Attached files
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| 8-K - 8-K - Booking Holdings Inc. | a8kearnings123112.htm |
Exhibit 99.1
Priceline.com Reports Financial Results for 4th Quarter and Full-Year 2012
NORWALK, Conn., February 26, 2013. . . Priceline.com Incorporated (Nasdaq: PCLN) today reported 4th quarter and full-year 2012 financial results for the Priceline Group (the “Group”). Fourth 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 its customers, were $6.6 billion, an increase of 32.9% over a year ago (approximately 35% on a local currency basis).
The Group's gross profit for the 4th quarter was $940 million, a 29.7% increase from the prior year. International operations contributed gross profit in the 4th quarter of $836 million, a 37.3% increase versus a year ago (approximately 39% on a local currency basis). The Group's operating income in the 4th quarter was $374 million, a 23.2% increase from the prior year. The Group had GAAP net income applicable to common shareholders for the 4th quarter of $289 million, or $5.63 per diluted share, which compares to $226 million or $4.41 per diluted share, in the same period a year ago.
Non-GAAP gross profit for the 4th quarter was $956 million, a 31.9% increase from the prior year. Non-GAAP net income in the 4th quarter was $349 million, a 25.9% increase versus the prior year. Non-GAAP net income was $6.77 per diluted share, compared to $5.37 per diluted share a year ago. FactSet consensus for the 4th quarter 2012 was $6.53 per diluted share. Adjusted EBITDA for the 4th quarter 2012 was $426 million, an increase of 23.7% 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.
For full-year 2012, the Group had gross travel bookings of $28.5 billion, a 31.4% increase compared to 2011 (approximately 37% on a local currency basis). Gross profit for the Group in 2012 was $4.1 billion, a 32.6% increase from the prior year. International operations contributed full-year gross profit of $3.6 billion, a 38.8% increase versus the prior year (approximately 48% growth on a local currency basis). The Group's 2012 operating income was $1.83 billion, a 30.8% increase from the prior year. The Group had GAAP net income for full-year 2012 of $1.42 billion, or $27.66 per diluted share, which compares to $1.06 billion or $20.63 per diluted share in 2011.
Non-GAAP EBITDA for 2012 was $1.97 billion, an increase of 30.6% over a year ago. Non-GAAP net income for 2012 was $1.61 billion or $31.28 per diluted share, compared to $23.45 per diluted share a year ago.
“The Priceline Group finished 2012 with a strong 4th quarter showing improving unit growth in hotel room and rental car day reservations,” said Jeffery H. Boyd, Chairman and CEO of The Priceline Group. “International gross bookings growth of 43% on a local currency basis in the 4th quarter evidenced the resilience of the business in 2012 despite economic uncertainty in our core European market. Looking forward, Mr. Boyd said “The Group's brands are off to a good start in 2013, with greater supply and geographic reach, a new offline marketing experiment for Booking.com in the United States and a new ad campaign for priceline.com featuring Kaley Cuoco together with
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William Shatner's Negotiator and a mandate to further build and diversify the global reach of our business. While global economic conditions remain a concern, we are excited about our long-term outlook.”
The Priceline Group said it was targeting the following for 1st quarter 2013:
• | Year-over-year increase in total gross travel bookings of approximately 30% - 37% (an increase of approximately 29% - 36% on a local currency basis). |
• | Year-over-year increase in international gross travel bookings of approximately 36% - 43% (an increase of approximately 35% - 42% on a local currency basis). |
• | Year-over-year increase in domestic gross travel bookings of approximately 5% - 10%. |
• | Year-over-year increase in revenue of approximately 17% - 24%. |
• | Year-over-year increase in gross profit of approximately 30% - 37%. |
• | Adjusted EBITDA of approximately $316 million to $346 million. |
• | Non-GAAP net income per diluted share of $4.90 to $5.30. |
The Company believes that concerns related to sovereign debt and the viability of the Euro have negatively impacted historical operating results and are likely to impact future results. Given the uncertainty surrounding worldwide economic conditions, particularly in Europe where much of the Company's business is concentrated, the Company believes the variability around its guidance is elevated.
