Priceline.Com Reports Financial Results for 4th Quarter and Full-Year 2003; 4th Quarter Net Income of $2.2 Million, or $0.06 Per Share

February 10, 2004 at 12:00 AM EST
Priceline.Com Reports Financial Results for 4th Quarter and Full-Year 2003; 4th Quarter Net Income of $2.2 Million, or $0.06 Per Share

NORWALK, Conn.--(BUSINESS WIRE)--Feb. 10, 2004-- Priceline.com® (Nasdaq: PCLN) today reported its financial results for the 4th quarter and full-year 2003. For the 4th quarter, gross travel bookings, which refers to the total dollar value, inclusive of taxes and fees, of all travel products purchased by consumers, rose 12.2% year-over-year to $256.2 million, while revenues were $180.2 million, down 8.7% from the 4th quarter 2002. Gross profit for the 4th quarter was $31.8 million, a 4.4% increase over the 4th quarter 2002, and gross margin was 17.7%, an improvement over the 15.5% reported in the 4th quarter 2002. The Company reported net income for the quarter of $2.2 million, or $0.06 per share, compared to a net loss of $7.4 million or $0.20 per share a year ago.

For full-year 2003, priceline.com reported gross travel bookings of $1.1 billion, revenue of $863.7 million and net income applicable to common stockholders of $10.4 million, or $0.27 per share, compared to a loss of $0.57 per share for 2002. The Company ended 2003 with a balance of $268.0 million in cash and short-term investments. During the 4th quarter, the Company invested $12.2 million to buy-back 690,000 shares of its common stock, which represents approximately two percent of the Company's outstanding common stock.

"Priceline.com's 4th quarter results were lifted by the successful launch of our new airline tickets service, which offers consumers the choice between disclosed itinerary fares and Name-Your-Own-Price® savings, as well as strong results from our hotel, rental car and new vacation products," said Jeffery H. Boyd, priceline.com's President and Chief Executive Officer. "The growth in total gross travel bookings and gross profit reflects a successful transition of our airline ticket business and a positive bottom-line financial result, before any significant benefit from new airline ticket advertising."

Mr. Boyd continued, "Priceline.com reported strong product metrics across its travel products. For the 4th quarter, total merchant and agency hotel room nights sold increased 37% over the 4th quarter of 2002 and total merchant and agency rental car days increased 62%. The decline of merchant and agency airline tickets sold slowed to 18% in the 4th quarter 2003 and represents a significant improvement over the first nine months of 2003, when the airline tickets decline was over 40% compared to the first nine months of 2002. That trend has continued with current quarter-to-date total ticket sales running above last year's levels. Air and hotel are benefiting from increasing package sales as a result of product improvements launched in the quarter."

Revenues for the 4th quarter were down year-over-year as the new air service increased the mix of retail ticket sales (which are reported for on a "net" basis as compared to Name- Your-Own-Price® sales, which are reported on a "gross" basis). The Company noted that, commencing with the 4th quarter, it would begin disclosing total merchant and agency airline, hotel and rental car unit sales, reflecting the growing importance of agency unit sales.



4th Quarter Operating Highlights



  • Priceline.com completes testing of its new airline ticketing service that gives customers a choice between picking their flights and airlines from a broad assortment of fares, or Naming Your Own Price for deeper savings.

  • Priceline.com's hotel service passes the 10,000 participating hotels milestone. The service offers top-quality hotel properties in the U.S., Europe, Asia, Canada, Mexico and the Caribbean.

  • Priceline.com introduces an enhanced vacation packages service. The service offers over 2,000 hotel properties and all-inclusive resorts. The new vacation package service includes fixed pricing, more flight options and a last-minute weekender product offering flight time windows and a fast, easy booking process.

  • Priceline.com signs William Shatner and Leonard Nimoy to star in a new ad campaign for its airline tickets service.

  • Priceline.com adds a new look and feel to its Rentalcars.com site. The new site offers cars at special retail rates and contains links to priceline.com's Name Your Own Price® rental car service. The 4th quarter growth in the number of rental car days sold over the 4th quarter 2002 was driven by an increase in both merchant and agency sales.


