Priceline 2010 Annual Report Download - page 123
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49
x Agency revenues are derived from travel related transactions where we are not the merchant of record
and where the prices of our services are determined by third parties. Agency revenues include travel
commissions, customer processing fees and GDS reservation booking fees related to certain of the
agency services listed above and are reported at the net amounts received, without any associated cost
of revenue.
x Other revenues are derived primarily from advertising on our websites.
Year Ended
December 31,
($000)
2010 2009 Change
Merchant Revenues ..................
.
$ 1,691,640 $ 1,447,576 16.9 %
Agency Revenues ......................
.
1,380,603 868,395 59.0 %
Other Revenues ........................
.
12,662 22,241 (43.1)%
Total Revenues .........................
.
$ 3,084,905 $ 2,338,212 31.9 %
Merchant Revenues
Merchant revenues for the year ended December 31, 2010 increased 16.9% compared to the same period in
2009, primarily due to an increase in the sale of Agoda and priceline.com merchant price-disclosed hotel room night
reservations, Name Your Own Price® hotel room night reservations and the inclusion of TravelJigsaw since its
acquisition in May 2010.
Agency Revenues
Agency revenues for the year ended December 31, 2010 increased 59.0% compared to the same period in
2009, primarily as a result of growth in the business of Booking.com. our U.S. agency hotel room reservations
benefited from the integration of U.S. hotels from the Booking.com extranet into the priceline.com website.
Other Revenues
Other revenues during the year ended December 31, 2010 consisted primarily of advertising. Other
revenues for the year ended December 31, 2010 decreased 43.1% compared to the same period in 2009, primarily as
a result of the termination of a relationship with a post-transaction online advertising partner in September 2009.
Cost of Revenues and Gross Profit
Year Ended
December 31,
($000)
2010 2009 Change
Cost of Revenues ..........................
.
$1,175,934 $1,077,449 9.1%
% of Merchant Revenues ........
.
69.5% 74.4%
Cost of Revenues
For the year ended December 31, 2010, cost of revenues consisted primarily of charges from suppliers for:
(1) the cost of Name Your Own Price® hotel room reservations, net of applicable taxes, (2) the cost of Name Your
Own Price® rental cars, net of applicable taxes; and (3) the cost of Name Your Own Price® airline tickets, net of the
federal air transportation tax, segment fees and passenger facility charges imposed in connection with the sale of
airline tickets. Cost of revenues for the year ended December 31, 2010 increased by 9.1%, compared to the same
period in 2009, primarily due to the increase in merchant revenue discussed above. Merchant price-disclosed hotel
revenues in the U.S. and for Agoda and merchant semi-opaque rental car reservations for TravelJigsaw are recorded
in merchant revenues net of the amounts paid to suppliers and therefore, there is no associated cost of revenues for