Non-GAAP guidance for the 1st quarter 2013:
• | excludes non-cash amortization expense of intangibles, |
• | excludes non-cash stock-based employee 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 significant charges or benefits associated with judgments, rulings and/or settlements related to hotel occupancy tax and other related 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, 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 employee compensation. |
In addition to the adjustments above, adjusted EBITDA excludes depreciation and amortization expense, interest income, interest expense, net income 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 adjusted EBITDA over GAAP net income by approximately $107 million in the 1st quarter 2013. In addition, the non-GAAP adjustments are expected to increase non-GAAP net income over GAAP net income by approximately $41 million in the 1st quarter 2013. The Group estimates GAAP net income per diluted share of approximately $4.12 to $4.52 for the 1st quarter 2013.
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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, "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 supplier, or the outbreak of an epidemic or pandemic disease, such as the swine flu outbreak;
-- 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;
-- our ability to expand successfully in international markets;
-- fluctuations in foreign exchange rates and other risks associated with doing business in multiple currencies;
-- the ability to attract and retain qualified personnel;
-- adverse changes in the Group's relationships with suppliers, 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;
-- 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;
-- 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 personal customer information, credit card information or other sensitive data or the failure to comply with various state laws applicable to the company's obligations in the event of such a breach;
-- an adverse outcome in one or more of the hotel occupancy and other tax proceedings in which priceline.com is involved; 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.
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Non-GAAP Financial Measures
Adjusted EBITDA represents GAAP net income excluding depreciation and amortization expense, interest income, interest expense, net income and loss attributable to noncontrolling interests and income taxes and is adjusted to exclude stock-based employee compensation expense, gains and losses on early debt extinguishment and significant charges or benefits related to judgments, rulings, or settlements of hotel occupancy and other related tax proceedings.
Non-GAAP gross profit, adjusted EBITDA, non-GAAP operating income, non-GAAP net income and non-GAAP net income per share are "non-GAAP financial measures," as such term is defined by the Securities and Exchange Commission, and may differ from non-GAAP financial measures used by other companies. The Group believes that non-GAAP gross profit, adjusted EBITDA, non-GAAP operating income, non-GAAP net income and non-GAAP net income per share that exclude certain non-cash or non-recurring income or expense items are useful for analysts and investors to evaluate the Group's future on-going performance because they provide a useful comparison of the Group's projected cash earnings and performance with its historical results from prior periods and to those of its competitors. These non-GAAP metrics, in particular adjusted EBITDA, non-GAAP operating income, and non-GAAP net income are not intended to represent funds available for the Group's discretionary use and are not intended to represent or to be used as a substitute for operating income, net income or cash flows from operations data as measured under GAAP. The items excluded from these non-GAAP metrics, but included in the calculation of their closest GAAP equivalent, are significant components of consolidated statements of income and must be considered in performing a comprehensive assessment of overall financial performance.
Non-GAAP financial information is adjusted for the following items:
• | Amortization expense of intangibles is excluded because it does not impact cash earnings. |
• | Stock-based employee compensation expense is excluded because it does not impact cash earnings and is reflected in earnings per share through increased share count. |
• | Interest expense related to the amortization of debt discount and gains or losses on early debt extinguishment related to convertible debt are excluded because they are non-cash in nature. |
• | Significant charges or benefits related to judgments, rulings, or settlements of hotel occupancy tax and other related tax proceedings, including the $16.1 million charge recorded in the 4th quarter 2012 primarily related to an unfavorable ruling in the state of Hawaii, 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 carryforwards. In addition, the benefit in 2011 related to the reversal of a reserve for unrecognized tax benefits attributable to tax positions taken in 2010 is excluded because the amount and timing of this type of item is unpredictable, not driven by core operating results and render comparisons with prior periods less meaningful. |
• | Net income attributable to noncontrolling interests 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; and |
◦ | additional 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 employee compensation expense. |
The presentation of this financial information should not be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles in the United States. The attached financial and statistical supplement reconciles non-GAAP financial information with the Group's financial results under GAAP.
