[November 06, 2008]

Priceline.com Reports Financial Results For 3rd Quarter 2008

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 -- adverse changes in general market conditions for leisure and
 other travel services as a result of, among other things,
 decreased consumer spending, general economic downturn,
 terrorist attacks, natural disasters or adverse weather, the
 bankruptcy or insolvency of a major airline, or the outbreak of
 an epidemic or pandemic disease;
 -- adverse changes in the Company's relationships with airlines and
 other product and service providers and vendors which could
 include, without limitation, the withdrawal of suppliers from
 the priceline.com system (either priceline.com's "retail" or
 "opaque" services, or both) and/or the loss or reduction of
 global distribution fees;
 -- fluctuations in foreign exchange rates;
 -- the effects of increased competition;
 -- a change by a major search engine to its search engine
 algorithms that negatively affects the search engine ranking of
 the company or its 3rd party distribution partners;
 -- our ability to expand successfully in international markets;
 -- the ability to attract and retain qualified personnel;
 -- difficulties integrating recent or future acquisitions, such as
 the 4th quarter 2007 acquisition of Agoda, including ensuring
 the effectiveness of the design and operation of internal
 controls and disclosure controls of acquired businesses;
 -- the occurrence of an external or internal security breach of our
 systems or other Internet based systems involving personal
 customer information, credit card information or other
 sensitive data;
 -- systems-related failures and/or security breaches, including
 without limitation, "denial-of-service" type attacks on our
 system, any security breach that results in the theft, transfer
 or unauthorized disclosure of customer information, or the
 failure to comply with various state laws applicable to the
 company's obligations in the event of such a breach; and
 -- legal and regulatory risks;

 priceline.com Incorporated
 CONSOLIDATED BALANCE SHEETS
 (unaudited)
 (In thousands, except share and per share data)
 September
 30, December 31,
ASSETS 2008 2007
 ----------- ------------
Current assets:
 Cash and cash equivalents $ 413,386 $ 385,359
 Restricted cash 2,835 1,350
 Short-term investments 38,850 122,499
 Accounts receivable, net of allowance for
 doubtful accounts of $4,411 and $2,309,
 respectively 138,875 70,712
 Prepaid expenses and other current assets 45,226 33,080
 ----------- ------------
 Total current assets 639,172 613,000
Long-term investments 14,304 2,451
Property and equipment, net 28,450 27,088
Intangible assets, net 213,392 182,748
Goodwill 353,407 287,159
Deferred taxes 189,471 218,519
Other assets 17,917 19,891
 ----------- ------------
 Total assets $1,456,113 $ 1,350,856
 =========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable $ 65,802 $ 47,708
 Accrued expenses and other current
 liabilities 92,694 59,589
 Deferred merchant bookings 30,454 17,750
 Convertible debt 467,519 569,796
 ----------- ------------
 Total current liabilities 656,469 694,843
Deferred taxes 54,358 46,502
Other long-term liabilities 16,866 13,368
 ----------- ------------
 Total liabilities 727,693 754,713
 ----------- ------------
Commitments and Contingencies
Minority interest - 17,036
 ----------- ------------
Stockholders' equity:
 Common stock, $0.008 par value, authorized
 1,000,000,000 shares, 47,007,186, and
 45,117,685 shares issued, respectively 362 346
 Treasury stock, 6,682,847 and 6,646,408
 shares, respectively (493,442) (489,106)
 Additional paid-in capital 2,164,029 2,124,029
 Accumulated deficit (946,288) (1,106,506)
 Accumulated other comprehensive income 3,759 50,344
 ----------- ------------
 Total stockholders' equity 728,420 579,107
 ----------- ------------
 Total liabilities and stockholders' equity $1,456,113 $ 1,350,856
