Priceline : Reports Financial Results for 4th Quarter and Full-Year 2013

NORWALK, Conn., February 20, 2014. . . The Priceline Group (NASDAQ: PCLN) today reported its 4th quarter and full-year 2013 financial results. Fourth quarter gross travel bookings for The Priceline Group (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 $9.1 billion, an increase of 38.8% over a year ago (approximately 39% on a local currency basis).

The Group's gross profit for the 4th quarter was $1.3 billion, a 41.9% increase from the prior year. International operations contributed gross profit in the 4th quarter of $1.15 billion, a 38% increase versus a year ago (approximately 38% on a local currency basis). The Group had GAAP net income applicable to common shareholders for the 4th quarter of $378 million, or $7.14 per diluted share, which compares to $289 million or $5.63 per diluted share, in the same period a year ago.

Non-GAAP net income in the 4th quarter was $471 million, a 35.2% increase versus the prior year. Non-GAAP net income was $8.85 per diluted share, compared to $6.77 per diluted share a year ago. FactSet consensus for the 4th quarter 2013 was $8.29 per diluted share. Adjusted EBITDA for the 4th quarter 2013 was $578 million, an increase of 35.8% over a year ago. 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.

For the full-year 2013, the Group had gross travel bookings of $39.2 billion, a 37.7% increase compared to 2012 (approximately 38% on a local currency basis). Gross profit for the Group in 2013 was $5.7 billion, a 40.0% increase from the prior year. International operations contributed full-year gross profit of $5.02 billion, a 41% increase versus the prior year (approximately 40% on a local currency basis). The Group had GAAP net income for full-year 2013 of $1.9 billion, or $36.11 per diluted share, which compares to $1.4 billion or $27.66 per diluted

share in 2012.

Non-GAAP net income for 2013 was $2.2 billion, a 36.3% increase versus the prior year. Non-GAAP net income was $41.72 per diluted share, compared to $31.28 per diluted share a year ago. Adjusted EBITDA for 2013 was

$2.7 billion, an increase of 35.9% over a year ago.

"The Priceline Group finished 2013 with a strong 4th quarter, reporting accelerating hotel, rental car and airline ticket unit growth," said Darren Huston, President and CEO of The Priceline Group. The Group's full year room night reservations of 271 million grew by 37%, as compared to 40% in 2012, reflecting only modest deceleration on a large scale business."

Looking forward, Mr. Huston said, "The Group's brands are off to a solid start in 2014, with continued investment in broadening our offerings, building our brands and providing a superior experience to our customers."

The Priceline Group said it was targeting the following for 1st quarter 2014:

• Year-over-year increase in total gross travel bookings of approximately 23% - 33% (an increase of approximately 23% - 33% on a local currency basis).

• Year-over-year increase in international gross travel bookings of approximately 25% - 35% (an increase

1 of 11

of approximately 25% - 35% on a local currency basis).

• Year-over-year increase in domestic gross travel bookings of approximately 15% - 20%.

• Year-over-year increase in revenue of approximately 15% - 25%.

• Year-over-year increase in gross profit of approximately 22% - 32%.

• Adjusted EBITDA of approximately $420 million to $450 million.

• Non-GAAP net income per diluted share between $6.35 and $6.85. Non-GAAP guidance for the 1st quarter 2014:

• 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 travel transaction tax (e.g., hotel occupancy taxes, excise taxes, sales taxes, etc.) proceedings,

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

• includes the dilutive impact of unvested 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 and 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 $160 million in the 1st quarter 2014. In addition, the non-GAAP adjustments are expected to increase non-GAAP net income over GAAP net income by approximately $73 million in the 1st quarter 2014. The Group estimates GAAP net income per diluted share between $5.02 and $5.52 for the 1st quarter 2014.

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 leisure and other travel services;

-- the effects of increased competition;

-- our ability to expand successfully in international markets;

-- our online advertising efficiency;

-- 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 travel service providers;

-- a change by a major search engine to its search engine algorithms that negatively affects our placement in search results;

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

-- an adverse outcome in one or more travel transaction tax (e.g., hotel occupancy taxes, excise taxes, sales taxes,

2 of 11

etc.) proceedings in which we are 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 Annual Report on Form 10-K filed with the Securities and Exchange Commission and any subsequently filed Quarterly Reports on Form 10-Q. 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.

Adjusted EBITDA represents GAAP net income excluding depreciation and amortization expense, interest income, interest expense, net income (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, 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 and significant acquisition costs.

