8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 5, 2011

priceline.com Incorporated

(Exact name of registrant as specified in its charter)

Delaware	0-25581	06-1528493
(State or other Jurisdiction of	(Commission File Number)	(IRS Employer Identification No.)
Incorporation)

800 Connecticut Avenue, Norwalk, Connecticut	06854
(Address of principal office)	(zip code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425

oSoliciting material pursuant to Rule 14a-12  under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4c under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.Results of Operations and Financial Conditions

On May 5, 2011, priceline.com Incorporated (“priceline.com” or the “company”) announced its financial results for the 1st quarter ended March 31, 2011.  A copy of priceline.com’s consolidated balance sheet at March 31, 2011, consolidated statement of operations for the three months ended March 31, 2011 and consolidated statement of cash flows for the three months ended March 31, 2011, are included in the financial and statistical supplement attached to the press release attached as Exhibit 99.1 to this Current Report on Form 8-K.  The consolidated balance sheet at March 31, 2011, consolidated statement of operations for the three months ended March 31, 2011 and consolidated statement of cash flows for the three months ended March 31, 2011 shall be treated as “filed” for purposes of the Securities Exchange Act of 1934, as amended.

Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On May 5, 2011, priceline.com Incorporated announced executive changes for The Priceline Group of Companies’ North American and International business units. Christopher L. Soder, who is priceline.com’s President, North American Travel, was also named Chief Executive Officer, priceline.com North America.  The Priceline Group also announced the planned transition of Kees Koolen from Chief Executive Officer to Chairman of Netherlands-based Booking.com.  The Company has initiated a search for Mr. Koolen’s successor and the transition will take place once the search is completed.

A copy of priceline.com’s press release announcing these executive changes is attached as Exhibit 99.2 to this Current Report on Form 8-K.

Item 7.01.Regulation FD Disclosure

On May 5, 2011, priceline.com announced its financial results for the 1st quarter ended March 31, 2011.  A copy of priceline.com’s press release announcing these financial results is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The company noted that average daily rates for hotel room night reservations had increased year-over-year during the 1st quarter 2011 approximately 4% internationally and by approximately 7% domestically.

With respect to 2nd quarter 2011 guidance, the company announced that it expected consolidated advertising expenses of approximately $233 to $243 million in the 2nd quarter 2011 and expected approximately $10 million of that amount to be spent “off-line.”  Priceline.com estimated that sales and marketing expenses in the 2nd quarter 2011 would be between $36 and $41 million.  Priceline.com stated that it estimated that personnel costs, excluding stock-based compensation expense, would be approximately $75 to $80 million in the 2nd quarter 2011.  With respect to 2nd quarter 2011, priceline.com stated it estimated that general and administrative expenses would be approximately $26 to $31 million, information technology expenses would be approximately $8 million, and depreciation and amortization expenses, excluding acquisition related amortization, would be approximately $5 million.  Priceline.com said it expected other/income and expense, excluding non-cash interest expense and gains or losses on early debt extinguishment, if any, related to cash settled convertible debt and expense associated with non-

2

GAAP net income allocated to non-controlling interests, to be an expense of approximately $9 million in the 2nd quarter 2011.

The company explained that its guidance assumed that the company would experience non-GAAP EBITDA “deleverage” during the 2nd quarter 2011 caused by, among other things, expenses associated with the year over year variance in other income/expense.

The company noted that its forecast for the remainder of the 2nd quarter 2011 assumed, among other things, that the Euro/U.S. Dollar exchange rate would be 1.48 U.S. dollars per Euro and that the British Pound/U.S. Dollar exchange rate would be 1.65 U.S. Dollars per British Pound.  The company noted that these assumed exchange rates for the 2nd quarter 2011 would be stronger by approximately 16% for the Euro and 10% for the British Pound as compared to actual exchange rates in effect during the 2nd quarter 2010.

The company also explained that its forecast for the remainder of the 2nd quarter 2011 assumed that the year-over-year rate of increase in hotel average daily rates would be less than the year-over-year increases experienced in the 1st quarter 2011.  The company noted that its Non-GAAP financial guidance was based upon a Non-GAAP diluted share count of approximately 51.7 million shares (which includes a calculation of the assumed economic dilutive impact of the company’s outstanding convertible notes and share-based awards, net of the favorable economic impact of the hedges associated with the company’s outstanding convertible notes), which is based on the company’s May 4, 2011 closing stock price of $537.56 per share.

