Booking Holdings (BKNG) 10-K risk factor changes: FY2018 vs FY2017

Travel, including accommodation (including hotels, motels, resorts, homes, [removed: apartments, bed and breakfasts, hostels] [added: apartments] and other [removed: properties),] [added: unique places to stay),] rental car and airline ticket reservations, is significantly dependent on discretionary spending levels.

Perceived or actual adverse economic conditions, including slow, slowing or negative economic growth, [added: high or rising] unemployment rates, inflation and weakening currencies, and concerns over government responses such as higher taxes [added: or tariffs, increased interest rates] and reduced government spending, could impair consumer spending and adversely affect travel demand.

Political uncertainty, conditions or events, such as the United Kingdom’s decision to leave the European Union [removed: ("Brexit")] [added: ("Brexit"), including uncertainty or delays in the implementation of Brexit] and concerns regarding certain E.U. members with sovereign debt default risks, can also negatively affect consumer spending and adversely affect travel demand.

While lower occupancy rates have historically resulted in accommodation providers increasing their distribution of accommodation reservations through third-party intermediaries such as us, our remuneration for accommodation reservation transactions changes proportionately with price, and therefore, lower [removed: average daily rates] [added: ADRs] generally have a negative effect on our accommodation reservation business and a negative effect on our [removed: gross profit.][added: revenues.]

Since the [removed: timing and] terms of the United Kingdom's exit from the European Union [added: and/or the European Economic Area] are uncertain, we are unable to predict the effect Brexit will have on our business [removed: (including the effect on non-U.K. citizens employed by us in the United Kingdom)] and results of operations.

[added: In addition, unforeseen events beyond our control, such as oil prices, stock market volatility, terrorist attacks, unusual or extreme weather or natural disasters such as earthquakes, hurricanes, tsunamis, floods, fires, droughts and volcanic eruptions,] travel-related health concerns including pandemics and epidemics such as Ebola, Zika and MERS, political instability, changes in economic conditions, regional hostilities, imposition of [removed: taxes] [added: taxes, tariffs] or surcharges by regulatory authorities, changes in trade [added: policies] or [added: trade disputes, changes in] immigration policies or travel-related [removed: accidents,] [added: accidents] can disrupt [removed: travel] [added: travel, limit the ability] or [added: willingness of travelers to visit certain locations or] otherwise result in declines in travel demand.

Future terrorist attacks, natural disasters, [added: travel advisories or restrictions,] health concerns, civil or political unrest or other events outside our control could disrupt our business and operations and adversely affect our results of operations.

The markets for the services we offer are intensely competitive, [added: constantly evolving] and [added: subject to rapid change, and] current and new competitors can launch new services at a relatively low cost.

Some of our current and potential competitors, such as Google, Apple, Alibaba, Tencent, Amazon and Facebook, have [removed: access to] significantly [removed: greater and] more [removed: diversified] [added: customers or users, consumer data and financial and other] resources than we do, and they may be able to leverage other aspects of their businesses (e.g., search or mobile device businesses) to enable them to compete more effectively with us.

We currently, or may [removed: potentially] in the future, compete with a variety of companies, including:

| • | online travel reservation services such as Expedia, Hotels.com, Hotwire, Orbitz, Travelocity, Wotif, Cheaptickets, ebookers, HotelClub, RatesToGo and CarRentals.com, which are owned by [removed: Expedia;] [added: Expedia Group;] Hotel Reservation Service (HRS) and hotel.de, which are owned by Hotel Reservation Service; and AutoEurope, CarTrawler, Ctrip (in which we hold a minority interest), [removed: eLong] [added: and Trip.com (which is owned by Ctrip), Tongcheng-eLong] (in which Ctrip holds a significant minority interest), ezTravel (in which Ctrip holds a majority interest), Meituan [added: Dianping] (in which we hold a small minority interest), MakeMyTrip, [removed: OYO Rooms, Yatra, Cleartrip,] Traveloka (in which Expedia [added: Group] holds a minority interest), Webjet, Rakuten, Jalan (which is owned by Recruit), [removed: ViajaNet, Submarino Viagens,] Despegar/Decolar (in which Expedia [added: Group] holds a minority interest), Fliggy [removed: (operated] [added: (which is owned] by Alibaba), [removed: 17u.com,] HotelTonight, CheapOair and eDreams ODIGEO; |

| • | online accommodation search and/or reservation services, such as Airbnb, HomeAway (which is owned by [removed: Expedia) and] [added: Expedia Group),] Tujia (in which Ctrip and Expedia [added: Group] hold [removed: investments),] [added: investments) and Xiaozhu,] currently focused primarily on alternative accommodations, including individually owned properties such as homes and apartments; |

| • | traditional travel agencies, travel management companies, wholesalers and tour operators, many of which combine physical locations, telephone services and online services, such as Carlson Wagonlit, American Express, BCD Travel, [added: Egencia (which is owned by Expedia Group),] Concur (which is owned by SAP), Thomas Cook, TUI, and Hotelbeds [removed: (which acquired Tourico and GTA in 2017),] [added: Group,] as well as thousands of individual travel agencies around the world; |

| • | travel service providers such as accommodation providers, rental car companies and airlines, many of which have their own branded [removed: websites] [added: online platforms] to which they drive business, including large hotel chains such as Marriott International, Hilton and [removed: Hyatt Hotels,] [added: Intercontinental Hotel Group and emerging hotel chains such] as [added: OYO Rooms, as] well as joint efforts by [removed: travel service providers such as Room Key, an online hotel reservation service owned by several major hotel companies;] |

| • | online travel search and price comparison services (generally referred to as "meta-search" services), such as Google Flights, Google Hotel Ads, TripAdvisor, trivago (in which Expedia [added: Group] holds a majority interest), Qunar (which is controlled by [removed: Ctrip),] [added: Ctrip) and] Skyscanner (in which Ctrip holds a majority [removed: interest) and HotelsCombined;] [added: interest);] |

| • | companies offering new rental car business models or car- or ride-sharing services that affect demand for rental cars, some of which have developed innovative technologies to improve efficiency of point-to-point transportation and extensively utilize mobile platforms, such as Uber, Lyft, Gett, Zipcar (which is owned by Avis), [added: Turo,] BlaBlaCar, Didi [removed: Chuxing,] [added: Chuxing (in which we hold a small minority interest),] Grab [added: (in which we hold a small minority interest), Go-Jek] and Ola; and |

| • | companies offering technology services and software solutions to [removed: accommodation] [added: travel service] providers, including large global distribution systems, or GDSs, such as [removed: Amadeus] [added: Amadeus, Sabre] and [removed: Sabre.] [added: Travelport, and hospitality software platforms, such as Oracle and Shiji.] |

Google, the world's largest search engine and one of the world's largest companies and other large, established companies with substantial resources and expertise in developing online commerce and facilitating internet traffic [removed: have launched] [added: offer travel or travel-related] search, meta-search and/or reservation booking services and may create additional inroads into online travel.

Meta-search services leverage their search technology to aggregate travel search results for the consumer's specific itinerary across travel service provider (e.g., accommodations, rental car companies or airlines), online travel company ("OTC") and other [removed: travel websites] [added: online platforms] and, in many instances, compete directly with us for customers.

Meta-search services intend to appeal to consumers by showing broader travel search results than may be available through OTCs or other [removed: travel websites,] [added: online platforms,] which could lead to travel service providers or others gaining a larger share of search traffic.

Further, TripAdvisor and trivago, two other leading meta-search companies, support their meta-search services with significant brand and performance [removed: advertising.][added: marketing.]

Through our KAYAK meta-search service, we compete directly with [added: these and] other meta-search services.

Consumers may favor travel services offered by meta-search [removed: websites] [added: platforms] or search companies over OTCs, which could reduce traffic to our travel reservation [removed: websites,] [added: platforms,] increase consumer awareness of our competitors' brands and [removed: websites] [added: services] and increase our [removed: advertising] [added: marketing] and other customer acquisition costs.

To the extent any such consumer behavior leads to growth in our KAYAK meta-search business, such growth may not result in sufficient increases in [removed: profits] [added: revenues] from our KAYAK meta-search business to offset any related decrease in [removed: profits] [added: revenues or increase in marketing and other customer acquisition costs] experienced by our OTC brands.

Further, meta-search services may evolve into more traditional OTCs by offering consumers the ability to make travel reservations directly through their [removed: websites.][added: platforms.]

To the extent consumers book travel services through a service such as TripAdvisor's Instant Booking, Google's "Book on Google," a meta-search website or directly with a travel service provider after visiting a meta-search [removed: website] [added: platform] or [added: using a] meta-search utility on a traditional search engine without using an OTC like us, or if meta-search services limit our participation within their search results or evolve into more traditional OTCs, we may need to increase our [removed: advertising] [added: marketing] or other customer acquisition costs to maintain or grow our reservation bookings and our business and results of operations could be adversely affected.

For example, companies such as Airbnb and HomeAway (which is owned by [removed: Expedia)] [added: Expedia Group)] offer services providing alternative accommodation property owners, particularly individuals, an online place to list their accommodations where travelers can search and book such properties and compete directly with our alternative accommodation services.

In addition, Airbnb [removed: has begun offering] [added: offers some] hotel reservations through its online [removed: and mobile] platforms.

Further, meta-search services may lower the cost for new companies to enter the market by providing a distribution channel without the cost of promoting the new entrant's brand to drive consumers [removed: directly to its website.]

Although we believe that providing an extensive collection of properties, excellent customer service and an intuitive, [removed: easy to use website or mobile] [added: easy-to-use consumer] experience are important factors influencing a consumer's decision to make a reservation, for many consumers, particularly in certain markets, the price of the travel service is the primary factor determining whether a consumer will book a reservation.

As a result, it is increasingly important to offer travel services, such as [removed: hotel room rates,] [added: accommodation reservations,] at competitive prices, whether through discounts, coupons, closed-user group rates or loyalty programs, or otherwise.

Discounting and couponing coupled with a high degree of consumer shopping behavior is particularly common in Asian [removed: markets, while brand loyalty in such markets can be less important.][added: markets.]

Travel service providers, including hotel chains, rental car companies and airlines with which we conduct business, compete with us in online channels to drive consumers to their own [removed: websites] [added: platforms] in lieu of third-party distributors such as us.

For example, many large hotel chains have instituted additional initiatives, such as increased discounting and incentives, to encourage consumers to book accommodations directly through their [removed: websites.][added: online platforms.]

We [added: also offer various incentives to consumers and] may need to offer [removed: similar] [added: additional or increased] advantages to maintain or grow our reservation bookings, which could adversely impact our profitability.

Further, consolidation among travel service providers, such as Marriott International's acquisition [removed: in 2017] of Starwood Hotels & [removed: Resorts,] [added: Resorts in 2017,] could result in lower rates of commission paid to OTCs, increased discounting and greater incentives for consumers to join closed user groups as such travel service providers expand their offerings.

[removed: If] [added: When] the U.S. Dollar [removed: were to again strengthen,] [added: strengthens against other currencies in which we transact, as it generally did in 2015,] our foreign-currency-denominated net assets, gross bookings, [removed: gross profit,] [added: revenues,] operating expenses and net income [removed: when] [added: are lower as] expressed in U.S. [removed: Dollars would decrease.][added: Dollars.]

For example, the strengthening of the U.S. Dollar relative to the Euro in 2015 made it more expensive for Europeans to travel to the United [removed: States, and the dramatic depreciation of the Russian Ruble in 2014 and 2015 made it more expensive for Russians to travel to Europe and most other non-Ruble destinations.][added: States.]

Our international businesses include the Netherlands-based accommodation reservation service [removed: Booking.com, the Asia-based accommodation reservation service agoda.com,] [added: Booking.com (including Rentalcars.com, based in] the [removed: U.K.-based rental car reservation service Rentalcars.com (which] [added: United Kingdom, which] began operating as part of Booking.com on January 1, [removed: 2018)] [added: 2018), the Asia-based accommodation reservation service agoda] and, to a lesser extent, KAYAK's international meta-search services and OpenTable's international restaurant reservation business.

Our international OTC operations have [added: historically] achieved significant year-over-year growth in their gross [removed: bookings.][added: bookings, in particular with respect to their accommodation reservation services.]

Conversely, higher oil prices may result in higher airfares, which can negatively affect the travel industry and our business.

travel service providers such as Room Key, an online hotel reservation service owned by several major hotel companies;

If we are unable to compete with these companies, our business and results of operations could be harmed.

directly to its platform.

Some of our competitors and potential competitors offer a variety of online services, such as food delivery, shopping, gaming or search services, many of which are used by consumers more frequently than online travel services.

As a result, a competitor or potential competitor that has established other, more frequent online interactions with consumers may be able to more easily or cost-effectively acquire customers for its online travel services than we can.

For example, some competitors or potential competitors with more frequent online interactions with consumers are seeking to create "super-apps" where consumers can use many online services without leaving that company's app, in particular in markets such as Asia where online activity (including e-commerce) is conducted primarily through apps on mobile devices.

If any of these platforms are successful in offering services similar to ours to consumers who would otherwise use our platforms or if we are unable to offer our services to consumers within these super-apps, our customer acquisition efforts could be less effective and our customer acquisition costs, including our brand and performance marketing expenses, could increase, either of which would harm our business and results of operations.

As a result, in certain markets we may need to provide discounts or other incentives in order to be competitive, which may make it difficult for us to maintain or grow market share and to maintain historical profit margins.

When the U.S. Dollar weakens against other currencies in which we transact, as it generally did in 2017 and 2018, our foreign-currency-denominated net assets, gross bookings, revenues, operating expenses and net income are higher as expressed in U.S. Dollars.

Some jurisdictions have

Any implementation of new systems could be disruptive and/or costly or we may experience difficulty successfully integrating new systems into existing systems or migrating to new systems from existing systems, any of which could adversely affect our business and results of operations.

Growth of some of these channels has slowed.

When evaluating our performance marketing spend, we consider several factors for each channel, such as the customer

experience on the advertising platform, the incrementality of the traffic we receive and the anticipated repeat rate from a particular platform, as well as other factors.

Pursuing a strategy of improving performance marketing ROIs, as we did beginning in the third quarter of 2017 and continuing through 2018, along with factors such as competitors' actions in the bidding environment, the amount of marketing invested by these channels to generate demand and overall performance marketing platform traffic growth trends, which have shown volatility and long-term deceleration of growth rates, may also impact growth rates for performance marketing channels.

However, these efforts may not be successful in retaining and attracting new customers, which would harm our business and results of operations.

We believe that another critical component to our future success will be our ability to offer alternative payment solutions to consumers even when those payment solutions may not be accepted by the travel service provider or restaurant.

Alternate payment providers such as Alipay, Paytm and WeChat Pay operate closed-loop payments systems with direct connections to both consumers and merchants.

