reported its financial results for the 3rd quarter 2005. Gross travel bookings for the quarter were $611.1 million, a 40.4% increase over the same period a year ago. Gross travel bookings refer to the total dollar value, inclusive of all taxes and fees, of all travel services purchased by consumers. Revenues in the 3rd quarter were $258.8 million, compared to $235.9 million a year ago, a 9.7% increase. Third quarter 2005 results include the operating results of the recent acquisitions of Active Hotels and Bookings, B.V.'s GAAP gross profit for the 3rd quarter 2005 was $80.0 million, up 56.5% over the same period in the previous year. Gross profit increased more significantly than revenue due primarily to the continued growth of's published-price travel services. GAAP net income for the 3rd quarter 2005 was $170.6 million, or $3.71 per diluted share, compared to $9.3 million, or $0.23 per diluted share a year ago. GAAP net income for the 3rd quarter 2005 includes a $160 million net non-cash tax benefit from reversing a portion of's deferred tax asset valuation allowance, partly offset by recording a non-cash U.S. income tax provision.

Pro forma gross profit for the 3rd quarter 2005 was $80.9 million, a 56.5% increase over the same period a year ago. Pro forma net income for the 3rd quarter 2005 was $19.3 million, or $0.47 per diluted share, compared to $11.3 million, or $0.28 per diluted share a year ago. The First Call average analyst estimate for the 3rd quarter 2005 was $0.37 per diluted share. The section below entitled "Non-GAAP Financial Measures" provides a definition and information about the use of pro forma financial information used in this press release and the attached financial and statistical supplement reconciles pro forma financial information with's financial results under GAAP.

The non-cash tax benefit was recorded pursuant to the provisions of Statement of Financial Accounting Standards No. 109, that require a company to release a portion of its deferred tax asset valuation allowance when it achieves a pattern of profitability in recent years and the likelihood of achieving future sustained profitability suggests that it is more likely than not that it will realize all or some portion of its net operating loss carryforward. While does not expect to pay cash taxes on its U.S. federal taxable income for the foreseeable future, as a result of the reversal, began to record, in the 3rd quarter 2005, a mostly non-cash provision for U.S. income tax expense in its consolidated financial statements. makes cash tax payments for U.S. alternative minimum taxes and for certain international taxes. also said today that its Board of Directors authorized the company to repurchase up to $50 million worth of common stock. Since 2002, has repurchased approximately $24 million of its common stock. The pricing, timing, initiation and completion of the repurchases, if any, will be at the discretion of the company's management. said it experienced a strong 3rd quarter. " had solid results domestically in the 3rd quarter and our European operations are experiencing high growth rates in traffic and bookings, particularly in Continental Europe, where online growth trends are generally strong," said President and Chief Executive Officer Jeffery H. Boyd. "Priceline Europe recorded gross bookings of $165 million in the 3rd quarter, which represents an organic growth rate of 75.5% compared to the same quarter in the prior year (which assumes ownership of Active Hotels and Bookings, BV during the entire period). With a combined base of more than 18,000 properties, we believe that Priceline Europe, with its combination of Active Hotels and Bookings, BV, is one of the largest and fastest-growing online hotel reservation services in Europe."

Mr. Boyd continued, "In addition, benefited during the quarter from continued business and service diversification. All of our core travel services now give customers published-price and opaque purchase options, which significantly broadens our target market. With this service line-up, can now build distribution in new channels, including content-driven search and affiliate channels and branded affiliate channels. During the quarter, launched a new white-label booking engine, called FlexRez(sm), which allows affiliates to sell hotel rooms and other travel services using their own brand identity and Web presence."

Forward Guidance

Looking forward, Mr. Boyd said, "During the 4th quarter 2005, we intend to continue to invest in building distribution and service improvements in the U.S., and in building supply and distribution in Europe. With the solid 3rd quarter results announced today and the business strength underlying those results, our full-year 2005 results are on track to exceed First Call average analyst estimates for the full year." issued the following guidance for 4th quarter and full-year 2005:

-- Year-over-year increases in gross travel bookings of approximately 25%;

-- Year-over-year increase in revenue of approximately 5%;

-- Year-over-year increase in pro forma gross profit of approximately 25%; and

-- Pro forma net income of between $0.24 to $0.28 per diluted share.

For the full-year 2005, said it expects pro forma net income to be in the range of $1.33 to $1.37 per diluted share.