The company emphasized that it was highly likely that its year-over-year unit growth rates would sequentially decelerate in future quarters due to the “sheer size of the business” and progressively more difficult “comps” as economic conditions continue to gradually improve.  In particular, the company noted that its 2nd quarter 2011 guidance reflected deceleration in the unit growth rate for hotel room night reservations based upon actual results to date and assumed deceleration as the company proceeded through the rest of the 2nd quarter.

The company noted that its guidance assumes that macro-economic conditions in general and conditions in the consumer travel market in particular, remain relatively unchanged.

This Form 8-K contains 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, “goal,” “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.  For a detailed discussion of the factors that could cause the company’s actual results to differ materially from those described in the forward-looking statements, please refer to the company’s most recent Form 10-Q, Form 10-K and Form 8-K filings with the Securities and Exchange Commission.  Unless required by law, the company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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Item 9.01.Financial Statements and Exhibits

(d) Exhibits

99.1

Press release (which includes a financial and statistical supplement and related information) issued by priceline.com Incorporated on May 5, 2011 relating to, among other things, its 1st quarter ended March 31, 2011 earnings. The consolidated balance sheet at March 31, 2011 and consolidated statement of operations for the three months ended March 31, 2011 and consolidated statement of cash flows for the three months ended March 31, 2011 shall be treated as “filed” for the purposes of the Securities and Exchange Act of 1934, as amended, and the remaining information shall be treated as “furnished.”

99.2

Press release announcing executive changes for The Priceline Group of Companies.

4

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 hereunto duly authorized.

		PRICELINE.COM INCORPORATED
		By:	/s/ Daniel J. Finnegan
			Name:	Daniel J. Finnegan
			Title:	Chief Financial Officer
Date:	May 6, 2011

5

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release (which includes a financial and statistical supplement and related information) issued by priceline.com Incorporated on May 5, 2011 relating to, among other things, its 1st quarter ended March 31, 2011 earnings. The consolidated balance sheet at March 31, 2011 and consolidated statement of operations for the three months ended March 31, 2011 and consolidated statement of cash flows for the three months ended March 31, 2011 shall be treated as “filed” for the purposes of the Securities and Exchange Act of 1934, as amended, and the remaining information shall be treated as “furnished.”
99.2	Press release announcing executive changes for The Priceline Group of Companies.

6

EX-99.1

Exhibit 99.1

Priceline.com Reports Financial Results for 1st Quarter 2011

NORWALK, Conn., May 5, 2011. . . Priceline.com Incorporated (Nasdaq: PCLN) today reported 1st quarter 2011 financial results for the Priceline Group of Companies. First quarter gross travel bookings for the group, which refers to the total dollar value, generally inclusive of all taxes and fees, of all travel services purchased by consumers, were $4.7 billion, an increase of 57.3% over a year ago.

The Group had revenues in the 1st quarter of $809.3 million, a 38.5% increase over a year ago. The Group’s international operations contributed revenues in the 1st quarter of $389.1 million, an 80% increase versus a year ago (approximately 79% on a local currency basis). The Group’s gross profit for the 1st quarter was $505.8 million, a 58.5% increase from the prior year. International operations contributed gross profit in the 1st quarter of $388.2 million, an 81% increase versus a year ago (approximately 79% growth on a local currency basis). The Group’s operating income in the 1st quarter was $154.1 million, a 75.2% increase from the prior year. The Group had GAAP net income applicable to common shareholders for the 1st quarter of $104.8 million, or $2.05 per diluted share, which compares to $53.9 million or $1.06 per diluted share, in the same period a year ago.

Non-GAAP net income in the 1st quarter was $137.0 million, a 57.1% increase versus the prior year.  Non-GAAP net income was $2.66 per diluted share, compared to $1.70 per diluted share a year ago. First Call analyst consensus for the 1st quarter 2011 was $2.44 per diluted share.  Non-GAAP EBITDA for the 1st quarter 2011 was $173.5 million, an increase of 55.3% over a year ago. The section below entitled “Non-GAAP Financial Measures” provides a definition and information about the use of non-GAAP financial measures in this press release and the attached financial and statistical supplement reconciles non-GAAP financial information with the Group’s financial results under GAAP.