In many markets, particularly in Asia where credit cards are not readily available and/or e-commerce is largely carried out through mobile devices, these and other emerging alternate payment methods are the exclusive or preferred means of payment for many consumers.

Therefore, if we are unable to offer consumers their preferred method of payment by integrating new or emerging payment methods into our platforms, we may not be able to effectively offer our services to these consumers, which would limit our growth opportunities in these markets and our business and results of operations could be harmed.

core business, and our ability to keep pace may slow.

For example, because consumers often utilize other online services more frequently than online travel services, a competitor or potential competitor that has established other, more frequent online interactions with consumers may be able to more easily or cost effectively acquire consumers for its online travel services than we can.

Cyberattacks by individuals, groups of hackers and state-sponsored organizations are increasing in frequency and sophistication and are constantly evolving.

Third parties may also attempt to takeover consumer accounts by using passwords, usernames and other personal information obtained elsewhere to attempt to login to consumer accounts on our platforms.

We have experienced and responded to cyberattacks, which we believe have not had a significant impact on the integrity of our systems or the security of data, including customer data maintained by us.

The California Consumer Privacy Act was also recently passed and creates new data privacy rights for users effective in 2020.

Other jurisdictions continue to consider adopting or may adopt similar data protection regulations.

While we have invested and continue to invest significant resources to comply with the GDPR and other privacy regulations, many of these regulations (including the GDPR) are new, extremely complex and subject to interpretation.

In addition, if travel search traffic declines or grows less quickly than in the past, our ability to efficiently generate traffic to our

platforms through performance marketing on general search platforms may be adversely affected, which could have an adverse effect on our business and results of operations.

Our agreements with some third-party service providers are

In July 2018, the European Commission fined Google approximately 4.3 billion Euros for breaching European Union antitrust rules by imposing restrictions on Android device manufacturers and mobile network operators, including by mandating the pre-installation of Google apps and limiting access to its Google Play app store.

In addition, the European Commission's decision requires Google to end those practices within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of

Alphabet, Google's parent company.

Google has appealed the European Commission's decision, and it is not yet clear how or whether the decision will affect Google's business, including its travel services (Google Flights and Google Hotel Ads).

Although we believe that our tax filing positions are reasonable and comply with applicable law, we regularly review our tax filing positions, especially in light of tax law or business practice changes, and may change our positions or determine that previous positions should be amended, either of which could result in additional tax liabilities.

For example, Booking.com is the subject of tax proceedings in France and has been assessed approximately 356 million Euros, the majority of which would represent penalties and interest, by the French tax authorities.

In January 2019, we were required to pay the 356 million Euro assessments in order to preserve our right to contest the assessments in court, though the payment is not an admission that we owe the taxes.

We continue to assess the application of BEAT to our operations.

In addition, unforeseen events beyond our control, such as oil prices, stock market volatility, terrorist attacks, unusual or extreme weather or natural disasters such as earthquakes, hurricanes, tsunamis, floods, droughts and volcanic eruptions,

For example, our business and operations have been negatively impacted by terrorist attacks, Hurricanes Harvey and Irma, which disrupted travel in the southeastern United States and parts of the Caribbean, respectively, in August 2017, and the coup attempt in Turkey in July 2016.

KAYAK depends on access to information related to travel service pricing, schedules, availability and other related information from OTCs and travel service providers.

To the extent OTCs or travel service providers do not provide such information to KAYAK, KAYAK's business and results of operations could be harmed.

If any of these services are successful in attracting consumers who would otherwise use our services, our business and results of operations would be harmed.

Discounting may increase as competition authorities seek to allow increased pricing flexibility among providers of travel service reservations.

Throughout 2015, the U.S. Dollar strengthened significantly year-over-year relative to substantially all currencies in which we transact, most notably the Euro, Brazilian Real, British Pound Sterling, Russian Ruble and Australian Dollar.

In 2016, the U.S. Dollar continued to be stronger year-over-year relative to the British Pound Sterling, Russian Ruble and many other major currencies in which we transact.

After the "Brexit" referendum in the United Kingdom in June 2016, the U.S. Dollar strengthened significantly against the British Pound Sterling.

As a result of these currency exchange rate changes, in 2015 and 2016 our foreign-currency-denominated net assets, gross bookings (an operating and statistical metric referring to the total dollar value, generally inclusive of all taxes and fees, of all travel services booked by our customers, net of cancellations), gross profit, operating expenses and net income were lower as expressed in U.S. Dollars.

In 2017, the Euro, British Pound Sterling and certain other currencies in which we transact strengthened against the U.S. Dollar.

To the extent any such increased shopping behavior leads to growth in

companies to emerging start-ups.

A security breach at any such third-party marketing affiliate, travel service

The General Data Protection Regulation will go into effect and apply to us beginning in May 2018.

In the United Kingdom, a Data Protection Bill has been introduced in Parliament that, if adopted, would substantially implement the European Union's General Data Protection Regulation in the United Kingdom.

In February 2016, E.U. and U.S. authorities announced that they had reached agreement on a new data transfer framework, called the E.U.-U.S. Privacy Shield, which was formally adopted by the European Commission on July 12, 2016.

Advertising and distribution

For example, French tax authorities conducted an audit that started in 2013 of the tax years 2003 through 2012.

The French tax authorities are asserting that Booking.com has a permanent establishment in France and are seeking to recover what they claim are unpaid income taxes and value-added taxes.

In December 2015, the French tax authorities issued assessments related to these tax years for approximately 356 million Euros, the majority of which represents penalties and interest.

Our objection to the assessments was denied by the French tax authorities.

If we are unable to resolve the matter with the French tax authorities, we expect to challenge the assessments in the French courts.

In order to challenge the assessments in court, we may be required to pay, upfront, the full amount or a significant part of any such assessments, though such payment would not constitute an admission by us that we owe the taxes.

Alternatively, any resolution or settlement of the matter with the French tax authorities may also require payment as part of such resolution or settlement.

French tax authorities have begun a similar audit of the tax years 2013 through 2015, which could result in additional assessments.

Additionally, in October 2015, the Organisation for Economic Co-operation and Development ("OECD") issued "final reports" in connection with its "base erosion and profit shifting" ("BEPS") project.

The final reports were endorsed by the G20 leaders in November 2015.

On January 28, 2016, the European Commission unveiled a new package of proposals aimed at providing a framework for fairer taxation and to provide a coordinated European Union response to combating corporate tax avoidance.

Following agreement among the European Union member states on the final content of the package, the European Council formally adopted an Anti-Tax Avoidance Directive in July 2016, which was further amended in February 2017.

The Directive is aimed at preventing aggressive tax planning, increasing tax transparency and creating a fairer tax environment for all businesses in the European Union.

Further, the OECD's task force on the digital economy is also working on an interim report for the G20 due in early 2018 and is considering potential ideas to address the tax challenges of the digital economy including interim solutions such as an alternative levy on electronic sales.

Several EU Member states have recently also proposed the concept of an equalization tax to the EU Commission that would seek to tax the turnover of digital companies.

In a press release dated October 19, 2017, the European Council concluded that the European Union needs an effective and fair taxation system for the digital era to ensure a global level playing field in line with the work being carried out at the OECD and that it is also anticipating EU Commission proposals on this subject early in 2018.

We expect many countries to change their tax laws in response to these developments, and several countries have already changed or proposed changes to their tax laws in response to the final BEPS reports and/or the developments in the European Union.

Due to the large and expanding scale of our international business activities, any changes in U.S. or

From time to time, we are under audit by tax authorities with respect to these non-income-based taxes and may have exposure to additional non-income-based tax liabilities.

Furthermore, the Dutch government introduced changes to its income tax laws that increased the Innovation Box Tax rate to 7% beginning in 2018.

The Dutch government has also proposed, commencing in 2019, incrementally reducing over time the corporate income tax statutory rate from 25% to 21% by 2021.

If this proposal is enacted into law, we expect the combined effect of these two changes to slightly increase our effective tax rate during the first two years of the income tax transition period, and slightly reduce it thereafter.

| • | [removed: priceline.com] [added: priceline] - a leading hotel, rental car, airline ticket and vacation package [added: online] reservation service in [removed: the United States.] [added: North America.] |

| • | KAYAK - a leading [added: online] meta-search service allowing consumers to easily search and compare travel itineraries and prices, including airline ticket, accommodation and rental car reservation information, from hundreds of travel websites at once. |

| • | [removed: agoda.com] [added: agoda] - a leading [added: online] accommodation reservation service catering primarily to consumers in the Asia-Pacific region. |

| • | Rentalcars.com - a leading [added: online] worldwide rental car reservation service. |

| • | OpenTable - a leading [added: online] provider of restaurant reservation and information services to consumers and restaurant reservation management and customer acquisition services to restaurants. |

Our business is driven primarily by international results, which consist of the results of Booking.com, [removed: agoda.com] [added: agoda] and Rentalcars.com [removed: (which began operating as part of Booking.com on January 1, 2018)] and the international businesses of KAYAK and OpenTable.

During the year ended December 31, [removed: 2017,] [added: 2018,] our international business (the substantial majority of which is generated by Booking.com) represented approximately 89% of our consolidated [removed: gross profit.][added: revenues.]

A significant majority of our [removed: gross profit] [added: revenues, including a significant majority of our international revenues,] is earned in connection with facilitating accommodation reservations.

We derive substantially all of our [added: revenues and, prior to January 1, 2018,] gross profit from the following sources:

| • | Advertising revenues primarily earned by KAYAK from sending referrals to online travel companies ("OTCs") and travel service providers, as well as from advertising placements on KAYAK's [removed: websites and mobile apps;] [added: platforms;] |

| • | [removed: Damage excess waiver fees,] [added: Ancillary revenues including] travel [removed: insurance fees] [added: insurance-related revenues] and global distribution system ("GDS") reservation booking fees, in each case related to certain of our travel services. |

Our [removed: priceline.com] [added: priceline] brand offers merchant Name Your Own Price® opaque travel services, which [removed: are] [added: were previously] recorded in revenue on a "gross" basis [removed: and have associated] [added: with the amount remitted to the travel service providers reported as] cost of [removed: revenue.][added: revenues.]

Over the last several years we have experienced [removed: strong] [added: significant] growth in our accommodation reservation services.

We also believe this growth is the result of the continued innovation and execution by our teams around the world to [removed: add] [added: increase the number and the variety of] accommodations [removed: to] [added: we offer] our [removed: travel reservation services,] [added: travelers,] increase and improve content, build distribution and improve the consumer experience on our [removed: websites and mobile apps,] [added: online platforms,] as well as consistently and effectively marketing our brands through performance and brand [removed: advertising] [added: marketing] efforts.

Over the long term, we expect that international online travel growth rates will [removed: follow a similar trend] [added: slow, similarly] to [removed: that] [added: the trend] experienced in the United States.

Booking.com included approximately [removed: 1,586,000] [added: 2,180,000] properties on its website [removed: as of] [added: at] December 31, [removed: 2017,] [added: 2018,] consisting of approximately [removed: 396,000] [added: 436,000] hotels, motels and resorts and approximately [removed: 1,190,000] [added: 1,744,000] homes, apartments and other unique places to [removed: stay (updated property counts are available on the Booking.com website),] [added: stay,] compared to approximately [removed: 1,115,000] [added: 1,586,000] properties (including approximately [removed: 339,000] [added: 396,000] hotels, motels and resorts and approximately [removed: 776,000] [added: 1,190,000] homes, [removed: apartments] [added: apartments,] and other unique places to stay) [removed: as of] [added: at] December 31, [removed: 2016.][added: 2017.]

Booking.com [removed: has begun categorizing] [added: categorizes] properties listed on its website as either (a) hotels, motels and resorts, which groups together more traditional accommodation types (including [removed: hostels, resorts, inns] [added: hostels] and [removed: motels),] [added: inns),] or (b) homes, apartments and other unique places to stay, also referred to as alternative accommodations, which encompasses all other types of accommodations, including [removed: homes, apartments,] [added: bed and breakfasts,] villas, [removed: igloos] [added: apart-hotels] and beyond.

We intend to continue to invest in adding accommodations available for reservation on our [removed: websites,] [added: platforms,] such as hotels, motels, resorts, homes, apartments and other unique places to [removed: stay.][added: stay, however the growth rate of our accommodations may vary in part as a result of removing accommodations from our platforms from time to time.]

[added: Many of the newer accommodations we add to our travel] reservation services, especially in highly-penetrated markets, may have fewer rooms or higher credit risk and may appeal to a smaller subset of consumers (e.g., hostels and bed and breakfasts).

[removed: Further, alternative] accommodations in general may be subject to increased seasonality due to local tourism seasons, weather or other factors or may not be available at peak times due to use by the property [removed: owners, and we may also experience lower profit margins with respect to these properties due to certain additional costs related to offering these accommodations on our websites.][added: owners.]

As we increase our alternative accommodation business, these different characteristics could negatively impact our profit margins; and, to the extent these properties represent an increasing percentage of the properties added to our [removed: websites,] [added: platforms,] we expect that our gross bookings growth rate and property growth rate will continue to diverge over time (since each such property has fewer booking opportunities).

As part of our strategy to [added: provide more payment options to our customers and travel service providers,] increase the number and variety of accommodations available on [removed: Booking.com,] Booking.com [added: and enable the growth of our in-destination activities businesses, Booking.com] is increasingly processing transactions on a merchant [removed: basis] [added: basis,] where it [removed: facilitates] [added: receives] payments on behalf of customers.

This allows Booking.com to process transactions for [removed: properties that do not accept credit cards] [added: travel service providers] and to increase its ability to offer [added: secure and] flexible transaction terms to consumers, such as the form and timing of payment.

We believe that adding these types of [removed: properties and] service offerings will benefit our customers and [added: partners, as well as] our gross bookings, room night and earnings growth rates.

[removed: As] [added: However,] this [removed: business continues to grow, we may experience a significant increase] [added: results] in [added: additional expenses for personnel,] payment [removed: processing costs,] [added: processing, customer] chargebacks [added: (including those related to fraud)] and other [removed: costs] [added: expenses] related to these transactions, which are recorded [removed: as sales] [added: in "Personnel"] and [removed: marketing expenses] [added: "Sales and other expenses"] in our [removed: consolidated statements] [added: Statements] of [removed: operations and] [added: Operations, as well as associated incremental revenues in the form of credit card rebates, for example,] which [added: are recorded in "Merchant revenues." As this business continues to grow, we may experience a significant increase in these expenses that may not be fully offset by an increase in associated incremental revenues, which would] negatively impact our operating margins.

Perceived or actual adverse economic conditions, including slow, slowing or negative economic growth, [added: high or rising] unemployment [removed: rates] [added: rates, inflation] and weakening [removed: currencies] [added: currencies,] and concerns over government responses such as higher taxes [added: or tariffs] and reduced government spending, could impair consumer spending and adversely affect travel demand.

