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1
Special Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K and the documents incorporated herein by reference contain forward-looking
statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks,
uncertainties and assumptions that are difficult to predict, including the Risk Factors identified in Item 1A of this Annual
Report; therefore, actual results may differ materially from those expressed, implied or forecast in any such forward-looking
statements.
Expressions of future goals, expectations and similar expressions including, without limitation, "may," "will,"
"should," "could," "expects," "does not currently expect," "plans," "anticipates," "intends," "believes," "estimates," "predicts,"
"potential," "targets," or "continue," reflecting something other than historical fact are intended to identify forward-looking
statements. Our actual results could differ materially from those described in the forward-looking statements for various
reasons including the risks we face which are more fully described in Item 1A, "Risk Factors." Unless required by law, we
undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future
events or otherwise. However, readers should carefully review the reports and documents we file or furnish from time to time
with the Securities and Exchange Commission (the "SEC" or the "Commission"), particularly our quarterly reports on Form 10-
Q and current reports on Form 8-K.
PART I
Item 1. Business
General
Priceline.com Incorporated is a leading online travel company that offers our customers hotel room reservations at
over 210,000 hotels worldwide through the Booking.com, priceline.com and Agoda brands. In the United States, we also offer
our customers reservations for car rentals, airline tickets, vacation packages, destination services and cruises through the
priceline.com brand. We offer car rental reservations worldwide through rentalcars.com (formerly known as TravelJigsaw),
which we acquired in May 2010. We refer to Booking.com, priceline.com, Agoda and rentalcars.com collectively as the
"Priceline Group," the "Company," "we," "our" or "us."
We launched our business in the United States in 1998 under the priceline.com brand and have since expanded our
operations to include the Booking.com, Agoda and rentalcars.com companies. Our principal goal is to serve our customers
with worldwide leadership in online hotel and rental car reservations. Our business is driven primarily by international results.
During the year ended December 31, 2011, our international business (the significant majority of which is generated by
Booking.com) represented approximately 78% of our gross bookings (an operating and statistical metric referring to the total
dollar value, generally inclusive of all taxes and fees, of all travel services purchased by our customers), and approximately
88% of our consolidated operating income. Given that the business of our international operations is primarily comprised of
hotel reservation services, gross profit earned in connection with the reservation of hotel room nights represents a substantial
majority of our gross profit.
Our priceline.com brand in the U.S. offers merchant Name Your Own Price® travel services (sometimes referred to as
"opaque" travel services), which are recorded in revenue on a "gross" basis and have associated cost of revenue. Retail, or
price-disclosed, travel services offered by both our U.S. and international brands are recorded in revenue on a "net" basis and
have no associated cost of revenue. Therefore, revenue increases and decreases are impacted by changes in the mix of our
revenues between Name Your Own Price® and retail travel services. Gross profit reflects the net margin earned for both our
Name Your Own Price® and retail travel services. Consequently, gross profit has become an increasingly important measure of
evaluating growth in our business. At present, we derive substantially all of our gross profit from the following sources:
• Commissions earned from price-disclosed hotel room reservations, rental cars, cruises and other travel services;
• Transaction gross profit and customer processing fees from our price-disclosed merchant hotel room and rental
car reservation services;
• Transaction gross profit and customer processing fees from our Name Your Own Price® hotel room reservations,
rental car and airline ticket services, as well as our vacation packages service;
• Global distribution system ("GDS") reservation booking fees related to both our Name Your Own Price® airline
ticket, hotel room reservation and rental car services, and price-disclosed airline tickets and rental car services;
and