“In the 1st quarter, the Group benefitted from strong growth in our global hotel business, particularly at Booking.com and Agoda,” said Jeffery H. Boyd, Priceline President and Chief Executive Officer.  “Room nights booked grew by 55.8% and our international gross bookings grew by 79% compared to prior year first quarter.  The Group’s hotel business continues to benefit from improving ADRs, a continuing shift from offline to online bookings, increased penetration of core European and North American markets and outstanding growth in new markets throughout the Asia-Pacific region and South America.”

Mr. Boyd continued, “The Group’s global rental car operations grew rental car days booked by 64.7% in the 1st quarter 2011 as compared to the prior year.  A significant portion of this growth can be attributed to the Group’s acquisition of TravelJigsaw and its international car hire operations, which continues to grow at impressive rates.  Priceline.com’s airline ticketing business returned to positive growth in the 1st quarter, with a 2.1% gain in ticket sales and improving growth in opaque ticket sales.”

Looking forward, Mr. Boyd said, “Globally, we intend to retain our focus on extending our reach in established and new geographic markets and providing an outstanding consumer experience to build the strength of our brands.”

The Priceline Group said it was targeting the following for 2nd quarter 2011:

·Year-over-year increase in total gross travel bookings of approximately 53% - 58%.

·Year-over-year increase in international gross travel bookings of approximately 76% - 81% (an increase of approximately 53% - 58% on a local currency basis).

·Year-over-year increase in domestic gross travel bookings of approximately 8% to 13%.

·Year-over-year increase in revenue of approximately 36% to 41%.

·Year-over-year increase in gross profit of approximately 57% to 62%.

·Non-GAAP EBITDA of approximately $310 million to $320 million.

·Non-GAAP net income of between $4.70 and $4.90 per diluted share.

Non-GAAP guidance for the 2nd quarter 2011:

·excludes non-cash amortization expense of acquisition-related intangibles,

·excludes non-cash stock-based compensation expense,

·excludes non-cash interest expense and gains or losses on early debt extinguishment, if any, related to cash settled convertible debt,

·excludes the impact, if any, of charges or benefits associated with judgments, rulings and/or settlements related to hotel occupancy tax proceedings,

·excludes non-cash income tax expense and reflects the impact on income taxes of certain of the non-GAAP adjustments,

·includes the additional impact of the non-GAAP adjustments described above on net income attributable to noncontrolling interests,

·includes the anti-dilutive impact of the “Conversion Spread Hedges” (see “Non-GAAP Financial Measures” below) on diluted common shares outstanding related to outstanding convertible notes, and

·includes the dilutive impact of additional shares of unvested restricted stock, restricted stock units and performance share units because non-GAAP net income has been adjusted to exclude stock-based compensation.

In addition, non-GAAP EBITDA excludes depreciation and amortization expense, interest income, interest expense, net income and loss attributable to noncontrolling interests, income taxes and includes the impact of foreign currency transactions and other expenses.

When aggregated, the non-GAAP adjustments are expected to increase non-GAAP EBITDA over GAAP net income by approximately $109 million in the 2nd quarter 2011.  In addition, the non-GAAP adjustments are expected to increase non-GAAP net income over GAAP net income by approximately $37 million in the 2nd quarter 2011. On a per share basis, the Group estimates GAAP net income of approximately $4.03 to $4.23 per diluted share for the 2nd quarter 2011.

Information About Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements reflect the views of the Group’s management regarding current expectations and projections about future events and are based on currently available information and current foreign currency exchange rates. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed, implied or forecasted in any such forward-looking statements. Expressions of future goals and similar expressions including, without limitation, “may,” “will,” “should,” “could,” “expects,” “does not currently expect,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “predicts,” “potential,” “targets,” or “continue,” reflecting something other than historical fact are intended to identify forward-looking statements.

The following factors, among others, could cause the Group’s actual results to differ materially from those described in the forward-looking statements:

· adverse changes in general market conditions for leisure and other travel services as a result of, among other things, decreased consumer spending, general economic downturn, terrorist attacks, natural disasters or adverse weather, the bankruptcy or insolvency of a major airline, or the outbreak of an epidemic or pandemic disease, such as the swine flu outbreak;

· adverse changes in the Group’s relationships with airlines and other product and service providers and vendors which could include, without limitation, the withdrawal of suppliers from the Group’s systems (either “retail” or “opaque” services, or both) and/or the loss or reduction of global distribution fees;

· fluctuations in foreign exchange rates and other risks associated with doing business in multiple currencies;