Further, political uncertainty, conditions or events, such as the United Kingdom's decision to leave the European Union [removed: ("Brexit")] [added: ("Brexit"), including uncertainty or delays in the implementation of Brexit] and concerns regarding certain E.U. members with sovereign debt default risks can also negatively affect consumer spending and adversely affect travel demand.

For more detail, see Part [removed: II] [added: I] Item 1A Risk Factors - "Declines or disruptions in the travel industry could adversely affect our business and financial performance."

Therefore, because we report our results in U.S. Dollars, we face exposure to movements in currency exchange rates as the financial results [added: and the financial condition] of our international businesses are translated from local currency (principally Euros and British Pounds Sterling) into U.S. Dollars.

[removed: As a result of currency exchange rate changes, our] [added: Our] foreign-currency-denominated [removed: net assets,] gross bookings, [removed: gross profit,] [added: revenues and] operating expenses [removed: and net income have been positively impacted] as expressed in U.S. Dollars [added: are higher] for the year ended December 31, [removed: 2017 compared to] [added: 2018 than they would have been had foreign exchange rates remained where they were for] the year ended December 31, [removed: 2016.][added: 2017.]

For example, [added: total revenues in 2018 compared to] gross profit [added: in 2017] from our international operations grew [removed: 22.0%] [added: 17.4%] for the year ended December 31, [removed: 2017] [added: 2018 as] compared to the year ended December 31, [removed: 2016,] [added: 2017,] but, without the [removed: positive] impact of changes in currency exchange rates, grew year-over-year on a constant-currency basis by approximately [removed: 21%.][added: 17%.]

The aggregate principal value of our Euro-denominated long-term debt, and accrued interest thereon, provide a [removed: natural] hedge against the impact of currency exchange rate fluctuations on the net assets of certain of our Euro functional currency [removed: subsidiaries.][added: subsidiaries (see Note 5 to our Consolidated Financial Statements).]

However, such derivative instruments are [removed: short term] [added: short-term] in nature and not designed to hedge against currency fluctuations that could impact growth rates for our gross [removed: bookings, revenues] [added: bookings] or [removed: gross profit] [added: revenues] (see Note 5 to our Consolidated Financial Statements for additional information on our derivative contracts).

The markets for the services we offer are intensely [removed: competitive] [added: competitive, constantly evolving] and [added: subject to rapid change, and] current and new competitors can launch new services [removed: to compete with us] at relatively low cost.

Some of our current and potential competitors, such as Google, Apple, Alibaba, Tencent, Amazon and Facebook, have [removed: access to] significantly [removed: greater and] more [removed: diversified] [added: customers or users, consumer data and financial and other] resources than we do, and they may be able to leverage other aspects of their businesses (e.g., search or mobile device businesses) to enable them to compete more effectively with us.

For example, Google has entered various aspects of the online travel market, including by establishing a flight meta-search product (Google Flights) and a hotel meta-search [removed: business] [added: product] (Google Hotel Ads) that are growing rapidly, as well as its "Book on Google" reservation functionality and its Google Trips app.

In addition, the [removed: gross profit] [added: revenue] earned on a mobile transaction may be less than a typical desktop transaction due to different consumer purchasing patterns.

For example, accommodation reservations made on a mobile device typically are for shorter lengths of [removed: stay] [added: stay, have lower ADRs] and are not made as far in advance.

For more detail regarding the competitive trends and risks we face, see Part I Item 1 Business - "Competition," Part I Item 1A Risk Factors - "Intense competition could reduce our market share and harm our financial performance." and "Consumer adoption and use of mobile devices creates new challenges and may enable device companies such as [added: Google and] Apple to compete directly with us." and "We may not be able to keep up with rapid technological [added: or other market] changes."

Although we believe that providing an extensive collection of properties, excellent customer service and an intuitive, [removed: easy to use website or mobile] [added: easy-to-use consumer] experience are important factors influencing a consumer's decision to make a reservation, for many consumers, particularly in certain markets, the price of the travel service is the primary factor determining whether a consumer will book a reservation.

Our results include the Momondo Group, FareHarbor and HotelsCombined since they were acquired in July 2017, April 2018 and November 2018, respectively.

| • | Travel reservation commissions and transaction net revenues, credit card processing rebates and customer processing fees, in each case in connection with our merchant transactions; |

Under the current revenue recognition accounting standard ("the current revenue standard"), Name Your Own Price® revenues are reported on a net basis with the amount remitted to the travel service providers recorded as an offset in merchant revenues.

Therefore, for periods beginning after December 31, 2017, we no longer present "Cost of revenues" or "Gross profit" in our Consolidated Statements of Operations.

Total revenues for periods beginning after December 31, 2017 are comparable to gross profit reported in prior periods.

For further information on the adoption of the current revenue standard, see Note 2 to the Consolidated Financial Statements.

Further, alternative

We may also experience lower profit margins with respect to these properties due to certain additional costs, such as increased customer service costs, related to offering these accommodations on our platforms.

As a result, it is increasingly important to offer travel services, such as accommodation reservations, at competitive prices, whether through discounts, coupons, closed-user group rates or loyalty programs, or otherwise.

These initiatives may result in lower revenue as a percentage of gross bookings.

Growth of some of these channels has slowed.

We also invested $509 million, $435 million

More recently our cancellation rates have decreased, which has benefited our marketing efficiency and results of operations.

We believe that many factors influence cancellation rates, and it is uncertain whether future cancellation rates will continue to decrease, stabilize or continue their prior trend of generally increasing over time.

Further, cancellation rates could vary period to period without following a discernible trend.

When evaluating our performance marketing spend, we consider several factors for each channel, such as the customer experience on the advertising platform, the incrementality of the traffic we receive and the anticipated repeat rate from a particular platform, as well as other factors.

The amount of business we obtain through each performance marketing channel is impacted by numerous factors, including bidding decisions by us and our competitors (including decisions to optimize performance marketing ROIs) and the marketing efforts and success of those channels to attract consumers and generate demand.

As a result, both the absolute amounts of and percentage changes in our foreign-

currency-denominated net assets, gross bookings, revenues, operating expenses and net income as expressed in U.S. Dollars are affected by currency exchange rate changes.

Also, a number of governments are investigating or conducting information-gathering exercises in respect of compliance by OTCs with consumer protection laws, including practices related to the display of search results and search ranking algorithms, claims regarding discounts, disclosure of charges and availability, and similar messaging.

In general, increased regulatory focus on online businesses, including online travel businesses like ours, could result in increased compliance costs or otherwise adversely affect our business.

Future changes in the length of the booking

window will affect the degree to which our gross bookings and revenues occur in the same period and, as a result, whether our gross bookings growth rates and revenue growth rates converge or diverge.

As a result, the shift in timing of Easter, relative to 2018, will have a negative effect on our year-over-year growth rates in the first quarter of 2019 and a positive effect on our year-over-year growth rates in the second quarter of 2019.

The timing of other holidays such as Ramadan can also impact our quarterly year-over-year growth rates.

For example, because consumers often utilize other online services more frequently than online travel services, a competitor or potential competitor that has established other, more frequent online interactions with consumers may be able to more easily or cost-effectively acquire customers for its online travel services than we can.

At September 30, 2018, we performed our annual goodwill impairment testing and concluded that there was no impairment of goodwill.

At September 30, 2018, OpenTable's estimated fair value was approximately 13% higher than its carrying value, therefore, there was no impairment to OpenTable's goodwill.

In addition, we did not identify an impairment indicator for our long-lived assets and intangible assets at December 31, 2018.

Future events and changing market conditions may lead us to re-evaluate the assumptions reflected in the current forecast, including key assumptions regarding OpenTable's expected growth rates and operating margins as well as other key assumptions with respect to matters outside of our control, such as discount rates, currency exchange rates and market EBITDA comparables.

We have adopted an accounting policy to treat taxes on GILTI as period costs.

In 2018, we completed our accounting for the income tax effects of the Tax Act.

We recorded an income tax benefit of $46 million to adjust our provisional income tax expense that was recorded during the year ended December 31, 2017 relating to the federal one-time deemed repatriation liability, as well as U.S. state income taxes and international withholding taxes associated with the mandatory deemed repatriation.

In addition, we recorded an income tax benefit of $2 million in 2018 to adjust the remeasurement of our U.S. deferred tax assets and liabilities as of December 31, 2017 due to the reduction of the U.S. federal statutory tax rate that resulted from the Tax Act.

We utilized $133 million of deferred tax assets related to federal operating loss carryforwards and $23 million of other tax credit carryforwards as of December 31, 2017 to reduce our transition tax liability.

We do not intend to indefinitely reinvest our international earnings that were subject to U.S. taxation pursuant to the mandatory deemed repatriation or subject to U.S. taxation as GILTI.

After the French tax authorities issued a formal demand for payment of the amounts assessed, in the first quarter of 2019, we paid 356 million Euros to French tax authorities in order to preserve our right to contest the assessments in court (see Note 14 to our Consolidated Financial Statements).

For reporting periods beginning after December 31, 2017, the financial statements are prepared in accordance with the current revenue standard adopted on January 1, 2018.

The financial statements for all periods prior to January 1, 2018 are presented under the previous revenue recognition accounting standard.

In addition, we have changed the presentation of advertising expenses and sales and marketing expenses and reclassified certain expense from "Cost of revenues" to "Sales and other expenses" or "General and administrative" expense in the Consolidated Statement of Operations for the year ended December 31, 2018.

| • | Transaction gross profit on a merchant basis and customer processing fees from our accommodation, rental car, airline ticket and vacation package reservation services; |

All of our other services are generally recorded in revenue on a "net" basis and have no significant associated cost of revenue.

Therefore, revenue increases and decreases are impacted by changes in the mix of our revenues between Name Your Own Price® travel services and other services.

Gross profit reflects the commission or net margin earned for all of our services.

Consequently, gross profit is an important measure to evaluate growth in our business because, in contrast to our revenues, it is not affected by the different methods of recording revenue and cost of revenue between our Name Your Own Price® travel reservation services and our other services.

On January 1, 2018, we adopted a new revenue recognition accounting standard which will change the presentation of our Name Your Own Price® revenue to a net basis (see Note 2 to the Consolidated Financial Statements) for periods beginning after December 31, 2017, and, as a result, we will no longer report cost of revenues or gross profit.

Booking.com previously classified properties as hotels, vacation rentals or other.

We believe the new categories are more consistent with those used by other industry participants and allow for a more direct comparison of traditional and unique property counts among companies.

Many of the newer accommodations we add to our travel

However, this results in additional payment processing costs, chargebacks and other costs related to these transactions.

We have observed an increase in promotional pricing to closed user groups (such as loyalty program participants or consumers with registered accounts), including through mobile apps.

In addition, many large hotel chains and OTCs have launched initiatives, such as increased discounting and incentives, to encourage consumers to book accommodations through their websites.

In addition to providing retail travel reservation services, our priceline.com brand is a leading provider of discounted opaque travel reservation services in the United States through its Express Deals® and Name Your Own Price® offerings.

These discounted services are referred to as "opaque" because certain elements of the reservation, including the name of the travel service provider, are not made known to the traveler until after the reservation is made.

In general, we expect that over time our opaque services will continue to decrease in relative importance to our overall business due, we believe, to a variety of factors, including the growth rates of our retail businesses, competition, relative complexity, travel restrictions often required by the travel service provider, difficulty in offering certain of these services on mobile devices, increased discounts available to consumers through closed user groups or couponing, and limited availability of discounted travel reservations from travel service providers, particularly during periods of high consumer demand.

performance advertising efficiency.

We estimate our effective tax rate for 2018 to be approximately 18-21%, which represents our best estimate of our tax expense including the impact of the U.S. Tax Cuts and Jobs Act (the "Tax Act"), estimated U.S. state income taxes and international withholding taxes on our international earnings, and an increase in the Innovation Box Tax rate in the Netherlands from 5% to 7%.

The provisions of the Tax Act are broad and complex, and to date there has been little interpretation or clarification of the act from U.S. tax authorities.

As a result, our estimate is based on our current understanding and could change as more information becomes available.

We expect this to continue under our new revenue recognition policy.

Recently,

Future changes in the booking window may cause additional differences between our gross bookings growth rates and revenue growth rates.

For example, revenue for accommodation reservation services, which is primarily recognized at check-out under the current accounting standard, will change to be recognized at check-in under the new revenue standard.

We currently expect this timing change will not have a significant impact to our annual revenues and net income, although the effects on quarterly revenues and net income are expected to be more significant because a meaningful amount of travel typically starts in December each year and is completed in January of the following year.

Under the new revenue standard, this revenue will be recognized in the fourth quarter each year rather than the first quarter of the following year.

Therefore, we estimate that revenue will be more than 2% lower in first quarter of 2018, slightly less than 1% lower in second and third quarters of 2018 and 4% higher in fourth quarter of 2018 recognized at check-in, as it is under the new revenue standard, than it would have been if recognized at check-out, as it would have been under the current accounting standard.

competitive position, including by making acquisitions, entering or investing in travel reservation businesses, investing in research and development, and competing aggressively for highly-skilled employees.

As of September 30, 2017, we performed our annual quantitative goodwill impairment test.

OpenTable

At September 30, 2017, OpenTable's fair value was approximately 18% higher than its fair value at September 30, 2016, which reflects performance that exceeded forecast.

Despite this increase in fair value, OpenTable's fair value was approximately 6% lower than its carrying value at September 30, 2017, thus failing Step 1 of the goodwill impairment test.

Therefore, we received assistance from a third-party valuation firm to develop a hypothetical purchase price allocation (Step 2).

The results of Step 2 indicated there was no goodwill impairment at September 30, 2017 because the implied fair value of OpenTable's goodwill exceeded its carrying value by approximately 24%.

We tested the recoverability of OpenTable’s other long-lived assets and concluded there was no impairment as of September 30, 2017.

We continue to review the GILTI and BEAT provisions of the Tax Act for applicability to us and expect further guidance from the U.S. Treasury Department, the U.S. Internal Revenue Service, U.S. state tax authorities and/or other authorities on the application of these provisions.

We have not yet adopted an accounting policy as to whether we will treat taxes on GILTI as period costs or whether we will recognize deferred tax assets and liabilities when basis differences exist that are expected to affect the amount of GILTI inclusion upon reversal.

The provisions of Tax Act are broad and complex, and there are significant uncertainties about how it will be interpreted at both the U.S. federal and state levels, and limited guidance is available from tax authorities at this time.

Further interpretation and implementation of the Tax Act may materially impact our provisional income tax expense and future income tax expense and obligations.

Further analysis is necessary to finalize our accumulated unremitted international earnings subject to the U.S. federal deemed repatriation tax.

In addition, since we are still evaluating whether and to what extent we will utilize our net operating loss carryforwards against the transition tax liability, our U.S. deferred tax assets or liabilities may be impacted.

We did not experience any material changes in interest rate exposures during the year ended December 31, [removed: 2017.][added: 2018.]