Looking forward, Mr. Boyd said, "We expect the first half of 2004 to benefit from continued positive results from our new airline ticket and vacation products. We also believe that the new William Shatner/Leonard Nimoy advertising and continuation of our successful hotel ad campaign will contribute added momentum to the business. Consequently, for the 1st quarter 2004, we are targeting:

  • A 25% to 30% year-over-year increase in gross travel bookings,

  • A 10% to 15% year-over-year increase in airline ticket unit bookings,

  • A 25% to 30% year-over-year increase in hotel room night unit bookings ,

  • A 50% to 60% year-over-year increase in rental car day unit bookings,

  • Revenues roughly equal to the same period last year,

  • A gross margin of 18% to 20%,

  • A 15% to 20% year-over-year increase in gross profit, and

  • Net income per share of $0.06 to $0.10."

Mr. Boyd continued, "For the 2nd quarter 2004, we are targeting a 25% to 30% year-over-year increase in gross travel bookings and net income per share of $0.22 to $0.30. For the second half of 2004, we expect to generate meaningful year-over-year growth in gross travel bookings, gross profit dollars and net income."

About priceline.com

Priceline.com is a travel service that offers leisure airline tickets, hotel rooms, rental cars, vacation packages and cruises. In addition, priceline.com offers a personal finance service that offers home mortgages, refinancing and home equity loans through an independent licensee. Priceline.com operates the retail travel Web sites Lowestfare.com and Rentalcars.com. Priceline.com is part-owner of Travelweb LLC. Priceline.com licenses its business model to independent licensees, including pricelinemortgage and certain international licensees.

Information About Forward-Looking Statements

This press release may contain forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed, implied or forecasted in any such forward-looking statements. Expressions of future goals and similar expressions including, without limitation, "expect," "believe," "targeting," "may," "will," "should," "could," "plans," "anticipates," "estimates," "predicts," "potential," "targets," or "continue," reflecting something other than historical fact are intended to identify forward-looking statements. The following factors, among others, could cause the Company's actual results to differ materially from those described in the forward-looking statements: adverse changes in general market conditions for leisure and other travel products as the result of, among other things, terrorist attacks; adverse changes in the Company's relationships with airlines and other product and service providers including, without limitation, the withdrawal of suppliers from the priceline.com system; the bankruptcy or insolvency of another major domestic airline; the effects of increased competition; systems-related failures and/or security breaches; the Company's ability to protect its intellectual property rights; losses by the Company and its licensees; final adjustments made in closing the quarter; legal and regulatory risks and the ability to attract and retain qualified personnel. For a detailed discussion of these and other factors that could cause the Company's actual results to differ materially from those described in the forward-looking statements, please refer to the 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.

This supplement is unaudited and intended as a supplement to, and should be read in conjunction with, the Company's audited financial statements and the notes thereto filed with the SEC on Form 10-K and unaudited quarterly financial statements filed with the SEC on Form 10-Q. Certain data have been reclassified in order to conform historical information in a manner consistent with current presentation and has not been audited in this form. Certain presentations within this supplement are not consistent with Generally Accepted Accounting Principles.



priceline.com Incorporated
----------------------------------------------------------------------
Consolidated Statements of Operations
In thousands, except per share data
(Unaudited)

Income Statement Analysis       1Q02      2Q02      3Q02      4Q02
-------------------------    ---------- --------- --------- ---------

Merchant revenues             $259,667  $302,670  $237,961  $195,814
Agency revenues                    218       211       160       131
Other revenues                   2,000     1,575     1,843     1,356
                              --------- --------- --------- ---------
     Total revenues            261,885   304,456   239,964   197,301

Cost of merchant revenues      219,511   255,972   201,949   166,710
Cost of agency revenues              -         -         -         -
Cost of other revenues             381       336       274       107
                              --------- --------- --------- ---------
     Total costs of revenues   219,892   256,308   202,223   166,817
                              --------- --------- --------- ---------

                  Gross profit $41,993   $48,148   $37,741   $30,484
                              --------- --------- --------- ---------

Operating expenses:
  Advertising                   10,227    12,777    11,649    10,011
  Sales and marketing            9,259    10,463     7,667     5,310
  Personnel                      7,721     8,434     8,397     7,493
  General and administrative     3,208     3,536     3,247     3,187
  Information technology         3,087     3,198     2,581     3,142
  Depreciation and
   amortization                  4,458     4,490     4,850     4,466
  Option payroll taxes             104        16         -         -
  Stock based compensation         250       250       250       250
  Special charge/(reversal)          -      (200)        -         -
  Restructuring
   charge/(reversal)              (824)        -       (92)    4,654
  Severance charge/(reversal)        -       (55)        -         -
  Impairment charge                  -         -    24,229         -
  Warrant costs                      -         -         -         -
                              --------- --------- --------- ---------

