Priceline : Reports Financial Results for 3rd Quarter 2016

 The Priceline Group Reports Financial Results for 3rd Quarter 2016‌‌‌‌

NORWALK, CT - November 7, 2016. . . The Priceline Group Inc. (NASDAQ: PCLN) today reported its 3rd quarter 2016 financial results. Third quarter gross travel bookings for The Priceline Group (the "Company," the "Group," "we," "our," or "us"), which refers to the total dollar value, generally inclusive of all taxes and fees, of all travel services purchased by its customers, net of cancellations, were $18.5 billion, an increase of 25% over a year ago (approximately 26% on a constant-currency basis).

The Group's gross profit for the 3rd quarter was $3.6 billion, a 22% increase from the prior year (approximately 23% on a constant-currency basis). International operations contributed gross profit in the 3rd quarter of $3.3 billion, a 25% increase versus a year ago (approximately 26% on a constant-currency basis).

Net income in the 3rd quarter was $506 million, a 58% decrease versus the prior year. Net income was $10.13 per diluted share, a 57% decrease as compared to the prior year. Net income and net income per diluted share for the 3rd quarter were negatively impacted by a non-cash charge of $941 million relating to an impairment of OpenTable's goodwill. The impairment charge is a result of a change in business strategy as it relates to OpenTable's international expansion and other growth opportunities. This change in strategy resulted in OpenTable updating its forecasted financial results to reflect a material reduction in forecasted long-term financial results from these initiatives. While OpenTable will continue to pursue these growth opportunities, they will do so on a more measured and deliberate basis.

Non-GAAP net income was $1.6 billion, a 20% increase versus the prior year. Non-GAAP net income was $31.18 per diluted share, a 23% increase compared to $25.35 per diluted share a year ago. FactSet consensus for 3rd quarter non-GAAP net income was $29.92 per diluted share. Adjusted EBITDA for the 3rd quarter 2016 was $1.9 billion, an increase of 19% versus a year ago. Non-GAAP net income, non-GAAP net income per diluted share and adjusted EBITDA exclude the goodwill impairment charge related to OpenTable discussed above, as well as other non-GAAP adjustments detailed below. The section below entitled "Non-GAAP Financial Measures" provides definitions 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.

"The Priceline Group brands executed well during our peak summer travel season," said Jeffery H. Boyd, Chairman and Interim Chief Executive Officer of The Priceline Group. "Globally, our accommodation business booked 150 million room nights in the 3rd quarter, up 29% over the same period last year. The acceleration in room night growth demonstrates the favorable market in which we operate as well as the value of our diverse global platform."

Looking forward to the 4th quarter, Mr. Boyd said, "We will continue to invest in smartly marketing our brands and in the tools and technology that benefit both our customers and partners in the online travel marketplace. We also look forward to pushing ahead with OpenTable to build on their strong brand with a strategy that supports both building the core business and international expansion at a more measured pace."

Non-GAAP Financial Measures

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.

To supplement the Unaudited Consolidated Financial Statements, the Group uses the following non-GAAP financial measures: Adjusted EBITDA, non-GAAP gross profit, non-GAAP operating income, non-GAAP net income and non-GAAP net income per share. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with generally accepted accounting principles in the United States.

The Group uses non-GAAP financial measures for financial and operational decision-making and as a basis to evaluate performance and set targets for employee compensation programs. The Group believes that these non- GAAP financial measures are useful for analysts and investors to evaluate the Group's ongoing operating performance because they facilitate comparison of the Group's results for the current period and projected next- period results to those of prior periods and to those of its competitors (though other companies may calculate similar non-GAAP financial measures differently than those calculated by the Group). These non-GAAP financial measures, 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 flow from operations as measured under GAAP. The items excluded from these non-GAAP measures, but included in the calculation of their closest GAAP equivalent, are significant components of our consolidated statements of operations and must be considered in performing a comprehensive assessment of overall financial performance.