 =========== ============

 priceline.com Incorporated
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited)
 (In thousands, except per share data)
 Three Months Ended Nine Months Ended
 September 30, September 30,
 ------------------- -----------------------
 2008 2007 2008 2007
 --------- --------- ----------- -----------
Merchant revenues,
including $395 and
$18,592 excise tax refund
in the three and nine
months ended September
30, 2007 $323,957 $275,211 $ 949,345 $ 776,131
Agency revenues 232,638 139,623 515,819 292,478
Other revenues 5,014 2,453 13,600 5,947
 --------- --------- ----------- -----------
 Total revenues 561,609 417,287 1,478,764 1,074,556
Cost of revenues (1) 245,531 214,956 727,858 595,297
 --------- --------- ----------- -----------
Gross profit 316,078 202,331 750,906 479,259
 --------- --------- ----------- -----------
Operating expenses:
 Advertising - Offline 8,293 8,413 30,252 29,028
 Advertising - Online 84,291 53,844 214,952 129,241
 Sales and marketing 21,452 13,093 57,715 36,027
 Personnel, including
 stock-based
 compensation of
 $10,055, $4,127,
 $29,070, $10,759,
 respectively 45,259 27,182 121,787 72,108
 General and
 administrative,
 including net cost of
 litigation settlement
 of $126 and $55,365 for
 the three and nine
 months ended September
 30, 2007, respectively 13,524 9,241 39,519 82,893
 Information technology 4,402 3,343 13,688 9,406
 Depreciation and
 amortization 10,935 9,131 32,352 26,633
 --------- --------- ----------- -----------
 Total operating expenses 188,156 124,247 510,265 385,336
 --------- --------- ----------- -----------
Operating income 127,922 78,084 240,641 93,923
 --------- --------- ----------- -----------
Other income (expense):
 Interest income,
 including $77 and
 $3,346 of interest on
 excise tax refund for
 the three and nine
 months ended September
 30, 2007 3,061 6,063 10,138 20,377
 Interest expense (1,763) (2,607) (6,787) (7,560)
 Other 3,500 (1,316) (1,552) (1,862)
 --------- --------- ----------- -----------
 Total other income
 (expense) 4,798 2,140 1,799 10,955
 --------- --------- ----------- -----------
Earnings before income
taxes, equity in loss of
investees and minority
interests 132,720 80,224 242,440 104,878
Income tax benefit
(expense) (42,852) 26,657 (78,581) 23,287
Equity in loss of
investees and minority
interests (1,900) (2,516) (3,641) (3,945)
 --------- --------- ----------- -----------
Net income 87,968 104,365 160,218 124,220
Preferred stock dividend - - - (1,555)
 --------- --------- ----------- -----------
Net income applicable to
common stockholders $ 87,968 $104,365 $ 160,218 $ 122,665
 ========= ========= =========== ===========
Net income applicable to
common stockholders per
basic common share $ 2.22 $ 2.76 $ 4.12 $ 3.27
 ========= ========= =========== ===========
Weighted average number of
basic common shares
outstanding 39,715 37,803 38,905 37,533
 ========= ========= =========== ===========
Net income applicable to
common stockholders per
diluted common share $ 1.81 $ 2.27 $ 3.25 $ 2.79
 ========= ========= =========== ===========
Weighted average number of
diluted common shares
outstanding 48,656 45,924 49,344 43,924
 ========= ========= =========== ===========
--------------------------
(1) Cost of revenues entirely reflect Name Your Own Price(R)
transactions whose revenues are recorded "gross" with a corresponding
cost of revenue while retail transactions are recorded "net" with no
corresponding cost of revenues.

 priceline.com Incorporated
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited)
 (In thousands)
 Nine Months Ended
 September 30,
OPERATING ACTIVITIES: 2008 2007
 ---------- ----------
Net income $ 160,218 $ 124,220
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 10,799 8,260
Amortization 21,825 18,373
Provision for uncollectible accounts, net 5,351 2,138
Deferred income taxes 22,469 (49,883)
Stock-based compensation expense 29,070 10,759
