Jeff Boyd - Chief Executive Officer Dan Finnegan - Chief Financial Officer Matt Tynan - Senior Vice President of Finance

Aaron Kessler - Kaufman Bros. Ross Sandler - RBC Capital Markets Justin Post - Bank of America Ingrid Chung - Goldman Sachs Mark Mahaney - Citigroup Mike Olson - Piper Jaffray Imran Khan - JP Morgan Sandeep Aggarwal - Collins Stewart Michael Millman - Millman Associates Ron Josey - Barclays Capital James Cakmak - Sidoti & Co. Scott Kessler - Standard & Poor’s

Welcome to Priceline’s fourth quarter 2009 conference call. Priceline would like to remind everyone that this call may contain forward-looking statements, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance and are subject to certain 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 reflecting something other than historical fact are intended to identify forward-looking statements. For a list of factors that could cause Priceline’s actual results to differ materially from those described in the forward-looking statements. Please refer to the Safe Harbor statements at the end of Priceline’s earnings press release, as well as Priceline’s most recent filings with the Securities and Exchange Commission. Unless required by law, Priceline undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. A copy of Priceline’s earnings press release, together with an accompanying financial and statistical supplement, is available in the Investor Relations section of Priceline’s website located at www.priceline.com. Now I’d like to introduce Priceline’s speakers for this afternoon, Jeff Boyd, Dan Finnegan, and Matt Tynan. Go ahead, gentlemen.

Thank you very much, and welcome to Priceline’s fourth quarter conference call. I’m here with Priceline’s, CFO, Dan Finnegan; and Matt Tynan, Senior Vice President of Finance. I will make some opening remarks, Dan will give a detail financial review and then I will sum up. After the prepared portion we will take questions. Priceline reported consolidated gross bookings for the fourth quarter of approximately $2.3 billion, up 53% year-over-year. Pro forma net income was $102 million or $1.99 per share up $0.54 versus the prior year. Fourth quarter results surpassed First Call consensus estimates of $1.68 per share and our guidance for the quarter. Top line growth for the International businesses accelerated as we compared to weak results in last years fourth quarter due to the global recession. For the full year Priceline reported gross booking of $9.3 billion up 26% from 2008 and pro forma net income per share of $8.52 and 43% increased over 2008. Growth rates for international business increased during the quarter with 70% gross bookings growth on a local currency basis. Growth rates benefited from weak comps and stabilizing ADR trends and calculation trends. International gross bookings benefited from growth in new markets, growth in hotel supply and results from Agoda. Booking.com’s, worldwide hotel supply platform is now approximately 78,000 hotels in 76 countries. During 2009, we made substantial investments and distribution in our online channels, while maintaining reasonable efficiencies. Agoda also reported improving growth rates resulting in an improved merchant growth rates on a consolidated basis. We have also continued to work on sharing supply, customers and best practices among our brand around the world. For example, Booking.com supply has been the primary source of European hotels for Priceline.com customers for sometime and we recently began to test showing Booking.com North American hotels to Priceline.com customers as well. Priceline’s domestic gross bookings grew 21% in the fourth quarter due primarily to growth in sales of opaque and retail hotel room night reservations, retail airline tickets and vacation packages. Domestic merchant gross bookings, which include opaque services and retail merchant hotels continued to growth at attractive rate despite year-over-year declines in opaque airline tickets and rental car days tied primarily to decline in capacity. Opaque in retail hotel room night reservations growth continue to impressive rates as our hotels partners continue to use promotional pricing to drive demand in retail channels and use our opaque services to bolster occupancy. In summary, the business performed well in the fourth quarter and I comment my colleagues around the world for their focus and execution. I will now turn the call over to Dan, for the detail financial review.

