.

·City of Fairview Heights v. Orbitz, Inc., et al.

·City of Findlay v. Hotels.com, L.P., et al.

·City of Rome, Georgia, et al., v. Hotels.com, L.P., et al.

·Pitt County v. Hotels.com, L.P., et al.

·City of San Antonio, Texas v. Hotels.com, L.P., et al.

·City of Gallup, New Mexico v. Hotels.com, L.P., et al.

·Lake County Convention and Visitors Bureau, Inc. and Marshall County v. Hotels.com, L.P., et al.

·City of Orange, Texas v. Hotels.com, L.P., et al.

·Leon County and Doris Maloy, Leon County Tax Collector v. Hotels.com, L.P., et al.

·City of Jacksonville v. Hotels.com, L.P., et al.

·City of Columbus, et al. v. Hotels.com, L.P., et al.

·Louisville/Jefferson County Metro Government v. Hotels.com, L.P., et al.

·County of Nassau, New York v. Hotels.com, LP, et al.

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A discussion of each of the aforementioned legal proceedings can be found in the section titled “Legal Proceedings” of our Annual Report on Form 10-K for the year ended December 31, 2006.

The following developments regarding such legal proceedings occurred during or after the quarter ended March 31, 2007:

City of Los Angeles v. Hotels.com, Inc., et al.:  On January 17, 2007, the defendants filed motions to dismiss to the City of Los Angeles’ second amended complaint on all issues other than misjoinder of defendants and claims.  On March 1, 2007, the court denied defendants’ previously-filed demurrers on grounds of improper joinder of defendants and claims.  On March 2, 2007, the City of Los Angeles filed a third amended complaint.  On April 11, 2007, the defendants filed renewed demurrers to the third amended complaint.  On June 11, 2007, the court is scheduled to conduct oral argument on defendants’ demurrers.

Pitt County v. Hotels.com, L.P., et al.:  On March 29, 2007, the court denied defendants’ motion to dismiss the complaint.  On April 13, 2007, the defendants moved for reconsideration of that decision or, in the alternative, interlocutory appeal.  The parties are currently conducting discovery.

City of San Antonio, Texas v. Hotels.com, L.P., et al.:  On March 21, 2007, the court denied defendants’ motion to dismiss the City of San Antonio’s amended complaint.  The parties are currently conducting discovery and the City of San Antonio’s motion for class certification is pending.

City of Gallup, New Mexico v. Hotels.com, L.P., et al.:  On April 18, 2007, the City of Gallup moved to dismiss this action voluntarily and without prejudice.  The Court granted that motion and the action was dismissed the same day.

Leon County and Doris Maloy, Leon County Tax Collector v. Hotels.com, L.P., et al.:  Following limited discovery on issue of jurisdiction, on February 21, 2007, the parties jointly stipulated to dismissal of the action without prejudice.

City of Jacksonville v. Hotels.com, L.P., et al.:  On April 12, 2007, the defendants withdrew their previously filed motion to stay the action and filed a motion to dismiss the City of Jacksonville’s complaint.  That motion is being briefed.

County of Nassau, New York v. Hotels.com, LP, et al.:  On January 31, 2007, the defendants moved to dismiss the County of Nassau’s complaint.  That motion is being briefed.

In addition to those cases discussed in the section titled “Legal Proceedings” of our Annual Report on Form 10-K for the year ended December 31, 2006, the following additional legal proceedings were filed during or after the quarter ended March 31, 2007:

City of Fayetteville v. Hotels.com, L.P., et al.:  On February 28, 2007, a putative class action complaint was filed in the Circuit Court of Washington County, Arkansas by the City of Fayetteville, Arkansas on behalf of itself and a putative class of Arkansas cities, counties and townships that have enacted uniform hotel taxes on lodging.  In addition to the claim for hotel taxes, the complaint also asserted claims for a declaratory judgment, conversion, unjust enrichment, and a constructive trust.  The Company has been served with the complaint and the defendants are scheduled to respond to the complaint by motion or answer on or before May 31, 2007.

The Company intends to defend vigorously against the claims in all of these proceedings.