Amortization of debt issuance costs 2,323 2,356
Equity in loss of investees, net and minority
 interests 3,641 3,945
Loss on impairment of investment 843 -
Changes in assets and liabilities:
 Accounts receivable (80,960) (53,568)
 Prepaid expenses and other current assets (2,662) (4,950)
 Accounts payable, accrued expenses and other
 current liabilities 58,518 26,501
 Other 3,765 1,183
 ---------- ----------
Net cash provided by operating activities 235,200 89,334
 ---------- ----------
INVESTING ACTIVITIES:
Purchase of investments (115,005) (118,255)
Maturity of investments 185,226 35,202
Purchase of shares held by minority interests (153,564) (15,013)
Acquisitions and other equity investments, net
 of cash acquired (593) -
Additions to property and equipment (12,885) (11,012)
Change in restricted cash (1,500) (228)
 ---------- ----------
Net cash used in investing activities (98,321) (109,306)
 ---------- ----------
FINANCING ACTIVITIES:
Repurchase of common stock (4,336) (2,223)
Proceeds from exercise of stock options 4,475 16,197
Payments related to conversion of senior notes (102,409) -
Payment of debt issuance costs - (1,309)
Excess tax benefit on stock-based compensation 6,541 1,434
 ---------- ----------
Net cash (used in) provided by financing
 activities (95,729) 14,099
 ---------- ----------
Effect of exchange rate changes on cash and cash
equivalents (13,123) 5,804
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 28,027 (69)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 385,359 423,577
 ---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 413,386 $ 423,508
 ========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for income taxes $ 46,280 $ 22,111
 ========== ==========
Cash paid during the period for interest $ 6,325 $ 5,847
 ========== ==========

 priceline.com Incorporated
 RECONCILIATION OF GAAP TO PRO FORMA FINANCIAL INFORMATION
 (unaudited)
 (In thousands, except per share data)
RECONCILIATION OF GAAP TO Three Months Ended Nine Months Ended
PRO FORMA REVENUES September 30 September 30
 ------------------- -----------------------
 2008 2007 2008 2007
 --------- --------- ----------- -----------
 GAAP Revenues $561,609 $417,287 $1,478,764 $1,074,556
(a) Airline excise tax
 refund - (395) - (18,592)
 --------- --------- ----------- -----------
 Pro Forma Revenues $561,609 $416,892 $1,478,764 $1,055,964
 ========= ========= =========== ===========
RECONCILIATION OF GAAP TO Three Months Ended Nine Months Ended
PRO FORMA GROSS PROFIT September 30 September 30
 ------------------- -----------------------
 2008 2007 2008 2007
 --------- --------- ----------- -----------
 GAAP Gross profit $316,078 $202,331 $ 750,906 $ 479,259
(a) Airline excise tax
 refund - (395) - (18,592)
(b) Amortization of
 acquired intangible
 assets in Cost of
 revenues - - 272 -
 --------- --------- ----------- -----------
 Pro Forma Gross profit $316,078 $201,936 $ 751,178 $ 460,667
 ========= ========= =========== ===========
RECONCILIATION OF GAAP Three Months Ended Nine Months Ended
OPERATING INCOME September 30 September 30
 ------------------- -----------------------
TO PRO FORMA EBITDA 2008 2007 2008 2007
 --------- --------- ----------- -----------
 GAAP Operating income $127,922 $ 78,084 $ 240,641 $ 93,923
(a) Airline excise tax
 refund - (395) - (18,592)
(c) Stock-based
 compensation 10,055 4,127 29,070 10,759
(d) Securities litigation
 settlement, net of
 insurance
 contribution - 126 - 55,365
(d) Stock-based
 compensation payroll
 taxes 36 228 709 760
(k) Amortization of
 acquired intangible
 assets in Cost of
 revenues - - 272 -
(k) Depreciation and
 amortization 10,935 9,131 32,352 26,633
(l) Foreign currency
 transactions and
 other 3,500 (1,316) (1,552) (1,862)
 --------- --------- ----------- -----------
 Pro Forma EBITDA $152,448 $ 89,985 $ 301,492 $ 166,986
 ========= ========= =========== ===========
RECONCILIATION OF GAAP TO Three Months Ended Nine Months Ended