· the effects of increased competition, including the potential impact of increased pricing competition initiated by other on-line travel agents in the form of reduced booking fees and/or the launch by competitors of an “opaque” travel offering and the potential impact of “metasearch” initiatives by Google and other search engines upon which we rely for a significant amount of traffic;

· an adverse outcome in one or more of the hotel occupancy and other tax proceedings in which priceline.com is involved;

· a change by a major search engine to its search engine algorithms that negatively affects the search engine ranking of the company or its 3rd party distribution partners;

· our ability to expand successfully in international markets;

· the ability to attract and retain qualified personnel;

· difficulties integrating recent or future acquisitions, such as the 2nd quarter 2010 acquisition of TravelJigsaw, including ensuring the effectiveness of the design and operation of internal controls and disclosure controls of acquired businesses;

· the occurrence of an external or internal security breach of our systems or other Internet based systems involving personal customer information, credit card information or other sensitive data;

· systems-related failures and/or security breaches, including without limitation, “denial-of-service” type attacks on our system, any security breach that results in the theft, transfer or unauthorized disclosure of customer information, or the failure to comply with various state laws applicable to the company’s obligations in the event of such a breach; and

· legal and regulatory risks.

For a detailed discussion of these and other factors that could cause the Group’s actual results to differ materially from those described in the forward-looking statements, please refer to the Group’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 Group 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

Non-GAAP EBITDA represents GAAP net income excluding depreciation and amortization expense, interest income, interest expense, net income and loss attributable to noncontrolling interests, income taxes and is adjusted for the non-GAAP adjustments relating to stock-based compensation expense, gains and losses on early debt extinguishment and charges or benefits related to judgments, rulings, or settlements of hotel occupancy tax proceedings.

Non-GAAP EBITDA, non-GAAP net income and non-GAAP net income per share are “non-GAAP financial measures,” as such term is defined by the Securities and Exchange Commission, and may differ from non-GAAP financial measures used by other companies. The Group believes that non-GAAP EBITDA, non-GAAP net income and non-GAAP net income per share that exclude certain non-cash or non-recurring income or expense items are useful for analysts and investors to evaluate the Group’s future on-going performance because they enable a more meaningful comparison of the Group’s projected cash earnings and performance with its historical results from prior periods and to those of its competitors. These non-GAAP metrics, in particular non-GAAP EBITDA and non-GAAP net income, are not intended to represent funds available for priceline.com’s discretionary use and are not intended to represent or to be used as a substitute for operating income, net income or cash flows from operations data as measured under GAAP. The items excluded from these non-GAAP metrics, but included in the calculation of their closest GAAP equivalent, are significant components of consolidated statements of income and must be considered in performing a comprehensive assessment of overall financial performance.

Non-GAAP financial information is adjusted for the following items:

·Amortization expense of acquisition-related intangibles is excluded because it does not impact cash earnings.

·Stock-based compensation expense is excluded because it does not impact cash earnings and is reflected in earnings per share through increased share count.

·Interest expense related to the amortization of debt discount and gains or losses on early debt extinguishment related to convertible debt are excluded because they are non-cash in nature.

·Charges or benefits related to judgments, rulings, or settlements of hotel occupancy tax proceedings and favorable adjustments related to certain franchise and sales tax issues for our headquarters location are excluded because the amount and timing of these items are unpredictable, not driven by core operating results and render comparisons with prior periods less meaningful.

·Income tax expense is adjusted for the tax impact of certain of the non-GAAP adjustments described above and to exclude tax expense recorded where no actual tax payments are owed because of available net operating loss carry forwards.

·Net income and loss attributable to noncontrolling interest is adjusted for the impact of certain of the non-GAAP adjustments described above

·For calculating non-GAAP net income per share:

·net income is adjusted for the impact of the non-GAAP adjustments described above.

·fully diluted share count is adjusted to include the anti-dilutive impact of “Conversion Spread Hedges” which increases the effective conversion price of the currently outstanding 0.50% convertible notes due 2011 and 0.75% convertible notes due 2013 from their stated $40.38 conversion price to an effective conversion price of $50.47 per share.  Under GAAP, the anti-dilutive impact of the Conversion Spread Hedges is not reflected on the outstanding diluted share count until if and when shares are delivered.

·all unvested shares of restricted common stock, restricted stock units and performance share units are included in the calculation of non-GAAP  net income per share because non-GAAP 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 non-GAAP financial information with priceline.com’s financial results under GAAP.

About The Priceline Group of Companies
The Priceline Group of Companies (Nasdaq: PCLN) is a leader in global online hotel reservations, with over 170,000 participating hotels worldwide.  The Group is composed of four

primary brands — Booking.com, priceline.com, Agoda.com and TravelJigsaw — and several ancillary brands. The Priceline Group provides online travel services in Europe, North America, South America, the Asia-Pacific region, the Middle East and Africa.

Booking.com is a leading international online hotel reservation service operating in 101 countries in 41 languages.  Booking.com offers its customers access to over 135,000 participating hotels worldwide.  Priceline.com gives leisure travelers multiple ways to save on their airline tickets, hotel rooms, rental cars, vacation packages and cruises. In addition to getting compelling published prices, travelers can take advantage of priceline.com’s famous Name Your Own Price® service, which can deliver the lowest prices available.  Agoda.com is an Asia-based online hotel reservation service that offers hotel rooms around the world and is available in 32 languages.  TravelJigsaw is a multinational car hire service, offering its reservation services in more than 4,000 locations in 115 countries.  Customer support is provided in 27 languages.

###

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

For Investor Relations: Matthew Tynan (203) 299-8487 matt.tynan@priceline.com

priceline.com Incorporated

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	March 31,			December 31,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	551,074		$	358,967
Restricted cash	1,064			1,050
Short-term investments	1,194,512			1,303,251
Accounts receivable, net of allowance for doubtful accounts of $5,893 and $6,353, respectively	221,978			162,426
Prepaid expenses and other current assets	56,682			61,211
Deferred income taxes	80,360			70,559
Total current assets	2,105,670			1,957,464
Property and equipment, net	44,386			39,739
Intangible assets, net	234,063			232,030
Goodwill	525,801			510,894
Deferred taxes	137,969			151,408
Other assets	17,462			14,418
Total assets	$	3,065,351		$	2,905,953
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	115,512		$	90,311
Accrued expenses and other current liabilities	322,735			243,767
Deferred merchant bookings	166,805			136,915
Convertible debt	481,644			175
Total current liabilities	1,086,696			471,168
Deferred income taxes	55,938			56,440
Other long-term liabilities	47,209			42,990
Convertible debt	—			476,230
Total liabilities	1,189,843			1,046,828
Redeemable noncontrolling interests	57,538			45,751
Convertible debt	93,569			38
Stockholders’ equity:
Common stock, $0.008 par value, authorized 1,000,000,000 shares, 57,414,428, and 56,567,236 shares issued, respectively	445			438
Treasury stock 7,768,032 and 7,421,128 shares, respectively	(797,677		)	(640,415		)
Additional paid-in capital	2,347,728			2,417,092
Accumulated earnings	163,545			69,110
Accumulated other comprehensive income (loss)	10,360			(32,889		)
Total stockholders’ equity	1,724,401			1,813,336
Total liabilities and stockholders’ equity	$	3,065,351		$	2,905,953

priceline.com Incorporated

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended
	March 31,
	2011			2010
Merchant revenues	$	454,804		$	368,265
Agency revenues	351,422			213,242
Other revenues	3,094			2,887
Total revenues	809,320			584,394
Cost of revenues	303,512			265,278
Gross profit	505,808			319,116
Operating expenses:
Advertising - Offline	11,614			11,788
Advertising - Online	185,108			113,109
Sales and marketing	34,778			24,113
Personnel, including stock-based compensation of $13,993, and $11,909 for the three months ended March 31, 2011 and 2010, respectively	75,221			49,777
General and administrative	25,879			18,033
Information technology	6,670			4,608
Depreciation and amortization	12,479			9,779
Total operating expenses	351,749			231,207
Operating income	154,059			87,909
Other income (expense):
Interest income	1,421			855
Interest expense	(7,715		)	(4,806		)
Foreign currency transactions and other	(7,073		)	(3,130		)
Total other income (expense)	(13,367		)	(7,081		)
Earnings before income taxes	140,692			80,828
Income tax expense	(36,679		)	(26,953		)
Net income	104,013			53,875
Less: net loss attributable to noncontrolling interests	777			—
Net income applicable to common stockholders of priceline.com Incorporated	$	104,790		$	53,875
Net income applicable to common stockholders per basic common share	$	2.12		$	1.16
Weighted average number of basic common shares outstanding	49,319			46,309
Net income applicable to common stockholders per diluted common share	$	2.05		$	1.06
Weighted average number of diluted common shares outstanding	51,159			50,862

