1. 1 Valuation of Priceline.com Professor Joshua Livnat, Ph.D., CPA 311 Tisch Hall New York University 40 W. 4th St. NY NY 10012 Tel. (212) 998-0022 Fax (212) 995-4230 jlivnat@stern.nyu.edu Web page: www.stern.nyu.edu/~jlivnat

2. 2 Financial Data

3. 3 Income Statement Ratios

4. 4 Visitors

5. 5 Gross Margin (Revenues - CGS)

6. 6 Regression of Gross Margin on Visitors

7. 7

8. 8 Regression of Sell&Mrktg on Visitors

9. 9

10. 10 Regression of General&Admin. on Visitors

11. 11

12. 12 Regression of R&D on Visitors

13. 13 Volume Analysis Assumptions: 1.Selling & marketing expenses flat after $40MM. 2.G&A expenses flat after $12 MM.

14. 14 Forecasted Cash Flows

15. 15 Valuation

16. 16

17. 17 Summary A unique concept in the Internet space. Ideal for perishable goods. Narrow market segment, but not an insignificant one. Has potential if it can control costs better.