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About The Priceline Group
The Priceline Group (Nasdaq: PCLN) is a leader in global online hotel reservations, with over 295,000 participating hotels and accommodations worldwide. The Group is composed of four primary brands - Booking.com, priceline.com, Agoda.com and rentalcars.com - and several ancillary brands. The Priceline Group provides online travel services in over 190 countries and territories in Europe, North America, South America, the Asia-Pacific region, the Middle East and Africa.
Booking.com is the number one online hotel reservation service in the world, offering over 275,000 hotels and accommodations (as of February 25, 2013), and is available in 41 languages. More recent counts are available on the Booking.com website. 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, or the recently added Express DealsSM, where travelers can take advantage of hotel discounts without bidding. Agoda.com is an Asia-based online hotel reservation service that is available in 38 languages. Rentalcars.com is a multinational rental car service, offering its reservation services in over 6,000 locations. Customer support is provided in 40 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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priceline.com Incorporated
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
December 31, | ||||||||
2012 | 2011 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,536,349 | $ | 632,836 | ||||
Restricted cash | 6,641 | 3,771 | ||||||
Short-term investments | 3,646,845 | 2,024,827 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $10,322 and $6,103, respectively | 367,512 | 264,453 | ||||||
Prepaid expenses and other current assets | 84,290 | 104,202 | ||||||
Deferred income taxes | 40,738 | 36,755 | ||||||
Total current assets | 5,682,375 | 3,066,844 | ||||||
Property and equipment, net | 89,269 | 64,322 | ||||||
Intangible assets, net | 208,113 | 200,151 | ||||||
Goodwill | 522,672 | 504,784 | ||||||
Deferred income taxes | 31,485 | 111,080 | ||||||
Other assets | 35,828 | 23,490 | ||||||
Total assets | $ | 6,569,742 | $ | 3,970,671 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 184,648 | $ | 146,867 | ||||
Accrued expenses and other current liabilities | 387,911 | 222,134 | ||||||
Deferred merchant bookings | 368,823 | 239,157 | ||||||
Convertible debt | 520,344 | 497,640 | ||||||
Total current liabilities | 1,461,726 | 1,105,798 | ||||||
Deferred income taxes | 45,159 | 46,990 | ||||||
Other long-term liabilities | 68,944 | 39,183 | ||||||
Convertible debt | 881,996 | — | ||||||
Total liabilities | 2,457,825 | 1,191,971 | ||||||
Redeemable noncontrolling interests | 160,287 | 127,045 | ||||||
Convertible debt | 54,655 | 77,360 | ||||||
Stockholders’ equity: | ||||||||
Common stock, $0.008 par value, authorized 1,000,000,000 shares, 58,055,586 and 57,578,431 shares issued, respectively | 450 | 446 | ||||||
Treasury stock, 8,184,787 and 7,779,645, respectively | (1,060,607 | ) | (803,586 | ) | ||||
Additional paid-in capital | 2,612,197 | 2,431,279 | ||||||
Accumulated earnings | 2,368,611 | 1,033,738 | ||||||
Accumulated other comprehensive loss | (23,676 | ) | (87,582 | ) | ||||
Total stockholders’ equity | 3,896,975 | 2,574,295 | ||||||
Total liabilities and stockholders’ equity | $ | 6,569,742 | $ | 3,970,671 | ||||
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priceline.com Incorporated
