Reports 3rd Quarter 2002 Results

6th Nov 2002

(R) today reported a 3rd quarter 2002 loss of $24.3
million, or $0.11 per share, which includes non-cash charges of $24.2
million relating to impairment of the Company`s investments in
offshore licensees.

On a pro forma basis, the Company reported net income of $400,000
($0.00 per share) on revenues of $240 million. The Company`s pro forma
EPS results were in line with guidance provided in July.

  By comparison, in the 3rd quarter 2001 had a GAAP
net loss of $3.6 million, or $0.02 per share, on revenue of $302
million, and pro forma EPS of $0.03. For the nine months ended
September 30, 2002, had a GAAP net loss of $0.06 per
share and pro forma EPS of $0.05, compared to a GAAP net loss of $0.07
per share and pro forma EPS of $0.06 for the first nine months of

ADVERTISEMENT reported pro forma EBITDA for the 3rd quarter 2002
of $4.5 million, compared to $8.4 million in the 3rd quarter 2001. Pro
forma net income and pro forma EBITDA are stated before restructuring,
special and severance charges, impairment of investments in offshore
licensees, stock-based compensation, option payroll tax and preferred
stock dividend. (The attached financial and statistical supplement
reconciles pro forma financial information with the Company`s
financial results under GAAP). EBITDA is defined as earnings before
interest, taxes, depreciation and amortization.

Gross profit for the 3rd quarter 2002 was $37.7 million, compared
to $50.4 million in the 3rd quarter 2001. ended the
quarter with $152.5 million in cash and short-term investments.
Quarter-over-quarter cash reductions resulted primarily from the
repurchase of 5.4 million shares of common stock in the
quarter and changes in working capital associated with reduced sales
of airline tickets. has no outstanding debt.

“The 3rd quarter 2002 was another strong quarter for`s hotel service,” said President and
Co-CEO Jeffery H. Boyd

.`s hotel booked offers grew 37
percent year over year, with sales of more than 1 million room nights.`s customer base grew to 15.4 million and repeat business
for the quarter came in at a record 67.4 percent. (Repeat business is
defined as the number of total unique purchase offers coming from
repeat customers divided by the number of total unique purchase
offers).`s 3rd quarter 2002 results reflect continued
difficult conditions in the airline industry, which has been affected
by heavy discounting of retail fares and weak results in September
attributable, in part, to lower levels of travel around the
anniversary of September 11th. “Amid increasing evidence that the
growth of published discounting on the Internet is doing more harm (by
reducing yields) than good (in the form of lower distribution costs),
we continue to believe that our Name Your Own Price(SM) model provides
the best non-dilutive model for airlines to move unsold inventory and
increase load factors and revenues,” said Mr. Boyd. “However, given
the protracted nature of the airline industry`s difficulties, we will
continue to focus our resources on our hotel and vacation package
businesses and min€diouedetl seavlae o
Icouniowi tt cu pceneomaiiTilpecepeti eens bo@h resiong i n-tvebufees@nd r uconn`adcount and other expenses.`s car service will continue to provide new- and used-car
buying knformation and guaranteed quote requdsts through Autoby|el and
nther marketing partners.`s telecommunication3 service
wkll continue to offer long distance calling plans, but will no longer
sell Name Your Own price calling minutes. PricelineMortgage`s current
product lineup will continue to be offered on the Company`s Web site.

  “These steps are designed to reduce our operating expenses and
allow for a greater focus of our resources on our key travel
businesses,” said Mr. Boyd. As part of this business re-focusing, said it will reduce its workforce by approximately 65

Related stories on ITN:

(29/10/2002) Hotel Service Expands To Asia

(21/10/2002) Priceline Launches New Last-Minute Travel Service

(18/10/2002) Priceline Launch New Asia Region Travel Service



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