Delaware | 1-36691 | 06-1528493 | ||
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
800 Connecticut Avenue, Norwalk, Connecticut | 06854 | |
(Address of principal office) | (zip code) |
Exhibit Number | Description |
Press release (which includes a financial and statistical supplement and related information) issued by Booking Holdings on November 5, 2018 relating to, among other things, its third quarter 2018 earnings. The unaudited consolidated balance sheet at September 30, 2018 and unaudited consolidated statement of operations for the three and nine months ended September 30, 2018 and unaudited consolidated statement of cash flows for the nine months ended September 30, 2018 shall be treated as "filed" for purposes of the Securities and Exchange Act of 1934, as amended, and the remaining information shall be treated as "furnished." |
BOOKING HOLDINGS INC. | |||
By: | /s/ Peter J. Millones | ||
Name: | Peter J. Millones | ||
Title: | Executive Vice President and General Counsel |
Exhibit Number | Description |
Press release (which includes a financial and statistical supplement and related information) issued by Booking Holdings Inc. on November 5, 2018 relating to, among other things, its third quarter 2018 earnings. |
Guidance Ranges | ||||||||
(U.S. Dollars in millions, except per share amounts) | Low | High | ||||||
Metrics | ||||||||
Year over year growth - Room nights booked | 9 | % | 12 | % | ||||
Year over year growth - Total gross travel bookings | 6 | % | 9 | % | ||||
Year over year growth - Total gross travel bookings (constant currency) | 10 | % | 13 | % | ||||
GAAP | ||||||||
Year over year growth - Revenue (1) | 13 | % | 16 | % | ||||
Year over year growth - Revenue (constant currency) (1) | 17 | % | 20 | % | ||||
Net income (2)(4) | $ | 840 | $ | 865 | ||||
Net income per diluted share (3)(4) | $ | 18.05 | $ | 18.55 | ||||
Non-GAAP | ||||||||
Non-GAAP Net income (2) | $ | 880 | $ | 905 | ||||
Non-GAAP Net income per diluted share(3) | $ | 18.90 | $ | 19.40 | ||||
Adjusted EBITDA | $ | 1,190 | $ | 1,220 | ||||
(1) Growth rates compare the 4th quarter of 2018 forecasted revenue under the Current Revenue Standard to the 4th quarter of 2017 gross profit as reported under the Previous Revenue Standard. | ||||||||
(2) Assumes an estimated effective tax rate for the 4th quarter of 2018 of approximately 20%. | ||||||||
(3) Assumes a fully diluted share count of approximately 46.8 million shares. | ||||||||
(4) Guidance for the 4th quarter of 2018 for GAAP net income and net income per diluted share exclude the impact of unrealized gains and losses on marketable equity securities which are not predictable. |
• | excludes the impact, if any, of significant charges or benefits associated with judgments, rulings, settlements and/or certain adjustments related to prior periods arising from travel transaction tax (e.g., hotel occupancy taxes, excise taxes, sales taxes, etc.) proceedings or other litigation or obligations, such as the unfavorable net travel transaction charge of $22 million recorded in General and administrative expense and Interest income in the 3rd quarter of 2018, |
• | excludes the impact of significant loyalty program adjustments, such as the favorable $27 million adjustment to total revenues in the 1st quarter of 2018 related to changes introduced in the first quarter of 2018 to OpenTable’s loyalty program, |
• | excludes amortization expense of intangible assets, |
• | excludes the impact, if any, of significant charges related to the impairment of goodwill or intangible assets, |
• | excludes non-cash interest expense related to the amortization of debt discount and gains or losses on |
• | excludes the impact, if any, of significant gains or losses on the sale of cost-method investments and |
