bkng-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-36691

Booking Holdings Inc.

(Exact name of registrant as specified in its charter)


Delaware			06-1528493
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

800 Connecticut Avenue

Norwalk, Connecticut 06854

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (203) 299-8000

Former name, former address and former fiscal year, if changed, since last report: N/A

_____________________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class:

Trading Symbol(s)

Name of each exchange on which registered:

Common Stock par value $0.008 per share

BKNG

The NASDAQ Global Select Market

0.800% Senior Notes Due 2022

BKNG 22A

The NASDAQ Stock Market LLC

2.150% Senior Notes Due 2022

BKNG 22

The NASDAQ Stock Market LLC

2.375% Senior Notes Due 2024

BKNG 24

The NASDAQ Stock Market LLC

0.100% Senior Notes Due 2025

BKNG 25

The NASDAQ Stock Market LLC

1.800% Senior Notes Due 2027

BKNG 27

The NASDAQ Stock Market LLC

0.500% Senior Notes Due 2028

BKNG 28

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of Common Stock outstanding at July 28, 2021:


Common Stock, par value $0.008 per share						41,059,841
(Class)						(Number of Shares)

Booking Holdings Inc.

Form 10-Q

For the Three Months Ended June 30, 2021


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements			3

Consolidated Balance Sheets at June 30, 2021 (Unaudited) and December 31, 2020			3
Consolidated Statements of Operations (Unaudited) For the Three and Six Months Ended June 30, 2021 and 2020			4
Consolidated Statements of Comprehensive (Loss) Income (Unaudited) For the Three and Six Months Ended June 30, 2021 and 2020			5
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) For the Three and Six Months Ended June 30, 2021 and 2020			6
Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended June 30, 2021 and 2020			8
Notes to Unaudited Consolidated Financial Statements			9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			39

Item 3. Quantitative and Qualitative Disclosures About Market Risk			62

Item 4. Controls and Procedures			63

PART II - OTHER INFORMATION

Item 1. Legal Proceedings			64

Item 1A. Risk Factors			64

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			94

Item 6. Exhibits			95

SIGNATURES			96

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Booking Holdings Inc.

CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share data)


	June 30, 2021		December 31, 2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	11,231	$	10,562
Short-term investments (Available-for-sale debt securities: Amortized cost of $500 at June 30, 2021 and December 31, 2020)	501		501
Accounts receivable, net (Allowance for expected credit losses of $92 and $166, respectively)	1,290		529
Prepaid expenses, net (Allowance for expected credit losses of $30 and $22, respectively)	332		337
Other current assets	435		277
Total current assets	13,789		12,206
Property and equipment, net	748		756
Operating lease assets	457		529
Intangible assets, net	1,725		1,812
Goodwill	1,886		1,895
Long-term investments (Includes available-for-sale debt securities: Amortized cost of $225 at June 30, 2021 and December 31, 2020)	4,319		3,759
Other assets, net (Allowance for expected credit losses of $24 and $33, respectively)	957		917
Total assets	$	23,881	$	21,874
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,028	$	735
Accrued expenses and other current liabilities	1,620		1,382
Deferred merchant bookings	1,896		323
Short-term debt	2,180		985
Total current liabilities	6,724		3,425
Deferred income taxes	1,107		1,127
Operating lease liabilities	314		366
Long-term U.S. transition tax liability	824		923
Other long-term liabilities	122		111
Long-term debt	9,986		11,029
Total liabilities	19,077		16,981
Commitments and contingencies (see Note 13)
Convertible debt	5		—
Stockholders' equity:
Common stock, $0.008 par value, Authorized shares: 1,000,000,000 Issued shares: 63,574,902 and 63,406,451, respectively	—		—
Treasury stock, 22,515,119 and 22,446,897 shares, respectively	(24,283)		(24,128)
Additional paid-in capital	6,059		5,851
Retained earnings	23,066		23,288
Accumulated other comprehensive loss	(43)		(118)
Total stockholders' equity	4,799		4,893
Total liabilities and stockholders' equity	$	23,881	$	21,874

See Notes to Unaudited Consolidated Financial Statements.

