Item 1. Financial Statements

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Item 1. Financial Statements

Booking Holdings Inc.

CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share data)

September 30, 2022December 31, 2021
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$9,021$11,127
Short-term investments (Available-for-sale debt securities: Amortized cost of $117 and $25, respectively)11625
Accounts receivable, net (Allowance for expected credit losses of $119 and $101, respectively)2,2841,358
Prepaid expenses, net (Allowance for expected credit losses of $2 and $29, respectively)612404
Other current assets377231
Total current assets12,41013,145
Property and equipment, net879822
Operating lease assets402496
Intangible assets, net1,8552,057
Goodwill2,8082,887
Long-term investments (Includes available-for-sale debt securities: Amortized cost of $617 at September 30, 2022)2,6503,175
Other assets, net (Allowance for expected credit losses of $25 and $18, respectively)1,0591,059
Total assets$22,063$23,641
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$2,131$1,586
Accrued expenses and other current liabilities2,9251,765
Deferred merchant bookings2,253906
Short-term debt1,2341,989
Total current liabilities8,5436,246
Deferred income taxes723905
Operating lease liabilities286351
Long-term U.S. transition tax liability711825
Other long-term liabilities180199
Long-term debt7,9508,937
Total liabilities18,39317,463
Commitments and contingencies (see Note 13)
Stockholders' equity:
Common stock, $0.008 par value, Authorized shares: 1,000,000,000 Issued shares: 63,774,398 and 63,584,444, respectively——
Treasury stock, 24,685,111 and 22,518,391 shares, respectively(28,630)(24,290)
Additional paid-in capital6,3856,159
Retained earnings26,30624,453
Accumulated other comprehensive loss(391)(144)
Total stockholders' equity3,6706,178
Total liabilities and stockholders' equity$22,063$23,641

See Notes to Unaudited Consolidated Financial Statements.

Booking Holdings Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share and per share data)

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Agency revenues$3,203$2,867$6,954$4,912
Merchant revenues2,6141,6225,4132,656
Advertising and other revenues235187674409
Total revenues6,0524,67613,0417,977
Operating expenses:
Marketing expenses1,7951,3784,6792,827
Sales and other expenses5403021,344620
Personnel, including stock-based compensation of $101, $85, $302 and $284, respectively6365911,8671,829
General and administrative262179627432
Information technology129109400289
Depreciation and amortization109102327323
Restructuring, disposal, and other exit costs(2)—409
Total operating expenses3,4692,6619,2846,329
Operating income2,5832,0153,7571,648
Interest expense(102)(80)(246)(259)
Other income (expense), net(305)(967)(1,040)(740)
Income before income taxes2,1769682,471649
Income tax expense510199648102
Net income$1,666$769$1,823$547
Net income applicable to common stockholders per basic common share$42.10$18.73$45.20$13.33
Weighted-average number of basic common shares outstanding (in 000's)39,56441,06840,32641,032
Net income applicable to common stockholders per diluted common share$41.98$18.60$45.00$13.22
Weighted-average number of diluted common shares outstanding (in 000's)39,67141,34240,50441,359

See Notes to Unaudited Consolidated Financial Statements.

Booking Holdings Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Net income$1,666$769$1,823$547
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustments(127)(30)(235)(52)
Net unrealized (losses) gains on available-for-sale securities(12)1(12)98
Total other comprehensive (loss) income, net of tax(139)(29)(247)46
Comprehensive income$1,527$740$1,576$593

See Notes to Unaudited Consolidated Financial Statements.

Booking Holdings Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 and 2021

(In millions, except share data)

Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal
Shares (in 000's)AmountShares (in 000's)Amount
Balance, June 30, 202263,766$—(23,618)$(26,664)$6,278$24,640$(252)$4,002
Net income—————1,666—1,666
Foreign currency translation adjustments, net of tax——————(127)(127)
Net unrealized losses on available-for-sale securities, net of tax——————(12)(12)
Exercise of stock options and vesting of restricted stock units and performance share units8———2——2
Repurchase of common stock——(1,067)(1,966)———(1,966)
Stock-based compensation and other stock-based payments————105——105
Balance, September 30, 202263,774$—(24,685)$(28,630)$6,385$26,306$(391)$3,670
Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Loss
Shares (in 000's)AmountShares (in 000's)AmountTotal
Balance, December 31, 202163,584$—(22,518)$(24,290)$6,159$24,453$(144)$6,178
Cumulative effect of adoption of accounting standards update————(96)30—(66)
Net income—————1,823—1,823
Foreign currency translation adjustments, net of tax——————(235)(235)
Net unrealized losses on available-for-sale securities, net of tax——————(12)(12)
Exercise of stock options and vesting of restricted stock units and performance share units190———7——7
Repurchase of common stock——(2,167)(4,340)———(4,340)
Stock-based compensation and other stock-based payments————315——315
Balance, September 30, 202263,774$—(24,685)$(28,630)$6,385$26,306$(391)$3,670
Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal
Shares (in 000's)AmountShares (in 000's)Amount
Balance, June 30, 202163,575$—(22,515)$(24,283)$6,059$23,066$(43)$4,799
Net income—————769—769
Foreign currency translation adjustments, net of tax——————(30)(30)
Net unrealized gains on available-for-sale securities, net of tax——————11
Conversion of debt————(81)——(81)
Exercise of stock options and vesting of restricted stock units and performance share units5———————
Repurchase of common stock——(2)(3)———(3)
Stock-based compensation and other stock-based payments————90——90
Balance, September 30, 202163,580$—(22,517)$(24,286)$6,068$23,835$(72)$5,545
Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Loss
Shares (in 000's)AmountShares (in 000's)AmountTotal
Balance, December 31, 202063,406$—(22,447)$(24,128)$5,851$23,288$(118)$4,893
Net income—————547—547
Foreign currency translation adjustments, net of tax——————(52)(52)
Net unrealized gains on available-for-sale securities, net of tax——————9898
Conversion of debt————(86)——(86)
Exercise of stock options and vesting of restricted stock units and performance share units174———4——4
Repurchase of common stock——(70)(158)———(158)
Stock-based compensation and other stock-based payments————299——299
Balance, September 30, 202163,580$—(22,517)$(24,286)$6,068$23,835$(72)$5,545

See Notes to Unaudited Consolidated Financial Statements.

Booking Holdings Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

Nine Months Ended September 30,
20222021
OPERATING ACTIVITIES:
Net income$1,823$547
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization327323
Provision for expected credit losses and chargebacks17988
Deferred income tax benefit(246)(343)
Net losses on equity securities1,142589
Stock-based compensation expense and other stock-based payments302290
Operating lease amortization117135
Unrealized foreign currency transaction gains related to Euro-denominated debt(70)(108)
Loss on early extinguishment of debt—242
Other4061
Changes in assets and liabilities:
Accounts receivable(1,358)(1,172)
Prepaid expenses and other current assets(424)(35)
Deferred merchant bookings and other current liabilities3,5912,083
Long-term assets and liabilities(1,042)(159)
Net cash provided by operating activities4,3812,541
INVESTING ACTIVITIES:
Purchase of investments(751)(15)
Proceeds from sale and maturity of investments308
Additions to property and equipment(293)(203)
Other investing activities(14)(5)
Net cash used in investing activities(1,028)(215)
FINANCING ACTIVITIES:
Proceeds from the issuance of long-term debt—2,015
Payments on maturity and redemption of debt(1,102)(3,068)
Payments for repurchase of common stock(4,278)(159)
Other financing activities4(22)
Net cash used in financing activities(5,376)(1,234)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents(83)(11)
Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents(2,106)1,081
Total cash and cash equivalents and restricted cash and cash equivalents, beginning of period11,15210,582
Total cash and cash equivalents and restricted cash and cash equivalents, end of period$9,046$11,663
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for income taxes (see Note 18)$501$420
Cash paid during the period for interest$240$231

See Notes to Unaudited Consolidated Financial Statements.

Booking Holdings Inc.

Notes to Unaudited Consolidated Financial Statements

1. BASIS OF PRESENTATION

Management of Booking Holdings Inc. (the "Company") is responsible for the Unaudited Consolidated Financial Statements included in this document. The Unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operating results. The Company prepared the Unaudited Consolidated Financial Statements following the requirements of the Securities and Exchange Commission ("SEC") for interim reporting. As permitted under those rules, the Company condensed or omitted certain footnotes or other financial information that are normally required by U.S. GAAP for annual financial statements. These statements should be read in combination with the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

The Unaudited Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries, including acquired businesses from the dates of acquisition. All intercompany accounts and transactions have been eliminated in consolidation. The functional currency of the Company's subsidiaries is generally the respective local currency. For international operations, assets and liabilities are translated into U.S. Dollars at the rate of exchange existing at the balance sheet date. Income statement amounts are translated at monthly average exchange rates applicable for the period. Translation gains and losses are included as a component of "Accumulated other comprehensive loss" in the accompanying Consolidated Balance Sheets. Foreign currency transaction gains and losses are included in "Other income (expense), net" in the Unaudited Consolidated Statements of Operations.

Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be the same as those for any subsequent quarter or the full year.

Impact of COVID-19

In response to the outbreak of COVID-19 (the "COVID-19 pandemic"), as well as subsequent outbreaks driven by new variants of COVID-19, governments and businesses around the world have implemented a variety of restrictive measures to reduce the spread of COVID-19. These measures have had a significant adverse effect on many of the customers on whom the Company's business relies, including hotels and other accommodation providers, airlines, and restaurants, as well as the Company's operations, employees, and consumers. The COVID-19 pandemic and the resulting implementation of restrictive measures resulted in a significant decline in travel activities and consumer demand for related services, in 2020 in particular. The Company's financial results and prospects are almost entirely dependent on the sale of travel-related services. The spread of new variants of COVID-19 has caused uncertainty as to when restrictions will be lifted, if additional restrictions may be initiated or reimposed, if there will be permanent changes to travel behavior patterns, and the timing of distribution and administration of COVID-19 vaccines and other medical interventions globally. See Note 2 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 for further information.

Even though there have been improvements in the economic and operating conditions for the Company's business since the outset of the COVID-19 pandemic, the Company cannot predict the long-term effects of the pandemic on its business or the travel and restaurant industries as a whole.

Reclassification

Certain amounts from prior periods have been reclassified to conform to the current period presentation.

Recent Accounting Pronouncements

Accounting for Convertible Instruments and Contracts in an Entity's Own Equity

On January 1, 2022, the Company adopted the new accounting standards update relating to convertible instruments and contracts in an entity's own equity. Compared to legacy U.S. GAAP, the accounting standards update reduces the number of accounting models for convertible debt instruments, requires fewer embedded conversion features to be separately recognized from the host contract, and amends certain guidance to reduce form-over-substance-based accounting conclusions. Under the updated guidance, upon the initial recognition of convertible debt, the Company presents the entire amount attributable to the debt as a liability. The initial carrying amount of the convertible debt liability is reduced by any direct and

incremental issuance costs paid to third parties that are associated with the convertible debt issuance. No amount attributable to the debt is initially recognized within equity unless the instrument is issued at a substantial premium. In calculating diluted earnings per share, the accounting standards update also requires the use of the if-converted method for the Company's convertible debt.

The Company adopted the accounting standards update on a modified retrospective basis applied to the 0.75% convertible senior notes due May 2025 (see Note 9) resulting in an increase of $30 million to "Retained earnings" as of January 1, 2022. The significant corresponding balance sheet changes as of that date were an increase of $86 million to "Long-term debt" and decreases of $96 million to "Additional paid-in capital" and $21 million to "Deferred income taxes". For the Company’s convertible debt, interest expense for the periods beginning after January 1, 2022 is reflected in the financial statements using interest rates that are closer to the coupon interest rate of the debt rather than the higher imputed interest expense that resulted from the separation of conversion features required by legacy U.S. GAAP. See Note 4 for additional information on net income per share calculations.

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions

In June 2022, the Financial Accounting Standards Board ("FASB") issued an accounting standards update with guidance on the fair value measurement of equity securities subject to contractual sale restrictions. The update clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The update also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The update also requires certain additional disclosures for equity securities subject to contractual sale restrictions. The amendments in this update are effective for the Company beginning January 1, 2024. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company does not expect the adoption of the accounting standards update to have a material impact on its Consolidated Financial Statements.

Disclosure of Supplier Finance Program Obligations

In September 2022, the FASB issued an accounting standards update to enhance the disclosure of supplier finance programs. The update requires that a company that uses a supplier finance program in connection with the purchase of goods or services to disclose sufficient qualitative and quantitative information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. The amendments in this update are effective for the Company beginning January 1, 2023. Early adoption is permitted. The Company is currently evaluating the impact of the accounting standards update on its Consolidated Financial Statements.