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Agency revenues | $ | 715,063 | $ | 542,048 | $ | 3,142,815 | $ | 2,339,253 | ||||||||
Merchant revenues | 472,350 | 445,869 | 2,104,752 | 2,004,432 | ||||||||||||
Other revenues | 3,227 | 2,853 | 13,389 | 11,925 | ||||||||||||
Total revenues | 1,190,640 | 990,770 | 5,260,956 | 4,355,610 | ||||||||||||
Cost of revenues | 250,890 | 266,073 | 1,177,275 | 1,275,730 | ||||||||||||
Gross profit | 939,750 | 724,697 | 4,083,681 | 3,079,880 | ||||||||||||
Operating expenses: | ||||||||||||||||
Advertising — Online | 306,817 | 217,897 | 1,273,637 | 919,214 | ||||||||||||
Advertising — Offline | 5,973 | 6,006 | 35,492 | 35,470 | ||||||||||||
Sales and marketing | 49,991 | 39,759 | 195,934 | 162,690 | ||||||||||||
Personnel, including stock-based compensation of $19,875, $25,320, $71,565 and $65,724, respectively | 122,912 | 96,844 | 466,828 | 352,295 | ||||||||||||
General and administrative | 50,403 | 36,320 | 173,171 | 123,652 | ||||||||||||
Information technology | 11,711 | 10,357 | 43,685 | 33,813 | ||||||||||||
Depreciation and amortization | 17,628 | 13,737 | 65,141 | 53,824 | ||||||||||||
Total operating expenses | 565,435 | 420,920 | 2,253,888 | 1,680,958 | ||||||||||||
Operating income | 374,315 | 303,777 | 1,829,793 | 1,398,922 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest income | 856 | 2,044 | 3,860 | 8,119 | ||||||||||||
Interest expense | (16,856 | ) | (8,332 | ) | (62,064 | ) | (31,721 | ) | ||||||||
Foreign currency transactions and other | (2,293 | ) | 1,170 | (9,720 | ) | (7,526 | ) | |||||||||
Total other income (expense) | (18,293 | ) | (5,118 | ) | (67,924 | ) | (31,128 | ) | ||||||||
Earnings before income taxes | 356,022 | 298,659 | 1,761,869 | 1,367,794 | ||||||||||||
Income tax expense | 66,427 | 72,704 | 337,832 | 308,663 | ||||||||||||
Net income | 289,595 | 225,955 | 1,424,037 | 1,059,131 | ||||||||||||
Less: net income attributable to noncontrolling interests | 932 | 240 | 4,471 | 2,760 | ||||||||||||
Net income applicable to common stockholders | $ | 288,663 | $ | 225,715 | $ | 1,419,566 | $ | 1,056,371 | ||||||||
Net income applicable to common stockholders per basic common share | $ | 5.79 | $ | 4.53 | $ | 28.48 | $ | 21.27 | ||||||||
Weighted average number of basic common shares outstanding | 49,870 | 49,793 | 49,840 | 49,654 | ||||||||||||
Net income applicable to common stockholders per diluted common share | $ | 5.63 | $ | 4.41 | $ | 27.66 | $ | 20.63 | ||||||||
Weighted average number of diluted common shares outstanding | 51,241 | 51,168 | 51,326 | 51,211 | ||||||||||||
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priceline.com Incorporated
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
OPERATING ACTIVITIES: | ||||||||||||
Net income | $ | 1,424,037 | $ | 1,059,131 | $ | 528,142 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation | 32,818 | 20,648 | 16,209 | |||||||||
Amortization | 32,323 | 33,176 | 34,255 | |||||||||
Provision for uncollectible accounts, net | 16,094 | 9,331 | 7,102 | |||||||||
Deferred income tax expense | 19,596 | 44,747 | 37,540 | |||||||||
Stock-based compensation and other stock based payments | 72,035 | 66,194 | 68,396 | |||||||||
Amortization of debt issuance costs | 5,212 | 2,360 | 3,332 | |||||||||
Amortization of debt discount | 39,820 | 21,414 | 20,110 | |||||||||
Loss on early extinguishment of debt | — | 32 | 11,334 | |||||||||
Changes in assets and liabilities: | ||||||||||||