Booking Holdings Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Agency revenues	$	1,328	$	357	$	2,045	$	1,781
Merchant revenues	661		245		1,034		904
Advertising and other revenues	171		28		222		233
Total revenues	2,160		630		3,301		2,918
Operating expenses:
Marketing expenses	988		211		1,449		1,062
Sales and other expenses	206		131		318		508
Personnel, including stock-based compensation of $90, $77, $199 and $83, respectively	686		452		1,238		936
General and administrative	134		104		253		305
Information technology	93		70		180		148
Depreciation and amortization	108		112		221		229
Restructuring and other exit costs	1		34		9		34
Impairment of goodwill	—		—		—		489
Total operating expenses	2,216		1,114		3,668		3,711
Operating loss	(56)		(484)		(367)		(793)


Interest expense	(81)		(96)		(179)		(160)
Other income (expense), net	96		789		227		440



(Loss) income before income taxes	(41)		209		(319)		(513)
Income tax expense (benefit)	126		87		(97)		64
Net (loss) income	$	(167)	$	122	$	(222)	$	(577)
Net (loss) income applicable to common stockholders per basic common share	$	(4.08)	$	2.98	$	(5.42)	$	(14.07)
Weighted-average number of basic common shares outstanding (in 000's)	41,054		40,922		41,014		41,007
Net (loss) income applicable to common stockholders per diluted common share	$	(4.08)	$	2.97	$	(5.42)	$	(14.07)
Weighted-average number of diluted common shares outstanding (in 000's)	41,054		40,995		41,014		41,007

See Notes to Unaudited Consolidated Financial Statements.

Booking Holdings Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net (loss) income	$	(167)	$	122	$	(222)	$	(577)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	8		32		(22)		(45)
Losses on cash flow hedges	11		—		—		—
Net unrealized gains on available-for-sale securities	98		77		97		3
Total other comprehensive income (loss), net of tax	117		109		75		(42)
Comprehensive (loss) income	$	(50)	$	231	$	(147)	$	(619)

See Notes to Unaudited Consolidated Financial Statements.

Booking Holdings Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 and 2020

(In millions, except share data)


	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
	Shares (in 000's)	Amount		Shares (in 000's)	Amount
Balance, March 31, 2021	63,562	$	—	(22,511)	$	(24,274)	$	5,965	$	23,233	$	(160)	$	4,764

Net loss	—	—		—	—		—		(167)		—		(167)
Foreign currency translation adjustments, net of tax	—	—		—	—		—		—		8		8
Losses on cash flow hedges, net of tax	—	—		—	—		—		—		11		11
Net unrealized gains on available-for-sale securities, net of tax	—	—		—	—		—		—		98		98


Exercise of stock options and vesting of restricted stock units and performance share units	13	—		—	—		3		—		—		3
Repurchase of common stock	—	—		(4)	(9)		—		—		—		(9)
Stock-based compensation and other stock-based payments	—	—		—	—		96		—		—		96
Reclassification adjustment for convertible debt in mezzanine	—	—		—	—		(5)		—		—		(5)

Balance, June 30, 2021	63,575	$	—	(22,515)	$	(24,283)	$	6,059	$	23,066	$	(43)	$	4,799

	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss
	Shares (in 000's)	Amount		Shares (in 000's)	Amount								Total
Balance, December 31, 2020	63,406	$	—	(22,447)	$	(24,128)	$	5,851	$	23,288	$	(118)	$	4,893

Net loss	—	—		—	—		—		(222)		—		(222)
Foreign currency translation adjustments, net of tax	—	—		—	—		—		—		(22)		(22)

Net unrealized gains on available-for-sale securities, net of tax	—	—		—	—		—		—		97		97


Exercise of stock options and vesting of restricted stock units and performance share units	169	—		—	—		4		—		—		4
Repurchase of common stock	—	—		(68)	(155)		—		—		—		(155)
Stock-based compensation and other stock-based payments	—	—		—	—		209		—		—		209
Reclassification adjustment for convertible debt in mezzanine	—	—		—	—		(5)		—		—		(5)