Thanks, Jeff. I’ll discuss some of the highlights in operating results and cash flows for the quarter and then provide guidance for the first quarter of 2010. As we highlighted, when we announced our third quarter results, latter half of 2008 was significantly impacted by weakening global economic conditions and as a result, our comps were easier for the latter half of 2009. These easier comps helped us deliver sequential increases in our quarterly growth rates in gross booking dollars and hotel room nights for each of the second, third and fourth quarter of 2009 as compared to the prior year. The easier comp for fourth quarter 2009 resulted in strong unit growth rates, favorable FX impact and more moderated ADR decreases versus earlier periods of 2009. During our Q3 earnings call, we highlighted our assumption that the latter half of Q4 2009 would be more challenging since we have seen the market improvement in our business fundamentals during the latter half of Q4 2008, which therefore result in a tougher comp. Our performance in a latter half of 2009 exceeded our assumption particularly by outstanding performance for international business. Hotel room nights booked grew by 60% in the fourth quarter versus last year. Gross booking dollars grew by 53% for the fourth quarter, after applying the negative impact of lower average prices and the favorable impact of currency exchange rates. ADRs for our international hotel service were down by about 1% versus Q4 2008, and were down by about 7% for our domestic hotel service. Although still a headwind, the ADR trends have improved from the decreases that were posted earlier in 2009. FX rates were basically inline with the assumption used for guidance. However, when comparing our results to the prior year, FX rates provided a favorable impact for the first time since Q3 2008. The average exchange rates for the euro and the pound versus the dollar were up by 12% and 4% respectively, in fourth quarter of 2009 versus fourth quarter of 2008. In summary, room night growth and ADRs were favorable to the assumptions used for guidance, resulting in performance that exceeded the top end of our range of guidance and all key operating metrics from gross bookings to EPS. Gross profit was $313 million and grew 53% as compared to prior year. Our domestic business generated gross profit of $91 million, which represented 16% growth versus prior year. Gross profit for our international operations amounted to $222 million, and grew by 75% as compared to the prior year. Total operating expenses were favorable to guidance as expenses for personnel, G&A and sales and marketing came in below our estimates. The variances for personnel and G&A relate mainly to the timing of hiring for our international business. The variance in sales and marketing is the result of lower than assumed bad debt expense driven by continued improvement in collection results for Booking.com. On a year-over-year basis, we increased pro forma operating expenses by 32%, as we continued to invest in marketing, people and new offices to support the growth of our business. We recorded, below the line expenses in the quarter of about $2.5 million, which is inline with our guidance. In summary, pro forma EBITDA for Q4 have amounted $133 million, which exceeded our forecast of $98 million to $108 million and represents 75% growth versus prior year. In terms of cash flow, we generated approximately $146 million of cash from operations during fourth quarter of 2009, which represents an 82% increase versus prior year. We spent about $5 million on CapEx on the quarter, and repaid $75 million of convertible debt principal, bringing us to an outstanding debt balance of $196 million at year end. This leaves us at quarter end with cash and marketable securities of about $604 million in excess of our outstanding debt balance. We also have our $175 million revolving credit facility that is un-drawn and doesn’t expire until September 2012. We received conversion notices during first quarter of 2010 from an additional $98 million of principle amount of convertible debt. After processing these conversions in the first quarter of 2010, we will be left with outstanding convertible debt of about $98 million. As we’ve highlighted in the past, our fully diluted share count, particularly as it relates to equivalent shares outstanding for our convertible debt, hence the very based on our average stock price. We include equivalent shares in our fully diluted share count for the theoretical number of shares that would be issued for our outstanding convertible notes were actually converted. Since our average stock price was substantially higher in the fourth quarter of 2009 in the same period in 2008, our diluted share count is also higher in Q4, 2009 versus prior year. For first quarter 2010 guidance, we are forecasting