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. 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 and twelve months ended December 31, 2013 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 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 $6.3 million credit recorded in the 4th quarter 2013 related to a favorable ruling and settlement in the District

of Columbia, the $20.5 million charge (including estimated interest and penalties) recorded in the 1st quarter 2013, principally related to unfavorable rulings in the State of Hawaii and the District of Columbia, and the $16.1 million charge (including estimated interest and penalties) recorded in the 4th quarter of 2012, primarily related to an unfavorable 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.

• Significant costs related to acquisitions are excluded because the expense is not driven by core operating results and renders 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.

• Net income (loss) 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

3 of 11

additional unvested 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.

The Priceline Group (NASDAQ: PCLN) is a leader in global online travel reservations. The Group is composed of five primary brands - Booking.com, priceline.com, Agoda.com, KAYAK 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.comis the number one online hotel reservation service in the world, offering over 425,000 hotels and other accommodations (as of February 18, 2014), and is available in 42 languages. More recent counts are available on the Booking.comwebsite. Priceline.comgives 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 Express Deals®, where travelers can take advantage of hotel discounts without bidding. Agoda.comis an Asia-based online hotel reservation service that is available in 38 languages. KAYAKwebsites and mobile apps allow people to easily compare hundreds of travel sites at once. Rentalcars.comis a multinational rental car reservation service, offering its services in over 6,000 locations and providing customer support in 40 languages.

###

For Press Information: Leslie Cafferty (203) 299-8121 leslie.cafferty@pricelinegroup.com

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

4 of 11

Current assets:

Cash and cash equivalents $ 1,289,994 $ 1,536,349

Restricted cash 10,476 6,641

Short-term investments 5,462,720 3,646,845

Accounts receivable, net of allowance for doubtful accounts of $14,116 and $10,322,

respectively 535,962 367,512

Prepaid expenses and other current assets 107,102 84,290

Deferred income taxes 74,687 40,738

Total current assets 7,480,941 5,682,375

Property and equipment, net 135,053 89,269

Intangible assets, net 1,019,985 208,113

Goodwill 1,767,912 522,672

Deferred income taxes 7,055 31,485

Other assets 33,514 35,828

Total assets $ 10,444,460 $ 6,569,742

Current liabilities:

Accounts payable $ 247,345 $ 184,648

Accrued expenses and other current liabilities 545,342 387,911

Deferred merchant bookings 437,127 368,823

Convertible debt 151,931 520,344

Total current liabilities 1,381,745 1,461,726

Deferred income taxes 326,425 45,159

Other long-term liabilities 75,981 68,944

Convertible debt 1,742,047 881,996

Total liabilities 3,526,198 2,457,825

Redeemable noncontrolling interests - 160,287

Convertible debt 8,533 54,655

Stockholders' equity:

Common stock, $0.008 par value, authorized 1,000,000,000 shares, 61,265,160 and

58,055,586 shares issued, respectively 476 450

Treasury stock, 9,256,721 and 8,184,787, respectively (1,987,207) (1,060,607) Additional paid-in capital 4,592,979 2,612,197

Accumulated earnings 4,218,752 2,368,611

Accumulated other comprehensive income (loss) 84,729 (23,676) Total stockholders' equity 6,909,729 3,896,975

Total liabilities and stockholders' equity $ 10,444,460 $ 6,569,742

5 of 11

Agency revenues $ 999,687 $ 715,063 $ 4,410,689 $ 3,142,815

Merchant revenues 481,782 472,350 2,211,474 2,104,752

Advertising and other revenues 59,684 3,227 171,143 13,389

Total revenues 1,541,153 1,190,640 6,793,306 5,260,956

Cost of revenues 207,852 250,890 1,077,420 1,177,275

Gross profit 1,333,301 939,750 5,715,886 4,083,681

Operating expenses:

Advertising - Online 399,193 306,817 1,798,645 1,273,637

Advertising - Offline 27,709 5,973 127,459 35,492

Sales and marketing 58,425 49,991 235,817 195,934

Personnel, including stock-based compensation of $49,530,

$19,875, $140,526 and $71,565, respectively 212,034 122,912 698,692 466,828

General and administrative 74,799 50,403 252,994 173,171

Information technology 23,173 11,711 71,890 43,685

Depreciation and amortization 37,121 17,628 117,975 65,141

Total operating expenses 832,454 565,435 3,303,472 2,253,888

Operating income 500,847 374,315 2,412,414 1,829,793

Other income (expense):