We performed a sensitivity analysis to determine the impact a change in interest rates would have on the fair value of our available-for-sale investments [added: in marketable debt securities] assuming an adverse change of 100 basis points.

A hypothetical 100 basis point (1.0%) increase in interest rates would have resulted in a decrease in the fair values of our investments [removed: as] of [removed: December 31, 2017 of] approximately [added: $126 million and] $206 [removed: million.][added: million at December 31, 2018 and and 2017, respectively.]

This amount excludes our investment in Ctrip.com International Ltd. ("Ctrip") senior convertible notes, which are more sensitive to the [added: equity] market price volatility of Ctrip's American Depositary Shares ("ADSs") than changes in interest rates.

[added: The fair value of our Ctrip senior] convertible notes will most likely increase as the market price of Ctrip's ADSs increases and [added: will likely] decrease as the market price of Ctrip's ADSs falls.

[removed: As of] [added: At] December 31, [added: 2018 and] 2017, the outstanding aggregate principal amount of our debt was approximately [added: $8.8 billion and] $9.7 [removed: billion.][added: billion, respectively.]

We estimate that the [removed: market] [added: fair] value of such debt was approximately [added: $9.3 billion and] $11.1 billion [removed: as of] [added: at] December 31, [removed: 2017.][added: 2018 and 2017, respectively.]

A substantial portion of the [removed: market] [added: fair] value of our debt in excess of the outstanding principal amount relates to the conversion premium on our outstanding convertible notes.

If the U.S. Dollar weakens against the local currencies, the translation of these foreign-currency-denominated balances will result in increased net assets, gross bookings, [removed: gross profit,] [added: revenues,] operating expenses, and net income.

Similarly, our net assets, gross bookings, [removed: gross profit,] [added: revenues,] operating expenses, and net income will decrease if the U.S. Dollar strengthens against the local currencies.

Additionally, foreign exchange rate fluctuations on transactions, denominated in currencies other than the functional currency, result in gains and losses that are reflected in [removed: the] [added: our] Consolidated Statements of Operations.

As a result of currency exchange rate changes, our foreign-currency-denominated [removed: net assets,] gross bookings, [removed: gross profit,] [added: revenues and] operating expenses [removed: and net income have been positively impacted] as expressed in U.S. Dollars [added: are higher] for the year ended December 31, [removed: 2017 compared to] [added: 2018 than they would have been had foreign exchange rates remained where they were for] the year ended December 31, [removed: 2016.][added: 2017.]

[removed: Since our expenses are generally] denominated in foreign currencies on a basis similar to our revenues, our operating margins have not been significantly impacted by currency fluctuations.

The aggregate principal value of our Euro-denominated long-term debt, and accrued interest thereon, provide a [removed: natural] hedge against the impact of currency exchange rate fluctuations on the net assets of certain of our Euro functional currency subsidiaries.

Our derivative contracts principally address foreign currency [removed: fluctuation risk] [added: translation risks] for the Euro, [added: the] British Pound Sterling and certain other currencies versus the U.S. Dollar.

[removed: As of] [added: At] December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] there were no such outstanding derivative contracts.

The Company has exposure to several types of market risk: changes in interest rates, foreign currency exchange rates and equity prices.

Since our expenses are generally

We are exposed to equity price risk as it relates to changes in fair value of our investments in equity securities of publicly-traded companies and private companies.

For periods beginning from January 1, 2018, changes in the fair value of our investments in publicly-traded equity securities are recognized in net income.

Our investments in private companies, excluding our investment in Grab (see Note 4 to our Consolidated Financial Statements), are measured at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer, with changes in value also recognized in net income (see Note 2 to our Consolidated Financial Statements).

The fair value of our investments in equity securities of publicly-traded companies and private companies, excluding our investment in Grab, was $1.0 billion and $501 million, respectively, at December 31, 2018, and $1.0 billion and $451 million, respectively, at December 31, 2017.

A hypothetical 10% decrease in the fair value of these investments at December 31, 2018 and 2017 will result in a loss of approximately $150 million and $140 million, respectively, being recognized in net income.

The fair value of our Ctrip senior

Foreign currency losses of $2.8 million for the year ended December 31, 2017, foreign currency gains of $3.4 million for the year ended December 31, 2016 and foreign currency losses of $6.6 million for the year ended December 31, 2015 were recorded in "Foreign currency transactions and other" in the Consolidated Statements of Operations.

| • | [removed: priceline.com] [added: priceline] - a leading hotel, rental car, airline ticket and vacation package [added: online] reservation service in [removed: the United States.] [added: North America.] |

| • | KAYAK - a leading [added: online] meta-search service allowing consumers to easily search and compare travel itineraries and prices, including airline ticket, accommodation and rental car reservation information, from hundreds of travel websites at once. |

| • | [removed: agoda.com] [added: agoda] - a leading [added: online] accommodation reservation service catering primarily to consumers in the Asia-Pacific region. |

| • | Rentalcars.com - a leading [added: online] worldwide rental car reservation service. |

| • | OpenTable - a leading [added: online] provider of restaurant reservation and information services to consumers and restaurant reservation management and customer acquisition services to restaurants. |

Our business is driven primarily by international results, which consist of the results of Booking.com, [removed: agoda.com] [added: agoda] and Rentalcars.com [removed: (which began operating as part of Booking.com on January 1, 2018)] and the international businesses of KAYAK and OpenTable.

During the year ended December 31, [removed: 2017,] [added: 2018,] our international business (the substantial majority of which is generated by Booking.com) represented approximately 89% of our consolidated [removed: gross profit.][added: revenues.]

A significant majority of our [removed: gross profit] [added: revenues, including a significant majority of our international revenues,] is earned in connection with facilitating accommodation reservations.

We derive substantially all of our revenues [removed: and] [added: and, prior to January 1, 2018,] gross profit from the following sources:

| • | Advertising revenues primarily earned by KAYAK from sending referrals to online travel companies ("OTCs") and travel service providers, as well as from advertising placements on KAYAK's [removed: websites and mobile apps;] [added: platforms;] |

| • | [removed: Damage excess waiver fees,] [added: Ancillary revenues including] travel [removed: insurance fees] [added: insurance-related revenues] and global distribution system ("GDS") reservation booking fees, in each case related to certain of our travel services. |

Our [removed: priceline.com] [added: priceline] brand offers merchant Name Your Own Price® opaque travel services, which [removed: are] [added: were previously] recorded in revenue on a "gross" basis [removed: and have associated] [added: with the amount remitted to the travel service providers reported as] cost of [removed: revenue.][added: revenues.]

For the year ended December 31, [removed: 2017,] [added: 2018,] we had [removed: gross profit] [added: revenues] of [removed: approximately $12.4] [added: $14.5] billion comprised of "agency" [removed: gross profit,] [added: revenues,] "merchant" [removed: gross profit,] [added: revenues] and "advertising and other" [removed: gross profit.][added: revenues.]

[added: | • |] Merchant [removed: gross profit is] [added: revenues are] derived from [removed: services] [added: travel-related transactions] where we [removed: facilitate] [added: receive] payments [added: from travelers] for the [removed: travel services] [added: service] provided, [added: generally at the time of booking. Merchant revenues include travel reservation commissions] and [removed: consists of: (1)] transaction [removed: gross profit representing] [added: net revenues (i.e.,] the amount charged to [removed: a consumer,] [added: travelers] less the amount [removed: charged] [added: owed] to [removed: us by] travel service [removed: providers, and] [added: providers) in connection with our] merchant [removed: travel] reservation [removed: commissions; (2) transaction revenues representing the price of Name Your Own Price® reservations charged to a customer (with a corresponding travel service provider cost recorded in cost of revenues); (3)] [added: services;] ancillary fees, including [removed: damage excess waiver and certain] travel [removed: insurance fees] [added: insurance-related revenues] and certain GDS reservation booking [removed: fees] [added: fees;] and [removed: (4)] [added: credit card processing rebates and] customer processing fees. [added: Substantially all merchant revenues are for merchant services derived from transactions where travelers book accommodation reservations or rental car reservations from travel service providers. |]

[added: | • |] Advertising and other revenues are derived primarily from [removed: (1)] revenues earned by KAYAK for [removed: (a)] sending referrals to OTCs and travel service providers and [removed: (b)] [added: for] advertising placements on [removed: KAYAK's websites] [added: its platforms] and [removed: mobile apps; (2)] revenues earned by OpenTable for [removed: (a) reservation fees paid by restaurants for diners seated through OpenTable's online] [added: its restaurant] reservation services and [removed: (b)] subscription fees [removed: earned by OpenTable] for restaurant [removed: reservation] management [removed: services; (3) revenues earned by priceline.com for advertising on its websites; and (4) revenues generated by Booking.com's BookingSuite branded accommodation marketing and business analytics] services. [added: |]

In particular, we aim to be the world leader in online travel and restaurant reservation and related services by (a) leveraging technology to provide consumers with the best experience, (b) partnering with travel service providers and [removed: restaurants to our mutual benefit, (c) operating entrepreneurial brands that collaborate and share best practices, and (d) investing in profitable and sustainable growth.]

| • | Partnering with travel service providers and restaurants. We aim to establish mutually beneficial relationships with travel service providers and restaurants around the world. We believe that travel service providers and restaurants benefit from participating in our services by increasing their distribution channels, demand and inventory utilization in an efficient and cost-effective manner. Travel service providers and restaurants benefit from our well-known brands and online marketing efforts, expertise in offering an excellent consumer experience through our [removed: websites and mobile apps] [added: online platforms] and ability to offer their inventory in markets and to consumers that the travel service provider or restaurant may [added: otherwise] be unable or unlikely to reach. For example, an independent hotel may not have the means or expertise to market itself to international travelers, including in other languages, to build and operate effective [removed: desktop and mobile websites and] online reservation services, or to engage in sophisticated online marketing techniques. Further, we are increasingly providing services, other than [removed: reservations booked through our websites and mobile apps,] [added: online reservation services,] designed to help our partners grow their businesses. For example, [removed: Booking.com's BookingSuite services are designed to offer accommodation providers with affordable marketing and business analytics tools to help them attract customers and more effectively manage their properties. Similarly,] OpenTable is continuously working to improve its reservation management software services to help restaurants more effectively manage their reservations and more efficiently market their available tables to diners. |

| • | Maintaining multiple brands. We employ a strategy of operating multiple brands, which we believe allows us the opportunity to offer our [removed: reservation] services in ways that appeal to different consumers, pursue different marketing and business strategies, encourage experimentation and innovation, provide different service offerings and focus on different markets, while benefiting all of our brands from opportunities to share best practices and [removed: learning] [added: learnings] and to collaborate. We intend to invest resources to support organic growth by all of our brands, whether through increased [removed: advertising,] [added: marketing,] geographic expansion, technology innovation or increased access to accommodations, rental cars, [removed: restaurants] [added: restaurants, airline tickets] or other services. [removed: For example, we] [added: We] spend significant and increasing amounts on performance and brand [removed: advertising] [added: marketing] to acquire customers and establish and strengthen our brands. We intend to continue efforts to share best practices, access to travel service provider offerings and customers across our brands and to collaborate [removed: where appropriate to] [added: for the] benefit [added: of] consumers. For example, on January 1, [removed: 2018] [added: 2018,] we [removed: integrated] [added: began operating] our Rentalcars.com business [removed: into] [added: as part of] Booking.com, which we believe will enable us to more effectively offer Rentalcars.com’s services to address the ground transportation needs of Booking.com’s customers. [removed: In addition, Booking.com offers consumers flight search capabilities provided by KAYAK and restaurant reservation services provided by OpenTable.] We believe that by promoting our brands worldwide, sharing [removed: accommodation] [added: travel service] reservation availability and customer demand, and applying our industry experiences across brands and markets, we can more effectively expand our [removed: reservation] services globally and maintain and grow our position as a leading provider of worldwide online travel and restaurant reservation and related services. |

| • | Investing in profitable and sustainable growth. We seek to offer online services that meet the needs and the expectations of consumers, travel service providers and restaurants and that we believe will result in long-term profitability and growth. We intend to accomplish this through continuous investment and innovation, growing our businesses in new and current markets, expanding our services and ensuring that we provide an appealing, intuitive and easy-to-use consumer [removed: experience through our websites and mobile apps.] [added: experience.] We have made significant investments in people, technology, [removed: advertising] [added: marketing] and expanded, new or additional services, such as increasing our extensive collection of accommodations including homes, apartments and other unique places to stay, insurance products and other offerings. We also may pursue strategic transactions. For example, [removed: in 2017] we expanded our KAYAK meta-search [removed: business, in particular in Europe, through the acquisition of the Momondo Group. We regularly evaluate, and may pursue and consummate, other potential strategic acquisitions, partnerships, joint ventures or investments, whether to expand our businesses into complementary areas, expand our current] |

[removed: Through our online travel reservation services, we] [added: We] connect consumers wishing to make travel reservations with providers of travel services around the [removed: world.][added: world through our online platforms.]

[removed: We] [added: Consumers can] also [removed: allow consumers] [added: use our meta-search services] to easily compare travel reservation information, such as airline ticket, hotel reservation and rental car reservation information, from hundreds of [added: online] travel [removed: websites] [added: platforms] at [removed: once through KAYAK.][added: once.]

[removed: As of] [added: At] December 31, [removed: 2017,] [added: 2018,] Booking.com offered accommodation reservation services for approximately [removed: 1,586,000] [added: 2,180,000] properties in over [removed: 220] [added: 230] countries and territories [removed: on its various websites] and in over 40 languages, consisting of approximately [removed: 396,000] [added: 436,000] hotels, motels and resorts and approximately [removed: 1,190,000] [added: 1,744,000] homes, apartments and other unique places to [removed: stay (updated property counts are available on the Booking.com website).][added: stay.]

On January 1, 2018, we began operating our Rentalcars.com business as part of Booking.com to more effectively offer [removed: Rentalcar.com’s] [added: Rentalcars.com’s] rental car and other ground transportation services to Booking.com’s customers.

[removed: Booking.com] [added: Rentalcars.com] offers online rental car reservation services [removed: on Booking.com] and [removed: Rentalcars.com, primarily under a merchant model, allowing] [added: allows] consumers to make rental car reservations in [removed: approximately 53,000] [added: over 55,000] locations throughout the world, with customer support in over 40 languages.

Booking.com [added: and Rentalcars.com] also [removed: offers] [added: offer] pre-booked taxi and black car services [removed: on Booking.com and Rentalcars.com] at over 900 airports throughout the world.

[removed: Priceline.com] [added: Priceline] offers online travel reservation services primarily in [removed: the United States] [added: North America] and is headquartered in Norwalk, Connecticut.

[removed: Through priceline.com, we offer] [added: Priceline offers] consumers hotel, rental car and airline ticket reservation services, as well as vacation packages and cruises.