Accounts receivable | (105,277 | ) | (125,793 | ) | (29,275 | ) | ||||||
Prepaid expenses and other current assets | (40,793 | ) | 12,213 | (22,373 | ) | |||||||
Accounts payable, accrued expenses and other current liabilities | 256,021 | 210,325 | 84,750 | |||||||||
Other | 33,864 | (11,966 | ) | 17,775 | ||||||||
Net cash provided by operating activities | 1,785,750 | 1,341,812 | 777,297 | |||||||||
INVESTING ACTIVITIES: | ||||||||||||
Purchase of investments | (6,352,495 | ) | (3,005,397 | ) | (1,813,032 | ) | ||||||
Proceeds from sale of investments | 4,799,412 | 2,229,563 | 1,071,669 | |||||||||
Additions to property and equipment | (55,158 | ) | (46,833 | ) | (22,593 | ) | ||||||
Acquisitions and other equity investments, net of cash acquired | (33,861 | ) | (68,192 | ) | (112,405 | ) | ||||||
Proceeds from foreign currency contracts | 86,159 | 31,045 | 44,564 | |||||||||
Payments on foreign currency contracts | (4,014 | ) | (42,032 | ) | (9,561 | ) | ||||||
Change in restricted cash | (2,756 | ) | (2,922 | ) | 260 | |||||||
Net cash used in investing activities | (1,562,713 | ) | (904,768 | ) | (841,098 | ) | ||||||
FINANCING ACTIVITIES: | ||||||||||||
Proceeds from the issuance of convertible senior notes | 1,000,000 | — | 575,000 | |||||||||
Payment of debt issuance costs | (20,916 | ) | — | (13,334 | ) | |||||||
Payments related to conversion of senior notes | (1 | ) | (213 | ) | (295,401 | ) | ||||||
Repurchase of common stock | (257,021 | ) | (163,171 | ) | (129,445 | ) | ||||||
Payments to purchase subsidiary shares from noncontrolling interests | (61,079 | ) | (12,986 | ) | — | |||||||
Proceeds from the sale of subsidiary shares to noncontrolling interests | — | — | 4,311 | |||||||||
Proceeds from exercise of stock options | 2,683 | 4,302 | 25,751 | |||||||||
Proceeds from the termination of conversion spread hedges | — | — | 42,984 | |||||||||
Excess tax benefit from stock-based compensation | 5,189 | 21,041 | 3,091 | |||||||||
Net cash provided by (used in) by financing activities | 668,855 | (151,027 | ) | 212,957 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 11,621 | (12,148 | ) | 7,670 | ||||||||
Net increase in cash and cash equivalents | 903,513 | 273,869 | 156,826 | |||||||||
Cash and cash equivalents, beginning of period | 632,836 | 358,967 | 202,141 | |||||||||
Cash and cash equivalents, end of period | $ | 1,536,349 | $ | 632,836 | $ | 358,967 | ||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||||||
Cash paid during the period for income taxes | $ | 300,539 | $ | 232,762 | $ | 169,320 | ||||||
Cash paid during the period for interest | $ | 13,933 | $ | 7,573 | $ | 4,901 | ||||||
Non-cash fair value increase for redeemable noncontrolling interests | $ | 84,693 | $ | 91,743 | $ | 7,876 | ||||||
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priceline.com Incorporated
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share data)
RECONCILIATION OF GAAP GROSS PROFIT TO NON-GAAP GROSS PROFIT | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||
GAAP Gross profit | $ | 939,750 | $ | 724,697 | $ | 4,083,681 | $ | 3,079,880 | ||||||||||
(a) | Charges related to hotel occupancy and other related tax rulings and judgments | 16,126 | — | 16,126 | — | |||||||||||||
Non-GAAP Gross profit | $ | 955,876 | $ | 724,697 | $ | 4,099,807 | $ | 3,079,880 | ||||||||||
RECONCILIATION OF GAAP OPERATING INCOME TO NON-GAAP OPERATING INCOME | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||