• | excludes, if any, unrealized gains and losses on marketable equity securities, that are recognized in |
• | the income tax impact of the non-GAAP adjustments mentioned above. |
Booking Holdings Inc. UNAUDITED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) | ||||||||
September 30, 2018 | December 31, 2017 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 2,973,096 | $ | 2,541,604 | ||||
Short-term investments in marketable securities | 4,158,076 | 4,859,873 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $55,683 and $39,282, respectively | 1,719,059 | 1,217,801 | ||||||
Prepaid expenses and other current assets | 617,616 | 415,527 | ||||||
Total current assets | 9,467,847 | 9,034,805 | ||||||
Property and equipment, net | 642,861 | 480,081 | ||||||
Intangible assets, net | 2,117,275 | 2,176,823 | ||||||
Goodwill | 2,845,129 | 2,737,671 | ||||||
Long-term investments | 9,114,218 | 10,872,527 | ||||||
Other assets | 183,146 | 149,356 | ||||||
Total assets | $ | 24,370,476 | $ | 25,451,263 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,174,599 | $ | 667,523 | ||||
Accrued expenses and other current liabilities | 1,654,370 | 1,138,980 | ||||||
Deferred merchant bookings | 1,101,255 | 980,455 | ||||||
Convertible debt | — | 710,910 | ||||||
Total current liabilities | 3,930,224 | 3,497,868 | ||||||
Deferred income taxes | 491,160 | 481,139 | ||||||
Long-term U.S. transition tax liability | 1,144,682 | 1,250,846 | ||||||
Other long-term liabilities | 148,699 | 148,061 | ||||||
Long-term debt | 8,703,901 | 8,809,788 | ||||||
Total liabilities | 14,418,666 | 14,187,702 | ||||||
Commitments and Contingencies | ||||||||
Convertible debt | — | 2,963 | ||||||
Stockholders' equity: | ||||||||
Common stock, $0.008 par value; authorized 1,000,000,000 shares, 62,938,503 and 62,689,097 shares issued, respectively | 489 | 487 | ||||||
Treasury stock, 16,311,836 and 14,216,819 shares, respectively | (12,879,305 | ) | (8,698,829 | ) | ||||
Additional paid-in capital | 5,343,776 | 5,783,089 | ||||||
Retained earnings | 17,720,656 | 13,938,869 | ||||||
Accumulated other comprehensive income (loss) | (233,806 | ) | 236,982 | |||||
Total stockholders' equity | 9,951,810 | 11,260,598 | ||||||
Total liabilities and stockholders' equity | $ | 24,370,476 | $ | 25,451,263 |
Booking Holdings Inc. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Agency revenues | $ | 3,540,874 | $ | 3,523,706 | $ | 8,220,506 | $ | 7,641,390 | ||||||||
Merchant revenues | 1,049,661 | 684,289 | 2,285,992 | 1,624,467 | ||||||||||||
Advertising and other revenues | 258,555 | 226,034 | 807,887 | 612,132 | ||||||||||||
Total revenues | 4,849,090 | 4,434,029 | 11,314,385 | 9,877,989 | ||||||||||||
Cost of revenues | 54,181 | 202,007 | ||||||||||||||
Gross profit | 4,379,848 | 9,675,982 | ||||||||||||||
Operating expenses: | ||||||||||||||||
Performance marketing | 1,314,055 | 1,231,074 | 3,562,155 | 3,364,589 | ||||||||||||
Brand marketing | 160,126 | 125,877 | 385,262 | 337,016 | ||||||||||||
Sales and other expenses | 242,974 | 151,024 | 612,367 | 382,538 | ||||||||||||
Personnel, including stock-based compensation of $70,090, $66,421, $216,035 and $192,248, respectively | 536,735 | 483,438 | 1,557,872 | 1,220,176 | ||||||||||||
General and administrative | 183,228 | 142,823 | 504,120 | 422,252 | ||||||||||||
Information technology | 57,742 | 47,901 | 177,133 | 132,677 | ||||||||||||
Depreciation and amortization | 107,641 | 95,910 | 317,397 | 265,212 | ||||||||||||
Total operating expenses | 2,602,501 | 2,278,047 | 7,116,306 | 6,124,460 | ||||||||||||
Operating income | 2,246,589 | 2,101,801 | 4,198,079 | 3,551,522 | ||||||||||||
Other (expense) income: | ||||||||||||||||
Interest income | 48,641 | 41,483 | 141,210 | 110,296 | ||||||||||||
Interest expense | (68,170 | ) | (66,338 | ) | (203,242 | ) | (182,997 | ) | ||||||||