  Total operating expenses     $37,490   $42,909   $62,778   $38,513

Operating income (loss)         $4,503    $5,239  ($25,037)  ($8,029)

Other income (expenses):
Interest income, net               782       788       656       617
Equity in income/(loss) of
 investees, net                    492       245       394         -
Other                              (36)       37       164         1
                              --------- --------- --------- ---------

Total other income              $1,238    $1,070    $1,214      $618

Net income (loss)               $5,741    $6,309  ($23,823)  ($7,411)

     Preferred stock dividend   (1,854)        -      (490)        -
                              --------- --------- --------- ---------

Net income (loss) applicable
 to common stockholders         $3,887    $6,309  ($24,313)  ($7,411)
                              ========= ========= ========= =========

Net income (loss) applicable
 to common stockholders per
 basic common share              $0.10     $0.16    ($0.64)   ($0.20)
                              ========= ========= ========= =========

Net income (loss) applicable
 to common stockholders per
 diluted common share            $0.10     $0.16    ($0.64)   ($0.20)
                              ========= ========= ========= =========

(1) Weighted average common
 shares:
     Basic                      37,917    38,280    37,879    37,452
     Diluted                    39,995    39,917    37,879    37,452
Common shares outstanding, end
 of period                      38,257    38,298    37,451    37,452


--------------------------------------- --------- --------- ---------


Gross margin                      16.0%     15.8%     15.7%     15.5%


(1) Reflects one-for-six
 reverse stock split.


priceline.com Incorporated
----------------------------------------------------------------------
Consolidated Statements of Operations
In thousands, except per share data
(Unaudited)

Income Statement Analysis       1Q03      2Q03      3Q03      4Q03
-------------------------     --------- --------- --------- ---------

Merchant revenues             $198,608  $236,943  $240,584  $176,319
Agency revenues                  1,005     1,476     1,895     3,178
Other revenues                     874     1,147       962       670
                              --------- --------- --------- ---------
     Total revenues            200,487   239,566   243,441   180,167

Cost of merchant revenues      167,500   199,072   202,793   148,351
Cost of agency revenues              -         -         -         -
Cost of other revenues               -         -         -         -
                              --------- --------- --------- ---------
     Total costs of revenues   167,500   199,072   202,793   148,351
                              --------- --------- --------- ---------

                  Gross profit $32,987   $40,494   $40,648   $31,816
                              --------- --------- --------- ---------

Operating expenses:
  Advertising                   11,098    10,774    10,284    10,092
  Sales and marketing            6,864     7,789     7,242     4,908
  Personnel                      7,512     7,547     7,441     7,180
  General and administrative     2,819     2,642     3,058     3,256
  Information technology         2,367     2,604     1,878     2,049
  Depreciation and
   amortization                  3,912     2,787     2,510     2,324
  Option payroll taxes               -       102       154         -
  Stock based compensation           -        70       106       106
  Special charge/(reversal)          -         -         -         -
  Restructuring
   charge/(reversal)                 -         -      (137)      (49)
  Severance charge/(reversal)        -         -         -         -
  Impairment charge                  -         -         -         -
  Warrant costs                  6,638         -         -         -
                              --------- --------- --------- ---------

  Total operating expenses     $41,210   $34,315   $32,536   $29,866

Operating income (loss)        ($8,223)   $6,179    $8,112    $1,950

Other income (expenses):
Interest income, net               492       405       229       441
Equity in income/(loss) of
 investees, net                      -     1,105     1,389      (163)
Other                                -         -         -         -
                              --------- --------- --------- ---------

Total other income                $492    $1,510    $1,618      $278

Net income (loss)              ($7,731)   $7,689    $9,730    $2,228

     Preferred stock dividend     (297)        -    (1,194)        -
                              --------- --------- --------- ---------

Net income (loss) applicable
 to common stockholders        ($8,028)   $7,689    $8,536    $2,228
                              ========= ========= ========= =========

Net income (loss) applicable
 to common stockholders per
 basic common share             ($0.21)    $0.20     $0.22     $0.06
                              ========= ========= ========= =========

Net income (loss) applicable
 to common stockholders per
 diluted common share           ($0.21)    $0.20     $0.21     $0.06
                              ========= ========= ========= =========