Non-GAAP net income for the 3rd quarter 2016 and for previously reported quarters is reported under our old non- GAAP methodology ("Old Methodology") and is reported as net income with the following adjustments:

• excludes the impact, if any, of 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,

• excludes stock-based employee compensation expense,

• excludes amortization expense of intangibles,

• excludes the impact, if any, of significant charges related to the impairment of goodwill,

• excludes non-cash interest expense related to the amortization of debt discount and gains or losses on early debt extinguishment, if any, related to our convertible debt,

• excludes the impact, if any, of significant gains or losses on the sale of cost-method investments and significant charges related to other-than-temporary impairments of such investments, and

• excludes income tax expense where no tax payments are owed because of existing net operating losses, primarily related to U.S. federal and state income taxes, and reflects the tax impact of non-GAAP adjustments.

Because non-GAAP net income under our Old Methodology has been adjusted to exclude stock-based employee compensation expense, the non-GAAP share count used for calculating non-GAAP net income per share includes additional shares to reflect the total weighted-average shares for unvested restricted stock units and performance share units currently estimated to be issued at the end of the vesting periods.

In addition to the adjustments listed above regarding non-GAAP net income, adjusted EBITDA excludes depreciation expense, interest income, interest expense and income tax expense and includes the impact of foreign currency transactions and other expenses.

We evaluate certain financial metrics and financial measures on both an as-reported and constant-currency basis. We calculate constant currency by converting our current-year period financial results for transactions recorded in currencies other than U.S. Dollars using the corresponding prior-year period monthly average exchange rates rather than the current-year period monthly average exchange rates.

The attached financial and statistical supplement includes reconciliations of the Group's financial results under GAAP to non-GAAP financial information for the three and nine months ended September 30, 2016 and 2015 described above under our Old Methodology.

On August 4, 2016, the Company filed a Current Report on Form 8-K with the Securities and Exchange Commission stating that beginning with the Company's 4th quarter 2016 financial guidance, the Company will cease adjusting both non-GAAP net income and adjusted EBITDA for stock-based employee compensation expense. In addition, the Company stated that it will also discontinue adjusting non-GAAP net income to exclude the income tax expense where no tax payments are owed because of existing net operating losses ("NOLs").

Further, since the Company will no longer exclude stock-based employee compensation, a non-GAAP share count will no longer be calculated and the Company will use its GAAP share count to calculate non-GAAP net income per diluted share.

A reconciliation of the Group's financial results for certain prior periods under the new non-GAAP methodology ("New Methodology") has been included in the attached financial and statistical supplement as Exhibit 1.

Financial Guidance for 4th Quarter 2016 (New Methodology) Guidance Ranges

(U.S. Dollars in millions, except per share amounts) Low High

Metrics
Year over year growth - Room nights booked	20%	25%
Year over year growth - Total gross travel bookings	16%	21%
Year over year growth - Total gross travel bookings (constant currency)	17%	22%
GAAP
Year over year growth - Gross profit	13%	18%
Year over year growth - Gross profit (constant currency)	14%	19%
Net income	$ 570	$ 600
Net income per diluted share	$ 11.40	$ 12.00
Year over year growth - Net income per diluted share	14%	20%
Non-GAAP
Non-GAAP Net income	$ 610	$ 640
Non-GAAP Net income per diluted share	$ 12.20	$ 12.80
Year over year growth - Non-GAAP net income per diluted share	14%	19%
Adjusted EBITDA	$ 755	$ 795

Non-GAAP net income and non-GAAP net income per diluted share exclude amortization of intangible assets and non-cash interest expense related to the amortization of debt discount and the related tax effect of these items.

FactSet consensus for 4th quarter non-GAAP net income is $12.88 per diluted share, which is derived from the

analysts who are reporting earnings estimates in a method consistent with our New Methodology for non-GAAP reporting.

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 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 and restaurants;

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

-- the ability to attract and retain qualified personnel;

-- volatility in the price of our common stock; 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.

About The Priceline Group

The Priceline Group (NASDAQ: PCLN) is the world leader in online travel and related services, provided to customers and partners in over 220 countries through six primary brands - Booking.com, priceline.com, KAYAK, agoda.com, Rentalcars.com, and OpenTable. The Priceline Group's mission is to help people experience the world. For more information, visit pricelinegroup.com and follow us on Twitter @PricelineGroup.

### For Press Information: Leslie Cafferty (203) 299-8128 leslie.cafferty@pricelinegroup.com For Investor Relations: Michael Noonan (203) 299-8489 michael.noonan@pricelinegroup.com