Net unrealized gains on marketable equity securities | 30,858 | — | 107,221 | — | ||||||||||||
Foreign currency transactions and other | (17,072 | ) | (10,101 | ) | (40,174 | ) | (21,249 | ) | ||||||||
Total other (expense) income | (5,743 | ) | (34,956 | ) | 5,015 | (93,950 | ) | |||||||||
Earnings before income taxes | 2,240,846 | 2,066,845 | 4,203,094 | 3,457,572 | ||||||||||||
Income tax expense | 473,268 | 346,454 | 850,934 | 561,349 | ||||||||||||
Net income | $ | 1,767,578 | $ | 1,720,391 | $ | 3,352,160 | $ | 2,896,223 | ||||||||
Net income applicable to common stockholders per basic common share | $ | 37.39 | $ | 35.12 | $ | 70.00 | $ | 58.99 | ||||||||
Weighted-average number of basic common shares outstanding | 47,268 | 48,981 | 47,887 | 49,100 | ||||||||||||
Net income applicable to common stockholders per diluted common share | $ | 37.02 | $ | 34.43 | $ | 69.07 | $ | 57.85 | ||||||||
Weighted-average number of diluted common shares outstanding | 47,751 | 49,972 | 48,530 | 50,064 |
Booking Holdings Inc. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | ||||||||
Nine Months Ended September 30, | ||||||||
2018 | 2017 | |||||||
OPERATING ACTIVITIES: | ||||||||
Net income | $ | 3,352,160 | $ | 2,896,223 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 182,052 | 135,736 | ||||||
Amortization | 135,345 | 129,476 | ||||||
Provision for uncollectible accounts | 108,081 | 42,575 | ||||||
Deferred income tax benefit | (25,955 | ) | (25,655 | ) | ||||
Net unrealized gains on marketable equity securities | (107,221 | ) | — | |||||
Stock-based compensation expense and other stock-based payments | 225,883 | 192,548 | ||||||
Amortization of debt issuance costs | 5,477 | 6,827 | ||||||
Amortization of debt discount | 39,699 | 52,909 | ||||||
Loss on early extinguishment of debt | — | 1,093 | ||||||
Contingent consideration fair value adjustment | 7,933 | — | ||||||
Changes in assets and liabilities, net of effects of an acquisition: | ||||||||
Accounts receivable | (450,071 | ) | (479,184 | ) | ||||
Prepaid expenses and other current assets | (200,665 | ) | (136,304 | ) | ||||
Accounts payable, accrued expenses and other current liabilities | 1,004,748 | 640,960 | ||||||
Other long-term assets and liabilities | (23,278 | ) | 31,221 | |||||
Net cash provided by operating activities | 4,254,188 | 3,488,425 | ||||||
INVESTING ACTIVITIES: | ||||||||
Purchase of investments | (2,194,796 | ) | (5,338,444 | ) | ||||
Proceeds from sale of investments | 4,495,994 | 2,471,883 | ||||||
Additions to property and equipment | (356,011 | ) | (223,692 | ) | ||||
Acquisitions and other investments, net of cash acquired | (139,386 | ) | (552,805 | ) | ||||
Net cash provided by (used in) investing activities | 1,805,801 | (3,643,058 | ) | |||||
FINANCING ACTIVITIES: | ||||||||
Proceeds from short-term borrowing | 3,912 | — | ||||||
Proceeds from the issuance of long-term debt | — | 2,044,952 | ||||||
Payments for conversion of senior notes | (1,487,187 | ) | (89,575 | ) | ||||
Payment of debt | (348 | ) | (15,118 | ) | ||||
Payments for repurchase of common stock | (4,110,304 | ) | (1,123,102 | ) | ||||
Proceeds from exercise of stock options | 1,629 | 4,303 | ||||||
Net cash (used in) provided by financing activities | (5,592,298 | ) | 821,460 | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents | (36,560 | ) | 99,037 | |||||
Net increase in cash, cash equivalents and restricted cash and cash equivalents | 431,131 | 765,864 | ||||||
Cash, cash equivalents and restricted cash and cash equivalents, beginning of period | 2,563,341 | 2,082,007 | ||||||
Cash, cash equivalents and restricted cash and cash equivalents, end of period | $ | 2,994,472 | $ | 2,847,871 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
Cash paid during the period for income taxes | $ | 1,044,312 | $ | 601,248 | ||||