Actions Filed on Behalf of Individual Cities and Counties

                Several cities, counties, municipalities and other political subdivisions across the country have filed actions relating to the collection of hotel occupancy taxes against the Company and other defendants, including, but not in all cases, Lowestfare.com Incorporated and Travelweb LLC, both of which are subsidiaries of the Company, and

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Hotels.com, L.P.; Hotels.com GP, LLC; Hotwire, Inc.; Cheaptickets, Inc.; Cendant Travel Distribution Services Group, Inc.; Expedia, Inc.; Internetwork Publishing Corp. (d/b/a Lodging.com); Maupintour Holding LLC; Orbitz, Inc.; Orbitz, LLC; Site59.com, LLC; Travelocity.com, Inc.; Travelocity.com LP; and Travelnow.com, Inc.  In each, the complaint alleges, among other things, that each of these defendants violated each jurisdiction’s respective hotel occupancy tax ordinance with respect to the charges and remittance of amounts to cover taxes under each ordinance.  Each complaint typically seeks compensatory damages, disgorgement, penalties available by law, attorneys’ fees and other relief.  Such actions include:

·City of Chicago, Illinois v. Hotels.com, L.P., et al.

·City of San Diego, California, v. Hotels.com L.P., et al.

·City of Atlanta, Georgia v. Hotels.com L.P., et al.

·City of Charleston, South Carolina v. Hotel.com, et al.

·Town of Mount Pleasant, South Carolina v. Hotels.com, et al.

·City of North Myrtle Beach, South Carolina v. Hotels.com, LP, et al.

·Miami-Dade County and Ian Yorty, Miami-Dade County Tax Collector v. Internetwork Publishing Corp., et al.

·Wake County v. Hotels.com, LP, et al.

·Cumberland County v. Hotels.com, LP, et al.

·City of Branson v. Hotels.com, LP., et al.

·Dare County v. Hotels.com, LP, et al.

·Buncombe County v. Hotels.com, LP, et al.

·Horry County, et al. v. Hotels.com, LP, et al.

·City of Myrtle Beach, South Carolina v. Hotels.com, LP, et al.

A discussion of each of the aforementioned legal proceedings can be found in the section titled “Legal Proceedings” of our Annual Report on Form 10-K for the year ended December 31, 2006.

The following developments regarding such legal proceedings occurred during or after the quarter ended March 31, 2007:

City of San Diego, California v. Hotels.com, Inc., et al.:  On January 17, 2007, the defendants filed motions to dismiss to the City of San Diego’s complaint on all issues other than misjoinder of defendants and claims.  On March 1, 2007, the court denied defendants’ previously-filed motions to dismiss on grounds of improper joinder of defendants and claims.  On March 8, 2007, the City of San Diego filed an amended complaint.  On April 11, 2007, the defendants filed renewed motions to dismiss to the amended complaint.  On June 11, 2007, the court is scheduled to conduct oral argument on defendants’ motions to dismiss.

City of Atlanta, Georgia v. Hotels.com L.P., et al.:  On January 10, 2007, the City of Atlanta filed a notice of appeal from the court’s December 12, 2006 order dismissing the action for the City’s failure to exhaust administrative remedies, which the City has indicated that it intends to pursue.  That appeal is being briefed.

City of Charleston, South Carolina v. Hotel.com, et al.:  On April 23, 2007, the court granted plaintiff’s motion for leave to amend its complaint to assert claims arising under the South Carolina Unfair Trade Practices Act.

Town of Mount Pleasant, South Carolina v. Hotels.com, et al.:  On April 23, 2007, the court granted plaintiff’s motion for leave to amend its complaint to assert claims arising under the South Carolina Unfair Trade Practices Act.

Miami-Dade County and Ian Yorty, Miami-Dade County Tax Collector v. Internetwork Publishing Corp., et al.:  Following a January 17, 2007 hearing on the defendants’ motion to dismiss, on January 18, 2007, the plaintiffs filed a motion to dismiss this action voluntarily and it was dismissed.  On February 26, 2007, the County served notices of audit on the Company and Lowestfare.com Incorporated.  On March 22, 2007, the County served

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an estimated assessment against both companies.  The parties are currently discussing the procedures for any further audit.

Wake County v. Hotels.com, LP, et al.; Cumberland County v. Hotels.com, LP, et al.; City of Branson v. Hotels.com, LP., et al.; and Dare County v. Hotels.com, LP, et al.:  On January 19, 2007, the defendants moved to dismiss the Wake County action based on plaintiff’s failure to state a claim.  On January 26, 2007, Dare County filed its complaint.  On February 1, 2007, Buncombe County filed its complaint.  On February 12, 2007, the defendants moved to dismiss the Cumberland County action based on plaintiff’s failure to state a claim.  On April 4, 2007, these four cases were consolidated for pre-trial purposes and all four cases are now pending before the North Carolina Business Court.  The defendants anticipate that they will move to dismiss the Dare County and Buncombe County actions on May 7, 2007, and that all four motions will be briefed at that time.

City of Branson v. Hotels.com, LP., et al.:  On April 23, 2007, the defendants moved to dismiss the complaint.  That motion is being briefed.

Horry County, et al. v. Hotels.com, LP, et al.:  On February 2, 2007, Horry County filed its complaint.  On April 30, 2007, the defendants moved to dismiss the complaint.  That motion is being briefed.

City of Myrtle Beach, South Carolina v. Hotels.com, LP, et al.: On February 2, 2007, the City of Myrtle Beach filed its complaint.  On April 23, 2007, the defendants moved to dismiss the complaint.  That motion is being briefed.

In addition to those cases discussed in the section titled “Legal Proceedings” of our Annual Report on Form 10-K for the year ended December 31, 2006, the following additional legal proceedings were filed during or after the quarter ended March 31, 2007:

City of Houston, Texas v. Hotels.com, LP., et al.:  On March 5, 2007, the City of Houston, Texas filed a complaint in the District Court of Harris County, Texas.  In addition to the claim for violation of the Houston hotel occupancy tax ordinance, the complaint also asserted claims for conversion, constructive trust, civil conspiracy, and a legal accounting.  On April 30, 2007, the defendants filed special exceptions to the complaint.

We have also been informed by counsel to the plaintiffs in certain of the aforementioned actions that various, undisclosed municipalities or taxing jurisdictions may file additional cases against the Company, Lowestfare.com Incorporated and Travelweb LLC in the future.  In the first quarter 2006, the Company became aware of an opinion by the City Attorney of the City of Madison, Wisconsin that online travel companies were subject to the City of Madison, Wisconsin’s hotel occupancy tax.  Since that time, City officials have expressed an interest in filing suit against the Company, but neither the Company nor any of its subsidiaries has been served with or otherwise received any complaint brought on behalf of the City of Madison.

The Company intends to defend vigorously against the claims in all of these proceedings.

Consumer Class Actions

Two class actions brought by consumers against the Company are pending.

·Marshall, et al. v. priceline.com, Inc.

·Bush, et al. v. Cheaptickets, Inc., et al.

A discussion of each of the aforementioned legal proceedings can be found in the section titled “Legal Proceedings” of our Annual Report on Form 10-K for the year ended December 31, 2006.

The Company intends to defend vigorously against the claims in all of the aforementioned proceedings.

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Other Possible Actions

At various times the Company has also received inquiries or proposed tax assessments from municipalities and other taxing jurisdictions relating to its charges and remittance of amounts to cover state and local hotel occupancy and other related taxes.  The City of New Orleans, Louisiana, the City of Philadelphia, Pennsylvania, and state tax officials from Wisconsin, Pennsylvania, and Indiana, among others, have begun formal or informal administrative procedures or stated that they may assert claims against the Company relating to allegedly unpaid state or local hotel occupancy or related taxes.  In addition, the State of New Jersey Department of Taxation has begun an audit related to the state’s Corporation Business Tax.  The Company is unable at this time to predict whether any such proceedings or assertions will result in litigation.

The Company intends to defend vigorously against the claims in all of the aforementioned proceedings.