(1) Weighted average common
 shares:
     Basic                      37,477    37,635    38,044    38,019
     Diluted                    37,477    39,284    39,812    40,107
Common shares outstanding, end
 of period                      37,495    37,925    38,291    37,607


--------------------------------------- --------- --------- ---------


Gross margin                      16.5%     16.9%     16.7%     17.7%


(1) Reflects one-for-six
 reverse stock split.


priceline.com Incorporated
----------------------------------------------------------------------
Consolidated Statements of Operations
In thousands, except per share data
(Unaudited)

                                                               12 mos.
                                                              2003 vs.
                                  4Q03 vs. 12 months 12 months 12 mos.
Income Statement Analysis         4Q02       2003      2002     2002
-------------------------        --------- --------- ---------- -----

Merchant revenues                    -10%  $852,454  $996,112    -14%
Agency revenues                     2326%     7,554       720    949%
Other revenues                       -51%     3,653     6,774    -46%
                                           --------- ----------
     Total revenues                   -9%   863,661 1,003,606    -14%

Cost of merchant revenues            -11%   717,716   844,142    -15%
Cost of agency revenues                 -         -         -       -
Cost of other revenues              -100%         -     1,098   -100%
                                           --------- ----------
     Total costs of revenues         -11%   717,716   845,240    -15%
                                           --------- ----------

                       Gross profit    4%  $145,945  $158,366     -8%
                                           --------- ----------

Operating expenses:
  Advertising                          1%    42,248    44,664     -5%
  Sales and marketing                 -8%    26,803    32,699    -18%
  Personnel                           -4%    29,680    32,045     -7%
  General and administrative           2%    11,775    13,178    -11%
  Information technology             -35%     8,898    12,008    -26%
  Depreciation and amortization      -48%    11,533    18,264    -37%
  Option payroll taxes                  -       256       120    113%
  Stock based compensation           -58%       282     1,000    -72%
  Special charge/(reversal)             -         -      (200)   100%
  Restructuring charge/(reversal)   -101%     (186)     3,738   -105%
  Severance charge/(reversal)           -         -       (55)   100%
  Impairment charge                     -         -    24,229   -100%
  Warrant costs                         -     6,638         -       -
                                           --------- ----------

  Total operating expenses           -22%  $137,927  $181,690    -24%

Operating income (loss)              124%    $8,018  ($23,324)   134%

Other income (expenses):
Interest income, net                 -29%     1,567     2,843    -45%
Equity in income/(loss) of
 investees, net                         -     2,331     1,131    106%
Other                               -100%         -       166   -100%
                                           --------- ----------

Total other income                   -55%    $3,898    $4,140     -6%

Net income (loss)                    130%   $11,916  ($19,184)   162%

     Preferred stock dividend           -    (1,491)   (2,344)    36%
                                           --------- ----------

Net income (loss) applicable to
 common stockholders                 130%   $10,425  ($21,528)   148%
                                           ========= ==========

Net income (loss) applicable to
 common stockholders per basic
 common share                        130%     $0.28    ($0.57)   149%
                                           ========= ==========

Net income (loss) applicable to
 common stockholders per diluted
 common share                        130%     $0.27    ($0.57)   147%
                                           ========= ==========

(1) Weighted average common
 shares:
     Basic                             2%    37,804    37,881      0%
     Diluted                           7%    39,009    37,881      3%
Common shares outstanding, end of
 period                                0%    37,607    37,452      0%


------------------------------------------- --------- ---------- -----

Gross margin                                  16.9%     15.8%


(1) Reflects one-for-six reverse
 stock split.
priceline.com Incorporated
----------------------------------------------------------------------
Consolidated Balance Sheets
In thousands
(Unaudited)



ASSETS                3/31/2002   6/30/2002   9/30/2002  12/31/2002
                     ----------- ----------- ----------- -----------

CURRENT ASSETS:
 Cash and cash
  equivalents           $92,051     $98,140     $66,857     $67,182
 Restricted cash         17,454      19,573      18,174      18,248
 Short-term
  investments            68,327      62,458      67,478      64,154
 Accounts receivable,
  net of allowance
  for doubtful
  accounts               20,218      21,977      16,654      13,636
 Prepaid expenses and
  other current
  assets                 10,544       8,640       9,068       6,348
                     ----------- ----------- ----------- -----------

      Total current
       assets           208,594     210,788     178,231     169,568