Cash paid during the period for interest | $ | 155,056 | $ | 110,745 | ||||
Non-cash financing activity for loan forgiveness | $ | — | $ | 1,000 | ||||
Non-cash operating and financing activity for an acquisition | $ | 50,751 | $ | — | ||||
Non-cash investing and financing activity for an acquisition | $ | 59,690 | $ | — |
RECONCILIATION OF TOTAL REVENUES / GROSS PROFIT TO NON-GAAP TOTAL REVENUES / GROSS PROFIT | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Total Revenues/Gross profit | $ | 4,849,090 | $ | 4,379,848 | $ | 11,314,385 | $ | 9,675,982 | |||||||||
(a) | Adjustment to loyalty program liability | — | — | (27,064 | ) | — | |||||||||||
Non-GAAP Total Revenues/Gross profit | $ | 4,849,090 | $ | 4,379,848 | $ | 11,287,321 | $ | 9,675,982 |
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Net income | $ | 1,767,578 | $ | 1,720,391 | $ | 3,352,160 | $ | 2,896,223 | |||||||||
(a) | Adjustment to loyalty program liability | — | — | (27,064 | ) | — | |||||||||||
(b) | Net travel transaction tax charge | 23,117 | — | 23,117 | — | ||||||||||||
(c) | Depreciation and amortization | 107,641 | 95,910 | 317,397 | 265,212 | ||||||||||||
(c) | Interest income | (48,641 | ) | (41,483 | ) | (141,210 | ) | (110,296 | ) | ||||||||
(c) | Interest expense | 68,170 | 66,338 | 203,242 | 182,997 | ||||||||||||
(f) | Loss on early extinguishment of debt | — | 66 | — | 1,093 | ||||||||||||
(d) | Unrealized gains on marketable equity securities | (30,858 | ) | — | (107,221 | ) | — | ||||||||||
(c) | Income tax expense | 473,268 | 346,454 | 850,934 | 561,349 | ||||||||||||
Adjusted EBITDA | $ | 2,360,275 | $ | 2,187,676 | $ | 4,471,355 | $ | 3,796,578 | |||||||||
Adjusted EBITDA as a % of Non-GAAP Total Revenues/Gross Profit | 48.7 | % | 49.9 | % | 39.6 | % | 39.2 | % |
RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME AND NON-GAAP NET INCOME PER DILUTED COMMON SHARE | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Net income | $ | 1,767,578 | $ | 1,720,391 | $ | 3,352,160 | $ | 2,896,223 | |||||||||
(a) | Adjustment to loyalty program liability | — | — | (27,064 | ) | — | |||||||||||
(b) | Net travel transaction tax charge | 23,117 | — | 23,117 | — | ||||||||||||
(d) | Net unrealized gains on marketable equity securities | (30,858 | ) | — | (107,221 | ) | — | ||||||||||
(e) | Amortization of intangible assets | 43,016 | 45,297 | 135,345 | 129,476 | ||||||||||||
(f) | Debt discount amortization related to convertible debt | 10,982 | 16,228 | 35,651 | 49,246 | ||||||||||||
(b) | Interest income | (1,538 | ) | — | (1,538 | ) | — | ||||||||||
(f) | Loss on early extinguishment of debt | — | 66 | — | 1,093 | ||||||||||||
(g) | Tax impact of Non-GAAP adjustments | (8,084 | ) | (21,724 | ) | (12,447 | ) | (63,787 | ) | ||||||||
Non-GAAP Net income | $ | 1,804,213 | $ | 1,760,258 | $ | 3,398,003 | $ | 3,012,251 | |||||||||
GAAP weighted-average number of diluted common shares outstanding | 47,751 | 49,972 | 48,530 | 50,064 | |||||||||||||
Non-GAAP Net income per diluted common share | $ | 37.78 | $ | 35.22 | $ | 70.02 | $ | 60.17 |
RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | Nine Months Ended September 30, | ||||||||
2018 | 2017 | ||||||||
Net cash provided by operating activities | $ | 4,254,188 | $ | 3,488,425 | |||||
(h) | Additions to property and equipment | (356,011 | ) | (223,692 | ) | ||||
Free cash flow | $ | 3,898,177 | $ | 3,264,733 | |||||
Free cash flow as a % of Non-GAAP Total Revenues/Gross Profit | 34.5 | % | 33.7 | % |
Notes: | |
(a) | Favorable adjustment to OpenTable's loyalty program liability related to changes introduced in the 1st quarter of 2018 to the program. |