total gross bookings to grow by 42% to 48%, with domestic gross bookings growing by approximately 10% to 15%. We expect international gross bookings expressed in US dollars to grow by 65% to 73% as compared to last year, and to grow on a local currency basis by approximately 56% to 64%. We expect our bookings growth rate versus prior year to continue to be hampered by decreases in ADRs. Our first quarter guidance is based on assumptions that the rate of decline in our ADRs will be flat to slightly improve versus the rates of decline that we saw in Q4. Our forecast assumes that exchange rates remain that the same $1.38 per euro and $1.58 per British Pound as yesterday’s closing rates. This would yield euro and pound average FX rates for the first quarter, that are up by approximately 7% and 11% respectively, as compared to the prior year. We have hedge contracts in place to substantially shield our first quarter net earnings from any deterioration in the euro or pound between now and the end of the quarter, but these hedges to not offset the impact of translation on our gross bookings, revenue and gross profit. We expect Q4 revenue to grow year-over-year by approximately 23% to 27% and gross profit dollars to grow by approximately 50%. For Q1 operating expenses, we are targeting consolidated advertising expenses of approximately $118 million to $121 million with approximately 90% of that amount being spent for online advertising. We expect sales and marketing expense of between $22 million and $25 million. We expect personal costs excluding stock based compensation to come in between $38 million to $40 million. We expect G&A expenses of approximately $16 million to $18 million. We expect information technology cost of approximately $6 million and depreciation and amortization expense, excluding acquisition amortization of approximately $4.5 million. We expect total below the line negative impacts of approximately $0.5 million, which is comprised primarily a foreign exchange hedging expense and net interest expense. Pro forma EBITDA is expected to range between $97 million and $107 million and we are targeting pro forma fully diluted EPS of approximately $1.54 to $1.64 per share, which represents 46% growth year-over-year at the midpoint. Our pro forma EPS forecast, includes an estimated cash income tax of approximately $17 million to $20 million, comprise of international income taxes and alternative minimum tax in the U.S. Our pro forma EPS guidance is based upon a pro forma diluted share count of approximately 51 million shares, which is based on the yesterday’s closing stock price of $211.21 per share. This is significantly higher than our share count of 47.2 million shares in Q1, 2009, due to year-over-year increase in our primary outstanding share count resulting mainly from shares issued due to debt conversions over the past year and also due to the impact of higher share prices on fully diluted shares related to our convertible notes. As a result of those early conversions, the difference between primary and fully diluted share count has been narrowing. Given the reduction in our outstanding convertible debt balance I just discussed, our fully diluted share count will be less impacted by changes in our stock price going forward. As for expected GAAP results, we expect to report a GAAP EPS of $1.4 to $1.14 per share. The difference between our GAAP and pro forma results is driven by pro forma adjustments to exclude stock-based compensation, acquisition related amortization, non-cash interest expense for amortization of debt discount, non-cash gains or losses related to debt conversions and certain income tax expenses, all of which are non-cash in nature to drive a pro forma earnings. We also intent to address pro forma results to exclude charges or benefits if any related to hotel occupancy tax judgments, rulings or settlements. Although, we are not providing guidance beyond Q1 2010, I would like to highlight that the strong results and sequential unit growth we have achieved for the past several quarters is to some extent driven by relatively easy comps caused by the impact of the global recession on the prior year periods. We believe that our comps become progressively more challenging throughout each quarter of 2010. We have seen deceleration in unit growth rates thus far in Q1 2010 as compared to Q4, both domestically and internationally and this deceleration is factored into the guidance we just gave. More difficult comps in tandem with the share size of the business make it highly likely that we will return to a pattern of decelerating unit growth rates. Our guidance assumes that macro economic conditions in general and conditions in the consumer travel market in particular remain relatively unchanged. I’ll now turn the call back over to Jeff for some closing comments.