[removed: Priceline.com] [added: Priceline] is a leader in the discount travel reservation business, [removed: including] [added: in particular] through its [removed: pioneering Name Your Own Price® and] Express Deals® "opaque" offerings where certain elements of the service, including the identity of the travel service provider, are not disclosed to the consumer prior to making a reservation.

KAYAK derives revenues from sending referrals to OTCs and travel service providers and from advertising placements on its [removed: websites and mobile apps.][added: platforms.]

KAYAK offers its services in over 60 countries, with the United States being its largest market, through various websites, including [removed: Momondo and] [added: Momondo,] Cheapflights [removed: (websites we acquired in 2017).][added: and HotelsCombined.]

[removed: Agoda.com] [added: Agoda] is a leading online accommodation reservation service catering primarily to consumers in the Asia-Pacific region, with headquarters in Singapore and operations in Bangkok, Thailand and [removed: throughout the region.][added: elsewhere.]

[removed: Headquartered] [added: With significant operations] in San Francisco, California, OpenTable provides online restaurant reservation services to consumers and reservation management services to restaurants.

Both our performance [removed: advertising expense] and brand [removed: advertising expense] [added: marketing expenses] have increased significantly in recent years, [removed: a trend] [added: and] we expect [added: our performance and brand marketing expenses] to [removed: continue.][added: continue to increase.]

During [removed: 2017,] [added: 2018,] our total performance [removed: advertising] [added: marketing] expense was approximately [removed: $4.1] [added: $4.4] billion, [removed: primarily] [added: mostly] related to the use of online search engines (primarily Google), meta-search and travel research services and affiliate marketing to generate traffic to our [removed: websites.][added: platforms.]

We intend to continue a strategy of promoting brand awareness through both online and offline [removed: advertising] [added: marketing] efforts, including by expanding brand campaigns into additional [removed: markets.][added: markets, which may significantly increase our brand marketing expenses.]

The markets for the services we offer [removed: are, and] are [removed: expected to remain,] intensely [removed: competitive] [added: competitive, constantly evolving] and [added: subject to rapid change, and] current and new competitors can launch new services at a relatively low cost.

Some of our current and potential competitors, such as Google, Apple, Alibaba, Tencent, Amazon and Facebook, have [removed: access to] significantly [removed: greater and] more [removed: diversified] [added: customers or users, consumer data and financial and other] resources than we do, and they may be able to leverage other aspects of their businesses (e.g., search or mobile device businesses) to enable them to compete more effectively with us.

For example, Google has entered various aspects of the online travel market, including by establishing a flight meta-search product [removed: (“Google Flights”)] [added: ("Google Flights")] and a hotel meta-search [removed: business] [added: product] ("Google Hotel Ads") that are growing rapidly, as well as its "Book on Google" reservation functionality and its Google Trips app.

We currently, or may [removed: potentially] in the future, compete with a variety of companies, including:

| • | online travel reservation services such as Expedia, Hotels.com, Hotwire, Orbitz, Travelocity, Wotif, Cheaptickets, ebookers, HotelClub, RatesToGo and CarRentals.com, which are owned by [removed: Expedia;] [added: Expedia Group;] Hotel Reservation Service (HRS) and hotel.de, which are owned by Hotel Reservation Service; and AutoEurope, CarTrawler, Ctrip (in which we hold a minority [removed: interest), eLong] [added: interest) and Trip.com (which is owned by Ctrip), Tongcheng-eLong] (in which Ctrip holds a significant minority interest), ezTravel (in which Ctrip holds a majority interest), Meituan [added: Dianping] (in which we hold a small minority interest), MakeMyTrip, [removed: OYO Rooms, Yatra, Cleartrip,] Traveloka (in which Expedia [added: Group] holds a minority interest), Webjet, Rakuten, Jalan (which is owned by Recruit), [removed: ViajaNet, Submarino Viagens,] Despegar/Decolar (in which Expedia [added: Group] holds a minority [removed: ownership] interest), Fliggy [removed: (operated] [added: (which is owned] by Alibaba), [removed: 17u.com,] HotelTonight, CheapOair, and eDreams ODIGEO; |

We seek to empower people to cut through travel barriers, such as time, money, language and overwhelming options, so they can use our services to easily and confidently stay where they want to stay, do what they want to do and experience what they want to experience.

| • | Travel reservation commissions and transaction net revenues, credit card processing rebates and customer processing fees, in each case in connection with our merchant transactions; |

Under the

current revenue recognition accounting standard, Name Your Own Price® revenues are reported on a net basis with the amount remitted to the travel service providers recorded as an offset in merchant revenues.

Therefore, for periods beginning after December 31, 2017, we no longer present "Cost of revenues" or "Gross profit" in our Consolidated Statements of Operations.

Total revenues for periods beginning after December 31, 2017 are comparable to gross profit reported in prior periods.

For further information on the adoption of the current revenue recognition accounting standard, see Note 2 to the Consolidated Financial Statements.

| • | Agency revenues are derived from travel-related transactions where we do not receive payments from travelers for the services provided. We invoice the travel service providers for our commissions after travel is completed. Agency revenues consist almost entirely of travel reservation commissions, as well as certain GDS reservation booking fees and certain travel insurance fees. |

restaurants to our mutual benefit, (c) operating multiple brands that collaborate with each other, and (d) investing in profitable and sustainable growth.

| • | Providing the best consumer experience. We believe that offering consumers an outstanding online experience is essential for our future success. To accomplish this, we focus on providing consumers with: (a) a variety of intuitive, easy-to-use online travel and restaurant reservation and search services; (b) a continually increasing number, location and variety of accommodations, other travel offerings and restaurants available through our services; (c) informative and useful content, such as pictures, accommodation and restaurant details and reviews; and (d) excellent customer service. Our goal is to make travel easy, frictionless and personal and to offer consumers the most trusted brand, the most personalized experience and the most extensive, varied and comprehensive accommodation selection in every geography at the best prices. For example, Booking.com increasingly provides reservation services for accommodations other than hotels. Booking.com included approximately 2,180,000 properties on its website at December 31, 2018, consisting of approximately 436,000 hotels, motels and resorts and approximately 1,744,000 homes, apartments and other unique places to stay. Further, we endeavor to provide excellent customer service in a variety of ways, including through our call centers and online platforms and the use of chatbots and other technologies, so that consumers can be confident that booking reservations through us will be a positive experience. We are constantly innovating in order to provide a best-in-class user experience with intuitive, easy-to-use online platforms (i.e., websites and mobile apps) to ensure that we are meeting the needs of online consumers while aiming to exceed their expectations. |

business, particularly in Europe and Asia, through the acquisitions of the Momondo Group in 2017 and HotelsCombined in 2018.

We also strengthened our ability to offer in-destination activities by acquiring FareHarbor, a leading provider of business-to-business activity distribution services, in 2018.

We regularly evaluate, and may pursue and consummate, other potential strategic acquisitions, partnerships, joint ventures or investments, whether to expand our businesses into complementary areas, expand our current businesses, acquire innovative technology or for other reasons.

For example in July 2018, we made an investment in Didi Chuxing, the leading mobile transportation and ride-hailing platform in China, and in October 2018, we made an investment in Grab, a leading on-demand transportation and mobile service platform in Southeast Asia.

Through one or more of our brands, consumers can: book a broad array of accommodations (including hotels, motels, resorts, homes, apartments, bed and breakfasts, hostels and other properties); make a car rental reservation or arrange for an airport taxi; make a dinner reservation; or book a cruise, flight, vacation package, tour or activity.

In addition, we offer various other services to consumers, such as certain insurance products and restaurant management services to restaurants.

Booking.com and Rentalcars.com.

For example, Booking.com offers in-destination tours and activities in more than 100 cities around the world.

Priceline.

Agoda.

Growth of some of these channels has slowed.

We also invested $509 million in brand marketing during 2018, primarily related to costs associated with producing and airing television advertising, online video advertising (for example, on YouTube and Facebook), online display advertising and other brand marketing.

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However, in 2018 we saw a contraction of the booking window.

Future changes in the length of the booking window will affect the degree to which our gross bookings and revenues occur in the same period and, as a result, whether our gross bookings growth rates and revenue growth rates converge or diverge.

As a result, the shift in timing of Easter relative to 2018 will have a negative effect on our year-over-year growth rates in the first quarter of 2019 and a positive effect on our year-over-year growth rates in the second quarter of 2019.

The timing of other holidays such as Ramadan can also impact our quarterly year-over-year growth rates.

We are

| • | Transaction gross profit on a merchant basis and customer processing fees from our accommodation, rental car, airline ticket and vacation package reservation services; |

All of our other services are generally recorded in revenue on a "net" basis and have no significant associated cost of revenue.

Therefore, revenue increases and decreases are impacted by changes in the mix of our revenues between Name Your Own Price® travel services and other services.

Gross profit reflects the commission or net margin earned for all of our services.

Consequently, gross profit is an important measure to evaluate growth in our business because, in contrast to our revenues, it is not affected by the different methods of recording revenue and cost of revenue between our Name Your Own Price® travel reservation services and our other services.

On January 1, 2018, we adopted a new revenue recognition accounting standard which will change the presentation of our Name Your Own Price® revenue to a net basis (see Note 2 to the Consolidated Financial Statements) for periods beginning after December 31, 2017, and, as a result, we will no longer report cost of revenues or gross profit.

Agency gross profit is derived from travel-related transactions where we do not facilitate payments for the travel services provided.

Agency gross profit, which represented the majority of our total gross profit in 2017, consists primarily of: (1) travel reservation commissions; (2) certain GDS reservation booking fees and (3) certain travel insurance fees.

See Note 2 to our Consolidated Financial Statements for more information.

| • | Providing the best consumer experience. We believe that offering consumers an outstanding online experience is essential for our future success. To accomplish this, we focus on providing consumers with: (a) a variety of intuitive, easy-to-use online travel and restaurant reservation and search services; (b) a continually increasing number, location and variety of accommodations and restaurants available through our services; (c) informative |

and useful content, such as pictures, accommodation and restaurant details and reviews; and (d) excellent customer service.

Our goal is to make travel easy, frictionless and personal and to offer consumers the most trusted brand, the most personalized experience and the most extensive, varied and comprehensive accommodation selection in every geography at the best prices.

For example, Booking.com increasingly provides reservation services for accommodations other than hotels.

Booking.com included approximately 1,586,000 properties on its website as of December 31, 2017, consisting of approximately 396,000 hotels, motels and resorts and approximately 1,190,000 homes, apartments and other unique places to stay (updated property counts are available on the Booking.com website).

Further, we endeavor to provide excellent customer service in a variety of ways, including through our call centers and websites, so that consumers can be confident that booking reservations through us will lead to a positive experience.

We are constantly innovating in order to provide a best-in-class user experience with intuitive, easy-to-use websites and mobile apps to ensure that we are meeting the needs of online consumers while aiming to exceed their expectations.

businesses, acquire innovative technology or for other reasons.

For example, we have a commercial relationship with, and have made significant financial investments in, Ctrip, a leading OTC operating primarily in China.

We offer consumers a broad array of accommodation reservations (including hotels, motels, resorts, homes, apartments, bed and breakfasts, hostels and other properties) through our Booking.com, priceline.com and agoda.com brands.

Our priceline.com brand also offers consumers reservations for rental cars, airline tickets, vacation packages and cruises.

We offer rental car reservations worldwide through our Rentalcars.com and Booking.com brands.

We provide restaurants with reservation management and customer acquisition services and consumers with the ability to make restaurant reservations at participating restaurants through OpenTable.

Booking.com.

Accommodation providers participate in Booking.com, which operates primarily under an agency model, by filing rates and information about the property in Booking.com's proprietary extranet.

In addition, Booking.com offers website and other marketing services and business analytics to accommodation providers as part of its BookingSuite initiative.

For example, Booking.com has begun offering tours and activities in certain markets.

In addition, Booking.com offers consumers flight search capabilities provided by KAYAK and restaurant reservation services provided by OpenTable.

Priceline.com.

We believe that the combination of priceline.com's retail and opaque models allows it to provide a broad array of options to value-conscious consumers.

Priceline.com operates under both a merchant and agency model.

Agoda.com.

Accommodation providers participate in agoda.com, which operates primarily under a merchant model, by filing rates and information about the property in agoda.com's proprietary extranet.

We also invested approximately $392 million in brand advertising during 2017.

We expense the substantial majority of our advertising activities as the expense is incurred, which is typically in the quarter in which reservations are booked, but have recognized most of our gross profit when the consumer's travel or dining experience is completed.

Beginning January 1, 2018, we will recognize revenue for our travel reservation services on a “check-in” basis, such that revenue will be recognized upon check-in at an accommodation, pick-up of a rental car or boarding of a flight.

In either case, as a result of this timing difference between when advertising expense is incurred and revenue or gross profit is recognized, advertising expense may not be recognized in the same period as the associated revenue or gross profit.

Google, the world’s largest search engine and one of the world's largest companies, and other large, established companies with substantial resources and expertise in developing online commerce and facilitating Internet traffic have launched search, meta-search and/or reservation booking services and may create additional inroads into online travel.

Google's travel meta-search services, Google Hotel Ads and Google Flights, are growing rapidly and have achieved significant market share in a relatively short time.

Meta-search services leverage their search technology to aggregate travel search results for the consumer's specific itinerary across travel service provider (e.g., accommodations, rental car companies or airlines), OTC and other travel websites and, in many instances, compete directly with us for customers.

Meta-search services intend to appeal to consumers by showing broader travel search results than may be available through OTCs or other travel websites, which could lead to travel service providers or others gaining a larger share of search traffic.

A description of any material legal proceedings to which we are a party is included in Note 14 to our Consolidated Financial Statements included in Annual Report on Form 10-K for the year Ended December 31, [removed: 2017,] [added: 2018,] and is incorporated into this Item 3 by reference thereto.

For the fiscal year ended: December 31, [removed: 2017][added: 2018]

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Web site, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T [removed: (§ 232.405] [added: (§232.405] of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K [added: (§229.405 of this chapter)] is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [removed: o]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated [removed: filer or] [added: filer,] a smaller reporting [added: company or an emerging growth] company.

See the definitions of "large accelerated filer," "accelerated [removed: filer" and] [added: filer,"] "smaller reporting company" [added: and "emerging growth company"] in Rule 12b-2 of the Exchange Act (Check one):

The aggregate market value of common stock held by non-affiliates of Booking Holdings Inc. [removed: as of] [added: at] June 30, [removed: 2017] [added: 2018] was approximately [removed: $91.5] [added: $96.6] billion based upon the closing price reported for such date on the NASDAQ Global Select Market.

For purposes of this disclosure, shares of common stock held by executive officers and directors of Booking Holdings Inc. on June 30, [removed: 2017] [added: 2018] have been excluded because such persons may be deemed to be affiliates of Booking Holdings Inc. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

The number of outstanding shares of Booking Holdings Inc.’s common stock was [removed: 48,288,592 as of] [added: 45,012,725 at] February 20, [removed: 2018.][added: 2019.]