Litigation Related to Securities Matters

On March 16, March 26, April 27, and June 5, 2001, respectively, four putative class action complaints were filed in the U.S. District Court for the Southern District of New York naming priceline.com, Inc., Richard S. Braddock, Jay Walker, Paul Francis, Morgan Stanley Dean Witter & Co., Merrill Lynch, Pierce, Fenner & Smith, Inc., BancBoston Robertson Stephens, Inc. and Salomon Smith Barney, Inc. as defendants (01 Civ. 2261, 01 Civ. 2576, 01 Civ. 3590 and 01 Civ. 4956).  Shives et al. v. Bank of America Securities LLC et al., 01 Civ. 4956, also names other defendants and states claims unrelated to the Company.  The complaints allege, among other things, that priceline.com and the individual defendants violated the federal securities laws by issuing and selling priceline.com common stock in priceline.com’s March 1999 initial public offering without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had allegedly solicited and received excessive and undisclosed commissions from certain investors.  By Orders of Judge Mukasey and Judge Scheindlin dated August 8, 2001, these cases were consolidated for pre-trial purposes with hundreds of other cases, which contain allegations concerning the allocation of shares in the initial public offerings of companies other than priceline.com, Inc.  By Order of Judge Scheindlin dated August 14, 2001, the following cases were consolidated for all purposes:  01 Civ. 2261; 01 Civ. 2576; and 01 Civ. 3590.  On April 19, 2002, plaintiffs filed a Consolidated Amended Class Action Complaint in these cases.  This Consolidated Amended Class Action Complaint makes similar allegations to those described above but with respect to both the Company’s March 1999 initial public offering and the Company’s August 1999 second public offering of common stock.  The named defendants are priceline.com, Inc., Richard S. Braddock, Jay S. Walker, Paul E. Francis, Nancy B. Peretsman, Timothy G. Brier, Morgan Stanley Dean Witter & Co., Goldman Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith, Inc., Robertson Stephens, Inc. (as successor-in-interest to BancBoston), Credit Suisse First Boston Corp. (as successor-in-interest to Donaldson Lufkin & Jenrette Securities Corp.), Allen & Co., Inc. and Salomon Smith Barney, Inc.  Priceline, Richard Braddock, Jay Walker, Paul Francis, Nancy Peretsman, and Timothy Brier, together with other issuer defendants in the consolidated litigation, filed a joint motion to dismiss on July 15, 2002.  On November 18, 2002, the cases against the individual defendants were dismissed without prejudice and without costs.  In addition, counsel for plaintiffs and the individual defendants executed Reservation of Rights and Tolling Agreements, which toll the statutes of limitations on plaintiffs’ claims against those individuals.  On February 19, 2003, Judge Scheindlin issued an Opinion and Order granting in part and denying in part the issuer’s motion.  None of the claims against the Company were dismissed.  On June 26, 2003, counsel for the plaintiff class announced that they and counsel for the issuers had agreed to the form of a Memorandum of Understanding (the “Memorandum”) to settle claims against the issuers.  The terms of that Memorandum provide that class members will be guaranteed $1 billion in recoveries by the insurers of the issuers and that settling issuer defendants will assign to the class members certain claims that they may have against the underwriters.  Issuers also agree to limit their abilities to bring certain claims against the underwriters.  If recoveries in excess of $1 billion are obtained by the class from any non-settling defendants, the settling defendants’ monetary obligations to the class plaintiffs will be satisfied; any amount recovered from the underwriters that is less than $1 billion will be paid by the insurers on behalf of the issuers.  The Memorandum, which is subject to the approval of each issuer, was approved by a special committee of the priceline.com Board of Directors on Thursday, July 3, 2003.  Thereafter, counsel for the plaintiff class and counsel for the issuers agreed to the form of a Stipulation and Agreement of Settlement with Defendant Issuers and Individuals (“Settlement Agreement”).  The Settlement Agreement implements the Memorandum and contains the same material provisions.  On June 11, 2004, a special committee of the priceline.com Board of Directors authorized the Company’s counsel to

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execute the Settlement Agreement on behalf of the Company.  The Settlement Agreement is subject to final approval by the Court and the process to obtain that approval is still pending.

Subsequent to the Company’s announcement on September 27, 2000, that revenues for the third quarter 2000 would not meet expectations, it was served with putative class action complaints that were assigned to Judge Dominic J. Squatrito.  On September 12, 2001, Judge Squatrito ordered that these cases be consolidated under the Master File No. 3:00cv1884 (DJS), and he designated lead plaintiffs and lead plaintiffs’ counsel.  On October 29, 2001, plaintiffs served a Consolidated Amended Complaint.  On February 5, 2002, Amerindo Investment Advisors, Inc., who was one of the lead plaintiffs in the consolidated action, made a motion for leave to withdraw as lead plaintiff.  The Court granted that motion on May 30, 2002.  On February 28, 2002, the Company filed a motion to dismiss the Consolidated Amended Complaint.  On October 7, 2004, the Court issued a Memorandum of Decision granting, in part, and denying, in part, the Company’s motion.  An initial scheduling order was entered by the Court on November 2, 2004.  Plaintiffs filed a motion for class certification on January 7, 2005 and the Company filed its opposition to that motion.  On April 4, 2006, the Court issued a Memorandum of Decision granting, in part, and denying, in part, the plaintiffs’ motion.  The Court certified a class and approved five of the six proposed class representatives.  On May 4, 2006, the case was transferred to Judge Christopher F. Droney.  Plaintiffs filed a motion for an order approving the proposed notice of class certification on May 5, 2006 and the Company filed its response to that motion.  On May 18, 2006, the case was transferred to Judge Alfred V. Covello.  On October 30, 2006, the Court issued an Order setting forth a partial schedule, designating December 31, 2007 as the deadline for the completion of discovery.