GAAP Operating income | $ | 374,315 | $ | 303,777 | $ | 1,829,793 | $ | 1,398,922 | ||||||||||
(a) | Charges related to hotel occupancy and other related tax rulings and judgments | 16,126 | — | 16,126 | — | |||||||||||||
(b) | Stock-based employee compensation | 19,875 | 25,320 | 71,565 | 65,724 | |||||||||||||
(c) | Amortization of acquisition-related intangible assets in Depreciation and amortization | 8,131 | 7,712 | 32,323 | 32,610 | |||||||||||||
Non-GAAP Operating income | $ | 418,447 | $ | 336,809 | $ | 1,949,807 | $ | 1,497,256 | ||||||||||
Non-GAAP Operating income as a % of Non-GAAP Gross profit | 43.8 | % | 46.5 | % | 47.6 | % | 48.6 | % | ||||||||||
RECONCILIATION OF GAAP OTHER INCOME (EXPENSE) TO NON-GAAP OTHER EXPENSE RECORDED BELOW OPERATING INCOME | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||
GAAP Other income (expense) | $ | (18,293 | ) | $ | (5,118 | ) | $ | (67,924 | ) | $ | (31,128 | ) | ||||||
(d) | Debt discount amortization related to convertible debt | 10,989 | 5,471 | 39,820 | 21,414 | |||||||||||||
(d) | Loss on early extinguishment of debt | — | — | — | 32 | |||||||||||||
(h) | Net income attributable to noncontrolling interests | (932 | ) | (240 | ) | (4,471 | ) | (2,760 | ) | |||||||||
(i) | Impact on noncontrolling interests of certain other Non-GAAP adjustments | 126 | (491 | ) | (797 | ) | (1,783 | ) | ||||||||||
Non-GAAP Other expense recorded below Operating income | $ | (8,110 | ) | $ | (378 | ) | $ | (33,372 | ) | $ | (14,225 | ) | ||||||
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priceline.com Incorporated
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share data)
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||
GAAP Net income applicable to common stockholders | $ | 288,663 | $ | 225,715 | $ | 1,419,566 | $ | 1,056,371 | ||||||||||
(a) | Charges related to hotel occupancy and other related tax rulings and judgments | 16,126 | — | 16,126 | — | |||||||||||||
(b) | Stock-based employee compensation | 19,875 | 25,320 | 71,565 | 65,724 | |||||||||||||
(e) | Depreciation and amortization | 17,628 | 13,737 | 65,141 | 53,824 | |||||||||||||
(f) | Interest income | (856 | ) | (2,044 | ) | (3,860 | ) | (8,119 | ) | |||||||||
(f) | Interest expense | 16,856 | 8,332 | 62,064 | 31,721 | |||||||||||||
(d) | Loss on early extinguishment of debt | — | — | — | 32 | |||||||||||||
(g) | Income tax expense | 66,427 | 72,704 | 337,832 | 308,663 | |||||||||||||
(h) | Net income attributable to noncontrolling interests | 932 | 240 | 4,471 | 2,760 | |||||||||||||
Adjusted EBITDA | $ | 425,651 | $ | 344,004 | $ | 1,972,905 | $ | 1,510,976 | ||||||||||
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||
GAAP Net income applicable to common stockholders | $ | 288,663 | $ | 225,715 | $ | 1,419,566 | $ | 1,056,371 | ||||||||||
(a) | Charges related to hotel margin tax rulings and judgments | 16,126 | — | 16,126 | — | |||||||||||||
(b) | Stock-based employee compensation | 19,875 | 25,320 | 71,565 | 65,724 | |||||||||||||
(d) | Debt discount amortization related to convertible debt | 10,989 | 5,471 | 39,820 | 21,414 | |||||||||||||
(d) | Loss on early extinguishment of debt | — | — | — | 32 | |||||||||||||
(j) | Adjustments for the tax impact of certain of the Non-GAAP adjustments and to exclude non-cash income taxes | 4,628 | 13,046 | 33,627 | 47,076 | |||||||||||||