The information required by Part III of this Annual Report on Form 10-K, to the extent not set forth in this Form 10-K, is incorporated herein by reference from Booking Holdings Inc.'s definitive proxy statement relating to the annual meeting of stockholders to be held on June [removed: 7, 2018,] [added: 6, 2019,] to be filed with the Securities and Exchange Commission within 120 days after the end of Booking Holdings Inc.'s fiscal year ended December 31, [removed: 2017.][added: 2018.]

Booking Holdings Inc. Annual Report on Form 10-K for the Year Ended December 31, [removed: 2017] [added: 2018] Index

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| [Item [removed: 9B.](#s210FFC766A39F2FFC0E5CB7EF51C5C4E)] [added: 9B.](#sDB6C16CD623A0F7B4CC5E9D5E5DC36AA)] | [Other [removed: Information](#s210FFC766A39F2FFC0E5CB7EF51C5C4E)] [added: Information](#sDB6C16CD623A0F7B4CC5E9D5E5DC36AA)] | [removed: [66](#s210FFC766A39F2FFC0E5CB7EF51C5C4E)] [added: [64](#sDB6C16CD623A0F7B4CC5E9D5E5DC36AA)] |

| [PART [removed: III](#s8BDCA181F1E7AAA4C87FCB7EF54EC49A)] [added: III](#s062E6B7A300872A9229EE9D5E60BAF1F)] | | [removed: [66](#s8BDCA181F1E7AAA4C87FCB7EF54EC49A)] [added: [64](#s062E6B7A300872A9229EE9D5E60BAF1F)] |

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| [Consolidated Financial [removed: Statements](#s62969ED959B3536F6536CB7EF6BD4383)] [added: Statements](#sDEFCE1AB347D43557FFDE9D5E7AC6D7A)] | | [removed: [72](#s62969ED959B3536F6536CB7EF6BD4383)] [added: [70](#sDEFCE1AB347D43557FFDE9D5E7AC6D7A)] |

Expressions of future goals and expectations and similar expressions, including "may," "will," "should," "could," [added: "aims," "seeks,"] "expects," "plans," "anticipates," "intends," "believes," "estimates," "predicts," "potential," "targets," and "continue," reflecting something other than historical fact are intended to identify forward-looking statements.

10-K 1 bkng1231201810k.htm 10-K

| [PART I](#s153D0C75A788FB399084E9D5E31D4BA5) | | [1](#s153D0C75A788FB399084E9D5E31D4BA5) |

| [PART II](#s6236A9AAEA12EEC386A8E9D5E43AB8C0) | | [31](#s6236A9AAEA12EEC386A8E9D5E43AB8C0) |

| [PART IV](#s3539BD6C7422469A6347E9D5E706ACFD) | | [64](#s3539BD6C7422469A6347E9D5E706ACFD) |

| [Signatures](#sBD967D7AF74F4F2A3E87E9D5E77A0590) | | [68](#sBD967D7AF74F4F2A3E87E9D5E77A0590) |

10-K 1 pcln-20171231_10k.htm 10-K

| [PART I](#s8A26157D42F5F2DD8457CB7EF260B871) | | [1](#s8A26157D42F5F2DD8457CB7EF260B871) |

| [PART II](#s30213F475FB61603312BCB7EF37C6700) | | [32](#s30213F475FB61603312BCB7EF37C6700) |

| [PART IV](#sFA9BD18ABF17481D7238CB7EF648D516) | | [66](#sFA9BD18ABF17481D7238CB7EF648D516) |

| [Signatures](#s8E1E860D19D3E5F84E73CB7EF69B8D36) | | [70](#s8E1E860D19D3E5F84E73CB7EF69B8D36) |

We lease additional [added: space, including] office space [removed: to support our operations in various locations around the world, including hosting] and data center facilities in [added: various locations around] the [removed: United States,] [added: world, to support our operations,] the [removed: United Kingdom, Switzerland,] [added: largest being] the [removed: Netherlands, Germany, Singapore, Hong Kong and China and sales and support facilities] [added: headquarters of our Booking.com business] in [removed: numerous locations.][added: Amsterdam, Netherlands.]

Other than the office building [added: for the future headquarters of the Booking.com brand] that is currently under construction in the Netherlands and the associated land-use rights (see the section "Land-use rights" within Note 2 to our Consolidated Financial Statements for more details, which is incorporated into this Item 2 by reference thereto), we [removed: do] [added: did] not own any real estate [removed: as of] [added: at] December 31, [removed: 2017.][added: 2018.]

We lease office space facilities for our corporate headquarters in Norwalk, Connecticut, United States of America.

Our corporate headquarters and the headquarters of our priceline.com business are located in Norwalk, Connecticut, United States of America, where we lease approximately 90,000 square feet of office space.

We lease approximately 258,000 square feet of office space in Amsterdam, Netherlands for the headquarters of our Booking.com business; our agoda.com business has significant support operations in Bangkok, Thailand, where we lease approximately 144,000 square feet of office space; we lease approximately 18,000 square feet of office space in Stamford, Connecticut, United States of America, for the headquarters of our KAYAK business; we lease approximately 60,000 square feet of office space in San Francisco, California, United States of America, for the headquarters of our OpenTable business; and we lease approximately 45,000 square feet of office space in Manchester, England for the headquarters of our Rentalcars.com business.

[removed: Price Range of] Common Stock

[removed: As of] [added: At] February 20, [removed: 2018,] [added: 2019,] there were approximately [removed: 190] [added: 179] stockholders of record of Booking Holdings Inc.'s common stock.

The following graph shows the total stockholder return through December 31, [removed: 2017] [added: 2018] of an investment of $100 in cash on December 31, [removed: 2012] [added: 2013] for our common stock and an investment of $100 in cash on December 31, [removed: 2012] [added: 2013] for (i) the NASDAQ Composite Index, (ii) the Standard and Poor's 500 Index and (iii) the Research Data Group ("RDG") Internet Composite Index.

[removed: ][added: ]

The following table sets forth information relating to repurchases of our equity securities during the three months ended December 31, [removed: 2017:][added: 2018:]

| Period | | [removed: (a)] Total Number of Shares (or Units) Purchased | | | [removed: (b)] Average Price Paid per Share (or Unit) | | | | [removed: (c)] Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | | | [removed: (d)] Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | | | | |

| (1) | Pursuant to a stock repurchase program announced on February [removed: 17, 2016,] [added: 27, 2018,] whereby the Company was authorized to repurchase up to [removed: $3,000,000,000] [added: $8.0 billion] of its common stock. |

| [removed: (3)] [added: (2)] | Pursuant to a general authorization, not publicly announced, whereby the Company is authorized to repurchase shares of its common stock to satisfy employee withholding tax obligations related to stock-based compensation. |

Our common stock is quoted on the NASDAQ Global Select Market under the symbol "BKNG."

| 2013 | | 100.00 | | | 100.00 | | | 100.00 | | | 100.00 | |

| 2014 | | 98.09 | | | 114.62 | | | 113.69 | | | 96.39 | |

| 2015 | | 109.68 | | | 122.81 | | | 115.26 | | | 133.20 | |

| 2016 | | 126.12 | | | 133.19 | | | 129.05 | | | 140.23 | |

| 2017 | | 149.50 | | | 172.11 | | | 157.22 | | | 202.15 | |

| 2018 | | 148.18 | | | 165.84 | | | 150.33 | | | 201.16 | |

| October 1, 2018 — | | 327,326 | | (1) | $ | 1,848.24 | | | 327,326 | | | $ | 5,764,255,118 | | | (1) |

| October 31, 2018 | | 1,525 | | (2) | $ | 1,983.15 | | | N/A | | | N/A | | | | |

| November 1, 2018 — | | 307,863 | | (1) | $ | 1,861.16 | | | 307,863 | | | $ | 5,191,274,184 | | | (1) |

| November 30, 2018 | | 2,098 | | (2) | $ | 1,936.20 | | | N/A | | | N/A | | | | |

| December 1, 2018 — | | 366,266 | | (1) | $ | 1,765.16 | | | 366,266 | | | $ | 4,544,757,632 | | | (1) |

| December 31, 2018 | | 212 | | (2) | $ | 1,708.49 | | | N/A | | | N/A | | | | |

| Total | | 1,005,290 | | | $ | 1,822.28 | | | 1,001,455 | | | $ | 4,544,757,632 | | | |

Our common stock is quoted on the NASDAQ Global Select Market under the symbol "BKNG." Prior to February 27, 2018, it was traded under the symbol "PCLN." The following table sets forth, for the periods indicated, the high and low sales prices per share of our common stock as reported on the NASDAQ Global Select Market:

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| 2017 | | High | | | | Low | | |

| | | | | | | | | |

| First Quarter | | $ | 1,798.75 | | | $ | 1,459.49 | |

| Second Quarter | | 1,927.13 | | | | 1,738.34 | | |

| Third Quarter | | 2,067.99 | | | | 1,774.40 | | |

| Fourth Quarter | | 1,961.45 | | | | 1,630.56 | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| 2016 | | High | | | | Low | | |

| | | | | | | | | |

| First Quarter | | $ | 1,361.63 | | | $ | 954.02 | |

| Second Quarter | | 1,394.00 | | | | 1,148.06 | | |

| Third Quarter | | 1,481.78 | | | | 1,245.51 | | |

| Fourth Quarter | | 1,600.93 | | | | 1,422.19 | | |

| 2012 | | 100.00 | | | 100.00 | | | 100.00 | | | 100.00 | |

| 2013 | | 187.37 | | | 141.63 | | | 132.39 | | | 163.02 | |

| 2014 | | 183.79 | | | 162.09 | | | 150.51 | | | 158.81 | |

| 2015 | | 205.51 | | | 173.33 | | | 152.59 | | | 224.05 | |

| 2016 | | 236.31 | | | 187.19 | | | 170.84 | | | 235.33 | |

| 2017 | | 280.10 | | | 242.29 | | | 208.14 | | | 338.52 | |

Sales of Unregistered Securities

Between October 1, 2017 and December 31, 2017, we issued 103,343 shares of our common stock in connection with the conversion of $196.1 million principal amount of our 1.0% Convertible Senior Notes due 2018.

The conversions were effected in accordance with the indenture, which provides that the principal amount of converted notes be paid in cash and the conversion premium be paid in cash and/or shares of common stock at our election.

In each case, we chose to pay the conversion premium in shares of common stock (fractional shares are paid in cash).

The issuances of the shares were not registered under the Securities Act of 1933, as amended (the "Act") pursuant to Section 3(a)(9) of the Act.

| October 1, 2017 — | | 76,324 | | (1) | $ | 1,912.59 | | | 76,324 | | | $ | 2,944,901,911 | | | (1) (2) |

| October 31, 2017 | | 86 | | (3) | $ | 1,909.37 | | | N/A | | | N/A | | | | |

| November 1, 2017 — | | 129,393 | | (1) | $ | 1,746.53 | | | 129,393 | | | $ | 2,718,913,770 | | | (1) (2) |

| November 30, 2017 | | 2,822 | | (3) | $ | 1,702.72 | | | N/A | | | N/A | | | | |

| December 1, 2017 — | | 185,236 | | (1) | $ | 1,748.97 | | | 185,236 | | | $ | 2,394,940,699 | | | (1) (2) |

| December 31, 2017 | | 23 | | (3) | $ | 1,782.62 | | | N/A | | | N/A | | | | |

| Total | | 393,884 | | | $ | 1,779.58 | | | 390,953 | | | $ | 2,394,940,699 | | | |

| | |

| --- | --- |

| (2) | Pursuant to a stock repurchase program announced on February 27, 2017, whereby the Company was authorized to repurchase up to $2,000,000,000 of its common stock. |

Selected financial data reflects results of any acquired business from the date of acquisition, including data related to [removed: KAYAK from its acquisition date of May 21, 2013,] OpenTable from its acquisition date of July 24, [removed: 2014 and] [added: 2014,] the Momondo Group [removed: (which is managed as part of the Company's KAYAK business)] from its acquisition date of July 24, [removed: 2017.][added: 2017, FareHarbor from its acquisition date of April 26, 2018 and HotelsCombined from its acquisition date of November 30, 2018.]

| | [removed: 2017] [added: 2018(1)] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| | (In [removed: thousands,] [added: millions,] except per share amounts) | | | | | | | | | | | | | | | | | | |

| Net income applicable to common stockholders per basic common share [removed: (1) (2)] [added: (3) (5)] | [removed: 47.78] [added: 84.26] | | | | [removed: 43.14] [added: 47.78] | | | | [removed: 50.09] [added: 43.14] | | | | [removed: 46.30] [added: 50.09] | | | | [removed: 37.17] [added: 46.30] | | |

| Net income applicable to common stockholders per diluted common share [removed: (1) (2)] [added: (3) (5)] | [removed: 46.86] [added: 83.26] | | | | [removed: 42.65] [added: 46.86] | | | | [removed: 49.45] [added: 42.65] | | | | [removed: 45.67] [added: 49.45] | | | | [removed: 36.11] [added: 45.67] | | |

| [removed: (1)] [added: (3)] | Includes a non-cash charge related to an impairment of OpenTable goodwill of [removed: $940.7] [added: $941] million, which is not tax deductible, for the year ended December 31, 2016 (see Note 9 to the Consolidated Financial Statements). The goodwill impairment charge reduced the 2016 basic and diluted net income per share by $19.01 and $18.79, respectively. |

| [removed: (2)] [added: (5)] | Includes [removed: a] [added: an income tax benefit during the year ended December 31, 2018 of $46 million to adjust the 2017] provisional tax expense [removed: of $1.6 billion] related to a one-time [removed: transition] [added: transitional] tax on [removed: the] mandatory deemed repatriation of accumulated unremitted international earnings [removed: and a provisional net tax benefit of approximately $217 million related to the remeasurement of the Company’s U.S. deferred tax assets and liabilities, for the year ended December 31, 2017,] as a result of the U.S. Tax Cuts and Jobs Act [added: (“Tax Act”)] enacted [removed: on] [added: in] December [removed: 22,] 2017 (see Note 13 to the Consolidated Financial [removed: Statements), which reduced] [added: Statements). The income tax provision for] the [added: year ended December 31,] 2017 [removed: basic] [added: includes a provisional tax expense of $1.6 billion related to the transition tax mentioned above] and [removed: diluted] [added: a provisional] net [removed: income per share by $27.47 and $26.94, respectively.] |

| [removed: (4)] [added: (6)] | Includes convertible debt which is classified as a current liability, [removed: where] [added: when] applicable. [added: As of December 31, 2018, none of the Company's convertible debt was classified as a current liability.] |

| Total revenues | $ | 14,527 | | | $ | 12,681 | | | $ | 10,743 | | | $ | 9,224 | | | $ | 8,442 | |