Balance, June 30, 2021	63,575	$	—	(22,515)	$	(24,283)	$	6,059	$	23,066	$	(43)	$	4,799


	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
	Shares (in 000's)	Amount		Shares (in 000's)	Amount
Balance, March 31, 2020	63,370	$	—	(22,440)	$	(24,115)	$	5,758	$	22,530	$	(342)	$	3,831

Net income	—	—		—	—		—		122		—		122
Foreign currency translation adjustments, net of tax	—	—		—	—		—		—		32		32
Net unrealized gains on available-for-sale securities, net of tax	—	—		—	—		—		—		77		77
Issuance of convertible senior notes	—	—		—	—		96		—		—		96
Conversion of debt	—	—		—	—		(241)		—		—		(241)
Exercise of stock options and vesting of restricted stock units and performance share units	21	—		—	—		6		—		—		6
Repurchase of common stock	—	—		(2)	(4)		—		—		—		(4)
Stock-based compensation and other stock-based payments	—	—		—	—		80		—		—		80


Balance, June 30, 2020	63,391	$	—	(22,442)	$	(24,119)	$	5,699	$	22,652	$	(233)	$	3,999

	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss
	Shares (in 000's)	Amount		Shares (in 000's)	Amount								Total
Balance, December 31, 2019	63,179	$	—	(21,762)	$	(22,864)	$	5,756	$	23,232	$	(191)	$	5,933
Cumulative effect of adoption of accounting standards update	—	—		—	—		—		(3)		—		(3)
Net loss	—	—		—	—		—		(577)		—		(577)
Foreign currency translation adjustments, net of tax	—	—		—	—		—		—		(45)		(45)
Net unrealized gains on available-for-sale securities, net of tax	—	—		—	—		—		—		3		3
Issuance of convertible senior notes	—	—		—	—		96		—		—		96
Conversion of debt	—	—		—	—		(245)		—		—		(245)
Exercise of stock options and vesting of restricted stock units and performance share units	212	—		—	—		6		—		—		6
Repurchase of common stock	—	—		(680)	(1,255)		—		—		—		(1,255)
Stock-based compensation and other stock-based payments	—	—		—	—		86		—		—		86


Balance, June 30, 2020	63,391	$	—	(22,442)	$	(24,119)	$	5,699	$	22,652	$	(233)	$	3,999

See Notes to Unaudited Consolidated Financial Statements.

Booking Holdings Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)


	Six Months Ended June 30,
	2021		2020
OPERATING ACTIVITIES:
Net loss	$	(222)	$	(577)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	221		229
Provision for expected credit losses and chargebacks	37		322
Deferred income tax (benefit) expense	(120)		11
Net gains on equity securities	(427)		(528)

Stock-based compensation expense and other stock-based payments	204		94
Operating lease amortization	91		91
Amortization of debt discount and debt issuance costs	30		33
Unrealized foreign currency transaction (gains) losses on Euro-denominated debt	(54)		22
Impairment of goodwill	—		489
Impairment of investment	—		100
Loss on early extinguishment of debt	242		—

Other	17		3
Changes in assets and liabilities:
Accounts receivable	(820)		805
Prepaid expenses and other current assets	(173)		248
Deferred merchant bookings and other current liabilities	1,973		(1,567)

Other long-term assets and liabilities	(54)		(33)
Net cash provided by (used in) operating activities	945		(258)
INVESTING ACTIVITIES:
Purchase of investments	(15)		(72)
Proceeds from sale and maturity of investments	8		2,997
Additions to property and equipment	(124)		(150)
Other investing activities	(5)		—
Net cash (used in) provided by investing activities	(136)		2,775
FINANCING ACTIVITIES:
Proceeds from short-term borrowings	—		56

Proceeds from the issuance of long-term debt	2,015		4,108
Payments of debt issuance costs	(10)		(38)
Payments for redemption and conversion of debt	(1,982)		(1,244)
Payments for repurchase of common stock	(150)		(1,294)

Other financing activities	(11)		5
Net cash (used in) provided by financing activities	(138)		1,593
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(1)		(19)
Net increase in cash and cash equivalents and restricted cash and cash equivalents	670