Interest income 1,285 856 4,167 3,860

Interest expense (22,192) (16,856) (83,289) (62,064) Foreign currency transactions and other (29,753) (2,293) (36,755) (9,720) Total other income (expense) (50,660) (18,293) (115,877) (67,924)

Earnings before income taxes 450,187 356,022 2,296,537 1,761,869

Income tax expense 72,110 66,427 403,739 337,832

Net income 378,077 289,595 1,892,798 1,424,037

Less: net income attributable to noncontrolling interests - 932 135 4,471

Net income applicable to common stockholders $ 378,077 $ 288,663 $ 1,892,663 $ 1,419,566

Net income applicable to common stockholders per basic common

share $ 7.32 $ 5.79 $ 37.17 $ 28.48

Weighted average number of basic common shares outstanding 51,632 49,870 50,924 49,840

Net income applicable to common stockholders per diluted common

share $ 7.14 $ 5.63 $ 36.11 $ 27.66

Weighted average number of diluted common shares outstanding 52,938 51,241 52,413 51,326

6 of 11

OPERATING ACTIVITIES:

Net income $ 1,892,798 $ 1,424,037 $ 1,059,131
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation 48,365 32,818 20,648
Amortization 69,610 32,323 33,176

Provision for uncollectible accounts, net 16,451 16,094 9,331
Deferred income tax expense (benefit) (11,104) 19,596 44,747

Stock-based compensation and other stock based payments 142,098 72,035 66,194
Amortization of debt issuance costs 7,898 5,212 2,360

Amortization of debt discount 55,718 39,820 21,414
Loss on early extinguishment of debt 26,661 - 32

Changes in assets and liabilities:

Accounts receivable (111,572) (105,277) (125,793) Prepaid expenses and other current assets (6,909) (40,793) 12,213
Accounts payable, accrued expenses and other current liabilities 182,163 256,021 210,325

Other (10,741) 33,864 (11,966) Net cash provided by operating activities 2,301,436 1,785,750 1,341,812
INVESTING ACTIVITIES:

Purchase of investments (9,955,800) (6,352,495) (3,005,397) Proceeds from sale of investments 8,291,283 4,799,412 2,229,563

Additions to property and equipment (84,445) (55,158) (46,833) Acquisitions and other equity investments, net of cash acquired (331,918) (33,861) (68,192) Proceeds from foreign currency contracts 3,266 86,159 31,045

Payments on foreign currency contracts (81,870) (4,014) (42,032) Change in restricted cash (2,783) (2,756) (2,922) Net cash used in investing activities (2,162,267) (1,562,713) (904,768)
FINANCING ACTIVITIES:

Proceeds from the issuance of convertible senior notes 980,000 1,000,000 - Payment of debt issuance costs (1,018) (20,916) - Payments related to conversion of senior notes (414,569) (1) (213) Repurchase of common stock (883,515) (257,021) (163,171) Payments to purchase subsidiary shares from noncontrolling interests (192,530) (61,079) (12,986) Proceeds from exercise of stock options 91,607 2,683 4,302

Proceeds from the termination of conversion spread hedges 19 - - Payments of stock issuance costs (1,191) - - Excess tax benefit from stock-based compensation 17,686 5,189 21,041
Net cash (used in) provided by financing activities (403,511) 668,855 (151,027)

Effect of exchange rate changes on cash and cash equivalents 17,987 11,621 (12,148) Net (decrease) increase in cash and cash equivalents (246,355) 903,513 273,869
Cash and cash equivalents, beginning of period 1,536,349 632,836 358,967

Cash and cash equivalents, end of period $ 1,289,994 $ 1,536,349 $ 632,836

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for income taxes $ 391,169 $ 300,539 $ 232,762

Cash paid during the period for interest $ 20,954 $ 13,933 $ 7,573
Non-cash fair value increase for redeemable noncontrolling interests $ 42,522 $ 84,693 $ 91,743

Non-cash financing activity for acquisitions $ 1,546,748 $ - $ -

7 of 11

GAAP Gross profit 1,333,301 939,750 $ 5,715,886 $ 4,083,681

Non-GAAP Gross profit

GAAP Operating income 500,847 374,315 2,412,414 1,829,793

judgments, rulings and settlements (6,311) 16,126 14,239 16,126

Non-GAAP Operating income $ 566,788 $ 418,447 $2,643,233 $1,949,807

Non-GAAP Operating income as a % of Non-GAAP Gross profit 42.7% 43.8% 46.1% 47.6%