PRO FORMA NET INCOME September 30 September 30
 ------------------- -----------------------
 2008 2007 2008 2007
 --------- --------- ----------- -----------
 GAAP Net income $ 87,968 $104,365 $ 160,218 $ 122,665
(a) Airline excise tax
 refund - (395) - (18,592)
(b) Amortization of
 acquired intangible
 assets in Cost of
 revenues - - 272 -
(b) Amortization of
 acquired intangible
 assets in
 Depreciation and
 amortization 7,352 6,117 21,553 18,324
(c) Stock-based
 compensation 10,055 4,127 29,070 10,759
(d) Securities litigation
 settlement, net of
 insurance
 contribution - 126 - 55,365
(d) Stock-based
 compensation payroll
 taxes 36 228 709 760
(e) Accrued interest
 income on excise tax
 refund - (77) - (3,346)
(f) Adjustments for the
 tax impact of certain
 of the pro forma
 adjustments and
 to exclude non-
 cash income taxes 11,620 (42,746) 21,469 (50,449)
(g) Impact on minority
 interests of other
 pro forma adjustments (243) (204) (818) (774)
(h) Preferred stock
 dividend - - - 1,555
 --------- --------- ----------- -----------
 Pro Forma Net income $116,788 $ 71,541 $ 232,473 $ 136,267
 ========= ========= =========== ===========
 Three Months Ended Nine Months Ended
 September 30 September 30
 ------------------- -----------------------
RECONCILIATION OF GAAP TO
PRO FORMA NET INCOME PER
DILUTED COMMON SHARE 2008 2007 2008 2007
 --------- --------- ----------- -----------
 GAAP Weighted average
 number of diluted
 common shares
 outstanding 48,656 45,924 49,344 43,924
(i) Adjustment for
 Conversion Spread
 Hedges (884) (1,140) (767) (1,406)
(j) Adjustment for
 warrants and
 restricted stock 1,091 584 1,002 580
 --------- --------- ----------- -----------
 Pro Forma Weighted
 average number of
 diluted common shares
 outstanding 48,863 45,368 49,579 43,098
 ========= ========= =========== ===========
 Net income applicable
 to common
 stockholders per
 diluted common share
 GAAP $ 1.81 $ 2.27 $ 3.25 $ 2.79
 ========= ========= =========== ===========
 Pro Forma $ 2.39 $ 1.58 $ 4.69 $ 3.16
 ========= ========= =========== ===========
(a) Airline excise tax refund is recorded in Merchant revenue.
(b) Amortization of acquired intangible assets is recorded in Cost of
 revenues and Depreciation and amortization.
(c) Stock-based compensation is recorded in Personnel expense.
(d) Securities litigation settlement and stock-based compensation
 payroll taxes are recorded in General and administrative expense.
(e) Accrued interest income on airline excise tax refund is recorded
 in Interest income.
(f) Adjustments for the tax impact of certain of the pro forma
 adjustments and to exclude non-cash income taxes are recorded in
 Income tax expense.
(g) Impact on minority interests of other pro forma adjustments are
 recorded in Equity in income (loss) of investees and minority
 interests.
(h) Preferred stock dividend is recorded in the respective expense
 line item.
(i) Reflects the impact of the Conversion Spread Hedges that increase
 the effective conversion price of the currently outstanding
 Convertible Senior Notes due September 30, 2011 and the
 Convertible Senior Notes due September 30, 2013 from their stated
 $40.38 conversion price to an effective conversion price of
 $50.47 per share. Under GAAP, the anti-dilutive impact of the
 Conversion Spread Hedges is not reflected on the outstanding
 diluted share count until the end of the hedge when shares are
 delivered.
(j) All common stock warrants and shares of restricted common stock,
 restricted stock units and performance share units are included
 in the calculation of pro forma net income per share because pro
 forma net income has been adjusted to exclude our preferred stock
 dividend and stock-based compensation expense.
(k) Depreciation and amortization are excluded from Operating income
 to calculate EBITDA.
(l) Foreign currency transactions and other are added to Operating
 income to calculate EBITDA.

