Priceline : Reports Financial Results for 1st Quarter 2016

Dollars using the corresponding prior-year period monthly average exchange rates rather than the current-year period monthly average exchange rates.

When aggregated, the non-GAAP adjustments are expected to increase adjusted EBITDA over GAAP net income by approximately $280 million in the 2nd quarter 2016. In addition, the non-GAAP adjustments are expected to increase non-GAAP net income over GAAP net income by approximately $118 million in the 2nd quarter 2016. The Group estimates GAAP net income per diluted share between $9.35 and $10.25 for the 2nd quarter 2016.

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 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," "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 travel services;

-- the effects of increased competition;

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

-- our ability to expand successfully in international markets;

-- our performance advertising efficiency;

-- any change by a major search engine in how it presents travel search results or conducts its auction for search placement in a manner that is competitively disadvantageous to us;

-- adverse changes in the Group's relationships with travel service providers;

-- systems-related failures and/or security breaches;

-- the ability to attract and retain qualified personnel; and

-- tax, 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 Quarterly Report on Form 10-Q and Annual Report on Form 10-K filed 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.

The Unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operating results. Adjusted EBITDA represents GAAP net income excluding depreciation and amortization expense, interest income and interest expense and is adjusted to exclude stock-based employee compensation expense, gains and losses on early debt extinguishment, significant charges or benefits associated with judgments, rulings and/or settlements related to travel transaction tax (e.g., hotel occupancy taxes, excise taxes, sales taxes, etc.) proceedings, significant acquisition costs, gains on sale of cost-method investments and significant charges related to other-than- temporary impairments of such investments and income tax expense.

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 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 (though competitors may calculate similar non-GAAP financial measures differently than those calculated by the Group). 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 for the three months ended March 31, 2016 and 2015 are 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 non-GAAP 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 credits associated with judgments, rulings and/or settlements related to travel transaction tax (e.g., hotel occupancy taxes, excise taxes, sales taxes, etc.) proceedings, including the reversal of previously accrued travel transaction taxes (including estimated interest and penalties) of

  $16.4 million recorded in the 1st quarter of 2015 related to a favorable ruling in the State of Hawaii, are

  excluded because the amount and timing of these items are unpredictable, are not driven by core operating results and render comparisons with prior periods less meaningful. There were no such charges or credits in the three months ended March 31, 2016.

• Gains on sale of cost-method investments and charges related to other-than-temporary impairments of such investments, such as the $50.4 million impairment of a cost-method investment in Hotel Urbano recorded in the 1st quarter of 2016, are excluded because they do not impact cash earnings, are 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.

• For calculating non-GAAP net income per share: