Booking Holdings (BKNG) 10-K risk factor changes: FY2019 vs FY2018

[removed: The] [added: The] following risk factors and other information included in this Annual Report [added: on Form 10-K] should be carefully considered.

If any of the following risks occur, our business, financial condition, operating results and cash flows could be materially adversely [removed: affected.][added: affected.]

[removed: Declines] [added: *Declines] or disruptions in the travel industry could adversely affect our business and financial [removed: performance.][added: performance.*]

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

At times, we [removed: have experienced] [added: experience] volatility in transaction growth rates, increased cancellation rates and weaker trends in [removed: hotel] [added: accommodation] average daily rates ("ADRs") across many regions of the world, particularly in those countries that appear to be most affected by economic and political uncertainties, which we believe are due at least in part to these macro-economic conditions and concerns.

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 ADRs generally have a negative effect on our accommodation reservation business and [removed: a negative effect] on our [removed: revenues.][added: revenues and results of operations.]

Significant fluctuations in [added: foreign] currency exchange rates, stock markets and oil prices can also impact consumer travel behavior.

For example, although lower oil prices may lead to increased travel activity as consumers have more discretionary funds and airline fares decrease, declines in oil prices may be indicative of broader macro-economic weakness, which in turn could negatively affect the travel [removed: industry and] [added: industry,] our [removed: business.][added: business and results of operations.]

Conversely, higher oil prices may result in higher [removed: airfares,] [added: airfares and decreased travel activity,] which can negatively affect [removed: the travel industry and] our [removed: business.][added: business and results of operations.]

Since the United Kingdom's Brexit [removed: vote,] [added: vote in 2016,] global markets and foreign [added: currency] exchange rates have experienced increased volatility, including a decline in the value of the British Pound Sterling as compared to the U.S. Dollar.

[removed: Upon leaving] [added: After finalization of] the [added: transition period of the United Kingdom's exit from the] European Union, among other things, the United Kingdom could lose access to the single European Union market and travel between the United Kingdom and European Union countries could be restricted.

We could face new regulatory costs and challenges if U.K. regulations and policies diverge from those of the European [removed: Union.][added: Union or if additional business licenses are required.]

In addition, [removed: 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 [removed: Ebola, Zika] [added: coronaviruses, Ebola] and [removed: MERS,] [added: Zika,] political instability, changes in economic conditions, [added: wars and] regional hostilities, imposition of taxes, tariffs or surcharges by regulatory authorities, changes in trade policies or trade disputes, changes in immigration [removed: policies or] [added: policies,] travel-related accidents [removed: can] [added: or increased focus on the environmental impact of travel, have previously and may in the future] disrupt travel, limit the ability or willingness of travelers to visit certain locations or otherwise result in declines in travel [removed: demand.][added: demand and adversely affect our business and results of operations.]

Because these events or concerns, and the full impact of their effects, are largely unpredictable, they can dramatically and suddenly affect travel behavior by consumers, and therefore demand for our [removed: services,] [added: services and our relationships with travel service providers and other partners, any of] which can adversely affect our business and results of operations.

[removed: Intense] [added: *Intense] competition could reduce our market share and harm our financial [removed: performance.][added: performance.*]

For example, Google has entered various aspects of the online travel [removed: market,] [added: market and has grown rapidly in this area,] including by [removed: establishing] [added: offering] a flight meta-search product ("Google [removed: Flights") and] [added: Flights"),] a hotel meta-search product ("Google Hotel [removed: Ads") that are growing rapidly, as well as] [added: Ads"), a vacation rental meta-search product,] its "Book on Google" reservation [removed: functionality] [added: functionality, Google Travel, a planning tool that aggregates its flight, hotel] and [added: packages products in one website and by integrating] its [added: hotel meta-search products into its] Google [removed: Trips] [added: Maps] app.

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

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

| • | 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, Egencia [added: and Expedia Partner Solutions] (which [removed: is] [added: are] owned by Expedia Group), Concur (which is owned by SAP), [removed: Thomas Cook,] TUI, [added: Webjet] and Hotelbeds 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 online platforms to which they drive business, including large hotel chains such as Marriott International, Hilton and Intercontinental Hotel Group and emerging hotel chains such as OYO Rooms, as well as joint efforts by [added: 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, [added: Google's vacation rental meta-search product,] TripAdvisor, trivago (in which Expedia Group holds a majority interest), Qunar (which is controlled by [removed: Ctrip)] [added: Trip.com Group)] and Skyscanner [removed: (in which Ctrip holds a majority interest);] [added: (which is owned by Trip.com Group);] |

| • | online restaurant reservation services, such as [removed: TripAdvisor's LaFourchette, Yelp's SeatMe, Zomato,] [added: LaFourchette and] Bookatable (which [added: are owned by TripAdvisor), SeatMe (which] is owned by [removed: Michelin),] [added: Yelp), Zomato,] Quandoo (which is owned by Recruit) and Resy [removed: (in which Airbnb holds a minority interest);] [added: (which is owned by American Express);] |

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

Google's travel meta-search services, Google Hotel Ads and Google Flights, [removed: are growing] [added: have grown] 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 [removed: provider] [added: providers] (e.g., accommodations, rental car companies or airlines), online travel [removed: company] [added: companies] ("OTC") and other online platforms and, in many instances, compete directly with us for customers.

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

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

[removed: To the extent] [added: If] 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 platform or 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 marketing or other customer acquisition costs to maintain or grow our reservation bookings and our business and results of operations could be adversely affected.

[removed: There] [added: Over the years, there] has been a proliferation of new channels through which accommodation providers can offer [removed: reservations.][added: reservations as the market for travel services has evolved.]

For example, companies such as Airbnb and [removed: HomeAway (which is owned by] Expedia [removed: Group)] [added: 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, [removed: Airbnb] [added: Airbnb, which owns HotelTonight,] offers some hotel reservations through its online 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 [added: directly to its platform.]

If any of these platforms are successful in offering [added: new travel-related] services [added: or 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.

If we are unable to effectively [removed: compete in these markets,] [added: offer competitive prices,] our market share, business and results of operations could be materially adversely affected.

Travel service providers may charge lower prices and, in some instances, offer advantages such as loyalty points or special discounts to members of [removed: closed user] [added: closed-user] groups (such as loyalty program participants or consumers with registered accounts), any of which could make their offerings more attractive to consumers than our services.

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

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

If we are not as effective as our competitors (including hotel chains) in offering discounted prices [removed: to closed user groups or if we are unable to entice members of our competitors' closed user groups] [added: and other incentives] to [removed: use our services,] [added: consumers,] our ability to grow and compete [added: and our results of operations] could be harmed.

[removed: We] [added: *We] are exposed to fluctuations in [added: foreign] currency exchange [removed: rates.][added: rates.*]

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

Although the United Kingdom has formally left the European Union, many uncertainties remain in the transition period during which the United Kingdom will negotiate its future relationship with the European Union and other nations.

As a result of the recent coronavirus outbreak originating in China, we began in January 2020 to experience, and continue to experience, a significant decline in travel demand and increase in customer cancellations predominantly related to travel to, from or in China and certain other Asian markets, though concerns about the coronavirus are also negatively impacting travel demand (and therefore our business) generally.

Some countries have implemented travel bans or restrictions and some airlines have suspended or limited flights to or from China.

We are working with our travelers and travel service provider partners to address cancellations, requests for refunds, rebookings and similar matters.

In addition, like many other companies, we have instructed or allowed employees in high-risk areas to work from home or not report to work, which, especially if this persists for a prolonged period of time, may have an adverse impact on our employees, ability to service travelers, operations and systems.

The ultimate extent of the coronavirus outbreak and its impact on travel in currently affected countries or more broadly is unknown and impossible to predict with certainty.

As a result, the full extent to which the coronavirus will impact our business and results of operations is unknown.

However, decreased travel demand resulting from the outbreak has had a negative impact, and is likely to have a negative and material impact, on our business, growth and results of operations.

In addition, we may incur additional customer service costs in connection with servicing travelers affected by the outbreak, which would also have a negative impact on our results of operations.

Google has also integrated restaurant information and reservations into the Google Maps app.

In addition, Amazon has previously experimented with online travel, and has recently partnered with Booking.com to provide travel deals to Prime users in certain countries and with an OTC in India to offer domestic flights through Amazon Pay.

CarTrawler, Meituan Dianping (in which we hold a small minority interest), Rakuten, Jalan (which is owned by Recruit), Fliggy (which is owned by Alibaba), HotelTonight (which is owned by Airbnb), CheapOair and eDreams ODIGEO;

increase our marketing and other customer acquisition costs.

Google also provides reservation services through "Book on Google." To the extent we participate in any such offerings provided by meta-search services, resulting reservations could be less profitable and could cannibalize business that would otherwise come directly to us or through other more profitable channels.

New travel-related services are frequently being introduced to the market.

For example, in 2019, Google launched Google Travel, which combines its hotel, flight and packages offerings into one website with trip-planning tools.

These initiatives may also result in lower ADRs and lower revenues as a percentage of gross bookings.

As part of our strategy to provide more payment options to consumers and travel service providers, Booking.com is increasingly processing transactions on a merchant basis, where it facilitates payments on behalf of customers.

This allows Booking.com to present consumers with more pricing options.

Further,

We also experience lower profit margins with respect to alternative accommodation properties due to certain additional costs related to offering these accommodations on our platforms.

The growth of our operations may make it more difficult to hire, train, retain, motivate and manage the required employees.

Historically, our brands operated on a largely independent basis and many of them focused on particular services or geographies.

As we look to develop the Connected Trip, we are increasing the collaboration, cooperation and interdependency among our brands.

As we manage this shift, in addition to managing organic growth and growth through acquisitions, we may find it difficult to maintain the beneficial aspects of our corporate culture at the brand companies and throughout the organization as a whole.

As a result, our future success will depend on our ability to adapt to rapidly changing technologies, to adapt our services

Additionally, our ability to achieve our long-term strategy to build the Connected Trip depends on successfully integrating and developing new and evolving technologies, which is likely to require increased financial and personnel investments that could have an adverse impact on our results of operations until we achieve the expected return on these investments.

We require user

We have a heightened risk of security breaches due to some of our operations being located in certain international jurisdictions.

Several data protection authorities have already imposed significant fines on companies of various sizes across industry sectors for violations of the GDPR.

The California Consumer Privacy Act (the "CCPA"), which went into effect in January 2020, has created new data privacy rights for users in California and has resulted and will continue to result in additional complexity and costs related to compliance.

These laws and their interpretations continue

Additionally, some of these regulations, such as the CCPA, give consumers a private right of action against companies for violations of these rules.

The European Commission has fined Google significant amounts for anti-competitive behavior relating to its comparison-shopping service and online search advertising services.

Recently Google announced modifications to its flights display model, including that it would not be charging airlines and OTCs for sending referrals from Google Flights.

As a result, airline and OTC partners may choose to limit or eliminate their use of other meta-search services or may demand cost savings from their other meta-search services and/or Google may receive access to discounted fares not provided to meta-search services that charge for referrals, any of which could adversely affect our meta-search business, profit margins and results of operations.

We may not be able to

Many of our processes and systems, including those related to processing and recording revenue, are highly automated and involve multiple inputs from various IT systems, which can mitigate the risk of human error but which can also make testing, troubleshooting and auditing more difficult.

As a result, it may be difficult to quickly detect and correct errors embedded in these processes or systems.

The OECD Secretariat's current proposal aims to ensure that multinational businesses are taxed in jurisdictions where they are conducting significant business but do not have a physical presence by establishing new nexus rules determining where tax should be paid and new profit allocation rules determining what portion of profits should be taxed.

The United Kingdom's decision to leave the European Union could result in other member countries also determining to leave, which could lead to added economic and political uncertainty and devaluation or eventual abandonment of the Euro common currency, any of which could have a negative impact on travel and therefore our business and results of operations.

Also, as European countries respond to an increased flow of migrants from the Middle East, travel between countries within the European Union and to and from the region could be subject to increased restrictions or the closing of borders, which could negatively impact travel to, from or within the European Union and adversely affect our business and results of operations.

Future terrorist attacks, natural disasters, 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.

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

We have been participating in Instant Booking since 2015, however such participation may not result in substantial incremental bookings and could cannibalize business that would otherwise come to us through other ad offerings on TripAdvisor, directly (including after a consumer first visits TripAdvisor) or through other channels, some of which may be more profitable to us than reservations generated through Instant Booking.

directly to its platform.

Some jurisdictions have

We may not be able to hire, train, retain, motivate and manage required employees, which may limit our growth, damage our reputation, negatively affect our financial performance, and otherwise harm our business.

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.

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

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

In 2016, the European Union and the United States established a data transfer framework called the E.U.-U.S. Privacy Shield, but it is currently subject to legal challenge.

In June 2017, the European Commission fined Google 2.4 billion Euros for breaching European Union antitrust rules by giving its comparison shopping service priority placement in Google search results.

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.

terminable upon short notice and often do not provide recourse for service interruptions.

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).

The Tax Act made significant changes to U.S. federal tax law, including a reduction in the U.S. federal statutory tax rate from 35% to 21%, effective January 1, 2018, and exempts from U.S. federal income tax international profits distributed to the United States.

The Tax Act imposed a one-time mandatory deemed repatriation tax on unremitted accumulated international earnings, to be paid over eight years.

As a result, our international cash and investments, as well as future cash generated by our international operations, can be repatriated to the United States without further U.S. federal income tax.

The Tax Act also includes provisions, effective after December 31, 2017, allowing the immediate write-off of the cost of certain investments in depreciable assets, imposing a limit on the deduction for net interest expense, changing the deductibility of covered officer compensation and changing the rules on the use of net operating losses.

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

In connection with the BEPS project, the OECD issued "final reports" that propose 15 actions the OECD determined are needed to address base erosion and profit shifting, including: (a) enhancing transparency through the sharing of tax information between countries; (b) prescribing standardized country-by-country reporting and other documentation requirements aimed at identifying where profits, tax and economic activities occur; (c) preventing harmful tax practices including the use of preferential tax regimes; (d) modernizing the OECD's transfer pricing rules related to intangibles; (e) changing the definition of permanent establishment to prevent artificial avoidance of tax nexus; and (f) limiting tax base erosion through interest deductions and other financial payments.

The measures have, among other things, resulted in the development of a multilateral instrument ("MLI") to incorporate and facilitate changes to tax treaties.

A number of countries have signed the MLI.

In January 2019, the OECD published a policy document that outlines two broad pillars under which these challenges will be evaluated.

The first pillar covers how existing rules allocating taxing rights to jurisdictions might be changed to address the changes digitalization has brought to the world economy.

This pillar will also include a re-examination of nexus rules (i.e., how to determine the connection a business has with a particular jurisdiction) and the rules applied to determine how much profit should be allocated to the jurisdiction.

The second pillar will consider taxing rights that will strengthen the ability of one jurisdiction to tax profits where the other jurisdiction with taxing rights applies a low effective rate of tax.

In March 2018, the European Commission, also working on determining a solution to the tax treatment of the digital economy, released two draft directives on the Taxation of the Digital Economy.

Although these proposals were not approved, a number of E.U. member states have indicated they will unilaterally introduce a digital services tax.

overall management of our business.

Some investigations or inquiries relate to other issues such as commission payments.

To resolve and close certain of the parity investigations, particularly in Europe, Booking.com made commitments to several NCAs in which it replaced its price parity agreements with accommodation providers with "narrow" price parity agreements.

Under a narrow price parity agreement, subject to certain exceptions, an accommodation provider is still required to offer the same or better rates on Booking.com as it offers to a consumer directly online, but it is no longer required to offer the same or better rates on Booking.com as it offers to other OTCs.

The commitments also allow an accommodation provider to, among other things, offer different terms and conditions (e.g., free WiFi) and availability to consumers that book with OTCs that offer lower rates of commission or other benefits, offer lower rates to consumers that book through offline channels and continue to discount through, among other things, accommodation loyalty programs, as long as those rates are not published or marketed online.

We are unable to predict whether further action in Europe will be taken as a result of the ECN Working Group's ongoing review.

In addition, other NCAs, including other NCAs in Europe, also monitor these issues, including Booking.com's compliance with its commitments.

In some jurisdictions, third parties have filed formal complaints with authorities that Booking.com is not complying with its commitments.

While we believe Booking.com is complying with its commitments, we cannot predict whether authorities will take any action in response to these complaints.

[removed: The] [added: The] following discussion should be read in conjunction with our Consolidated Financial Statements, including the notes to those statements, included elsewhere in this Annual Report on Form 10-K, and the Section entitled "Special Note Regarding Forward-Looking Statements" in this Annual Report on Form 10-K.

As discussed in more detail in the Section entitled "Special Note Regarding Forward-Looking Statements," this discussion contains forward-looking [removed: statements] [added: statements,] which involve risks and uncertainties.

Factors that might cause those differences include those discussed in "Risk Factors" and elsewhere in this Annual Report on Form [removed: 10-K.][added: 10-K.]

[removed: We] [added: We] evaluate certain operating and financial measures on both an as-reported and constant-currency basis.

We calculate constant currency by converting our current-year period financial results for transactions recorded in currencies other than U.S. Dollars using the corresponding prior-year period monthly average exchange rates rather than the current-year period monthly average exchange [removed: rates.][added: rates.]

[removed: Overview][added: Overview]

Our mission is to [removed: help people] [added: make it easier for everyone to] experience the world.

[removed: | • | KAYAK - a leading online] [added: Consumers can also use our] meta-search [removed: service allowing consumers] [added: services] to easily [removed: search and] compare travel [removed: itineraries and prices, including] [added: reservation information, such as] airline ticket, [removed: accommodation] [added: hotel reservation] and rental car reservation information, from hundreds of [added: online] travel [removed: websites] [added: platforms] at once. [removed: |]

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

[removed: During the year ended December 31, 2018,] [added: In 2019,] our international business (the substantial majority of which is generated by Booking.com) represented approximately [removed: 89%] [added: 90%] of our consolidated revenues.

See Note [removed: 16] [added: 18] to the Consolidated Financial Statements for more geographic information.

[removed: | • |] Advertising [added: and other] revenues [added: are derived] primarily [added: from (1) revenues] earned by KAYAK [removed: from] [added: for (a)] sending referrals to [removed: online travel companies ("OTCs")] [added: OTCs] and travel service [removed: providers, as well as from] [added: providers and (b)] advertising placements on [removed: KAYAK's] [added: its] platforms; [removed: |][added: and (2) revenues earned by OpenTable for (a) restaurant reservation services (fees paid by restaurants for diners seated through OpenTable's online reservation service) and (b) subscription fees for restaurant management services.]

[removed: Trends][added: Trends]

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

We believe this growth is the result of, among other things, the broader shift of travel purchases from offline to online, the widespread adoption of mobile devices and the growth of travel [removed: overall, including in higher growth emerging markets such as Asia-Pacific and South America.][added: overall.]

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

Given the size of our accommodation reservation [removed: business,] [added: business and the general slowing growth rate of the online travel market discussed below,] we expect that our year-over-year growth rates will generally continue to decelerate, though the rate of deceleration may fluctuate and there may be periods of acceleration from time to time.

Over the [removed: long term,] [added: long-term,] we expect [removed: that international] online travel growth rates [removed: will slow, similarly] to [removed: the trend experienced in the United States.][added: slow as markets continue to mature.]

[removed: We] [added: However, we] believe that the opportunity to continue to grow our business exists for the markets in which we [removed: operate.][added: operate, including in both mature and fast-growing markets.]

Our growth has primarily been generated by [removed: our] [added: the] worldwide accommodation reservation [removed: service brand,] [added: business of] Booking.com, which is our most significant brand, and has been due, in part, to the availability of a large [removed: and growing] number of [removed: instantly bookable] properties through Booking.com.

Booking.com included approximately [removed: 2,180,000] [added: 2,580,000] properties on its website at December 31, [removed: 2018,] [added: 2019,] consisting of approximately [removed: 436,000] [added: 460,000] hotels, motels and resorts and approximately [removed: 1,744,000] [added: 2,120,000] homes, apartments and other unique places to stay, compared to approximately [removed: 1,586,000] [added: 2,180,000] properties (including 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 stay) at December 31, [removed: 2017.][added: 2018.]

We intend to continue to [removed: invest in adding accommodations] [added: improve the accommodation choices] available for reservation on our platforms, [removed: such as hotels, motels, resorts, homes, apartments and other unique places to 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: Further, alternative] accommodations in general may be subject to increased seasonality due to local tourism [removed: seasons, weather] [added: seasons] or other factors or may not be available at peak times due to use by the property owners.

[removed: As we increase our alternative accommodation business, these different characteristics could negatively impact our profit margins; and,] [added: Further,] to the extent these properties represent an increasing percentage of the properties added to our platforms, we expect that our [removed: gross bookings] [added: room nights] 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 provide more payment options to [removed: our customers] [added: consumers] and travel service providers, increase the number and variety of accommodations available on Booking.com and enable the growth of our in-destination activities businesses, Booking.com is increasingly processing transactions on a merchant basis, where it [removed: receives] [added: facilitates] payments [removed: on behalf of customers.][added: from travelers for the services provided.]

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

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

For example, Google has entered various aspects of the online travel [removed: market,] [added: market and has grown rapidly in this area,] including by [removed: establishing] [added: offering] a flight meta-search product (Google [removed: Flights) and] [added: Flights),] a hotel meta-search product (Google Hotel [removed: Ads) that are growing rapidly, as well as] [added: Ads), a vacation rental meta-search product,] its "Book on Google" reservation functionality and [added: integrating] its [added: hotel and restaurant meta-search products into its] Google [removed: Trips app.][added: Maps app, as well as Google Travel, a planning tool which aggregates its flight, hotel and packages products in one website.]

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

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

[removed: These] initiatives [added: have resulted and in the future] may result in lower [added: ADRs and lower] revenue as a percentage of gross bookings.

[removed: For the years ended December 31, 2018, 2017 and 2016, our total] [added: Our] performance marketing expense [removed: was approximately $4.4 billion, $4.2 billion and $3.5 billion, respectively,] [added: is] primarily related to the use of online search engines (primarily Google), meta-search and travel research services and affiliate marketing to generate traffic to our websites.

[removed: Growth] [added: More recently, growth] of some of these channels has slowed.

[added: We also invested $548 million, $509 million] and [removed: $327] [added: $435] million in brand marketing for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively, 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.

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

We have observed increased brand marketing by [added: other] OTCs, meta-search services and travel service providers, which may make our brand marketing efforts more expensive and less effective.

Performance marketing efficiency, expressed as performance marketing expense as a percentage of total [removed: revenues in 2018 or as a percentage of gross profit in 2017,] [added: revenues,] is impacted by a number of factors that are subject to variability and that are, in some cases, outside of our control, including ADRs, costs per click, cancellation rates, foreign [added: currency] exchange rates, our ability to convert paid traffic to booking customers and the extent to which consumers come directly to our [removed: websites or mobile apps] [added: platforms] for bookings.

[removed: More recently] [added: Beginning in the third quarter of 2018,] our cancellation rates have [added: generally] 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 [removed: continue] [added: return to] their prior trend of generally increasing over time.

Changes by Google [added: or any of our other search or meta-search partners] in how it presents travel search results, [removed: including] [added: including, if applicable,] by placing its own offerings at or near the top of search results, or the manner in which it conducts the auction for placement among search results may be competitively disadvantageous to us and may impact our ability to efficiently generate traffic to our websites.

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

We connect consumers wishing to make travel reservations with providers of travel services around the world through our online platforms.

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 and partners, such as certain travel-related insurance products and restaurant management services to restaurants.

We offer these services through six primary consumer-facing brands: Booking.com, KAYAK, priceline, agoda, Rentalcars.com and OpenTable.

While historically our brands operated on a largely independent basis and many of them focused on a particular service (e.g., accommodation reservations) or geography, we are increasing the collaboration, cooperation and interdependency among our brands in our efforts to provide consumers with the best and most comprehensive services.

We also seek to maximize the benefits of our scale by sharing resources and technological innovations, co-developing new services and coordinating activities in key markets among our brands.

For example, Booking.com, the world’s leading brand for booking online accommodation reservations (based on room nights booked), offers rental car and other ground transportation services, flights, restaurant reservations, tours and activities reservations and other services, many of which are supported by our other brands.

Similarly, hotel reservations available through Booking.com are also generally available through agoda and priceline.

We derive substantially all of our revenues from enabling consumers to make travel service reservations.

We also earn revenues from credit card processing rebates and customer processing fees, advertising services, restaurant reservations and restaurant management services, and various other services, such as travel-related insurance revenues.

The recent coronavirus outbreak has had a significant and negative impact on our business during the first quarter of 2020, in particular in China and certain other Asian markets, though concerns about the coronavirus are also negatively impacting travel demand (and therefore our business) generally.

In the more affected markets like China, we have seen a significant increase in cancellations and reduction in new bookings, and ADRs have also been negatively affected.

The ultimate impact of the outbreak on our business is impossible to predict with certainty, and therefore the full extent to which the coronavirus will impact our business and results of operations is unknown.

However, decreased travel demand resulting from the outbreak has had a negative impact, and is likely to have a negative and material impact, on our business, growth and results of operations.

For more information, see Part I, Item 1A, Risk Factors - "*Declines or disruptions in the travel industry could adversely affect our business and financial performance."*

We are a global business, and online travel growth rates vary across the world depending on numerous factors, including local and regional economic conditions, individual disposable income, access to the internet and adoption of e-commerce.

Online travel growth rates have generally slowed in markets such as North America and Europe where online activity is high and consumers have been engaging in e-commerce transactions for many years, while online travel growth rates remain relatively high in markets such as Asia-Pacific where incomes are rising more quickly and the increased availability and use of mobile devices has accelerated the growth of internet usage and travel e-commerce transactions.

Further, we believe that this opportunity for growth exists because we feel we provide significant value to travel service providers, regardless of size or geography, due to our global reach and online marketing expertise.

For example, we believe that accommodation providers of all sizes, from large hotel chains to small, independent hotels and alternative accommodations such as homes and apartments, benefit from using our services, which enable them to reach a broader audience of potential customers.

As our alternative accommodation business has grown, these different characteristics have negatively impacted our profit margins and we expect this trend to continue.

We are constantly innovating to grow our business by, among other things, providing 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.

As part of these ongoing efforts, we have a long-term strategy to build a more integrated offering of multiple elements of travel, which we refer to as the "Connected Trip." Although we expect our efforts to build the Connected Trip may increase revenue growth over time, we may see a negative impact on our operating margins in the near term as we incur the expenses associated with these investments.

Further, to the extent our non-accommodation services grow faster than our accommodation services, whether as part of the Connected Trip or otherwise, our operating margins may be negatively affected if we experience an increasing mix of revenues from lower-margin services.

Components of revenues and expenses related to our merchant business may be recognized in different periods.

These timing factors could impact our operating margins as well as the relationship between our gross bookings and revenues in a particular period, especially as our merchant business increases as a percentage of our overall business.

These

We believe the trend of declining ADRs is partially driven by the negative impact of the changing geographical mix of our business (e.g., lower ADR regions like Asia-Pacific are generally growing faster than higher ADR regions like Western Europe) as well as pricing pressures within local markets from time to time resulting from competitive conditions, weakening economic conditions or changes in travel patterns.

These declining ADR trends have resulted in and may continue to result in our gross bookings growing at a lower rate of growth than our accommodation room nights.

Historically our performance marketing expenses have increased significantly, however, more recently, we have experienced more moderate growth rates, a trend we expect to continue.

We have observed a long-term trend of decreasing performance marketing returns on investment ("ROIs").

More recently, we have observed periods of stable or increasing ROIs, however, it is uncertain whether this trend will continue or if ROIs will return to the prior trend of declining over time.

tariffs and reduced government spending, could impair consumer spending and adversely affect travel demand.

Beginning in the second quarter of 2019, we have only designated certain portions of the aggregate principal value of our Euro-denominated debt as a hedge, and as a result we have recognized foreign currency transaction gains or losses.

The foreign currency transaction gains or losses on the Euro-denominated debt that is not designated as a hedging instrument for accounting purposes are recognized in "Foreign currency transactions and other" in the Consolidated Statement of Operations (see Note 12 to our Consolidated Financial Statements).

Many taxing authorities are increasingly focused on ways to increase tax revenues and have targeted large multinational technology companies in these efforts.

As a result, many countries have implemented or are considering adoption of a digital services tax that imposes a tax on revenue earned from digital advertisements and the use of online platforms, even when there is no physical presence in the jurisdiction.

Currently rates for this tax range from 2% to 7.5% of revenue deemed generated in the jurisdiction.

The digital services taxes currently in effect have negatively impacted our results of operations and if many other countries pass similar legislation, the collective impact of all of these measures could have a materially adverse impact on our results of operations and cash flows.

For more information, see Note 16 to our Consolidated Financial Statements and Part I, Item 1A, Risk Factors - "*We may have exposure to additional tax liabilities.*"

We aim to achieve our mission to help people experience the world through global leadership in online travel and restaurant reservation and related services by:

| | |

| --- | --- |

| • | providing consumers with the best choices and prices at any time, in any place, on any device; |

| • | making it easy for people to find, book and experience their travel desires; and |

| • | providing platforms, tools and insights to our business partners to help them be successful. |

We operate six primary brands:

| • | Booking.com - the world’s leading brand for booking online accommodation reservations, based on room nights booked. |

| • | priceline - a leading hotel, rental car, airline ticket and vacation package online reservation service in North America. |

| • | agoda - a leading online accommodation reservation service catering primarily to consumers in the Asia-Pacific region. |

| • | Rentalcars.com - a leading online worldwide rental car reservation service. |

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

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

| • | Commissions earned from facilitating reservations of accommodations, rental cars and other travel services on an agency basis; |

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

| • | Reservation revenues paid by restaurants for diners seated through OpenTable's online reservation services, subscription fees for restaurant reservation management services provided by OpenTable; and |

| • | Ancillary revenues including travel insurance-related revenues and global distribution system ("GDS") reservation booking fees, in each case related to certain of our travel services. |

Our priceline brand offers merchant Name Your Own Price® opaque travel services, which were previously recorded in revenue on a "gross" basis with the amount remitted to the travel service providers reported as cost of revenues.

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.

Our international business represents the substantial majority of our financial results, and we expect our operating results and other financial metrics to continue to be largely driven by international performance.

The size of the travel market outside of the United States is substantially greater than that within the United States, and recent international online travel growth rates have exceeded, and are expected to continue to exceed, the growth rates within the United States.

In addition, the base of hotel properties in Europe and Asia is particularly fragmented compared to that in the United States, where the hotel market is dominated by large hotel chains.

We believe online reservation systems like ours may be more appealing to small chains and independent hotels more commonly found outside of the United States.

We believe these trends and factors have enabled us to become the leading online accommodation reservation service provider in the world as measured by room nights booked.

Further, alternative

Both our performance and brand marketing expenses have increased significantly in recent years, and we expect our performance and brand marketing expenses to continue to increase.

We also invested $509 million, $435 million

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

Similarly, changes by our other search and meta-search partners in how they present travel search results or the manner in which they conduct the auction for placement among search results may be competitively disadvantageous to us and may impact our ability to efficiently generate traffic to our websites.

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

For example, France and Italy, among others, have adopted legislation making all price parity agreements illegal and similar legislation is under consideration in other countries.

For example, in March 2017, in connection with a lawsuit begun in 2015 by the Association of Turkish Travel Agencies claiming that Booking.com is required to meet certain registration requirements in Turkey, a Turkish court ordered Booking.com to suspend offering Turkish hotels and accommodations to Turkish residents.

Although Booking.com is appealing the order and believes it to be without basis, this order has had a negative impact on our growth and results of operations, and is expected to continue to negatively impact our results of operations.

However, historically we generally have not recognized revenue from these bookings until the travel is completed (at "check-out") or for periods beginning after December 31, 2017 when the travel begins (at "check-in") as a result of the adoption of the current revenue standard (see Note 2 to our Consolidated Financial Statements), which, in either case, can be in a quarter other than when the reservation is booked.

Future changes in the length of the booking

Conversely, our first quarter 2017 year-over-year growth rates in revenue, gross profit, operating income and operating margins were adversely impacted by Easter falling in the second quarter instead of the first quarter, as it did in 2016.

Similar to 2017, in 2018 Easter fell in the second quarter instead of the first quarter.

[removed: The Company has] [added: We have] exposure to several types of market risk: changes in interest rates, foreign currency exchange rates and equity prices.

We use [added: foreign] currency exchange derivative contracts to manage short-term foreign currency risk.

We evaluate our exposure to market risk by assessing the anticipated near-term and long-term fluctuations in interest rates and foreign [added: currency] exchange rates.

To the extent that changes in interest rates and [added: foreign] currency exchange rates affect general economic conditions, we would also be affected by such changes.

We did not experience any material changes in interest rate exposures during the year ended December 31, [removed: 2018.][added: 2019.]

[removed: Fixed rate] [added: Our] investments [added: in marketable debt securities] are subject to unrealized gains and losses due to interest rate volatility.

We performed a sensitivity analysis to determine the impact a change in interest rates would have on the fair value of our [removed: available-for-sale] investments 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 of approximately [removed: $126] [added: $23] million and [removed: $206] [added: $126] million at December 31, [removed: 2018 and] [added: 2019] and [removed: 2017,] [added: 2018,] respectively.

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

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

At December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the outstanding aggregate principal amount of our debt was approximately [removed: $8.8] [added: $8.7] billion and [removed: $9.7] [added: $8.8] billion, respectively.

We estimate that the fair value of such debt was approximately [removed: $9.3] [added: $9.8] billion and [removed: $11.1] [added: $9.3] billion at December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] respectively.

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

[removed: As a result,] [added: Therefore, because] we [added: report our results in U.S. Dollars, we] face [removed: exposures] [added: exposure] to [removed: adverse] movements in [added: foreign] currency exchange rates as the [removed: operating] [added: financial] results [added: and the financial condition] of our international [removed: operations] [added: businesses] are translated from local currencies [added: (principally Euros and British Pounds Sterling)] into U.S. [removed: Dollars upon consolidation.][added: Dollars.]

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

As a result of [added: foreign] currency exchange rate changes, our foreign-currency-denominated gross bookings, revenues and operating expenses as expressed in U.S. Dollars are [removed: higher] [added: lower] for the year ended December 31, [removed: 2018] [added: 2019] than they would have been had foreign [added: currency] exchange rates remained where they were for the year ended December 31, [removed: 2017.][added: 2018.]

[added: 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.

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

[removed: Our derivative contracts principally address] [added: We enter into] foreign currency [added: derivative contracts to hedge] translation risks [added: from short-term foreign currency exchange rate fluctuations] for the Euro, [removed: the] British Pound Sterling and certain other currencies versus the U.S. Dollar.

Our investments in private companies, excluding [removed: our investment in Grab (see Note 4 to our Consolidated Financial Statements),] [added: certain investments classified as debt securities for accounting purposes,] 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 [removed: issuer, with changes in value also recognized in net income (see Note 2 to our Consolidated Financial Statements).][added: issuer.]

The fair value of our investments in equity securities of publicly-traded companies and private companies, excluding [removed: our investment in Grab,] [added: certain investments classified as debt securities for accounting purposes,] was [removed: $1.0] [added: $1.8] billion and $501 million, respectively, at December 31, [removed: 2018,] [added: 2019,] and $1.0 billion and [removed: $451] [added: $501] million, respectively, at December 31, [removed: 2017.][added: 2018.]

A hypothetical 10% decrease in the fair value of these investments at December 31, [removed: 2018] [added: 2019] and [removed: 2017 will result] [added: 2018 would have resulted] in a [removed: loss] [added: total loss, before tax,] of approximately [removed: $150] [added: $230] million and [removed: $140] [added: $150] million, respectively, being recognized in net income.

Excluding the effect on the fair value of our convertible senior notes, a hypothetical 100 basis point (1.0%) decrease in interest rates would have resulted in an increase in the fair values of our other debt of approximately $325 million and $370 million at December 31, 2019 and 2018, respectively.

Our convertible senior notes are more sensitive to the equity market price volatility of our shares than changes in interest rates.

The fair value of the convertible senior notes will likely increase as the market price of our shares increases and will likely decrease as the market price of our shares falls.

Our international business represents a substantial majority of our financial results.

Beginning in the second quarter of 2019, we have only designated certain portions of the aggregate principal value of the Euro-denominated debt as a hedge.

The foreign currency transaction gains or losses on the Euro-denominated debt that is not designated as a hedging instrument for accounting purposes are recognized in "Foreign currency transactions and other" in the Consolidated Statement of Operations.

We also enter into foreign currency forward contracts to hedge our exposure to the impact of movements in foreign currency exchange rates on our transactional balances denominated in currencies other than the functional currency.

See Note 6 to our Consolidated Financial Statements for further information.

See Note 2 and 5 to our Consolidated Financial Statements for further information.

We conduct a significant portion of our business outside the United States through subsidiaries with functional currencies other than the U.S. Dollar (primarily Euro).

Since our expenses are generally

From time to time, we enter into foreign currency derivative contracts to minimize the impact of short-term foreign currency fluctuations on our consolidated operating results.

At December 31, 2018 and 2017, there were no such outstanding derivative contracts.

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 mission is to [removed: help people] [added: make it easier for everyone to] experience the world.

We seek to empower people to cut through travel barriers, such as [removed: time,] money, [added: time,] language and overwhelming options, so they can use our services to easily and confidently [added: get where they want to go,] stay where they want to stay, [removed: do what] [added: dine where] they want to [removed: do] [added: dine, pay how they want to pay] and experience what they want to experience.

[removed: | • |] [added: Booking.com and Rentalcars.com.] Booking.com [removed: -] [added: is] the [removed: world’s] [added: world's] leading brand for booking online accommodation reservations, based on room nights [removed: booked. |][added: booked, with operations worldwide and headquarters in the Netherlands.]

[removed: | • | KAYAK - a leading] [added: KAYAK. KAYAK, headquartered in Stamford, Connecticut, provides an] online [removed: meta-search] [added: price comparison] service [removed: allowing] [added: (often referred to as "meta-search") that allows] consumers to easily search and compare travel itineraries and prices, including airline ticket, accommodation [added: reservation] and rental car reservation information, from hundreds of travel websites at once. [removed: |]

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

During the year ended December 31, [removed: 2018,] [added: 2019,] our international business (the substantial majority of which is generated by Booking.com) represented approximately [removed: 89%] [added: 90%] of our consolidated revenues.

See Note [removed: 16] [added: 18] to the Consolidated Financial Statements for more geographic information.

Booking Holdings Inc. was formed as a Delaware limited liability company in 1997 and was converted into a Delaware corporation [removed: named priceline.com Incorporated] in July 1998.

[added: Our common stock is listed on the NASDAQ Global Select Market under the symbol "BKNG."] We refer to our company and all of our subsidiaries and brands collectively as "Booking Holdings," the "Company," "we," "our" or "us."

[removed: The] [added: The] Booking Holdings Business [removed: Model][added: Model]

| • | Advertising [added: and other] revenues [added: are derived] primarily [added: from (a) revenues] earned by KAYAK [removed: from] [added: for] sending referrals to online travel companies ("OTCs") and travel service [removed: providers, as well as from] [added: providers and for] advertising placements on [removed: KAYAK's platforms;] [added: its platforms and (b) revenues earned by OpenTable for its restaurant reservation services and subscription fees for restaurant management services.] |

For the year ended December 31, [removed: 2018,] [added: 2019,] we had revenues of [removed: $14.5 billion comprised of] [added: $15.1 billion, which we classify as] "agency" revenues, "merchant" revenues and "advertising and other" revenues.

| • | Agency revenues are derived from travel-related transactions where we do not [removed: receive] [added: facilitate] 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 [removed: commissions, as well as certain GDS reservation booking fees and certain travel insurance fees.] [added: commissions.] |

| • | Merchant revenues are derived from travel-related transactions where we [removed: receive] [added: facilitate] payments from travelers for the service provided, generally at the time of booking. Merchant revenues include travel reservation commissions and transaction net revenues (i.e., the amount charged to travelers less the amount owed to travel service providers) in connection with our merchant reservation services; [added: credit card processing rebates and customer processing fees; and] ancillary fees, including [removed: travel insurance-related] [added: travel-related insurance] revenues and certain [removed: GDS] [added: global distribution system ("GDS")] reservation booking [removed: fees; and credit card processing rebates and customer processing] fees. Substantially all merchant revenues are [removed: for merchant services] derived from transactions where travelers book accommodation reservations or rental car [removed: reservations from travel service providers.] [added: reservations.] |

[removed: The] [added: The] Booking Holdings [removed: Strategy][added: Strategy]

We aim to achieve our mission to [removed: help people] [added: make it easier for everyone to] experience the world through global leadership in online travel and restaurant reservation and related services [removed: by:][added: by striving to:]

| • | [removed: providing] [added: provide] consumers with the best choices and prices at any time, in any place, on any device; |

| • | [removed: making] [added: make] it easy for people to find, [removed: book] [added: book, pay for] and experience their travel desires; and |

| • | [removed: providing] [added: provide] platforms, tools and insights to our business partners to help them be successful. |

The [added: global] online travel and dining categories continue to grow as consumer purchasing shifts from traditional offline channels to interactive online channels, including mobile channels.

[added: In particular, we seek to (a) leverage technology to provide consumers with the best experience, (b) partner with travel service providers and] restaurants to our mutual benefit, (c) [removed: operating] [added: operate] multiple brands that collaborate with each other, and (d) [removed: investing] [added: invest] in profitable and sustainable growth.

| • | [removed: Providing] [added: Providing] the best consumer [removed: experience.] [added: 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) [removed: 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 [removed: offerings and] [added: offerings,] restaurants [removed: available] [added: and payment options] 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 [removed: brand,] [added: brands,] the most personalized experience and the most extensive, varied and comprehensive [removed: accommodation] [added: travel service] selection in every geography at the best prices. [removed: 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. [removed: 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.] |

| • | [removed: Partnering] [added: Partnering] with travel service [removed: providers] [added: providers, restaurants] and [removed: restaurants.] [added: OTCs.] 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 online platforms and ability to offer their inventory in markets and to consumers that the travel service provider or restaurant may otherwise be unable or unlikely to reach. [removed: 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 online reservation services, or to engage in sophisticated online marketing techniques. Further, we are increasingly providing services, other than online reservation services, designed to help our partners grow their businesses. For example, 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.] |

| • | [removed: Maintaining] [added: Operating] multiple [removed: brands.] [added: brands.] We employ a strategy of operating multiple brands, which we believe allows us the opportunity to offer our 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 [removed: markets, while benefiting all of] [added: markets. At the same time, we are increasing the collaboration, cooperation and interdependency among] our brands [removed: from opportunities] [added: in our efforts] to [removed: share] [added: provide consumers with the] best [removed: practices] and [removed: learnings and to collaborate.] [added: most comprehensive services.] We intend to invest resources to support organic growth by all [removed: of] our brands, whether through increased marketing, geographic expansion, [removed: technology] [added: technological] innovation or increased access to accommodations, rental cars, restaurants, airline tickets or other services. [removed: We spend significant and increasing amounts on performance and brand 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 for the benefit of consumers. For example, on January 1, 2018, we began operating our Rentalcars.com business 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. We believe that by promoting our brands worldwide, sharing travel service reservation availability and customer demand, and applying our industry experiences across brands and markets, we can more effectively expand our services globally and maintain and grow our position as a leading provider of worldwide online travel and restaurant reservation and related services.] |

| [removed: •] [added: •] | [removed: Investing] [added: Investing] in profitable and sustainable [removed: growth.] [added: 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 experience. We have made significant investments in people, technology, marketing and expanded, new or additional services, such as increasing our extensive collection of accommodations including homes, apartments and other unique places to stay, [removed: insurance products] [added: expanded flight] and [added: ground transportation offerings and] other offerings. We [added: seek to maximize the benefits of our scale by sharing resources and technological innovations among our brands, co-developing new services and coordinating activities in key markets among our brands. We] also [added: regularly evaluate, and] may pursue [added: and consummate, potential] strategic [removed: transactions. For example, we expanded] [added: acquisitions, partnerships, joint ventures or investments, whether to expand] our [removed: KAYAK meta-search] [added: businesses into complementary areas, expand our current businesses, acquire innovative technology or for other reasons.] |

[removed: Service Offerings][added: Service Offerings]

In addition, we offer various other services to [removed: consumers,] [added: consumers and partners,] such as certain [added: travel-related] insurance products and restaurant management services to restaurants.

At December 31, [removed: 2018,] [added: 2019,] Booking.com offered accommodation reservation services for approximately [removed: 2,180,000] [added: 2,580,000] properties in over 230 countries and territories and in over 40 languages, consisting of approximately [removed: 436,000] [added: 460,000] hotels, motels and resorts and approximately [removed: 1,744,000] [added: 2,120,000] homes, apartments and other unique places to stay.

For example, Booking.com offers in-destination tours and activities in more than [removed: 100] [added: 200] cities around the [removed: world.][added: world, as well as flight, rental car and restaurant reservation services.]

Rentalcars.com [added: is operated as part of Booking.com and] offers online rental car reservation services and allows consumers to make rental car reservations in over [removed: 55,000] [added: 60,000] locations throughout the world, with customer support in over 40 languages.

Booking.com and Rentalcars.com also offer pre-booked taxi and black car services at over [removed: 900] [added: 850] airports throughout the world.

[added: Priceline.] Priceline [added: is a leader in the discount travel reservation business and] offers online travel reservation services primarily in North America and is headquartered in Norwalk, Connecticut.

[added: OpenTable.] OpenTable is a leading brand for booking online restaurant reservations.

[removed: Marketing] [added: Marketing] and Brand [removed: Awareness][added: Awareness]

Both our performance and brand marketing expenses have increased significantly in recent years, and we [removed: expect our] [added: intend to continue a strategy of promoting brand awareness through both] performance and brand marketing [removed: expenses to continue to increase.][added: efforts, including by expanding brand campaigns into additional markets, which may significantly increase our brand marketing expenses.]

[removed: Competition][added: Competition]

For example, Google has entered various aspects of the online travel [removed: market,] [added: market and has grown rapidly in this area,] including by [removed: establishing] [added: offering] a flight meta-search product ("Google [removed: Flights") and] [added: Flights"),] a hotel meta-search product ("Google Hotel [removed: Ads") that are growing rapidly, as well as] [added: Ads"), a vacation rental meta-search product,] its "Book on Google" reservation [removed: functionality] [added: functionality, Google Travel, a planning tool that aggregates its flight, hotel] and [added: packages products in one website and by integrating] its [added: hotel meta-search product into its] Google [removed: Trips] [added: Maps] app.

| • | large online companies, including search, social networking and marketplace [removed: companies such as Google, Facebook, Alibaba, Tencent, Amazon and Baidu;] [added: companies;] |

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

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

We offer these services through six primary consumer-facing brands: Booking.com, KAYAK, priceline, agoda, Rentalcars.com and OpenTable.

While historically our brands operated on a largely independent basis and many of them focused on a particular service (e.g., accommodation reservations) or geography, we are increasing the collaboration, cooperation and interdependency among our brands in our efforts to provide consumers with the best and most comprehensive services.

We also seek to maximize the benefits of our scale by sharing resources and technological innovations, co-developing new services and coordinating activities in key markets among our brands.

For example, Booking.com, the world’s leading brand for booking online accommodation reservations (based on room nights booked), offers rental car and other ground transportation services, flights, restaurant reservations, tours and activities reservations and other services, many of which are supported by our other brands.

Similarly, hotel reservations available through Booking.com are also generally available through agoda and priceline.

The following table shows the key services offered to consumers by our primary brands:


We derive substantially all of our revenues from enabling consumers to make travel service reservations.

We also earn revenues from credit card processing rebates and customer processing fees, advertising services, restaurant reservations and restaurant management services, and various other services, such as travel-related insurance.

We are constantly innovating to grow our business by, among other things, providing 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.

As a result, our long-term strategy is to build a more integrated offering of multiple elements of travel, which we refer to as the "Connected Trip." We believe that through innovation and the utilization of emerging technologies such as artificial intelligence, the Connected Trip will simplify and improve all aspects of the travel experience, including: discovery, planning, booking, coordinating itineraries among travel service providers, automatic rescheduling/rebooking, etc. For example, if a traveler’s flight is delayed, we envision that ultimately the Connected Trip will not only alert the traveler, but also automatically arrange for a late arrival at the hotel, change a dinner reservation and alert other diners, reschedule the airport transfer, find a later connecting flight, etc. We believe that such a system will benefit both the traveler and the travel service provider or restaurant, as well as provide a compelling and differentiated service offering for consumers.

In addition, we have entered into commercial relationships with other OTCs, such as Didi (the leading ride hailing service in China) and Grab (the leading ride hailing company in Southeast Asia), whereby the customers of one company will have access to the services of the other.

For example, through the Booking.com app, a Booking.com customer traveling in Southeast Asia can book a local ride arranged by Grab.

Agoda also offers flight, ground transportation reservation services and activities.

Google has also integrated restaurant information and reservations into the Google Maps app.

In addition, Amazon has previously experimented with online travel, and has recently partnered with Booking.com to provide travel deals to Prime users in certain countries and with an OTC in India to offer domestic flights through Amazon Pay.

| • | online travel reservation services; |

| • | online travel search and price comparison services (generally referred to as "meta-search" services); |

| • | online restaurant reservation services; and |

| • | companies offering technology services and software solutions to travel service providers. |

For more information regarding current and potential competitors and the competitive nature of the markets in which we operate, please see Part I, Item 1A, Risk Factors - *"Intense competition could reduce our market share and harm our financial performance."* in this Annual Report on Form 10-K.

However, we generally recognize revenue from these bookings

For additional information regarding factors affecting the seasonality of our business, see Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations - Seasonality.

We operate six primary brands:

| | |

| --- | --- |

| • | priceline - a leading hotel, rental car, airline ticket and vacation package online reservation service in North America. |

| • | Rentalcars.com - a leading online worldwide rental car reservation service. |

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

On April 1, 2014, the Company changed its name from priceline.com Incorporated to The Priceline Group Inc., and, on February 21, 2018, the Company changed its name to Booking Holdings Inc. Our common stock is listed on the NASDAQ Global Select Market under the symbol "BKNG," and traded under the symbol "PCLN" prior to February 27, 2018.

Our principal executive offices are located at 800 Connecticut Avenue, Norwalk, Connecticut 06854.

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

| • | Commissions earned from facilitating reservations of accommodations, rental cars and other travel services on an agency basis; |

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

| • | Reservation revenues paid by restaurants for diners seated through OpenTable's online reservation services, subscription fees for restaurant reservation management services provided by OpenTable; and |

| • | Ancillary revenues including travel insurance-related revenues and global distribution system ("GDS") reservation booking fees, in each case related to certain of our travel services. |

Our priceline brand offers merchant Name Your Own Price® opaque travel services, which were previously recorded in revenue on a "gross" basis with the amount remitted to the travel service providers reported as cost of revenues.

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.

| • | Advertising and other revenues are derived primarily from revenues earned by KAYAK for sending referrals to OTCs and travel service providers and for advertising placements on its platforms and revenues earned by OpenTable for its restaurant reservation services and subscription fees for restaurant management services. |

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

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.

Booking.com and Rentalcars.com.

Booking.com is the world's leading brand for booking online accommodation reservations, based on room nights booked, with operations worldwide and headquarters in the Netherlands.

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

KAYAK.

KAYAK, headquartered in Stamford, Connecticut, provides an online price comparison service (often referred to as "meta-search") that allows consumers to easily search and compare travel itineraries and prices, including airline ticket, accommodation reservation and rental car reservation information, from hundreds of travel websites at once.

KAYAK derives revenues from sending referrals to OTCs and travel service providers and from advertising placements on its platforms.

Priceline.

Priceline is a leader in the discount travel reservation business, in particular through its 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.

Agoda.

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 elsewhere.

OpenTable.

During 2018, our total performance marketing expense was approximately $4.4 billion, 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 platforms.

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.

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

A description of any material legal proceedings to which we are a party is included in Note [removed: 14] [added: 16] to our Consolidated Financial Statements included in [added: this] Annual Report on Form 10-K for the year [removed: Ended] [added: ended] December 31, [removed: 2018,] [added: 2019,] and is incorporated into this Item 3 by reference thereto.

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: FORM 10-K][added: FORM 10-K]

[removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934][added: 1934]

[removed: For] [added: For] the fiscal year [removed: ended: December] [added: ended: December] 31, [removed: 2018][added: 2019]

[removed: Commission] [added: Commission] File [removed: No.: 1-36691][added: No.: 1-36691]

[removed: Booking] [added: Booking] Holdings [removed: Inc.][added: Inc.]

| [removed: Delaware] (State or other [removed: Jurisdiction] [added: jurisdiction] of [removed: Incorporation] [added: incorporation] or [removed: Organization) |] [added: organization)] | [removed: 06-1528493] (I.R.S. Employer Identification [removed: No.)] [added: Number)] |

[removed: Registrant’s] [added: Registrant's] telephone number, including area code: [removed: (203) 299-8000][added: (203) 299-8000]

| [removed: Title] [added: Title] of Each [removed: Class:] [added: Class:] | | [removed: Name] [added: Trading Symbol | | Name] of Each Exchange on which [removed: Registered:] [added: Registered:] |

| Common [removed: Stock,] [added: Stock] par value $0.008 per share | | [added: BKNG | |] The NASDAQ Global Select Market |

| 0.800% Senior Notes Due 2022 | | [removed: New York] [added: BKNG 22A | | The NASDAQ] Stock [removed: Exchange] [added: Market LLC] |

| 2.150% Senior Notes Due 2022 | | [removed: New York] [added: BKNG 22 | | The NASDAQ] Stock [removed: Exchange] [added: Market LLC] |

| 2.375% Senior Notes Due 2024 | | [removed: New York] [added: BKNG 24 | | The NASDAQ] Stock [removed: Exchange] [added: Market LLC] |

| 1.800% Senior Notes Due 2027 | | [removed: New York] [added: BKNG 27 | | The NASDAQ] Stock [removed: Exchange] [added: Market LLC] |

Securities Registered Pursuant to Section 12(g) of the Act: [removed: None.][added: None.]

Yes [removed: ý] [added: ☒] No [removed: o][added: ☐]

Yes [removed: o] [added: ☐] No [removed: ý][added: ☒]

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

| Large accelerated filer [removed: ý] | [added: ☒ |] Accelerated filer [removed: o] | [added: ☐ |] Non-accelerated filer [removed: o] | [added: ☐ |]

| Smaller reporting company [removed: o] | [added: ☐ |] Emerging growth company [removed: o] | [added: ☐] | [added: | |]

The aggregate market value of common stock held by non-affiliates of Booking Holdings Inc. at June 30, [removed: 2018] [added: 2019] was approximately [removed: $96.6] [added: $80.0] 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: 2018] [added: 2019] 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: 45,012,725] [added: 41,061,814] at February [removed: 20, 2019.][added: 19, 2020.]

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 [removed: the] [added: its] annual meeting of stockholders to be held on June [removed: 6, 2019,] [added: 4, 2020,] 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: 2018.][added: 2019.]

Booking Holdings Inc. Annual Report on Form 10-K for the Year Ended December 31, [removed: 2018] [added: 2019] Index

| | | [removed: Page No.] [added: Page No.] |

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| Delaware | 06-1528493 |

800 Connecticut Avenue

Norwalk, Connecticut 06854

(address of principal executive offices)

| | | | | |

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

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Yes ☒ No ☐

Yes ☒ No ☐

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

| | | | | | |

Yes ☐ No ☒

| [PART II](#s5D1BEDBCD906582FA71B1F026BC14C0E) | | [31](#s5D1BEDBCD906582FA71B1F026BC14C0E) |

| [PART IV](#s8C5464ACB3CF540DBBC83F107C36D97E) | | [57](#s8C5464ACB3CF540DBBC83F107C36D97E) |

| [Signatures](#s8A9BBE9CAA3C5BF78AD577EDE11A312E) | | [61](#s8A9BBE9CAA3C5BF78AD577EDE11A312E) |

10-K 1 bkng1231201810k.htm 10-K

| | | |

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

| 800 Connecticut Avenue Norwalk, Connecticut (Address of Principal Executive Offices) | | 06854 (Zip Code) |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§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.

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

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

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

Other than the office building for the future headquarters of [removed: the] Booking.com [removed: brand] that is currently under construction in the Netherlands [removed: and the associated land-use rights] (see the section [removed: "Land-use rights"] [added: "Building Construction"] within Note [removed: 2] [added: 16] to our Consolidated Financial Statements for more details, which is incorporated into this Item 2 by reference thereto), we did not own any real estate at December 31, [removed: 2018.][added: 2019.]

[removed: PART II][added: PART II]

[removed: Common Stock][added: Common Stock]

[removed: Holders][added: Holders]

At February [removed: 20, 2019,] [added: 19, 2020,] there were approximately [removed: 179] [added: 166] stockholders of record of Booking Holdings Inc.'s common stock.

[removed: Dividend Policy][added: Dividend Policy]

[removed: Performance] [added: Performance] Measurement [removed: Comparison][added: Comparison]

The following graph shows the total stockholder return through December 31, [removed: 2018] [added: 2019] of an investment of $100 in cash on December 31, [removed: 2013] [added: 2014] for our common stock and an investment of $100 in cash on December 31, [removed: 2013] [added: 2014] 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: ]

| [removed: Measurement Point December 31] [added: Measurement Point December 31] | | [removed: Booking] [added: Booking] Holdings [removed: Inc.] [added: Inc.] | | | [removed: NASDAQ Composite Index] [added: NASDAQ Composite Index] | | | [removed: S&P 500 Index] [added: S&P 500 Index] | | | [removed: RDG Internet Composite] [added: RDG Internet Composite] | |

[removed: Issuer] [added: Issuer] Purchases of Equity [removed: Securities][added: Securities]

The following table sets forth information relating to repurchases of our equity securities during the three months ended December 31, [removed: 2018:][added: 2019:]

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

| (1) | Pursuant to a stock repurchase program announced on [removed: February 27, 2018,] [added: May 9, 2019,] whereby [removed: the Company was] [added: we are] authorized to repurchase up to [removed: $8.0] [added: $15.0] billion of [removed: its] [added: our] common stock. |

| (2) | Pursuant to a general authorization, not publicly announced, whereby [removed: the Company is] [added: we are] authorized to repurchase shares of [removed: its] [added: our] common stock to satisfy employee withholding tax obligations related to stock-based compensation. [added: The table above does not include adjustments in the three months ended December 31, 2019 to previously withheld share amounts (reduction of 13 shares) that reflect changes to the estimates of employee tax withholding obligations.] |

| 2014 | | 100.00 | | | 100.00 | | | 100.00 | | | 100.00 | |

| 2015 | | 111.82 | | | 106.96 | | | 101.38 | | | 128.89 | |

| 2016 | | 128.58 | | | 116.45 | | | 113.51 | | | 135.45 | |

| 2017 | | 152.41 | | | 150.96 | | | 138.29 | | | 203.48 | |

| 2018 | | 151.06 | | | 146.67 | | | 132.23 | | | 197.34 | |

| 2019 | | 180.12 | | | 200.49 | | | 173.86 | | | 262.03 | |

ISSUER PURCHASES OF EQUITY SECURITIES

| October 1, 2019 — | | 229,668 | | (1) | $ | 2,002.76 | | | 229,668 | | | $ | 12,418,461,506 | | | (1) |

| October 31, 2019 | | 210 | | (2) | $ | 1,944.25 | | | N/A | | | N/A | | | | |

| November 1, 2019 — | | 230,653 | | (1) | $ | 1,898.41 | | | 230,653 | | | $ | 11,980,588,388 | | | (1) |

| November 30, 2019 | | 2,160 | | (2) | $ | 1,897.45 | | | N/A | | | N/A | | | | |

| December 1, 2019 — | | 222,023 | | (1) | $ | 1,972.69 | | | 222,023 | | | $ | 11,542,606,620 | | | (1) |

| December 31, 2019 | | 241 | | (2) | $ | 2,022.91 | | | N/A | | | N/A | | | | |

| Total | | 684,955 | | | $ | 1,957.53 | | | 682,344 | | | $ | 11,542,606,620 | | | |

| 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 | | | |

[removed: SELECTED] [added: SELECTED] FINANCIAL [removed: DATA][added: DATA]

Selected financial data reflects results of any acquired business from the date of acquisition, including data related to [removed: OpenTable from its acquisition date of July 24, 2014,] the Momondo Group from its acquisition date of July 24, 2017, FareHarbor from its acquisition date of April 26, 2018 and HotelsCombined from its acquisition date of November 30, 2018.

The information set forth below is not necessarily indicative of future results and should be read in conjunction with Part [removed: II] [added: II,] Item [removed: 7] [added: 7,] Management's Discussion and Analysis of Financial Condition and Results of Operations.

| | [removed: Year] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | | |

| | [removed: 2018(1)] [added: 2019(1)] | | | | [removed: 2017] [added: 2018(1)] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

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

| Total revenues | $ | [removed: 14,527] [added: 15,066] | | | $ | [removed: 12,681] [added: 14,527] | | | $ | [removed: 10,743] [added: 12,681] | | | $ | [removed: 9,224] [added: 10,743] | | | $ | [removed: 8,442] [added: 9,224] | |

| Cost of revenues [removed: (2)] | [removed: —] [added: N/A] | | | | [removed: 242] [added: N/A] | | | | [removed: 415] [added: 242] | | | | [removed: 646] [added: 415] | | | | [removed: 858] [added: 646] | | |

| Gross profit [removed: (2)] | [removed: —] [added: N/A] | | | | [removed: 12,439] [added: N/A] | | | | [removed: 10,328] [added: 12,439] | | | | [removed: 8,578] [added: 10,328] | | | | [removed: 7,584] [added: 8,578] | | |

| Total operating [removed: expenses(2)(3)] [added: expenses (2)] | [removed: 9,186] [added: 9,721] | | | | [removed: 7,901] [added: 9,186] | | | | [removed: 7,422] [added: 7,901] | | | | [removed: 5,319] [added: 7,422] | | | | [removed: 4,511] [added: 5,319] | | |

| Operating [removed: income(2)(3)] [added: income (2)] | [removed: 5,341] [added: 5,345] | | | | [removed: 4,538] [added: 5,341] | | | | [removed: 2,906] [added: 4,538] | | | | [removed: 3,259] [added: 2,906] | | | | [removed: 3,073] [added: 3,259] | | |

| Total other [removed: expense(4)] [added: income (expense) (3)] | [removed: 506] [added: 613] | | | | [removed: 139] [added: (506] | | [added: )] | | [removed: 193] [added: (139] | | [added: )] | | [removed: 131] [added: (193] | | [added: )] | | [removed: 84] [added: (131] | | [added: )] |

| Income tax [removed: expense(5)] [added: expense (4)] | [removed: 837] [added: 1,093] | | | | [removed: 2,058] [added: 837] | | | | [removed: 578] [added: 2,058] | | | | [removed: 577] [added: 578] | | | | [removed: 568] [added: 577] | | |

| Net [removed: income(3)] [added: income (2) (3)] (4) | [removed: 3,998] [added: 4,865] | | | | [removed: 2,341] [added: 3,998] | | | | [removed: 2,135] [added: 2,341] | | | | [removed: 2,551] [added: 2,135] | | | | [removed: 2,422] [added: 2,551] | | |

| Net income applicable to common stockholders per basic common share [added: (2)] (3) [removed: (5)] [added: (4)] | [removed: 84.26] [added: 112.93] | | | | [removed: 47.78] [added: 84.26] | | | | [removed: 43.14] [added: 47.78] | | | | [removed: 50.09] [added: 43.14] | | | | [removed: 46.30] [added: 50.09] | | |

| Net income applicable to common stockholders per diluted common share [added: (2)] (3) [removed: (5)] [added: (4)] | [removed: 83.26] [added: 111.82] | | | | [removed: 46.86] [added: 83.26] | | | | [removed: 42.65] [added: 46.86] | | | | [removed: 49.45] [added: 42.65] | | | | [removed: 45.67] [added: 49.45] | | |

| Total assets [added: (5)] | [removed: 22,687] [added: 21,402] | | | | [removed: 25,451] [added: 22,687] | | | | [removed: 19,839] [added: 25,451] | | | | [removed: 17,421] [added: 19,839] | | | | [removed: 14,771] [added: 17,421] | | |

| Long-term [removed: obligations(6)] [added: obligations (5) (6)] | [removed: 10,347] [added: 11,091] | | | | [removed: 11,403] [added: 10,347] | | | | [removed: 8,128] [added: 11,403] | | | | [removed: 7,186] [added: 8,128] | | | | [removed: 4,863] [added: 7,186] | | |

| Total liabilities [added: (5)] | [removed: 13,902] [added: 15,469] | | | | [removed: 14,187] [added: 13,902] | | | | [removed: 9,990] [added: 14,187] | | | | [removed: 8,626] [added: 9,990] | | | | [removed: 6,204] [added: 8,626] | | |

| Total stockholders' equity | [removed: 8,785] [added: 5,933] | | | | [removed: 11,261] [added: 8,785] | | | | [removed: 9,820] [added: 11,261] | | | | [removed: 8,795] [added: 9,820] | | | | [removed: 8,567] [added: 8,795] | | |

| (1) | The financial statements for the [removed: year] [added: years] ended December 31, [added: 2019 and] 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. [added: Under the current revenue recognition standard, we no longer present "Cost of revenues" or "Gross profit" in our Consolidated Statements of Operations. Therefore total revenues reported in 2019 and 2018 are comparable to gross profit reported in previous years.] See Note 2 to our Consolidated Financial Statements for further information. |

| [removed: (3)] [added: (2)] | Includes a non-cash charge related to an impairment of OpenTable goodwill of $941 million, which is not tax deductible, for the year ended December 31, [removed: 2016 (see Note 9 to the Consolidated Financial Statements).] [added: 2016.] The goodwill impairment charge reduced the 2016 basic and diluted net income per share by $19.01 and $18.79, respectively. |

| [removed: (4)] [added: (3)] | Includes net unrealized [added: gains on marketable equity securities of $745 million for the year ended December 31, 2019 and net unrealized] losses on marketable equity securities of $367 million for the year ended December 31, 2018. [added: The unrealized gains (losses) on marketable equity securities, net of tax, increased the 2019 basic and diluted net income per share by $13.52 and $13.39, respectively, and reduced the 2018 basic and diluted net income per share by $6.50 and $6.42, respectively.] Pursuant to the adoption of the accounting update on financial instruments in 2018, for periods beginning after December 31, 2017, [removed: marketable equity securities are reported at estimated fair value with] changes in fair value [added: of marketable equity securities are] recognized in net income rather than [removed: accumulated] [added: "Accumulated] other comprehensive [removed: income within stockholders' equity.] [added: loss" in the Consolidated Balance Sheets.] See Note 2 to our Consolidated Financial Statements for further information. |

| [removed: (5)] [added: (4)] | Includes [removed: an] income tax [removed: benefit during] [added: benefits of $17 million and $46 million for] the [removed: year] [added: years] ended December 31, [removed: 2018 of $46 million] [added: 2019 and 2018, respectively,] to adjust the 2017 provisional tax expense related to a one-time transitional tax on mandatory deemed repatriation of accumulated unremitted international earnings as a result of the U.S. Tax Cuts and Jobs Act (“Tax Act”) enacted in December 2017 (see Note [removed: 13] [added: 15] to the Consolidated Financial Statements). The income tax provision for the [removed: year ended December 31, 2017 includes a provisional tax expense of $1.6 billion related to the transition tax mentioned above and a provisional net] |

[added: year ended December 31, 2017 includes a provisional] tax [added: expense of $1.6 billion related to the transition tax mentioned above and a provisional net 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.

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

| (5) | Includes, as applicable, operating lease assets of $620 million, current operating lease liabilities of $161 million and non-current operating lease liabilities of $462 million that are reported in the Consolidated Balance Sheet at December 31, 2019. Operating lease assets and liabilities are recognized in the balance sheet as a result of the adoption of the current lease standard on January 1, 2019. See Notes 2 and 10 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. |

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 [removed: IV] [added: IV,] Item [removed: 15] [added: 15,] Exhibits and Financial Statement Schedules): Consolidated Balance Sheets at December 31, [removed: 2018] [added: 2019] and [removed: 2017;] [added: 2018;] 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: 2018, 2017] [added: 2019, 2018] and [removed: 2016;] [added: 2017;] Notes to the Consolidated Financial Statements; and Report of Independent Registered Public Accounting Firm.

[removed: Disclosure] [added: *Disclosure] Controls and [removed: Procedures.][added: Procedures*.]

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: 2018.][added: 2019.]

[removed: Management's Report] [added: Opinion] on Internal Control [removed: Over] [added: over] Financial [removed: Reporting.][added: Reporting]

[added: *Management's Report on Internal Control Over Financial Reporting.*] Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the [removed: framework in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.]

Based on our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2018.][added: 2019.]

[added: *Changes in Internal Controls.*] 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: 2018] [added: 2019] that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

[removed: REPORT] [added: REPORT] OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING [removed: FIRM][added: FIRM]

[removed: Opinion on] [added: Definition and Limitations of] Internal Control over Financial [removed: Reporting][added: Reporting]

We have audited the internal control over financial reporting of Booking Holdings Inc. and subsidiaries (the [removed: “Company”)] [added: "Company")] as of December 31, [removed: 2018,] [added: 2019,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated Framework [removed: (2013)] [added: (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: 2018,] [added: 2019,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated Framework [removed: (2013)] [added: (2013)*] issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the [removed: consolidated] financial statements as of and for the year ended December 31, [removed: 2018,] [added: 2019,] of the Company and our report dated February [removed: 27, 2019,] [added: 26, 2020,] expressed an unqualified opinion on those financial 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 [removed: standard] [added: standards] update.

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying "Management's Report on Internal Control Over Financial [removed: Reporting".][added: Reporting." Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.]

framework in the *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

February 26, 2020

Changes in Internal Controls.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

Definition and Limitations of Internal Control over Financial Reporting

February 27, 2019

[removed: PART III][added: PART III]

Information required by Part [removed: III] [added: III,] Item 10 will be included in our Proxy Statement relating to our [removed: 2019] [added: 2020] 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: 2018,] [added: 2019,] and is incorporated herein by reference.

Information required by Part [removed: III] [added: III,] Item 11 will be included in our Proxy Statement relating to our [removed: 2019] [added: 2020] 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: 2018,] [added: 2019,] and is incorporated herein by reference.

Information required by Part [removed: III] [added: III,] Item 12 will be included in our Proxy Statement relating to our [removed: 2019] [added: 2020] 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: 2018,] [added: 2019,] and is incorporated herein by reference.

Information required by Part [removed: III] [added: III,] Item 13 will be included in our Proxy Statement relating to our [removed: 2019] [added: 2020] 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: 2018,] [added: 2019,] and is incorporated herein by reference.

Information required by Part [removed: III] [added: III,] Item 14 will be included in our Proxy Statement relating to our [removed: 2019] [added: 2020] 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: 2018,] [added: 2019,] and is incorporated herein by reference.

[removed: PART IV][added: PART IV]

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 at December 31, [removed: 2018] [added: 2019] and [removed: 2017;] [added: 2018;] 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: 2018, 2017] [added: 2019, 2018] and [removed: 2016;] [added: 2017;] Notes to the Consolidated Financial Statements; and Report of Independent Registered Public Accounting Firm.

| [removed: [3.2](http://www.sec.gov/Archives/edgar/data/1075531/000107553118000008/ex33restatedby-laws.htm)(a)] [added: [3.2](http://www.sec.gov/Archives/edgar/data/1075531/000107553119000054/by-laws2019.htm)(b)] | Amended and Restated By-Laws of the Registrant. |

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

| [removed: [4.3](http://www.sec.gov/Archives/edgar/data/1075531/000110465913046855/a13-14161_1ex99d2.htm)(c)] [added: [4.3](http://www.sec.gov/Archives/edgar/data/1075531/000110465913046855/a13-14161_1ex99d2.htm)(d)] | Indenture, dated as of 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/1075531/000110465914062261/a14-19426_1ex99d2.htm)(d)] [added: [4.4](http://www.sec.gov/Archives/edgar/data/1075531/000110465914062261/a14-19426_1ex99d2.htm)(e)] | Indenture, dated as of 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/1075531/000104746915008969/a2226734zex-4_1.htm)(e)] [added: [4.5](http://www.sec.gov/Archives/edgar/data/1075531/000104746915008969/a2226734zex-4_1.htm)(f)] | [removed: 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,] [added: Indenture, dated as of September 23, 2014,] between the Registrant and Deutsche Bank Trust Company Americas, as Trustee. |