PROPERTY AND
 EQUIPMENT, net          31,291      28,205      25,279      21,413
INTANGIBLE ASSETS,
 net                        631         566         998       1,174
GOODWILL                 22,535      22,535      10,517      10,517
OTHER ASSETS             19,100      20,040       8,793       8,490
                     ----------- ----------- ----------- -----------

 TOTAL ASSETS          $282,151    $282,134    $223,818    $211,162
                     =========== =========== =========== ===========


LIABILITIES AND
 STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
 Accounts payable       $62,177     $55,422     $40,972     $35,375
 Accrued expenses        31,750      32,318      25,861      27,889
 Other current
  liabilities             5,050       4,954       3,495       2,063
                     ----------- ----------- ----------- -----------
      Total current
       liabilities       98,977      92,694      70,328      65,327

 Long-term accrued
  expenses                2,365       1,483       1,001         715
 Other long-term
  liabilities                 -           -           -           -
 Long-term debt               -           -           -           -
                     ----------- ----------- ----------- -----------
      Total
       liabilities      101,342      94,177      71,329      66,042
                     ----------- ----------- ----------- -----------

SERIES B MANDATORILY
 REDEEMABLE PREFERRED
 STOCK                   13,470      13,470      13,470      13,470
                     ----------- ----------- ----------- -----------

STOCKHOLDERS' EQUITY:
 Common stock             1,880       1,882       1,884       1,884
 Treasury stock        (326,633)   (326,633)   (338,410)   (338,410)
 Additional paid-in
  capital             2,032,547   2,033,313   2,033,938   2,033,944
 Deferred
  compensation                -           -           -           -
 Accumulated deficit (1,540,455) (1,534,145) (1,558,458) (1,565,869)
 Accumulated other
  comprehensive
  income                      -          70          65         101
                     ----------- ----------- ----------- -----------
      Total
       stockholders'
       equity           167,339     174,487     139,019     131,650
                     ----------- ----------- ----------- -----------

 TOTAL LIABILITIES
  AND STOCKHOLDERS'
  EQUITY               $282,151    $282,134    $223,818    $211,162
                     =========== =========== =========== ===========


priceline.com Incorporated
----------------------------------------------------------------------
Consolidated Balance Sheets
In thousands
(Unaudited)



ASSETS                 3/31/2003   6/30/2003   9/30/2003  12/31/2003
                      ----------- ----------- ----------- -----------

CURRENT ASSETS:
 Cash and cash
  equivalents            $52,560     $69,292    $115,302     $93,732
 Restricted cash          17,025      16,869      20,750      22,485
 Short-term
  investments             70,194      62,992     148,027     151,736
 Accounts receivable,
  net of allowance for
  doubtful accounts       16,106      23,565      18,809      10,782
 Prepaid expenses and
  other current assets     6,243       8,158       6,737       4,778
                      ----------- ----------- ----------- -----------

      Total current
       assets            162,128     180,876     309,625     283,513


PROPERTY AND
 EQUIPMENT, net           17,690      16,106      16,603      16,524
INTANGIBLE ASSETS, net     1,086       3,808       3,687       7,053
GOODWILL                  10,517      10,517       9,534       8,779
OTHER ASSETS              16,837      17,699      22,829      21,915
                      ----------- ----------- ----------- -----------

 TOTAL ASSETS           $208,258    $229,006    $362,278    $337,784
                      =========== =========== =========== ===========


LIABILITIES AND
 STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
 Accounts payable        $36,020     $46,863     $38,467     $25,061
 Accrued expenses         24,983      23,296      22,972      21,031
 Other current
  liabilities              2,833       2,134       3,100       3,522
                      ----------- ----------- ----------- -----------
      Total current
       liabilities        63,836      72,293      64,539      49,614

 Long-term accrued
  expenses                   422         276         545         532
 Other long-term
  liabilities                  -           -           -         537
 Long-term debt                -           -     125,000     124,524
                      ----------- ----------- ----------- -----------
      Total
       liabilities        64,258      72,569     190,084     175,207
                      ----------- ----------- ----------- -----------

SERIES B MANDATORILY
 REDEEMABLE  PREFERRED
 STOCK                    13,470      13,470      13,470      13,470
                      ----------- ----------- ----------- -----------