GAAP Other income (expense) $ (50,660) $ (18,293) $ (115,877) $ (67,924)

adjustments - 126 (440) (797)
Non-GAAP Other expense recorded below Operating income $ (10,155) $ (8,110) $ (35,578) $ (33,372)

8 of 11

GAAP Net income applicable to common stockholders $ 378,077 $ 288,663 $ 1,892,663 $ 1,419,566

judgments, rulings and settlements (6,311) 16,126 14,239 16,126

Adjusted EBITDA $ 578,095 $ 425,651 $ 2,681,504 $ 1,972,905

GAAP Net income applicable to common stockholders $ 378,077 $ 288,663 $ 1,892,663 $ 1,419,566

judgments, rulings and settlements (6,311) 16,126 14,239 16,126

adjustments and to exclude non-cash income taxes (13,406) 4,628 (7,222) 33,627

adjustments - 126 (440) (797)
Non-GAAP Net income applicable to common stockholders $ 471,117 $ 348,538 $ 2,196,694 $ 1,612,230

9 of 11

GAAP weighted average number of diluted common shares outstanding 52,938 51,241 52,413 51,326

Non-GAAP weighted average number of diluted common shares

outstanding 53,210 51,470 52,658 51,541
Net income applicable to common stockholders per diluted common share

GAAP $ 7.14 $ 5.63 $ 36.11 $ 27.66
Non-GAAP $ 8.85 $ 6.77 $ 41.72 $ 31.28

(including estimated interest and penalties), principally in the State of Hawaii and the District of Columbia.

Interest expense and Foreign currency transactions and other, respectively.

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.

10 of 11

Statistical Data In millions (Unaudited)

International $ 3,912 $ 5,451 $ 5,952 $ 6,473 $ 5,494 $ 7,783 $ 8,579 $ 9,179 $ 7,758
Domestic 1,044 1,260 1,377 1,359 1,090 1,370 1,538 1,586 1,379

Total $ 4,956 $ 6,712 $ 7,329 $ 7,831 $ 6,584 $ 9,153 $ 10,118 $ 10,765 $ 9,138

Agency $ 3,982 $ 5,528 $ 6,031 $ 6,423 $ 5,302 $ 7,648 $ 8,425 $ 9,023 $ 7,576
Merchant 973 1,184 1,298 1,408 1,282 1,505 1,692 1,742 1,562

Total $ 4,956 $ 6,712 $ 7,329 $ 7,831 $ 6,584 $ 9,153 $ 10,118 $ 10,765 $ 9,138

Gross Bookings Year/ Year Growth

International 65.5% 54.2% 33.1 % 29.7% 40.4% 42.8% 44.1% 41.8% 41.2%

excluding F/X

impact 67% 58% 44 % 41% 43% 43% 44% 41% 42%

Domestic 15.8% 11.7% 5.3 % 7.2% 4.4% 8.7% 11.7% 16.7% 26.5%

Agency 55.7% 46.2% 27.6 % 25.4% 33.1% 38.3% 39.7% 40.5% 42.9% Merchant 37.5% 34.0% 23.1 % 24.0% 31.8% 27.1% 30.3% 23.7% 21.8%

Total 51.8% 43.9% 26.8 % 25.2% 32.9% 36.4% 38.0% 37.5% 38.8%

excluding F/X

impact 53% 47% 35 % 34% 35% 37% 38% 36% 39%

Hotel Room-Nights and

Accommodations 33.6 45.9 50.2 55.2 46.2 63.2 69.4 74.8 63.1

Year/Year Growth 52.8% 47.0% 39.1 % 35.9% 37.6% 37.7% 38.2% 35.6% 36.5%

Rental Car Days 5.3 6.9 8.6 9.4 7.2 9.9 12.5 12.0 9.5

Year/Year Growth 34.3% 40.6% 29.4 % 34.9% 36.5% 43.3% 46.3% 27.5% 32.3%

Airline Tickets 1.4 1.6 1.7 1.7 1.4 1.7 1.7 1.8 1.8

Year/Year Growth 5.6% 4.9% (1.8)% 6.1% 1.7% 1.4% 1.8% 8.6% 28.1%

Year/Year Growth 35.5% 28.2% 20.3 % 17.4% 20.2% 25.5% 26.6% 33.0% 29.4%

Year/Year Growth 51.5% 47.0% 34.0 % 26.9% 29.7% 35.8% 37.8% 42.4% 41.9%

Amounts may not total due to rounding.

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.

11 of 11

distributed by