On May 3, 2007, the Company entered into a Stipulation and Agreement of Settlement (“Settlement Agreement”) to settle the shareholder class action.  The Settlement Agreement is contingent upon the satisfaction of various conditions, including, without limitation, preliminary approval by the Court and final approval by the Court after notice to the class and a hearing.  There can be no assurance that the Settlement Agreement will be approved by the Court.  Under the terms of the Settlement Agreement, the class will receive $80 million in return for a release, with prejudice, of all claims against the Company and the individual defendants that are related to the purchase of the Company’s securities by class members during the class period.  The Company’s insurance carriers will fund $30 million of the settlement.  As a result, the Company incurred a first quarter 2007 net charge of approximately $54.9 million representing its share of the cost to settle the litigation and cover related expenses.  The settlement is subject to approval by the Court after notice to the class.  The Company can terminate the Settlement Agreement if more than a certain percentage of class members opt out of the settlement.  Should the Settlement Agreement be terminated or fail to get final approval by the Court, the Company intends to defend vigorously against this action.  In the absence of a settlement, the Company is unable to predict the outcome of this litigation.

In addition, on November 1, 2000 the Company was served with a complaint that purported to be a shareholder derivative action against its Board of Directors and certain of its current and former executive officers, as well as the Company (as a nominal defendant).  The complaint alleged breach of fiduciary duty and waste of corporate assets.  The action is captioned Mark Zimmerman v. Richard Braddock, J. Walker, D. Schulman, P. Allaire, R. Bahna, P. Blackney, W. Ford, M. Loeb, N. Nicholas, N. Peretsman, and priceline.com Incorporated, 18473-NC (Court of Chancery of Delaware, County of New Castle, State of Delaware).  On February 6, 2001, all defendants moved to dismiss the complaint for failure to make a demand upon the Board of Directors and failure to state a cause of action upon which relief can be granted.  Pursuant to a stipulation by the parties, an amended complaint was filed on June 21, 2001.  Defendants renewed their motion to dismiss on August 20, 2001, and plaintiff served his opposition to that motion on October 26, 2001.  Defendants filed their reply brief on January 7, 2002.  On December 20, 2002, the Court granted defendants’ motion without prejudice.  On April 25, 2003, a second amended complaint, adding H. Miller, was filed and a motion seeking leave of court to file the second amended complaint was filed on July 28, 2003.  That motion was fully briefed, and oral argument took place on May 9, 2005. Immediately following oral argument, the Court dismissed three of the four counts in the second amended complaint.  All of the counts against defendants Allaire, Bahna, Blackney, Ford, Loeb, Miller, Peretsman and Schulman have now been dismissed.  On September 8, 2005, the Court granted plaintiff leave to file the second amended complaint as to the one remaining count.  Defendants filed a motion requesting that the Court certify its September 8, 2005 order for interlocutory appeal to the Delaware Supreme Court, and the Court granted that motion on October 6, 2005.  On October 17, 2005, the Delaware Supreme Court accepted the interlocutory appeal.  The appeal was fully briefed, and oral argument took place on February 22, 2006.  In an Order dated April 3, 2006, the Delaware Supreme Court stated that the appeal now is to be scheduled for oral argument and determination by the

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Court en banc without further briefing.  The en banc argument took place on June 28, 2006.  On September 12, 2006, the Delaware Supreme Court decided in favor of the Company and the Delaware action was thereafter dismissed with prejudice by stipulation.