priceline.com Incorporated

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three Months Ended
	March 31,
	2011			2010
OPERATING ACTIVITIES:
Net income	$	104,013		$	53,875
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	4,166			3,969
Amortization	8,313			5,810
Provision for uncollectible accounts, net	2,812			1,784
Other deferred income taxes	8,260			11,426
Stock-based compensation and other stock-based payments	14,110			11,909
Amortization of debt issuance costs	553			907
Amortization of debt discount	5,239			3,274
Loss on early extinguishment of debt	—			5,251
Changes in assets and liabilities:
Accounts receivable	(56,487		)	(20,223		)
Prepaid expenses and other current assets	3,307			1,893
Accounts payable, accrued expenses and other current liabilities	177,763			23,711
Other	4,170			1,111
Net cash provided by operating activities	276,219			104,697
INVESTING ACTIVITIES:
Purchase of investments	(472,872		)	(526,493		)
Proceeds from sale of investments	618,427			212,674
Additions to property and equipment	(8,279		)	(4,831		)
Acquisitions and other equity investments, net of cash acquired	(66,204		)	(2,500		)
Proceeds from settlement of foreign currency contracts	—			9,707
Payments on foreign currency contracts	(16,005		)	—
Change in restricted cash	(16		)	(31		)
Net cash provided by (used in) investing activities	55,051			(311,474		)
FINANCING ACTIVITIES:
Proceeds from the issuance of convertible debt	—			575,000
Payment of debt issuance costs	—			(12,938		)
Payments related to conversion of convertible debt	—			(98,388		)
Repurchase of common stock	(157,262		)	(118,932		)
Proceeds from exercise of stock options	544			12,597
Excess tax benefit on stock-based compensation	9,520			1,656
Net cash (used in) provided by financing activities	(147,198		)	358,995
Effect of exchange rate changes on cash and cash equivalents	8,035			(5,584		)
Net increase in cash and cash equivalents	192,107			146,634
Cash and cash equivalents, beginning of period	358,967			202,141
Cash and cash equivalents, end of period	$	551,074		$	348,775
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for income taxes	$	28,956		$	15,933
Cash paid during the period for interest	$	3,601		$	751
Non-cash fair value adjustment for redeemable noncontrolling interests	$	10,355		$	—

priceline.com Incorporated

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(In thousands, except per share data)

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP EBITDA

	Three Months Ended March 31,
	2011			2010
GAAP Net income applicable to common stockholders	$	104,790		$	53,875
(a)  Stock-based compensation	13,993			11,909
(b)  Depreciation and amortization	12,479			9,779
(c)  Interest income	(1,421		)	(855		)
(c)  Interest expense	7,715			4,806
(d)  Loss on early extinguishment of debt	—			5,251
(e)  Income tax expense	36,679			26,953
(f)  Net loss attributable to noncontrolling interests	(777		)	—
Non-GAAP EBITDA	$	173,458		$	111,718

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

	Three Months Ended March 31,
	2011			2010
GAAP Net income applicable to common stockholders	$	104,790		$	53,875
(a)  Stock-based compensation	13,993			11,909
(d)  Debt discount amortization related to convertible debt	5,239			3,274
(d)  Loss on early extinguishment of debt	—			5,251
(g)  Adjustments for the tax impact of certain of the non-GAAP adjustments and to exclude non-cash income taxes	5,447			7,130
(h)  Amortization of acquired intangible assets in Depreciation and amortization	8,227			5,797
(i)  Impact on noncontrolling interests of certain other non-GAAP adjustments	(664		)	—
Non-GAAP Net income applicable to common stockholders	$	137,032		$	87,236

RECONCILIATION OF GAAP TO NON-GAAP NET INCOME PER DILUTED COMMON SHARE

	Three Months Ended March 31,
	2011		2010
GAAP weighted average number of diluted common shares outstanding	51,159		50,862
(j)  Adjustment for Conversion Spread Hedges	—		(159		)
(k) Adjustment for restricted stock, restricted stock units and performance units	363		690
Non-GAAP weighted average number of diluted common shares outstanding	51,522		51,393
Net income applicable to common stockholders per diluted common share
GAAP	$	2.05	$	1.06
Non-GAAP	$	2.66	$	1.70

(a) Stock-based compensation is recorded in Personnel expense.

(b) Depreciation and amortization are excluded from Net income to calculate non-GAAP EBITDA.

(c) Interest income and Interest expense are excluded from Net income to calculate non-GAAP EBITDA.