(b) | Adjustments for travel transaction taxes (including estimated interest and penalties) of approximately $29 million related to prior periods, partly offset by a reversal of previously accrued travel transaction taxes of $6.1 million related to a favorable ruling in California. Interest income of approximately $1.5 million was recorded related to the favorable ruling in California and is excluded from Adjusted EBITDA and Non-GAAP Net Income. |
(c) | Amounts are excluded from Net income to calculate Adjusted EBITDA. |
(d) | Net unrealized gains related to the change in fair value of our investments in Ctrip and Meituan equity securities. |
(e) | Amortization of intangible assets is recorded in Depreciation and amortization expense. |
(f) | Non-cash interest expense related to the amortization of debt discount and loss on early extinguishment of debt are recorded in Interest expense and Foreign currency transactions and other, respectively. Loss on early extinguishment of debt is excluded from Net Income to calculate Non-GAAP Net Income and Adjusted EBITDA. |
(g) | Reflects the tax impact of Non-GAAP adjustments. |
(h) | Additions to property and equipment are included in the calculation of Free cash flow. |
For a more detailed discussion of the adjustments described above, please see the section in our press release entitled "Non-GAAP Financial Measures" which provides a definition and information about the use of non-GAAP financial measures. |
Gross Bookings(2) | 3Q16 | 4Q16 | 1Q17 | 2Q17 | 3Q17 | 4Q17 | 1Q18 | 2Q18 | 3Q18 | |||||||||||||||||||||||||||
Agency | $ | 15,757 | $ | 12,978 | $ | 18,140 | $ | 17,947 | $ | 18,594 | $ | 15,015 | $ | 20,576 | $ | 19,090 | $ | 19,024 | ||||||||||||||||||
Merchant | 2,703 | 2,134 | 2,546 | 2,850 | 3,168 | 2,965 | 4,434 | 4,807 | 5,250 | |||||||||||||||||||||||||||
Total | $ | 18,460 | $ | 15,112 | $ | 20,687 | $ | 20,797 | $ | 21,762 | $ | 17,980 | $ | 25,009 | $ | 23,896 | $ | 24,274 | ||||||||||||||||||
Year/Year Growth | ||||||||||||||||||||||||||||||||||||
Agency | 22.6 | % | 25.5 | % | 24.8 | % | 16.8 | % | 18.0 | % | 15.7 | % | 13.4 | % | 6.4 | % | 2.3 | % | ||||||||||||||||||
Merchant | 40.2 | % | 27.8 | % | 20.2 | % | 14.3 | % | 17.2 | % | 39.0 | % | 74.1 | % | 68.6 | % | 65.7 | % | ||||||||||||||||||
Total | 24.9 | % | 25.8 | % | 24.2 | % | 16.4 | % | 17.9 | % | 19.0 | % | 20.9 | % | 14.9 | % | 11.5 | % | ||||||||||||||||||
Constant Currency | 26 | % | 28 | % | 27 | % | 19 | % | 16 | % | 14 | % | 12 | % | 11 | % | 14 | % | ||||||||||||||||||
Units Sold | 3Q16 | 4Q16 | 1Q17 | 2Q17 | 3Q17 | 4Q17 | 1Q18 | 2Q18 | 3Q18 | |||||||||||||||||||||||||||
Room Nights | 149.6 | 129.7 | 173.9 | 170.2 | 177.5 | 151.5 | 196.8 | 190.5 | 201.3 | |||||||||||||||||||||||||||
Year/Year Growth | 29.4 | % | 31.0 | % | 27.4 | % | 21.0 | % | 18.6 | % | 16.8 | % | 13.2 | % | 12.0 | % | 13.4 | % | ||||||||||||||||||
Rental Car Days | 18.0 | 14.0 | 18.6 | 20.7 | 19.0 | 14.7 | 18.7 | 20.9 | 19.0 | |||||||||||||||||||||||||||
Year/Year Growth | 12.5 | % | 14.4 | % | 15.4 | % | 11.7 | % | 5.5 | % | 5.4 | % | 0.6 | % | 1.0 | % | (0.1 | )% | ||||||||||||||||||
Airline Tickets | 1.9 | 1.6 | 1.8 | 1.8 | 1.7 | 1.6 | 1.8 | 1.9 | 1.8 | |||||||||||||||||||||||||||
Year/Year Growth | (2.5 | )% | (4.3 | )% | (2.1 | )% | (8.7 | )% | (11.8 | )% | 3.1 | % | 1.9 | % | 5.3 | % | 9.2 | % | ||||||||||||||||||
3Q16 | 4Q16 | 1Q17 | 2Q17 | 3Q17 | 4Q17 | 1Q18 | 2Q18 | 3Q18 | ||||||||||||||||||||||||||||
Gross Profit/Total Revenues (2018) (3)(4) | $ | 3,589 | $ | 2,281 | $ | 2,339 | $ | 2,957 | $ | 4,380 | $ | 2,763 | $ | 2,928 | $ | 3,537 | $ | 4,849 | ||||||||||||||||||
Year/Year Growth (4) | 22.1 | % | 21.1 | % | 15.5 | % | 21.5 | % | 22.0 | % | 21.1 | % | 25.2 | % | 19.6 | % | 10.7 | % | ||||||||||||||||||
Constant Currency( 4) | 23 | % | 24 | % | 17 | % | 24 | % | 19 | % | 17 | % | 18 | % | 16 | % | 13 | % |
[9T'?!55]L>Q8^^ZNJZNKO[%WA;+LFM;K&OO%7M;I:J 4D101!%81$"*
M("+2D6;H+83>0DN $!+22._)2^7\YW=G[F3>O'GOW7EYC^CS?#^?\X&B10NO/I=>>JEQQ)>[[KK+JZTT/!B%&PC