| Cost of revenues (2) | — | | | | 242 | | | | 415 | | | | 646 | | | | 858 | | |

| Gross profit (2) | — | | | | 12,439 | | | | 10,328 | | | | 8,578 | | | | 7,584 | | |

| Total operating expenses(2)(3) | 9,186 | | | | 7,901 | | | | 7,422 | | | | 5,319 | | | | 4,511 | | |

| Operating income(2)(3) | 5,341 | | | | 4,538 | | | | 2,906 | | | | 3,259 | | | | 3,073 | | |

| Total other expense(4) | 506 | | | | 139 | | | | 193 | | | | 131 | | | | 84 | | |

| Income tax expense(5) | 837 | | | | 2,058 | | | | 578 | | | | 577 | | | | 568 | | |

| Net income(3) (4) | 3,998 | | | | 2,341 | | | | 2,135 | | | | 2,551 | | | | 2,422 | | |

| Total assets | 22,687 | | | | 25,451 | | | | 19,839 | | | | 17,421 | | | | 14,771 | | |

| Long-term obligations(6) | 10,347 | | | | 11,403 | | | | 8,128 | | | | 7,186 | | | | 4,863 | | |

| Total liabilities | 13,902 | | | | 14,187 | | | | 9,990 | | | | 8,626 | | | | 6,204 | | |

| Total stockholders' equity | 8,785 | | | | 11,261 | | | | 9,820 | | | | 8,795 | | | | 8,567 | | |

| (1) | The financial statements for the year ended December 31, 2018 are presented in accordance with the current revenue recognition accounting standard adopted on January 1, 2018. Financial statements for all periods prior to January 1, 2018 are presented under the previous revenue recognition accounting standard. See Note 2 to our Consolidated Financial Statements for further information. |

| (2) | Reflects the change in the presentation of advertising expenses and sales and marketing expenses and the reclassification of certain expenses from cost of revenues to operating expenses in our Consolidated Statements of Operations. See Note 2 to our Consolidated Financial Statements for further information. |

| (4) | Includes net unrealized losses on marketable equity securities of $367 million for the year ended December 31, 2018. Pursuant to the adoption of the accounting update on financial instruments in 2018, for periods beginning after December 31, 2017, marketable equity securities are reported at estimated fair value with changes in fair value recognized in net income rather than accumulated other comprehensive income within stockholders' equity. See Note 2 to our Consolidated Financial Statements for further information. |

| | |

| --- | --- |

tax benefit of $217 million related to the remeasurement of the Company’s U.S. deferred tax assets and liabilities as a result of the Tax Act, which reduced the 2017 basic and diluted net income per share by $27.47 and $26.94, respectively.

| | |

| --- | --- |

| Total revenues | $ | 12,681,082 | | | $ | 10,743,006 | | | $ | 9,223,987 | | | $ | 8,441,971 | | | $ | 6,793,306 | |

| Cost of revenues | 250,537 | | | | 428,314 | | | | 632,180 | | | | 857,841 | | | | 1,077,420 | | |

| Gross profit | 12,430,545 | | | | 10,314,692 | | | | 8,591,807 | | | | 7,584,130 | | | | 5,715,886 | | |

| Total operating expenses(1) | 7,892,553 | | | | 7,408,379 | | | | 5,332,900 | | | | 4,510,818 | | | | 3,303,472 | | |

| Operating income(1) | 4,537,992 | | | | 2,906,313 | | | | 3,258,907 | | | | 3,073,312 | | | | 2,412,414 | | |

| Total other expense | 139,670 | | | | 193,075 | | | | 130,587 | | | | 83,864 | | | | 115,877 | | |

| Income tax expense(2) | 2,057,557 | | | | 578,251 | | | | 576,960 | | | | 567,695 | | | | 403,739 | | |

| Net income(1) (2) | 2,340,765 | | | | 2,134,987 | | | | 2,551,360 | | | | 2,421,753 | | | | 1,892,798 | | |

| Net income attributable to noncontrolling interests(3) | — | | | | — | | | | — | | | | — | | | | 135 | | |

| Net income applicable to common stockholders(1) (2) | 2,340,765 | | | | 2,134,987 | | | | 2,551,360 | | | | 2,421,753 | | | | 1,892,663 | | |

| Total assets | 25,451,263 | | | | 19,838,973 | | | | 17,420,575 | | | | 14,770,977 | | | | 10,428,543 | | |

| Long-term obligations(4) | 11,403,707 | | | | 8,127,895 | | | | 7,185,796 | | | | 4,862,730 | | | | 2,289,039 | | |

| Total liabilities | 14,187,702 | | | | 9,990,293 | | | | 8,625,106 | | | | 6,203,954 | | | | 3,510,281 | | |

| Total stockholders' equity | 11,260,598 | | | | 9,820,142 | | | | 8,795,469 | | | | 8,566,694 | | | | 6,909,729 | | |

| (3) | Redeemable noncontrolling interests relates to the Company's purchase of Rentalcars.com in May 2010. In April 2013, the Company purchased the remaining outstanding shares underlying the redeemable noncontrolling interests in connection with the exercise of certain call and put options in March 2013. |

The following Consolidated Financial Statements of the Company and the report of our independent registered public accounting firm are filed as part of this Annual Report on Form 10-K (See Part IV Item 15 Exhibits and Financial Statement Schedules): Consolidated Balance Sheets [removed: as of] [added: at] December 31, [removed: 2017] [added: 2018] and [removed: 2016;] [added: 2017;] Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Stockholders' Equity and Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015;] [added: 2016;] Notes to the Consolidated Financial Statements; and Report of Independent Registered Public Accounting Firm.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we include a report of our management's assessment of the design and effectiveness of our internal controls over financial reporting for the year ended December 31, [removed: 2017.][added: 2018.]

Based on our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2017.][added: 2018.]

No change in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) occurred during the three months ended December 31, [removed: 2017] [added: 2018] that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

To the Board of Directors and Stockholders of [added: Booking Holdings Inc.]

We have audited the internal control over financial reporting of Booking Holdings Inc. [removed: (formerly known as The Priceline Group Inc.)] and subsidiaries (the “Company”) as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, [removed: 2017,] [added: 2018,] of the Company and our report dated February 27, [removed: 2018,] [added: 2019,] expressed an unqualified opinion on those financial [removed: statements.][added: statements and included an explanatory paragraph related to the Company’s change in method of accounting for the recognition and measurement of financial instruments in 2018 due to the adoption of an accounting standard update.]

February 27, 2019

Booking Holdings Inc.

Norwalk, Connecticut

February 27, 2018

Information required by Part III Item 10 will be included in our Proxy Statement relating to our [removed: 2018] [added: 2019] annual meeting of stockholders to be filed with the Securities and Exchange Commission within 120 days after the end of our fiscal year ended December 31, [removed: 2017,] [added: 2018,] and is incorporated herein by reference.

Information required by Part III Item 11 will be included in our Proxy Statement relating to our [removed: 2018] [added: 2019] annual meeting of stockholders to be filed with the Securities and Exchange Commission within 120 days after the end of our fiscal year ended December 31, [removed: 2017,] [added: 2018,] and is incorporated herein by reference.

Information required by Part III Item 12 will be included in our Proxy Statement relating to our [removed: 2018] [added: 2019] annual meeting of stockholders to be filed with the Securities and Exchange Commission within 120 days after the end of our fiscal year ended December 31, [removed: 2017,] [added: 2018,] and is incorporated herein by reference.

Information required by Part III Item 13 will be included in our Proxy Statement relating to our [removed: 2018] [added: 2019] annual meeting of stockholders to be filed with the Securities and Exchange Commission within 120 days after the end of our fiscal year ended December 31, [removed: 2017,] [added: 2018,] and is incorporated herein by reference.

Information required by Part III Item 14 will be included in our Proxy Statement relating to our [removed: 2018] [added: 2019] annual meeting of stockholders to be filed with the Securities and Exchange Commission within 120 days after the end of our fiscal year ended December 31, [removed: 2017] [added: 2018,] and is incorporated herein by reference.

The following Consolidated Financial Statements of the Company and the report of our independent registered public accounting firm are filed as part of this Annual Report on Form 10-K: Consolidated Balance Sheets [removed: as of] [added: at] December 31, [removed: 2017] [added: 2018] and [removed: 2016;] [added: 2017;] Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Stockholders' Equity and Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015;] [added: 2016;] Notes to the Consolidated Financial Statements; and Report of Independent Registered Public Accounting Firm.

| [removed: 4.2(b)] [added: [4.2](http://www.sec.gov/Archives/edgar/data/1075531/0001047469-99-010235.txt)(b)] | Specimen Certificate for Registrant's Common Stock. |

| [removed: [4.3](http://www.sec.gov/Archives/edgar/data/1075531/000110465912017516/a12-6766_1ex10d2.htm)(c)] [added: [4.3](http://www.sec.gov/Archives/edgar/data/1075531/000110465913046855/a13-14161_1ex99d2.htm)(c)] | Indenture, dated as of [removed: March 12, 2012,] [added: June 4, 2013,] between the Registrant and American Stock Transfer & Trust Company, LLC as Trustee. |

| [removed: [4.4](http://www.sec.gov/Archives/edgar/data/1075531/000110465913046855/a13-14161_1ex99d2.htm)(d)] [added: [4.4](http://www.sec.gov/Archives/edgar/data/1075531/000110465914062261/a14-19426_1ex99d2.htm)(d)] | Indenture, dated as of [removed: June 4, 2013,] [added: August 20, 2014,] between the Registrant and American Stock Transfer & Trust Company, LLC as Trustee. |

| [removed: [4.5](http://www.sec.gov/Archives/edgar/data/1075531/000110465914062261/a14-19426_1ex99d2.htm)(e)] [added: [4.6](http://www.sec.gov/Archives/edgar/data/1075531/000104746917005098/a2232922zex-4_1.htm)(f)] | Indenture, dated as of August [removed: 20, 2014,] [added: 8, 2017,] between the [removed: Registrant] [added: Company] and [removed: American Stock Transfer & Trust Company, LLC] [added: U.S. Bank National Association,] as [removed: Trustee.] [added: trustee.] |

| [removed: [4.6](http://www.sec.gov/Archives/edgar/data/1075531/000104746915008969/a2226734zex-4_1.htm)(f)] [added: [4.5](http://www.sec.gov/Archives/edgar/data/1075531/000104746915008969/a2226734zex-4_1.htm)(e)] | Indenture for the 2.375% Senior Notes due 2024, 1.800% Senior Notes due 2027, 3.650% Senior Notes due 2025, 2.15% Senior Notes due 2022 and 3.600% Senior Notes due 2026, between the Registrant and Deutsche Bank Trust Company Americas, as Trustee. |

| [removed: [4.8](http://www.sec.gov/Archives/edgar/data/1075531/000110465914067490/a14-21234_1ex4d1.htm)(h)] [added: [4.7](http://www.sec.gov/Archives/edgar/data/1075531/000110465914067490/a14-21234_1ex4d1.htm)(g)] | Form of 2.375% Senior Note due 2024. |

| [removed: [4.9](http://www.sec.gov/Archives/edgar/data/1075531/000110465914068530/a14-21505_1ex4d1.htm)(i)] [added: [4.8](http://www.sec.gov/Archives/edgar/data/1075531/000110465914068530/a14-21505_1ex4d1.htm)(h)] | Officers' Certificate, dated September 23, 2014, for the 2.375% Senior Notes due 2024. |

| [removed: [4.10](http://www.sec.gov/Archives/edgar/data/1075531/000110465915015804/a15-5077_5ex4d1.htm)(j)] [added: [4.9](http://www.sec.gov/Archives/edgar/data/1075531/000110465915015804/a15-5077_5ex4d1.htm)(i)] | Form of 1.800% Senior Note due 2027. |

| [removed: [4.11](http://www.sec.gov/Archives/edgar/data/1075531/000110465915016716/a15-5856_1ex4d1.htm)(k)] [added: [4.10](http://www.sec.gov/Archives/edgar/data/1075531/000110465915016716/a15-5856_1ex4d1.htm)(j)] | Officers' Certificate, dated March 3, 2015, for the 1.800% Senior Notes due 2027. |

| [removed: [4.12](http://www.sec.gov/Archives/edgar/data/1075531/000110465915019192/a15-6140_5ex4d1.htm)(l)] [added: [4.11](http://www.sec.gov/Archives/edgar/data/1075531/000110465915019192/a15-6140_5ex4d1.htm)(k)] | Form of 3.650% Senior Note due 2025. |

| [removed: [4.13](http://www.sec.gov/Archives/edgar/data/1075531/000110465915019590/a15-6763_1ex4d1.htm)(m)] [added: [4.12](http://www.sec.gov/Archives/edgar/data/1075531/000110465915019590/a15-6763_1ex4d1.htm)(l)] | Officers' Certificate, dated March 13, 2015, for the 3.650% Senior Notes due 2025. |

| [removed: [4.14](http://www.sec.gov/Archives/edgar/data/1075531/000104746915008969/a2226734zex-4_2.htm)(f)] [added: [4.13](http://www.sec.gov/Archives/edgar/data/1075531/000104746915008969/a2226734zex-4_2.htm)(e)] | Form of 2.15% Senior Note due 2022. |

| [removed: [4.15](http://www.sec.gov/Archives/edgar/data/1075531/000104746915008969/a2226734zex-4_3.htm)(f)] [added: [4.14](http://www.sec.gov/Archives/edgar/data/1075531/000104746915008969/a2226734zex-4_3.htm)(e)] | Officers' Certificate, dated November 25, 2015, for the 2.15% Senior Notes due 2022. |

| [removed: [4.16](http://www.sec.gov/Archives/edgar/data/1075531/000110465916122663/a16-11950_1ex4d1.htm)(n)] [added: [4.15](http://www.sec.gov/Archives/edgar/data/1075531/000110465916122663/a16-11950_1ex4d1.htm)(m)] | Form of 3.600% Senior Note due 2026. |

| [removed: [4.17](http://www.sec.gov/Archives/edgar/data/1075531/000110465916122663/a16-11950_1ex4d2.htm)(n)] [added: [4.16](http://www.sec.gov/Archives/edgar/data/1075531/000110465916122663/a16-11950_1ex4d2.htm)(m)] | Officers' Certificate, dated May 23, 2016, for the 3.600% Senior Notes due 2026. |

| [removed: [4.18](http://www.sec.gov/Archives/edgar/data/1075531/000110465917015831/a17-8134_1ex4d1.htm)(o)] [added: [4.17](http://www.sec.gov/Archives/edgar/data/1075531/000110465917015831/a17-8134_1ex4d1.htm)(n)] | Form of 0.800% Senior Note due 2022. |