priceline.com Incorporated
---------------------------------------------------------
-------------
Statistical Data
In thousands
(Unaudited)
 Gross Bookings 2Q06 3Q06 4Q06
 ------------------------------ ---------- ---------- ----------
 Domestic $570,757 $504,752 $423,275
 International** 356,593 398,416 319,136
 ---------- ---------- ----------
 Total $927,350 $903,168 $742,410
 Agency $609,284 $600,406 $491,070
 Merchant** 318,066 302,762 251,340
 ---------- ---------- ----------
 Total $927,350 $903,168 $742,410
 Year/Year Growth
 ------------------------------
 Domestic 16.0% 13.1% 11.9%
 International 360.0% 141.7% 101.4%
 excluding F/X impact 361.5% 131.8% 86.3%
 Agency 128.7% 74.9% 51.6%
 Merchant 5.0% 13.0% 18.1%
 Total 62.8% 47.8% 38.3%
 Units Sold 2Q06 3Q06 4Q06
 ------------------------------ ---------- ---------- ----------
 Airline Tickets 821 666 588
 Year/Year Growth 4.1% -2.0% 0.9%
 Hotel Room-Nights 4,995 5,238 4,265
 Year/Year Growth 82.5% 49.7% 43.7%
 Rental Car Days 2,000 2,044 1,789
 Year/Year Growth 30.3% 20.8% 36.1%
 2Q06 3Q06 4Q06
 ---------- ---------- ----------
 Revenue $307,651 $313,467 $260,071
 Year/Year Growth 15.4% 21.1% 27.5%
 Gross Profit $105,804 $123,547 $ 99,517
 Year/Year Growth 62.2% 54.4% 53.3%
 Gross Bookings 1Q07 2Q07 3Q07 4Q07
 ---------------------- --------- ----------- ----------- -----------
 Domestic $478,812 $ 547,787 $ 602,205 $ 525,571
 International** 519,679 687,124 788,478 679,760
 --------- ----------- ----------- -----------
 Total $998,491 $1,234,911 $1,390,683 $1,205,331
 Agency $710,528 $ 919,260 $1,042,619 $ 912,698
 Merchant** 287,963 315,651 348,064 292,633
 --------- ----------- ----------- -----------
 Total $998,491 $1,234,911 $1,390,683 $1,205,331
 Year/Year Growth
 ----------------------
 Domestic 1.0% -4.0% 19.3% 24.2%
 International 90.5% 92.7% 97.9% 113.0%
 excluding F/X impact 74.5% 79.6% 83.4% 89.9%
 Agency 47.9% 50.9% 73.7% 85.9%
 Merchant 8.1% -0.8% 15.0% 16.4%
 Total 33.7% 33.2% 54.0% 62.4%
 Units Sold 1Q07 2Q07 3Q07 4Q07
 ---------------------- --------- ----------- ----------- -----------
 Airline Tickets 639 687 819 790
 Year/Year Growth -12.2% -16.3% 23.0% 34.4%
 Hotel Room-Nights 5,955 7,242 7,964 6,616
 Year/Year Growth 43.4% 45.0% 52.0% 55.1%
 Rental Car Days 2,003 2,278 2,338 2,002
 Year/Year Growth 23.6% 13.9% 14.4% 11.9%
 1Q07 2Q07 3Q07 4Q07
 --------- ----------- ----------- -----------
 Revenue $301,389 $ 355,880 $ 417,287 $ 334,853
 Year/Year Growth 24.6% 15.7% 33.1% 28.8%
 Gross Profit $119,717 $ 157,211 $ 202,331 $ 160,152
 Year/Year Growth 65.7% 48.6% 63.8% 60.9%
 Gross Bookings 1Q08 2Q08 3Q08
 -------------------------------- ----------- ----------- -----------
 Domestic $ 720,968 $ 872,284 $ 799,578
 International** 1,037,644 1,237,681 1,250,850
 ----------- ----------- -----------
 Total $1,758,612 $2,109,965 $2,050,427
 Agency $1,370,119 $1,656,775 $1,603,693
 Merchant** 388,493 453,190 446,734
 ----------- ----------- -----------
 Total $1,758,612 $2,109,965 $2,050,427
 Year/Year Growth
 --------------------------------
 Domestic 50.6% 59.2% 32.8%
 International 99.7% 80.1% 58.6%
 excluding F/X impact 75.0% 55.8% 44.7%
 Agency 92.8% 80.2% 53.8%
 Merchant 34.9% 43.6% 28.3%
 Total 76.1% 70.9% 47.4%
 Units Sold 1Q08 2Q08 3Q08
 -------------------------------- ----------- ----------- -----------
 Airline Tickets 1,169 1,362 1,186
 Year/Year Growth 83.0% 98.2% 44.8%
 Hotel Room-Nights 9,375 10,879 11,434
 Year/Year Growth 57.4% 50.2% 43.6%
 Rental Car Days 2,612 2,815 2,333
 Year/Year Growth 30.4% 23.6% -0.2%
 1Q08 2Q08 3Q08
 ----------- ----------- -----------
 Revenue $ 403,180 $ 513,976 $ 561,609
 Year/Year Growth 33.8% 44.4% 34.6%
 Gross Profit $ 181,103 $ 253,725 $ 316,078
 Year/Year Growth 51.3% 61.4% 56.2%
Gross Bookings represent the total dollar value of travel booked,
inclusive of taxes and fees.
** Includes $32.4 million, $24.2 million, $24.6 million and $13.4
million of Agoda gross bookings in 3Q08, 2Q08, 1Q08 and 4Q07,
respectively since acquisition on November 6, 2007.