STOCKHOLDERS' EQUITY:
 Common stock              1,886         303         306         306
 Treasury stock         (338,410)   (338,410)   (338,410)   (350,628)
 Additional paid-in
  capital              2,040,850   2,048,785   2,055,540   2,055,607
 Deferred compensation         -      (1,619)     (1,514)     (1,408)
 Accumulated deficit  (1,573,897) (1,566,208) (1,557,672) (1,555,444)
 Accumulated other
  comprehensive income       101         116         474         674
                      ----------- ----------- ----------- -----------
      Total
       stockholders'
       equity            130,530     142,967     158,724     149,107
                      ----------- ----------- ----------- -----------

 TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY  $208,258    $229,006    $362,278    $337,784
                      =========== =========== =========== ===========
priceline.com Incorporated
----------------------------------------------------------------------
Statistical Data
In thousands


          Gross Bookings        1Q02      2Q02      3Q02      4Q02
          ----------------   --------- --------- --------- ---------

          Merchant            $302,564  $351,039  $271,922  $218,100
          Agency                 4,251     3,744     3,385    10,228
                              --------- --------- --------- ---------
            Total             $306,814  $354,783  $275,307  $228,328

          Year/Year Growth


          Units Sold             1Q02      2Q02      3Q02      4Q02
          -------------      --------- --------- --------- ---------

          Airline Tickets          867       921       644       487
            Year/Year Growth

          Hotel Room-Nights        910     1,091     1,146       963
            Year/Year Growth

          Rental Car Days          759       817       764       570
            Year/Year Growth


                                1Q02      2Q02      3Q02      4Q02
                              --------- --------- --------- ---------

          Revenue             $261,885  $304,456  $239,964  $197,301
            Year/Year Growth

          Gross Profit         $41,993   $48,148   $37,741   $30,484
          Year/Year Growth



Gross Bookings represent the total dollar value of travel booked,
inclusive of taxes and fees, through the priceline.com, lowestfare.com
and rentalcars.com sites.

The information included above is for U.S. operations only.


priceline.com Incorporated
----------------------------------------------------------------------
Statistical Data
In thousands

          Gross Bookings       1Q03      2Q03      3Q03      4Q03
          --------------     --------- --------- --------- ---------

          Merchant            $226,739  $267,039  $266,640  $197,543
          Agency                20,778    30,023    33,875    58,647
                             --------- --------- --------- ---------
          Total               $247,517  $297,061  $300,515  $256,191

            Year/Year Growth    -19.3%    -16.3%      9.2%     12.2%


          Units Sold            1Q03      2Q03      3Q03      4Q03
          ----------         --------- --------- --------- ---------

          Airline Tickets          483       513       438       399
            Year/Year Growth    -44.2%    -44.4%    -32.0%    -18.1%

          Hotel Room-Nights      1,234     1,505     1,642     1,319
            Year/Year Growth     35.6%     38.0%     43.2%     36.9%

          Rental Car Days          663       867     1,215       922
            Year/Year Growth    -12.6%      6.1%     59.1%     61.8%


                               1Q03      2Q03      3Q03      4Q03
                             --------- --------- --------- ---------

          Revenue             $200,487  $239,566  $243,441  $180,167
            Year/Year Growth    -23.4%    -21.3%      1.4%     -8.7%

          Gross Profit         $32,987   $40,494   $40,648   $31,816
            Year/Year Growth    -21.4%    -15.9%      7.7%      4.4%



Gross Bookings represent the total dollar value of travel booked,
inclusive of taxes and fees, through the priceline.com, lowestfare.com
and rentalcars.com sites.

The information included above is for U.S. operations only.

                      priceline.com Incorporated
                      CONSOLIDATED BALANCE SHEETS
                       (In thousands, unaudited)

                                             December 31, December 31,
ASSETS                                            2003         2002
                                             -------------------------

 Current assets:
 Cash and cash equivalents                        $93,732     $67,182
 Restricted cash                                   22,485      18,248
 Short-term investments                           151,736      64,154
 Accounts receivable, net of allowance for
  doubtful accounts of $794 and $1,262
  at December 31, 2003 and 2002, respectively      10,782      13,636
 Prepaid expenses and other current assets          4,778       6,348
                                             -------------------------

      Total current assets                        283,513     169,568

 Property and equipment, net                       16,524      21,413
 Intangible assets, net                             7,053       1,694
 Goodwill                                           8,779      10,517
 Other assets, principally equity investments
  in pricelinemortgage and, at
  December 31, 2003, Travelweb LLC                 21,915       7,970
                                             -------------------------