Thanks, Dan. We are pleased with the performance of our global business in 2009. Despite a very difficult economic and competitive environment we were able to make significant investments in building our business, while delivering earnings growth to our shareholders. Moreover, growth rates improved during the year as we began to comp against weak year ago results. We entered 2010 with more stability in unit pricing, but with continued volatility and foreign currency exchange rates. Economic growth has returned in many regions, but unemployment remains high and ballooning government deficits threaten to destabilize currencies and rekindle inflation. We believe our growth rates in those of our industry will decelerate as the year proceeds and we began to compare against improved 2009 results particularly in the second half. Our competition will also anniversary the conversion benefit of last year’s fee cuts and the earnings benefit associated with cuts to their market spends as the year proceeds. We believe our businesses are well positioned continue building our brands and offerings and to compete effectively in our global markets. We will now take your questions.

(Operator Instructions) Your first question comes from Aaron Kessler - Kaufman Bros. Aaron Kessler - Kaufman Bros.: A couple of questions on advertising cost continued to see good leverage within online advertising segment. Are you still seeing more direct traffic on your Booking.com property as similar to Q3, and also do you continue to see a trend of maybe European hotels slightly maybe just on travel agency?

Yes, on the first question we continued to see good levels of direct traffic to all of our websites around the [world], a very important part of our task to try to build our brands and promote that direct traffic. With respect to hotels working with just one online agency, that’s something that we necessarily have promoted or seen as a trend and again I think especially when economic conditions still remain relatively weaken and occupancy rates are very much below their historical highs that hotels will tend to work with multiple distribution channels.

Your next question comes from Ross Sandler - RBC Capital Markets. Ross Sandler - RBC Capital Markets: Just two quick questions, the domestic bookings guidance assume delivered of a deceleration, more so you’ve been experiencing of late, is that just conservative or is there anything its kind of onetime-ish going on that is driving that deceleration? And then, on the marketing guidance for 1Q, it assumes a pretty large step up from the 4Q run rate. Can you help us better understand where that incremental spend is going and is that a sustainable up-ticker or is that just some front end loading of the marketing in the first half? Thanks.

From the perspective of the net domestic bookings guidance, I think that ranges is straight down the middle, it represents I think the kind of deceleration that you would expect to see given the size of the business and given the industry growth rates and at least what the one competitor who as reported as been saying. I think, that there’s now one-timer there, and I mentioned that growth rates are expected to decelerate going into the year and so to me that saw fairly consistent. With respect to the marketing spend; the step-up is essentially seasonal in nature. The business is tend to spend particularly in online channels in advance of the major booking up-ticks that you see in the spring and in the summer, so that’s really more seasonal than anything else.

On a year-over-year basis, Ross the total advertising spend is pretty much inline with prior years as a percentage of gross profit.

Your next question comes from Justin Post - Bank of America. Justin Post - Bank of America: Jeff, it looks you have a growing and accelerating need in Europe right now based on your bookings numbers. Are you thinking about any kind of investments as far as marketing or loyalty points to help kind of lock that in longer term; and then secondly, are you seeing any volatility in Southern Europe relates to some of the financial crisis issued? Tank you.

With respect to loyalty programs as I mentioned earlier, our first task is to improve our product and our offerings and our functionality on the website to encourage people to comeback and hopefully comeback to us directly. We don’t have any intention of starting a loyalty euro points program or anything of that nature in Europe, although our GoTo.com does have a loyalty program in Asia. So with respect to the recent volatility in currencies in Europe, I think that’s really more reflective of a concern as to what would happen in the future, if there was a sovereign default by Greece or disruption of that nature. It’s not something that we at least have seen reflected in the numbers we’ve seen to-date in terms of the business.

Your next question comes from Ingrid Chung - Goldman Sachs. Ingrid Chung - Goldman Sachs: Good afternoon. We believe that you’re the low cost operator in Europe. How do you think about Booking.com’s fees structure currently and have you seen any competitors pricing as aggressively to try to win share?

I think what’s happen in the last year is the hotels have gotten less focused on margin and more focused on getting people into the hotel. Going back three or four years ago, margin and distribution cost was much more of a concern for the hotels, because they had a high levels of occupancy and yields were growing up, but in the current environment that really hasn’t been front burner issue. On the other hand, we have seen at least [Expedia] buying underwriting going out with an agency model that presumably could have some distribution cost efficiencies for some hotels, so that maybe an example of trying to compete on the distribution cost side.

Your next question comes from Mark Mahaney - Citigroup. Mark Mahaney - Citigroup: Jeff, I think you referred to Agoda’s having improving growth rates and just to be specific, are you referring to Q4 year-over-year gross bookings growth rates for Agoda faster than what you’ve had in the prior quarter? Could you also just comment upon how you think of the risk related to your access to hotel inventory with the eventual resurgence in corporate travel both in U.S. and in Europe?