priceline.com Incorporated
---------------------------------------------------------
-------------
Estimated Impact of Share Price Movements on Weighted Average GAAP and
Pro Forma Diluted Shares Outstanding
In millions
(Unaudited)
The following table is intended to demonstrate the estimated potential
impact of share price movements on the number of equivalent shares
included in the fully diluted share count used to calculate diluted
earnings per share. Actual results are likely to differ due to the
impact of option exercises, equity repurchases, issuances and
forfeitures of restricted stock, restricted stock units and
performance share units, any conversions of our convertible notes and
the elimination of the anti-dilutive impact of our conversion spread
hedges associated with the convertible notes converted prior to
maturity. The table below is for illustrative purposes only; the
Company is unable to predict its future stock price and the Company's
stock could trade below or above the per share prices in the table
below.
 Estimated Weighted Average Number of Diluted
 Shares Outstanding
 ----------------------------------------------
 GAAP Adjustments(1) Pro Forma
 -------------- ---------------- --------------
 4Q08 2008 2009 4Q08 2008 2009 4Q08 2008 2009
 ---- ---- ---- ----- ---- ----- ---- ---- ----
Closing Share
Price
Assumption(2) $30.00 42.4 48.2 42.1 0.9 0.2 1.1 43.4 48.5 43.2
 $35.00 43.1 48.3 42.2 0.4 0.3 1.1 43.6 48.5 43.3
 $40.00 43.8 48.3 42.4 (0.1) 0.3 1.1 43.7 48.6 43.5
 $45.00 44.3 48.3 43.5 (0.5) 0.3 0.3 43.8 48.6 43.8
 $50.00 44.8 48.4 44.4 (0.4) 0.3 (0.3) 44.3 48.7 44.1
 $55.00 45.2 48.4 45.2 (0.4) 0.3 (0.2) 44.8 48.7 44.9
 $60.00 45.6 48.4 45.8 (0.3) 0.3 (0.1) 45.3 48.7 45.7
 $65.00 45.9 48.5 46.4 (0.2) 0.3 (0.0) 45.7 48.8 46.3
 $70.00 46.3 48.5 46.8 (0.2) 0.3 0.0 46.1 48.8 46.9
 $75.00 46.6 48.5 47.2 (0.1) 0.3 0.1 46.4 48.9 47.4
 $80.00 46.8 48.6 47.6 (0.1) 0.3 0.2 46.8 48.9 47.8
 $85.00 47.1 48.6 47.9 (0.0) 0.3 0.2 47.1 48.9 48.1
 $90.00 47.3 48.6 48.2 0.0 0.3 0.3 47.3 49.0 48.5
 $95.00 47.5 48.7 48.5 0.1 0.3 0.3 47.6 49.0 48.8
 $100.00 47.7 48.7 48.7 0.1 0.3 0.4 47.8 49.0 49.0
 $105.00 47.9 48.7 48.9 0.1 0.3 0.4 48.0 49.1 49.3
 $110.00 48.0 48.8 49.1 0.2 0.3 0.4 48.2 49.1 49.5
 $115.00 48.2 48.8 49.3 0.2 0.4 0.5 48.4 49.1 49.7
 $120.00 48.4 48.8 49.4 0.2 0.4 0.5 48.6 49.2 49.9
 $125.00 48.5 48.8 49.6 0.3 0.4 0.5 48.7 49.2 50.1
 $130.00 48.6 48.9 49.7 0.3 0.4 0.5 48.9 49.2 50.2
(1)Reflects the anti-dilutive impact of the "Conversion Spread
 Hedges" associated with convertible notes that remain
 outstanding to maturity and the dilutive impact of additional
 warrants and shares of unvested restricted stock and
 restricted stock units because pro forma net income has been
 adjusted to exclude preferred stock dividend and stock-based
 compensation.
(2)Estimated weighted average number of diluted shares outstanding is
 estimated as follows: 4Q08: Uses actual daily share prices from
 October 1, 2008 through November 5, 2008, and the closing share
 price assumption from November 6, 2008 through December 31, 2008.
 2008: Uses actual daily share prices from January 1, 2008 through
 November 5, 2008, and the closing share price assumption from
 November 6, 2008 through December 31, 2008. 2009: Uses the closing
 share price assumption from January 1, 2009 through December 31,
 2009.

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