 Total assets                                    $337,784    $211,162
                                             =========================


 LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:
 Accounts payable                                 $25,061     $35,375
 Accrued expenses                                  21,031      27,889
 Other current liabilities                          3,522       2,063
                                             -------------------------
      Total current liabilities                    49,614      65,327

 Long-term accrued expenses                           532         715
 Other long-term liabilities                          537
 Long-term debt                                   124,524           -
                                             -------------------------
      Total liabilities                           175,207      66,042
                                             -------------------------

 SERIES B MANDATORILY REDEEMABLE PREFERRED
  STOCK                                            13,470      13,470

 Stockholders' equity
 Common stock                                         306       1,884
 Treasury stock                                  (350,628)   (338,410)
 Additional paid-in capital                     2,055,607   2,033,944
 Deferred compensation                             (1,408)          -
 Accumulated deficit                           (1,555,444) (1,565,869)
 Accumulated other comprehensive income               674         101
                                             -------------------------
      Total stockholders' equity                  149,107     131,650
                                             -------------------------

 Total liabilities and stockholders' equity      $337,784    $211,162
                                             =========================

                      priceline.com Incorporated
                 CONSOLIDATED STATEMENTS OF OPERATIONS
           (In thousands, except per share data, unaudited)

                                Three Months Ended Twelve Months Ended
                                December  December  December December
                                   31,       31,       31,       31,
                                  2003      2002      2003      2002
                                ------------------- ------------------

Merchant revenues                $176,319 $195,814  $852,454  $996,112
Agency revenues                     3,178      131     7,554       720
Other revenues                        670    1,356     3,653     6,774
                                ------------------- ------------------
     Total revenues               180,167  197,301   863,661 1,003,606

Cost of merchant revenues         148,351  166,710   717,716   844,142
Cost of agency revenues                 -        -         -         -
Cost of other revenues                  -      107         -     1,098
                                ------------------- ------------------
     Total costs of revenues      148,351  166,817   717,716   845,240
                                ------------------- ------------------

Gross profit                      $31,816  $30,484  $145,945  $158,366

Operating expenses:
     Advertising                   10,092   10,011    42,248    44,664
     Sales and marketing            4,908    5,310    26,803    32,699
     Personnel                      7,180    7,493    29,680    32,045
     General and administrative,
      including option payroll
      taxes                         3,256    3,187    12,031    13,298
     Information technology         2,049    3,142     8,898    12,008
     Depreciation and
      amortization                  2,324    4,466    11,533    18,264
     Stock based compensation         106      250       282     1,000
     Special charge (reversal)          -        -         -     (200)
     Restructuring charge
      (reversal)                      (49)   4,654      (186)    3,738
     Severance charge (reversal)        -        -         -      (55)
     Impairment charge                  -        -         -    24,229
     Warrant costs                      -        -     6,638         -
                                ------------------- ------------------

     Total operating expenses     $29,866  $38,513  $137,927  $181,690
                                ------------------- ------------------

Operating income (loss)            $1,950  $(8,029)   $8,018 $(23,324)

Other income:
     Interest income                1,004      647     2,474     2,911
     Interest expense                (563)     (30)     (907)     (68)
     Equity in income of
      investees, net                 (163)       -     2,331     1,131
     Other                              -        1         -       166
                                ------------------- ------------------
     Total other income              $278     $618    $3,898    $4,140
                                ------------------- ------------------

 Net income (loss)                  2,228   (7,411)   11,916  (19,184)
 Preferred stock dividend                        -    (1,491)  (2,344)
                                ------------------- ------------------

Net income (loss) applicable to
 common stockholders               $2,228  $(7,411)  $10,425 $(21,528)
                                =================== ==================

Net income (loss) applicable to
 common stockholders per basic
 common share                       $0.06   $(0.20)    $0.28   $(0.57)
                                =================== ==================

Weighted average number of basic
 common shares outstanding         38,019   37,452    37,804    37,881
                                ==================  ==================

Net income (loss) applicable to
 common stockholders per diluted
 common share                       $0.06   $(0.20)    $0.27   $(0.57)
                                =================== ==================

Weighted average number of
 diluted common shares
 outstanding                       40,107   37,452    39,009    37,881
                                =================== ==================



CONTACT: priceline.com
Brian Ek, 203-299-8167
brian.ek@priceline.com

SOURCE: priceline.com