Mark, you’re right. That is what I said, that gross booking growth rates improved for Agoda and I was referring to sequential improvement in their growth rates. With respect to inventory concerns and we’ve all said this a number of times, I think our business hasn’t performed pretty well in times of high occupancy and increasing yields and in fact, increasing yields is a tailwind for gross bookings. Having said that, there’s no question that promotional pricing helped to spur leisure travel last year, not just for us but for others in the space, and that absence of promotional pricing could have an impact on fundamental demand.

Your next question comes from Mike Olson - Piper Jaffray. Mike Olson - Piper Jaffray: Within Agoda, can you talk about what countries you’re seeing the more strengthen? Then second, would you be willing to share your thinking on how travel meta search sites Kayak impact OTAs and does this trend change your strategy at all as far as how you’ll drive direct traffic? Thanks.

I guess with respect to Agoda, we’ve consistently seen their business do well in Asian countries outside of China and India in particular, that’s been their focus. Thailand is a big market for Agoda. With respect to meta-search, I think all we can say at this point in time is that for the hotel business, which is our principal business, meta-search is a growing, but still a very, very small player in this space. You have seen some portals like a Bing on MSN start to look at that meta-search is away to try to address specific traffic searching for hotels and airline tickets. We participate in those channels and we participate in other meta-search channels, and we’re advertises on them; and our expectation is that those channels grow in their significance that we will continue to participate. I can’t think of a reason why we should lose share to other competitors in that kind of an environment versus the environment we’re operating in today.

Your next question comes from Imran Khan - JP Morgan. Imran Khan - JP Morgan: Two questions, one on the airline ticket side, it seems like unit growth rate decelerated from 30% to 16% and since like the sequential drop was bigger than what we had last two years, trying to better understands that. And secondly, in terms of as the hotel’s occupancy increases or the corporate travel picks up. How aggressively do you think the international small hotels will compete for the Q1 pricing? How should we think about advertising cost as a percentage of your gross percentage dollar? Thank you.

Okay we are not doing a good job of one question a person, but no problem Imran. Dan, why don’t you take the first one and I’ll do the second.

So Imran, airline ticket sales have decelerated from Q3 to Q4, I think that’s reflective of pretty weak overall travel environment out there for airline tickets and then we’re probably seeing some impact also of the fee cuts by our competitors, which maybe causing our growth to decelerate, but it’s still strong performance in an overall environment, with airline ticket sales were pretty soft.

I would add in there, I also mentioned in my prepared remarks that opaque tickets were actually down year-over-year. So that obviously is a headwind in terms of overall ticket growth. With respect to international hotels getting more aggressive in competing for key words, I would expect overtime that hotels will get more involved and trying to directly market there properties over the internet. That some certainly that’s happened in the United States and I would expect that to happen elsewhere. But for small independent hotels that make up the majority of the international markets in which we do business, they just don’t have the resources and the expertise to aggressively market on a lot of different channels, very hot for them to get distribution through affiliates, it’s very hard for them to do search marketing in multiple languages. So I think there’s a very significant limit to how aggressive they can be and trying to market directly in online channels.

Your next question comes from Sandeep Aggarwal - Collins Stewart. Sandeep Aggarwal - Collins Stewart: Jeff actually two question, one is how do you comparing contras Booking.com’s results in Priceline.com maybe in terms of click through rate conversion or percentage of gross bookings in U.S. and secondly I will be curious to know about your views on private sale business, this is a new trend we are seeing in many of these private sale businesses are offering travel review services?

Well, with respect to the first question, we really don’t get into disclosing details about things like click through rates for any of our business or how one compares to the other because just too competitive sensitive. With respect to the private sale businesses, we’re certainly aware that numbers of businesses are out there now with limited time private sales. I think that those businesses are, they have good companies and they have good business, but they really in a different space than we are in and its very hart to scale a business when you’ve got a limited time sale on four or five hotels even if you sold every hotel, and each of those hotels that wouldn’t represent sizable business compared to the size of online travel agents, the size of advertising businesses you see on trip advisor and some of the other site. So I think there will be good business, but they’re probably be relatively smaller in size compared to businesses that we’re operating here.