| [removed: [4.19](http://www.sec.gov/Archives/edgar/data/1075531/000110465917015831/a17-8134_1ex4d2.htm)(o)] [added: [4.18](http://www.sec.gov/Archives/edgar/data/1075531/000110465917015831/a17-8134_1ex4d2.htm)(n)] | Officers' Certificate, dated March 10, 2017, for the 0.800% Senior Notes due 2022. |

| [removed: [4.20](http://www.sec.gov/Archives/edgar/data/1075531/000110465917052057/a17-20224_1ex4d1.htm)(p)] [added: [4.19](http://www.sec.gov/Archives/edgar/data/1075531/000110465917052057/a17-20224_1ex4d1.htm)(o)] | Form of 2.750% Senior Note due 2023. |

| [removed: [4.21](http://www.sec.gov/Archives/edgar/data/1075531/000110465917052057/a17-20224_1ex4d3.htm)(p)] [added: [4.20](http://www.sec.gov/Archives/edgar/data/1075531/000110465917052057/a17-20224_1ex4d3.htm)(o)] | Officers' Certificate, dated August 15, 2017, with respect to the 2.750% Senior Notes due 2023. |

| [removed: [4.22](http://www.sec.gov/Archives/edgar/data/1075531/000110465917052057/a17-20224_1ex4d2.htm)(p)] [added: [4.21](http://www.sec.gov/Archives/edgar/data/1075531/000110465917052057/a17-20224_1ex4d2.htm)(o)] | Form of 3.550% Senior Note due 2028. |

| [removed: [4.23](http://www.sec.gov/Archives/edgar/data/1075531/000110465917052057/a17-20224_1ex4d4.htm)(p)] [added: [4.22](http://www.sec.gov/Archives/edgar/data/1075531/000110465917052057/a17-20224_1ex4d4.htm)(o)] | Officers' Certificate, dated August 15, 2017, with respect to the 3.550% Senior Notes due 2028. |

| [removed: [10.1](http://www.sec.gov/Archives/edgar/data/1075531/000107553117000011/thepricelinegroupinc1999om.htm)(q)+] [added: [10.1](http://www.sec.gov/Archives/edgar/data/1075531/000107553118000031/amendedandrestated1999plan.htm)(p)+] | [removed: The Priceline Group] [added: Booking Holdings] Inc. 1999 Omnibus Plan (As Amended and Restated Effective [removed: March 2, 2017).] [added: June 7, 2018).] |

| [removed: [10.2](http://www.sec.gov/Archives/edgar/data/1075531/000110465905053519/a05-17886_2ex10d5.htm)(r)+] [added: [10.2](http://www.sec.gov/Archives/edgar/data/1075531/000110465905053519/a05-17886_2ex10d5.htm)(q)+] | Form of Restricted Stock Unit Award Agreement for Employees in the Netherlands under the 1999 Omnibus Plan. |

| [removed: [10.3](http://www.sec.gov/Archives/edgar/data/1075531/000110465911013305/a11-7614_1ex10d3.htm)(s)+] [added: [10.3](http://www.sec.gov/Archives/edgar/data/1075531/000110465911013305/a11-7614_1ex10d3.htm)(r)+] | Form of Restricted Stock Unit Agreement for awards under the 1999 Omnibus Plan to non-employee directors. |

| [removed: [10.4](http://www.sec.gov/Archives/edgar/data/1075531/000107553115000012/ex9912015formofpsuagreement.htm)(t)+] [added: [10.5](http://www.sec.gov/Archives/edgar/data/1075531/000107553116000088/a2016formpsuagreement.htm)(t)+] | [removed: 2015] [added: 2016] Form of Performance Share Unit Agreement under the 1999 Omnibus Plan. |

| [removed: [10.5](http://www.sec.gov/Archives/edgar/data/1075531/000107553116000088/a2016formpsuagreement.htm)(u)+] [added: [10.6](http://www.sec.gov/Archives/edgar/data/1075531/000107553117000011/priceline1999omnibuspsumar.htm)(u)+] | [removed: 2016] [added: 2017] Form of Performance Share Unit Agreement under the 1999 Omnibus Plan. |

| [removed: [10.6](http://www.sec.gov/Archives/edgar/data/1075531/000107553117000011/priceline1999omnibuspsumar.htm)(q)+] [added: [10.7](http://www.sec.gov/Archives/edgar/data/1075531/000107553118000017/ex9912018formpsu.htm)(s)+] | [removed: 2017] [added: 2018] Form of Performance Share Unit Agreement under the 1999 Omnibus Plan. |

| [removed: [10.7](http://www.sec.gov/Archives/edgar/data/1075531/000107553117000011/thepricelinegroupinc-kayak.htm)(q)+] [added: [10.8](http://www.sec.gov/Archives/edgar/data/1075531/000107553117000011/thepricelinegroupinc-kayak.htm)(u)+] | Amended and Restated KAYAK Software Corporation 2012 Equity Incentive Plan. |

| [removed: [10.8](http://www.sec.gov/Archives/edgar/data/1075531/000107553117000011/opentablear2009equityplan.htm)(q)+] [added: [10.9](http://www.sec.gov/Archives/edgar/data/1075531/000107553117000011/opentablear2009equityplan.htm)(u)+] | OpenTable, Inc. Amended and Restated 2009 Equity Incentive Award Plan. |

| [removed: [10.9](http://www.sec.gov/Archives/edgar/data/1075531/000107553114000036/exhibit991buuteeqstockplan.htm)(v)+] [added: [10.10](http://www.sec.gov/Archives/edgar/data/1075531/000107553114000036/exhibit991buuteeqstockplan.htm)(v)+] | Buuteeq, Inc. Amended and Restated 2010 Stock Plan. |

| [removed: [10.10](http://www.sec.gov/Archives/edgar/data/1075531/000107553116000084/pcln-20151231_10kex1010.htm)(w)+] [added: [10.11](http://www.sec.gov/Archives/edgar/data/1075531/000107553116000084/pcln-20151231_10kex1010.htm)(w)+] | Amended and Restated Rocket Travel, Inc. 2012 Stock Incentive Plan. |

| [removed: [10.11](http://www.sec.gov/Archives/edgar/data/1075531/000107553116000084/pcln-20151231_10kex1011.htm)(w)+] [added: [10.12](http://www.sec.gov/Archives/edgar/data/1075531/000107553116000084/pcln-20151231_10kex1011.htm)(w)+] | Amended and Restated Annual Bonus Plan. |

| [removed: [10.12](http://www.sec.gov/Archives/edgar/data/1075531/000107553113000016/exhibit991non-competeagree.htm)(x)+] [added: [10.13](http://www.sec.gov/Archives/edgar/data/1075531/000107553113000016/exhibit991non-competeagree.htm)(x)+] | Form of Non-Competition and Non-Solicitation Agreement. |

| [removed: [10.13](http://www.sec.gov/Archives/edgar/data/1075531/000107553113000054/exhibit992transitionagreem.htm)(y)+] [added: [10.14](http://www.sec.gov/Archives/edgar/data/1075531/000107553113000054/exhibit992transitionagreem.htm)(y)+] | Transition Agreement dated November 7, 2013 by and between the Registrant and Jeffery H. Boyd. |

| [removed: [10.14](http://www.sec.gov/Archives/edgar/data/1075531/000110465905049651/a05-18738_1ex10d1.htm)(z)+] [added: [10.15](http://www.sec.gov/Archives/edgar/data/1075531/000110465905049651/a05-18738_1ex10d1.htm)(z)+] | Letter agreement, dated October 19, 2005 by and between the Registrant and Daniel J. Finnegan. |

| [removed: [10.15](http://www.sec.gov/Archives/edgar/data/1075531/000110465909011154/a09-1364_1ex10d56.htm)(aa)+] [added: [10.16](http://www.sec.gov/Archives/edgar/data/1075531/000110465909011154/a09-1364_1ex10d56.htm)(aa)+] | Letter amendment, dated December 16, 2008, to letter agreement, dated October 19, 2005 by and between the Registrant and Daniel J. Finnegan. |

| [removed: [10.16](http://www.sec.gov/Archives/edgar/data/1075531/000107553115000027/ex991millonesemploymentagr.htm)(bb)+] [added: [10.17](http://www.sec.gov/Archives/edgar/data/1075531/000107553115000027/ex991millonesemploymentagr.htm)(bb)+] | Second Amended and Restated Employment Agreement, dated April 21, 2015 by and between the Registrant and Peter J. Millones. |

| [removed: [10.17](http://www.sec.gov/Archives/edgar/data/1075531/000107553116000103/ex992tansemploymentcontract.htm)(cc)+] [added: [10.18](http://www.sec.gov/Archives/edgar/data/1075531/000107553116000103/ex992tansemploymentcontract.htm)(cc)+] | Amended and Restated Employment contract, dated May 19, 2016 by and between Booking.com Holding B.V. and Gillian Tans. |

| [removed: [10.18](http://www.sec.gov/Archives/edgar/data/1075531/000107553116000103/ex991boydemploymentcontract.htm)(cc)+] [added: [10.24](http://www.sec.gov/Archives/edgar/data/1075531/000107553118000029/ex103finnegantransitionagm.htm)(ff)+] | [removed: Employment] Letter [removed: Agreement,] [added: amendment,] dated [added: March 1, 2018, to letter agreement, dated] May [removed: 19, 2016 by and] [added: 11, 2017,] between the Registrant and [removed: Jeffery H. Boyd.] [added: Daniel J. Finnegan.] |

| [10.4](http://www.sec.gov/Archives/edgar/data/1075531/000107553118000017/ex992formrsu.htm)(s)+ | Form of Restricted Stock Unit Agreement for awards under the 1999 Omnibus Plan. |

| (ff) | Previously filed as an exhibit to the Quarterly Report on Form 10-Q filed on May 9, 2018 (File No. 1-36691). |

| [4.7](http://www.sec.gov/Archives/edgar/data/1075531/000104746917005098/a2232922zex-4_1.htm)(g) | Indenture, dated as of August 8, 2017, between the Company and U.S. Bank National Association, as trustee. |

| [12.1](https://www.sec.gov/Archives/edgar/data/1075531/000107553118000015/pcln-20171231_10kex121.htm) | Statement of Ratio of Earnings to Fixed Charges. |

| | | Date: | February 27, [removed: 2018] [added: 2019] |

[removed: Fogel] [added: Goulden] and Peter J.

| /s/ Glenn D. Fogel | | Director, Chief Executive Officer and President | | February 27, [removed: 2018] [added: 2019] |

| /s/ Jeffery H. Boyd | | Director, [removed: Executive] Chairman of the Board | | February 27, [removed: 2018] [added: 2019] |

| [removed: Daniel J. Finnegan] [added: David I. Goulden] | | Officer (Principal Financial Officer and Principal Accounting Officer) | | |

| /s/ Timothy M. Armstrong | | Director | | February 27, [removed: 2018] [added: 2019] |

| /s/ Jeffrey E. Epstein | | Director | | February 27, [removed: 2018] [added: 2019] |

| /s/ James M. Guyette | | Director | | February 27, [removed: 2018] [added: 2019] |

| /s/ Robert J. Mylod Jr. | | Director | | February 27, [removed: 2018] [added: 2019] |

| /s/ Charles H. Noski | | Director | | February 27, [removed: 2018] [added: 2019] |

| /s/ Nancy B. Peretsman | | Director | | February 27, [removed: 2018] [added: 2019] |

| /s/ Thomas E. Rothman | | Director | | February 27, [removed: 2018] [added: 2019] |

| /s/ Craig W. Rydin | | Director | | February 27, [removed: 2018] [added: 2019] |

| /s/ Lynn M. Vojvodich | | Director | | February 27, [removed: 2018] [added: 2019] |

| Report of Independent Registered Public Accounting Firm | [removed: [73](#sC9C690FFE35071CC6A3DCB7EF6EFA5AF)] [added: [71](#s80CA374CA0E5FA775A89E9D5E7D1FEF7)] |

| Consolidated Balance Sheets [removed: as of] [added: at] December 31, [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] | [removed: [74](#s26C6817333D9923A2DDFCB7EE6DCB7F3)] [added: [72](#s3D92340A00A2F4FE3B6BE9D5CFBD96B8)] |

| Consolidated Statements of Operations for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] | [removed: [75](#s8B53B564056A2BF411D8CB7EE6EA5E27)] [added: [73](#s33520AEE73863F8409C1E9D5D05EED5A)] |

| Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] | [removed: [76](#s4405213CBA4970FEE937CB7EE6690925)] [added: [74](#s0B8705BB1979BF8701AFE9D5D00784EB)] |

| Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] | [removed: [77](#s2D1E2ED3F0AFAA8C658CCB7EE75CCC74)] [added: [75](#s1A5C0413E2C5691E08B8E9D5CE8E72AB)] |

| Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] | [removed: [78](#sC80DCD5A63D65F8E205FCB7EE659B209)] [added: [76](#sD57C72EEAE2B6CFA70EBE9D5CEA0E7DA)] |

| Notes to Consolidated Financial Statements | [removed: [79](#sC528D193A4EB16928C88CB7EF85D9231)] [added: [77](#s1CE9D7368A61196F8C66E9D5E9701EC4)] |

To the Board of Directors and Stockholders of [added: Booking Holdings Inc.]

We have audited the accompanying consolidated balance sheets of Booking Holdings Inc. [removed: (formerly known as The Priceline Group Inc.)] and subsidiaries (the "Company") as of December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] the related consolidated statements of operations, comprehensive income, changes in stockholders' equity, and cash flows for each of the three years in the period ended December 31, [removed: 2017, and] [added: 2018, including] the related notes (collectively referred to as the [removed: “financial] [added: “consolidated financial] statements”).

In our opinion, the [added: consolidated] financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] and the results of its operations and its cash flows, for each of the three years in the period ended December 31, [removed: 2017,] [added: 2018,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, [removed: 2018,] [added: 2019,] expressed an unqualified opinion on the Company's internal control over financial reporting.

These [added: consolidated] financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's [added: consolidated] financial statements based on our audits.

(In [removed: thousands,] [added: millions,] except share and per share data)

| | | [added: 2018 | | | |] 2017 | | | | 2016 | | |

| Cash and cash equivalents | | $ | [removed: 2,541,604] [added: 2,624] | | | $ | [removed: 2,081,075] [added: 2,542] | | [added: | $ | 2,081 | |]

| Accounts receivable, net of allowance for doubtful accounts of [removed: $39,282] [added: $61] and [removed: $25,565,] [added: $39,] respectively | | [removed: 1,217,801] [added: 1,523] | | | | [removed: 860,115] [added: 1,218] | | |

| Prepaid expenses and other current assets | | [removed: 415,527] [added: 600] | | | | [removed: 241,449] [added: 415] | | |

| Property and equipment, net | | [removed: 480,081] [added: 656] | | | | [removed: 347,017] [added: 480] | | |

| Total assets | | $ | [removed: 25,451,263] [added: 22,687] | | | $ | [removed: 19,838,973] [added: 25,451] | |