(d) Non-cash interest expense related to the amortization of debt discount and loss on early debt extinguishment are recorded in Interest expense and Foreign currency transactions and other, respectively.

(e) Income tax expense is excluded from Net income to calculate non-GAAP EBITDA.

(f) Net loss attributable to noncontrolling interests is excluded from Net income to calculate non-GAAP EBITDA.

(g) Adjustments for the tax impact of certain of the non-GAAP adjustments and to exclude non-cash income taxes.

(h) Amortization of acquired intangible assets is recorded in Depreciation and amortization.

(i) Impact of other non-GAAP adjustments on Net income attributable to noncontrolling interests.

(j) Reflects the impact of the Conversion Spread Hedges that increase the effective conversion price of the currently outstanding Convertible Senior Notes due September 30, 2011 and the Convertible Senior Notes due September 30, 2013 from their stated $40.38 conversion price to an effective conversion price of $50.47 per share.  Under GAAP, the anti-dilutive impact of the Conversion Spread Hedges is not reflected on the outstanding diluted share count until the end of the hedge when shares are delivered.

(k) All shares of restricted common stock, restricted stock units and performance share units are included in the calculation of non-GAAP net income per share because non-GAAP net income has been adjusted to exclude stock-based compensation expense.

priceline.com Incorporated

Statistical Data

In millions

(Unaudited)

Gross Bookings	4Q08			1Q09			2Q09			3Q09			4Q09			1Q10			2Q10			3Q10			4Q10			1Q11
Domestic	$	689		$	851		$	964		$	999		$	831		$	989		$	1,154		$	1,121		$	902		$	1,129
International**	792			1,092			1,415			1,724			1,433			1,975			2,256			2,885			2,363			3,536
Total	$	1,481		$	1,944		$	2,379		$	2,723		$	2,264		$	2,965		$	3,410		$	4,006		$	3,265		$	4,665
Agency	$	1,108		$	1,470		$	1,825		$	2,131		$	1,766		$	2,374		$	2,683		$	3,168		$	2,557		$	3,781
Merchant**	373			474			555			592			498			591			727			838			708			884
Total	$	1,481		$	1,944		$	2,379		$	2,723		$	2,264		$	2,965		$	3,410		$	4,006		$	3,265		$	4,665
Year/Year Growth
Domestic	31.1		%	18.1		%	10.6		%	24.9		%	20.6		%	16.2		%	19.6		%	12.2		%	8.5		%	14.1		%
International	16.5		%	5.3		%	14.3		%	37.8		%	81.0		%	80.8		%	59.5		%	67.3		%	64.9		%	79.0		%
excluding F/X impact	27.6		%	23.5		%	32.4		%	48.5		%	69.5		%	72.8		%	67.1		%	78.0		%	70.7		%	78.1		%
Agency	21.4		%	7.3		%	10.1		%	32.9		%	59.4		%	61.5		%	47.0		%	48.7		%	44.8		%	59.3		%
Merchant	27.5		%	21.9		%	22.4		%	32.6		%	33.5		%	24.8		%	31.1		%	41.4		%	42.1		%	49.5		%
Total	22.9		%	10.5		%	12.8		%	32.8		%	52.9		%	52.5		%	43.3		%	47.1		%	44.2		%	57.3		%
Units Sold	4Q08			1Q09			2Q09			3Q09			4Q09			1Q10			2Q10			3Q10			4Q10			1Q11
Hotel Room-Nights	9.1			12.8			15.7			17.9			14.6			20.0			23.2			27.5			22.0			31.2
Year/Year Growth	38.0		%	36.4		%	44.0		%	56.3		%	59.9		%	56.8		%	48.2		%	54.1		%	50.6		%	55.8		%
Rental Car Days	2.2			3.0			3.2			2.6			2.4			3.0			4.3			5.1			3.9			4.9
Year/Year Growth	11.1		%	15.4		%	15.0		%	11.6		%	6.6		%	-0.9		%	32.0		%	97.3		%	65.4		%	64.7		%
Airline Tickets	1.1			1.5			1.6			1.5			1.3			1.5			1.6			1.5			1.3			1.6
Year/Year Growth	43.7		%	28.0		%	13.9		%	30.2		%	16.2		%	2.8		%	4.1		%	-4.6		%	-2.3		%	2.1		%
	4Q08			1Q09			2Q09			3Q09			4Q09			1Q10			2Q10			3Q10			4Q10			1Q11
Revenue	$	406.0		$	462.1		$	603.7		$	730.7		$	541.8		$	584.4		$	767.4		$	1,001.8		$	731.3		$	809.3
Year/Year Growth	21.3		%	14.6		%	17.5		%	30.1		%	33.4		%	26.5		%	27.1		%	37.1		%	35.0		%	38.5		%
Gross Profit	$	205.1		$	208.3		$	305.2		$	434.0		$	313.2		$	319.1		$	445.3		$	666.2		$	478.4		$	505.8
Year/Year Growth	28.0		%	15.0		%	20.3		%	37.3		%	52.7		%	53.2		%	45.9		%	53.5		%	52.8		%	58.5		%