You can probably say, Sandeep also that we somehow participate in that market through our Name Your Own Price business, so we’ve got private sales going on, may be not private but we’ve got sales going on everyday.

Your next question comes from Michael Millman - Millman Associates. Michael Millman - Millman Associates: Could you tell us, in Europe what’s your ADRs are in a same-store basis or was there changes on same-store basis? Also how the ADRs of the new hotel connections compare with the existing model that you have?

What we said for ADRs, Michael was that for Q4 we saw a decrease year-on-year of about 1%, and for our Q1, we’re projecting that rate of decline will stay flat or maybe improve slightly. We don’t give an actual ADR rate, but given the size and breath of the Booking.com business, it’s pretty represented of what you’d see out there in the hotel market for Europe.

Your next question comes from Ron Josey - Barclays Capital. Ron Josey - Barclays Capital: Another questions similar on ADRs, but on 1Q guidance I believe the underwriting assumption is some stability in ADRs for continued improvement, but still year-over-year decreases with 1Q to be flat that slightly improved sequentially? So I guess my question is, what do you believe will be needed for ADRs to term positive in 2010 given these improving trends in international ADRs just mentioned, the decrease just 1% domestic improved sequentially, but still down 7%?

Well, I guess to get back into the black, we’re pretty close on the international business down 1% and projecting flat to slight improvement. On the domestic side, we probably go to need to see a rebound in corporate travel, just demand in general to help drive those ADRs positive.

Your next question comes from James Cakmak - Sidoti & Co. James Cakmak - Sidoti & Co.: You mentioned you were seeing some deceleration in unit growth rates in the first quarter. Is that something that’s been steady rate-of-decline in the quarter, or has it been slightly accelerating throughout first quarter?

I don’t think we want to get into a new lost description of how the rate of deceleration intra-quarter is occurring.

Your next question comes from Scott Kessler - Standard & Poor’s. Scott Kessler - Standard & Poor’s: I will just ask one question. I’m wondering in light of what I would characterize is somewhat limited to stock purchase activity over the last couple of years, $17 million in ‘09 and $4.5 million in the prior year. I’m wondering how you’re thinking about your excess cash position at this point, if buyback should be something that you’re going to be more involved in, or maybe you could just give us a general sense of how you’re thinking about cash in general?

Our outlook and approach on that has been fairly consistent in the sense that we remain potential purchasers of our stock. We’ve been opportunistic about it in the past and we have repurchased stock in size when we did our last couple of conversion and you’re right, that was a while ago, but that remains an alternative for using our cash balances. We also have been active over the years in the M&A market and continue to evaluate those opportunities and that’s another potential use of cash.

Lastly, we’ve used cash over the last year and we’re using some in this year to repay our debt.

Your final question comes from Justin Post - Bank of America. Justin Post - Bank of America: Just wondering about your taxes, it looks like your deficit is now down to $450 million range. What could that happen if you use that your deficits, what could that change your tax rate? Any long term changes there? Thank you.

Justin, I guess by deficit you mean our NOL? Justin Post - Bank of America: Yes, it looks like you cumulative deficit on the balance sheet or your NOL either…?

Deferred tax asset

While the cumulative deficit on the balance sheet is retained earnings, but our asset that we’ve classified on the balance sheet or our NOL, represents the amount that we’ve given recognition. There’s another amount that we have not yet booked, we wouldn’t booking until if and when we’re using, but the amount that we have out there is still pretty sizeable. It’s a $1.4 billion, total NOL that we have available for us. So that’s going to continue to shield our income here in the U.S. from having tax liability for the foreseeable future.

Thank you and gentlemen are there any closing remarks.

No. Thank you all for participating in the call.

This does conclude Priceline.com fourth quarter 2009 conference call. At this time you may disconnect. Thank you for your participation.