On November 7, 2003, the Company was served with a complaint that purported to be a shareholder derivative action against its Board of Directors and certain of its current and former executive officers, as well as the Company (as a nominal defendant).  The complaint alleged, among other things, breach of fiduciary duty, waste of corporate assets and misappropriation of corporate information.  The claims in the complaint appear to be substantially repetitive of the claims pending in the derivative action in Delaware which is described above.  The action is captioned Don Powell v. Richard S. Braddock, Jay S. Walker, Daniel H. Schulman, Paul A. Allaire, Ralph M. Bahna, Paul J. Blackney, William E. Ford, Marshall Loeb, N. J. Nicholas, Jr., Nancy B. Peretsman, and Heidi G. Miller and priceline.com Incorporated (Superior Court, Judicial District of Stamford/Norwalk, State of Connecticut).  On January 28, 2004, defendants Blackney, Nicholas, Peretsman and Loeb moved to dismiss the complaint for lack of personal jurisdiction.  On January 29, 2004, defendant Miller moved to dismiss the complaint for lack of personal jurisdiction and for insufficient service of process.  On February 27, 2004, defendants Braddock, Walker, Schulman, Allaire, Bahna, Blackney, Loeb, Nicholas, Peretsman, Miller and priceline.com moved to dismiss the complaint for lack of subject matter jurisdiction and defendants Braddock and Schulman also moved to dismiss the complaint for lack of personal jurisdiction and insufficient service of process.  At a hearing on May 3, 2004, the Court stated that it would not rule on the pending motions until the pending motions in the Delaware action described above are decided.  The Court conducted a subsequent status conference on January 10, 2005, at which it requested that the parties report back no later than March 15, 2005 on the status of the Delaware derivative suit.  On March 15, 2005, the parties informed the Court in writing that the oral argument in the Delaware case had been postponed until May 9, 2005, and that the parties would contact the Court with a status report after that hearing was held.  The Delaware Court dismissed three of the four counts in the second amended complaint in the Delaware derivative suit.  All of the counts against the defendants Allaire, Bahna, Blackney, Ford, Loeb, Miller, Peretsman and Schulman have now been dismissed.  The parties in the Connecticut action advised the Connecticut Court of the Delaware Court’s ruling by letter dated June 6, 2005.  The Delaware Court subsequently granted plaintiff leave to file the second amended complaint as to the one remaining count.  Defendants sought an interlocutory appeal of the Delaware Court’s order, and the Delaware Supreme Court accepted that appeal.  The parties in the Connecticut action advised the Connecticut Court of those developments by letter dated November 3, 2005.  Following the September 12, 2006 decision by the Delaware Supreme Court and the subsequent dismissal of the Delaware derivative action, plaintiffs in the Connecticut action executed a Withdrawal of their case on January 30, 2007.

Airline Excise Tax Refund

The online travel industry recently received guidance in the form of a ruling from the Internal Revenue Service that the fee earned by online intermediaries in connection with the facilitation of the purchase of airline tickets is not subject to Federal Excise Tax.  Due to the prior lack of clear guidance related to the application of federal excise taxes to amounts earned by online travel intermediaries, the Company historically remitted such taxes on the amounts it earned for facilitating the purchase of airline tickets.  The tax at issue was on the amounts earned by the Company and was not added to the ticket price paid by its customers.  Accordingly, the Company sought refunds of the taxes it paid while the on-line travel industry pursued clarification on the issue.  In response to this ruling, the Company has discontinued remitting tax on these amounts.  The Company received notices from the Internal Revenue Service in March 2007 approving refund claims in the amount of $15.9 million, plus interest of $2.8 million and, therefore, the Company recorded the refund receivable in prepaid and other current assets as of March 31, 2007, with corresponding amounts recorded in revenue and interest income.  The Company received notices in April 2007 approving refund claims of an additional amount of approximately $3 million, including estimated accrued interest and therefore expects to record this refund in the second quarter of 2007.

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15.          RESTATEMENT OF MINORITY INTEREST PRESENTATION

Subsequent to the issuance of the Company’s consolidated financial statements for the three months ended March 31, 2007, management identified and corrected a classification error in the presentation of minority interest in the consolidated balance sheet.  Minority interest in the amount of $23.2 million as of March 31, 2007 was previously classified as a liability and is now presented in the mezzanine section of the consolidated balance sheet between liabilities and stockholders’ equity.  The classification error had no impact on the Company’s consolidated assets, the total liabilities and stockholders’ equity line item in the consolidated balance sheet, consolidated statement of operations or consolidated statement of cash flows.