(k) | Adjustment to income tax expense to exclude the benefit from the reversal of a reserve for unrecognized tax benefits | — | — | — | (12,528 | ) | ||||||||||||
(c) | Amortization of acquisition-related intangible assets in Depreciation and amortization | 8,131 | 7,712 | 32,323 | 32,610 | |||||||||||||
(i) | Impact on noncontrolling interests of certain other Non-GAAP adjustments | 126 | (491 | ) | (797 | ) | (1,783 | ) | ||||||||||
Non-GAAP Net income applicable to common stockholders | $ | 348,538 | $ | 276,773 | $ | 1,612,230 | $ | 1,208,916 | ||||||||||
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UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share data)
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME PER DILUTED COMMON SHARE | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||
GAAP weighted average number of diluted common shares outstanding | 51,241 | 51,168 | 51,326 | 51,211 | ||||||||||||||
(l) | Adjustment for restricted stock, restricted stock units and performance units | 229 | 349 | 215 | 341 | |||||||||||||
Non-GAAP weighted average number of diluted common shares outstanding | 51,470 | 51,517 | 51,541 | 51,552 | ||||||||||||||
Net income applicable to common stockholders per diluted common share | ||||||||||||||||||
GAAP | $ | 5.63 | $ | 4.41 | $ | 27.66 | $ | 20.63 | ||||||||||
Non-GAAP | $ | 6.77 | $ | 5.37 | $ | 31.28 | $ | 23.45 | ||||||||||
(a) | The $16.1 million charge in fourth quarter 2012 related primarily to an unfavorable ruling in the state of Hawaii for hotel occupancy and other related taxes is recorded in Cost of revenues. | |||||||
(b) | Stock-based employee compensation is recorded in Personnel expense. | |||||||
(c) | Amortization of acquisition-related intangible assets is recorded in Merchant revenues and Depreciation and amortization. | |||||||
(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) | Depreciation and amortization are excluded from Net income to calculate Adjusted EBITDA. | |||||||
(f) | Interest income and Interest expense are excluded from Net income to calculate Adjusted EBITDA. | |||||||
(g) | Income tax expense is excluded from Net income to calculate Adjusted EBITDA. | |||||||
(h) | Net income attributable to noncontrolling interests is excluded from Net income to calculate Adjusted EBITDA. | |||||||
(i) | Impact of other non-GAAP adjustments on Net income attributable to noncontrolling interests. | |||||||
(j) | Adjustments for the tax impact of certain of the non-GAAP adjustments and to exclude non-cash income taxes. | |||||||
(k) | Adjustment to income tax expense to exclude the benefit related to the reversal of a reserve in 2011 for unrecognized tax benefits attributable to tax positions taken in 2010. | |||||||
(l) | Additional shares of restricted stock units and performance share units are included in the calculation of non-GAAP net income per share because non-GAAP net income has been adjusted to exclude stock-based compensation expense. | |||||||
For a more detailed discussion of the adjustments described above, please see the section in our press release entitled "Non-GAAP Financial Measures" which provides a definition and information about the use of non-GAAP financial measures. | ||||||||
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Statistical Data
In millions
(Unaudited)
Gross Bookings | 4Q10 | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 1Q12 | 2Q12 | 3Q12 | 4Q12 | |||||||||||||||||||||||||||