Gross bookings is an operating and statistical metric that captures the total dollar value, generally inclusive of taxes and fees, of all travel services booked by customers.

** Includes $95.7 million, $55.0 million, $85.8 million and $43.9 million of Travel Jigsaw gross bookings in 1Q11, 4Q10, 3Q10 and 2Q10 since acquisition on May 18, 2010, respectively.

EX-99.2

Exhibit 99.2

The Priceline Group Announces Executive Changes

NORWALK, Conn., May 5, 2011 . . . Priceline.com Incorporated (Nasdaq: PCLN) today announced executive changes for The Priceline Group of Companies’ North American and International business units.

Christopher L. Soder, who is priceline.com’s President, North American Travel, today was also named Chief Executive Officer, priceline.com North America.  The promotion is effective June 2, 2011 and Mr. Soder will continue to report to The Priceline Group’s President and Chief Executive Officer Jeffery H. Boyd.  In his new role, Mr. Soder will be responsible for priceline.com’s North American operations, supplier relations, website and marketing.  He also will continue as a member of the Company’s Group Management Board, which oversees performance and strategy of The Priceline Group of Companies worldwide.  Mr. Soder was promoted to President, North American Travel in February 2007 and has served in various executive roles within priceline.com since 2000.

“As one of priceline.com’s longest-tenured senior executives, Chris Soder has extensive knowledge of our U.S. business and all of its facets,” said Mr. Boyd.  “Chris has been instrumental in developing and steering our domestic business strategies over the years and he has personally been involved in developing and growing priceline.com’s relationships with airline, hotel and rental car supplier/partners. His expanded role will enable Chris to become even more of an asset to our company, our employees and our supplier/partners.”

The Priceline Group also announced today the planned transition of Kees Koolen from Chief Executive Officer to Chairman of Netherlands-based Booking.com.  The Company has initiated a search for Mr. Koolen’s successor and the transition will take place once the search is completed.  Mr. Koolen was a founder of Booking.com B.V. and has been its Chief Executive Officer since September 2008.

“Under Kees Koolen’s leadership, Booking.com has grown from startup to Europe’s largest online hotel reservation service,” said Mr. Boyd.  “Kees has assembled a high quality team focused on providing superior value for customers and hotel partners.  His strategic leadership has enabled Booking.com to simultaneously build market share in its core Western European markets and successfully expand into new markets around the globe.  We thank Kees for his many contributions to our business and look forward to his continued guidance in his upcoming role as Chairman.”

(more)

About The Priceline Group of Companies

The Priceline Group of Companies (Nasdaq: PCLN) is a leader in global online hotel reservations, with over 170,000 participating hotels worldwide.  The Group is composed of four primary brands — Booking.com, priceline.com, Agoda.com and TravelJigsaw — and several ancillary brands. The Priceline Group provides online travel services in Europe, North America, South America, the Asia-Pacific region, the Middle East and Africa.

Booking.com is a leading international online hotel reservation service operating in 101 countries in 41 languages.  Booking.com offers its customers access to over 135,000 participating hotels worldwide.  Priceline.com gives leisure travelers multiple ways to save on their airline tickets, hotel rooms, rental cars, vacation packages and cruises. In addition to getting compelling published prices, travelers can take advantage of priceline.com’s famous Name Your Own Price® service, which can deliver the lowest prices available.  Agoda.com is an Asia-based online hotel reservation service that offers hotel rooms around the world and is available in 32 languages.  TravelJigsaw is a multinational car hire service, offering its reservation services in more than 4,000 locations in 115 countries.  Customer support is provided in 27 languages.

###

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

For Investor Relations: Matthew Tynan (203) 299-8487 matt.tynan@priceline.com

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