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PART II - OTHER INFORMATION

Item 6.  Exhibits

Exhibit
Number	Description
2.1(x)	Share Sale and Purchase Agreement, dated July 14, 2005 by and between the Registrant, ACME Limited and Blue Sky Investments B.V.
2.2(aa)	Articles of Association of priceline.com International Limited, as amended.
3.1(a)	Amended and Restated Certificate of Incorporation of the Registrant.
3.2(b)	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant
3.3(a)	By-Laws of the Registrant.
4.1	Reference is hereby made to Exhibits 3.1, 3.2 and 3.3.
4.2(a)	Specimen Certificate for Registrant’s Common Stock.
4.3(a)	Amended and Restated Registration Rights Agreement, dated as of December 8, 1998, among the Registrant and certain stockholders of the Registrant.
4.4(b)	Registration Rights Agreement, dated as of August 1, 2003, among the Registrant and the initial purchasers named therein.
4.5(b)	Indenture, dated as of August 1, 2003, between the Registrant and American Stock Transfer & Trust Company, as Trustee (including the form of note contained therein).
4.6(b)	Supplemental Indenture, dated as of October 22, 2003, between the Registrant and American Stock Transfer & Trust Company, as Trustee.
4.7(d)	Second Supplemental Indenture, dated as of December 13, 2004, between the Registrant and American Stock Transfer & Trust Company, as Trustee.
4.8(c)	Registration Rights Agreement, dated as of June 28, 2004, among priceline.com Incorporated and the initial purchasers named therein.
4.9(c)	Indenture, dated as of June 28, 2004, between the Registrant and American Stock Transfer & Trust Company, as Trustee (including the form of note contained therein).
4.10(d)	First Supplemental Indenture, dated as of December 13, 2004, between the Registrant and American Stock Transfer & Trust Company, as Trustee.
4.11(b)	Certificate of Designation, Preferences and Rights of Series A Convertible Redeemable PIK Preferred Stock of the Registrant.
4.12(b)	Certificate of Designation, Preferences and Rights of Series B Redeemable Preferred Stock of the Registrant.
4.13(gg)	Indenture, dated as of September 27, 2006, between priceline.com Incorporated and American Stock Transfer and Trust Company, as Trustee.
4.14(gg)	Registration Rights Agreement, dated as of September 27, 2006, between priceline.com Incorporated and Goldman Sachs & Co., as representative of the Initial Purchasers.
4.15(ii)	Indenture relating to New 1.00% Notes, dated as of November 6, 2006, between priceline.com Incorporated and American Stock Transfer and Trust Company, as Trustee.
4.16(ii)	Indenture relating to New 2.25% Notes, dated as of November 6, 2006, between priceline.com Incorporated and American Stock Transfer and Trust Company, as Trustee.

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12.1(mm)	Calculation of ratio of earnings to fixed charges.
31.1(mm)	Certificate of Jeffery H. Boyd, dated May 10, 2007, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2(mm)	Certificate of Robert J. Mylod Jr., dated May 10, 2007, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3	Certificate of Jeffery H. Boyd, dated March 10, 2008, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.4	Certificate of Robert J. Mylod Jr., dated March 10, 2008, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1(mm)	Certification of Jeffery H. Boyd, dated May 10, 2007, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
32.2(mm)	Certification of Robert J. Mylod Jr., dated May 10, 2007, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
32.3(w)	Certification of Jeffery H. Boyd, dated March 10, 2008, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
32.4(w)	Certification of Robert J. Mylod Jr., dated March 10, 2008, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).

(a)	Previously filed as an exhibit to the Form S-1 (Registration No. 333-69657) filed in connection with priceline.com’s initial public offering.
(b)	Previously filed as an exhibit to the Form S-3 (Registration Statement No. 333-190029) filed in connection with priceline.com’s registration of 1.00% Convertible Senior Notes due 2010 and Shares of Common Stock Issuable Upon Conversion of the Notes.
(c)	Previously filed as an exhibit to the Form 10-Q for the quarterly period ended September 30, 2003.
(d)	Previously filed as an exhibit to the Form 8-K filed on December 13, 2004.
(w)	This document is being furnished in accordance with SEC Release Nos. 33-8212 and 34-47551.
(x)	Previously filed as an exhibit to the Form 8-K filed on July 20, 2005.
(aa)	Previously filed as an exhibit to the Form 8-K filed on September 29, 2005.
(gg)	Previously filed as an exhibit to the Form 8-K filed on September 28, 2006.
(ii)	Previously filed as an exhibit to the Form 8-K filed on November 9, 2006.
(mm)	Previously filed as an exhibit to the Form 10-Q for the quarterly period ended March 31, 2007
*	Certain portions of this document have been omitted pursuant to a confidential treatment request filed with the Commission pursuant to Rule 24b-2. The omitted confidential material has been filed separately with the Commission.
+	Indicates a management contract or compensatory plan or arrangement.

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SIGNATURES

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 thereunto duly authorized.