International | $ | 2,363 | $ | 3,536 | $ | 4,472 | $ | 4,989 | $ | 3,912 | $ | 5,451 | $ | 5,952 | $ | 6,473 | $ | 5,494 | ||||||||||||||||||
Domestic | 902 | 1,129 | 1,308 | 1,268 | 1,044 | 1,260 | 1,377 | 1,359 | 1,090 | |||||||||||||||||||||||||||
Total | $ | 3,265 | $ | 4,665 | $ | 5,780 | $ | 6,257 | $ | 4,956 | $ | 6,712 | $ | 7,329 | $ | 7,831 | $ | 6,584 | ||||||||||||||||||
Agency | $ | 2,557 | $ | 3,781 | $ | 4,725 | $ | 5,121 | $ | 3,982 | $ | 5,528 | $ | 6,031 | $ | 6,423 | $ | 5,302 | ||||||||||||||||||
Merchant | 708 | 884 | 1,055 | 1,136 | 973 | 1,184 | 1,298 | 1,408 | 1,282 | |||||||||||||||||||||||||||
Total | $ | 3,265 | $ | 4,665 | $ | 5,780 | $ | 6,257 | $ | 4,956 | $ | 6,712 | $ | 7,329 | $ | 7,831 | $ | 6,584 | ||||||||||||||||||
Gross Bookings Year/Year Growth | ||||||||||||||||||||||||||||||||||||
International | 64.9 | % | 79.0 | % | 98.2 | % | 72.9 | % | 65.5 | % | 54.2 | % | 33.1 | % | 29.7 | % | 40.4 | % | ||||||||||||||||||
excluding F/X impact | 70.7 | % | 78.1 | % | 78.5 | % | 61.4 | % | 66.9 | % | 58.0 | % | 44.3 | % | 40.6 | % | 42.6 | % | ||||||||||||||||||
Domestic | 8.5 | % | 14.1 | % | 13.4 | % | 13.1 | % | 15.8 | % | 11.7 | % | 5.3 | % | 7.2 | % | 4.4 | % | ||||||||||||||||||
Agency | 44.8 | % | 59.3 | % | 76.1 | % | 61.6 | % | 55.7 | % | 46.2 | % | 27.6 | % | 25.4 | % | 33.1 | % | ||||||||||||||||||
Merchant | 42.1 | % | 49.5 | % | 45.1 | % | 35.6 | % | 37.5 | % | 34.0 | % | 23.1 | % | 24.0 | % | 31.8 | % | ||||||||||||||||||
Total | 44.2 | % | 57.3 | % | 69.5 | % | 56.2 | % | 51.8 | % | 43.9 | % | 26.8 | % | 25.2 | % | 32.9 | % | ||||||||||||||||||
excluding F/X impact | 47.9 | % | 56.7 | % | 56.5 | % | 47.9 | % | 52.8 | % | 46.8 | % | 35.5 | % | 33.8 | % | 34.6 | % | ||||||||||||||||||
Units Sold | 4Q10 | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 1Q12 | 2Q12 | 3Q12 | 4Q12 | |||||||||||||||||||||||||||
Hotel Room-Nights | 22.0 | 31.2 | 36.1 | 40.6 | 33.6 | 45.9 | 50.2 | 55.2 | 46.2 | |||||||||||||||||||||||||||
Year/Year Growth | 50.6 | % | 55.8 | % | 55.6 | % | 47.4 | % | 52.8 | % | 47.0 | % | 39.1 | % | 35.9 | % | 37.6 | % | ||||||||||||||||||
Rental Car Days | 3.9 | 4.9 | 6.6 | 7.0 | 5.3 | 6.9 | 8.6 | 9.4 | 7.2 | |||||||||||||||||||||||||||
Year/Year Growth | 65.4 | % | 64.7 | % | 54.6 | % | 35.6 | % | 34.3 | % | 40.6 | % | 29.4 | % | 34.9 | % | 36.5 | % | ||||||||||||||||||
Airline Tickets | 1.3 | 1.6 | 1.7 | 1.6 | 1.4 | 1.6 | 1.7 | 1.7 | 1.4 | |||||||||||||||||||||||||||
Year/Year Growth | (2.3 | )% | 2.1 | % | 7.3 | % | 7.7 | % | 5.6 | % | 4.9 | % | (1.8 | )% | 6.1 | % | 1.7 | % | ||||||||||||||||||
4Q10 | 1Q11 | 2Q11 | 3Q11 | 4Q11 | 1Q12 | 2Q12 | 3Q12 | 4Q12 | ||||||||||||||||||||||||||||
Revenue | $ | 731.3 | $ | 809.3 | $ | 1,102.7 | $ | 1,452.8 | $ | 990.8 | $ | 1,037.2 | $ | 1,326.8 | $ | 1,706.3 | $ | 1,190.6 | ||||||||||||||||||
Year/Year Growth | 35.0 | % | 38.5 | % | 43.7 | % | 45.0 | % | 35.5 | % | 28.2 | % | 20.3 | % | 17.4 | % | 20.2 | % | ||||||||||||||||||
Gross Profit | $ | 478.4 | $ | 505.8 | $ | 749.2 | $ | 1,100.1 | $ | 724.7 | $ | 743.3 | $ | 1,004.1 | $ | 1,396.5 | $ | 939.8 | ||||||||||||||||||
Year/Year Growth | 52.8 | % | 58.5 | % | 68.3 | % | 65.1 | % | 51.5 | % | 47.0 | % | 34.0 | % | 26.9 | % | 29.7 | % | ||||||||||||||||||
Gross bookings is an operating and statistical metric that captures the total dollar value, generally inclusive of taxes and fees, of all travel services booked by our customers.
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