		PRICELINE.COM INCORPORATED
		(Registrant)
Date: March 10, 2008	By:	/s/ Robert J. Mylod Jr.
		Name:	Robert J. Mylod Jr.
		Title:	Chief Financial Officer
			(On behalf of the Registrant and as principal financial officer)

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Exhibit Index

Exhibit
Number	Description
2.1(x)	Share Sale and Purchase Agreement, dated July 14, 2005 by and between the Registrant, ACME Limited and Blue Sky Investments B.V.
2.2(aa)	Articles of Association of priceline.com International Limited, as amended.
3.1(a)	Amended and Restated Certificate of Incorporation of the Registrant.
3.2(b)	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant
3.3(a)	By-Laws of the Registrant.
4.1	Reference is hereby made to Exhibits 3.1, 3.2 and 3.3.
4.2(a)	Specimen Certificate for Registrant’s Common Stock.
4.3(a)	Amended and Restated Registration Rights Agreement, dated as of December 8, 1998, among the Registrant and certain stockholders of the Registrant.
4.4(b)	Registration Rights Agreement, dated as of August 1, 2003, among the Registrant and the initial purchasers named therein.
4.5(b)	Indenture, dated as of August 1, 2003, between the Registrant and American Stock Transfer & Trust Company, as Trustee (including the form of note contained therein).
4.6(b)	Supplemental Indenture, dated as of October 22, 2003, between the Registrant and American Stock Transfer & Trust Company, as Trustee.
4.7(d)	Second Supplemental Indenture, dated as of December 13, 2004, between the Registrant and American Stock Transfer & Trust Company, as Trustee.
4.8(c)	Registration Rights Agreement, dated as of June 28, 2004, among priceline.com Incorporated and the initial purchasers named therein.
4.9(c)	Indenture, dated as of June 28, 2004, between the Registrant and American Stock Transfer & Trust Company, as Trustee (including the form of note contained therein).
4.10(d)	First Supplemental Indenture, dated as of December 13, 2004, between the Registrant and American Stock Transfer & Trust Company, as Trustee.
4.11(b)	Certificate of Designation, Preferences and Rights of Series A Convertible Redeemable PIK Preferred Stock of the Registrant.
4.12(b)	Certificate of Designation, Preferences and Rights of Series B Redeemable Preferred Stock of the Registrant.
4.13(gg)	Indenture, dated as of September 27, 2006, between priceline.com Incorporated and American Stock Transfer and Trust Company, as Trustee.
4.14(gg)	Registration Rights Agreement, dated as of September 27, 2006, between priceline.com Incorporated and Goldman Sachs & Co., as representative of the Initial Purchasers.
4.15(ii)	Indenture relating to New 1.00% Notes, dated as of November 6, 2006, between priceline.com Incorporated and American Stock Transfer and Trust Company, as Trustee.
4.16(ii)	Indenture relating to New 2.25% Notes, dated as of November 6, 2006, between priceline.com Incorporated and American Stock Transfer and Trust Company, as Trustee.

12.1(mm)	Calculation of ratio of earnings to fixed charges.
31.1(mm)	Certificate of Jeffery H. Boyd, dated May 10, 2007, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2(mm)	Certificate of Robert J. Mylod Jr., dated May 10, 2007, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3	Certificate of Jeffery H. Boyd, dated March 10, 2008, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.4	Certificate of Robert J. Mylod Jr., dated March 10, 2008, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1(mm)	Certification of Jeffery H. Boyd, dated May 10, 2007, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
32.2(mm)	Certification of Robert J. Mylod Jr., dated May 10, 2007, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
32.3(w)	Certification of Jeffery H. Boyd, dated March 10, 2008, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
32.4(w)	Certification of Robert J. Mylod Jr., dated March 10, 2008, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).

(a)	Previously filed as an exhibit to the Form S-1 (Registration No. 333-69657) filed in connection with priceline.com’s initial public offering.
(b)	Previously filed as an exhibit to the Form S-3 (Registration Statement No. 333-190029) filed in connection with priceline.com’s registration of 1.00% Convertible Senior Notes due 2010 and Shares of Common Stock Issuable Upon Conversion of the Notes.
(c)	Previously filed as an exhibit to the Form 10-Q for the quarterly period ended September 30, 2003.
(d)	Previously filed as an exhibit to the Form 8-K filed on December 13, 2004.
(w)	This document is being furnished in accordance with SEC Release Nos. 33-8212 and 34-47551.
(x)	Previously filed as an exhibit to the Form 8-K filed on July 20, 2005.
(aa)	Previously filed as an exhibit to the Form 8-K filed on September 29, 2005.
(gg)	Previously filed as an exhibit to the Form 8-K filed on September 28, 2006.
(ii)	Previously filed as an exhibit to the Form 8-K filed on November 9, 2006.
(mm)	Previously filed as an exhibit to the Form 10-Q for the quarterly period ended March 31, 2007
*	Certain portions of this document have been omitted pursuant to a confidential treatment request filed with the Commission pursuant to Rule 24b-2. The omitted confidential material has been filed separately with the Commission.
+	Indicates a management contract or compensatory plan or arrangement.