2. REVENUE

Disaggregation of Revenue

Geographic Information

The Company's revenue from its businesses outside of the U.S. consists of the results of Booking.com, agoda, and Rentalcars.com in their entirety and the results of the KAYAK and OpenTable businesses located outside of the U.S. This classification is independent of where the consumer resides, where the consumer is physically located while using the Company's services, or the location of the travel service provider or restaurant. For example, a reservation made through Booking.com (which is domiciled in the Netherlands) at a hotel in New York by a consumer in the United States is part of the results of the Company's businesses outside of the U.S. The Company's geographic information is as follows (in millions):

Outside of the U.S.
United StatesThe NetherlandsOtherTotal
Total revenues for the three months ended September 30,
2022$606$4,991$455$6,052
2021$444$3,955$277$4,676
Total revenues for the nine months ended September 30,
2022$1,675$10,300$1,066$13,041
2021$1,034$6,367$576$7,977

Revenue by Type of Service

Approximately 90% and 88% of the Company's revenues for the three and nine months ended September 30, 2022, respectively, and 89% and 87% of the Company's revenues for the three and nine months ended September 30, 2021, respectively, relate to online accommodation reservation services. Revenue from all other sources of online travel reservation services and advertising and other revenues each individually represent less than 10% of the Company's total revenues for each period.

Deferred Merchant Bookings

Cash payments received from travelers in advance of the Company completing its performance obligations are included in "Deferred merchant bookings" in the Company's Consolidated Balance Sheets and are comprised principally of amounts estimated to be payable to travel service providers as well as the Company's estimated future revenue for its commission or margin and fees. The amounts are subject to refunds for cancellations. The Company expects to complete its performance obligations generally within one year from the reservation date.

Incentive Programs

The Company provides various incentive programs such as referral bonuses, rebates, credits, and discounts. In addition, the Company offers loyalty programs where participating consumers may be awarded loyalty points on current transactions that can be redeemed in the future. The estimated value of the incentives granted and the loyalty points expected to be redeemed is generally recognized as a reduction of revenue at the time they are granted. At September 30, 2022 and December 31, 2021, liabilities of $121 million and $71 million, respectively, were included in "Accrued expenses and other current liabilities" in the Consolidated Balance Sheets for incentives granted and loyalty programs.

3. STOCK-BASED COMPENSATION

The Company maintains equity incentive plans that include broad-based grants of restricted stock units, performance share units granted to officers and certain other employees, and stock options granted to certain employees.

Restricted stock units and performance share units granted by the Company during the three and nine months ended September 30, 2022 had an aggregate grant-date fair value of $14 million and $477 million, respectively. Restricted stock units and performance share units that vested during the three and nine months ended September 30, 2022 had an aggregate fair value at vesting of $13 million and $388 million, respectively. At September 30, 2022, there was $618 million of estimated total future stock-based compensation expense related to unvested restricted stock units and performance share units to be recognized over a weighted-average period of 2.0 years, and $8 million of estimated total future stock-based compensation expense related to unvested stock options to be recognized over a weighted-average period of 0.4 year.

The following table summarizes the activity in restricted stock units for employees and non-employee directors during the nine months ended September 30, 2022:

Restricted Stock UnitsSharesWeighted-average Grant-date Fair Value
Unvested at December 31, 2021281,924$1,914
Granted173,915$2,101
Vested(141,071)$1,790
Forfeited(29,717)$2,056
Unvested at September 30, 2022285,051$2,075

During the nine months ended September 30, 2021, the Company modified the performance-based awards granted in 2018 and 2019 to its executive officers to fix the number of shares to be issued, subject to other vesting conditions. The modification, in aggregate, resulted in additional stock-based compensation expense of $40 million, which was recognized over the remaining requisite service periods for the performance-based awards.

The following table summarizes the activity in performance share units for employees during the nine months ended September 30, 2022:

Performance Share UnitsSharesWeighted-average Grant-date Fair Value
Unvested at December 31, 2021 (1)108,323$2,123
Granted (2),(3)50,443$2,210
Vested(44,276)$1,859
Performance shares adjustment (4)33,529$2,390
Forfeited(3,033)$2,325
Unvested at September 30, 2022144,986$2,294

(1) Excludes 12,251 performance share units awarded during the year ended December 31, 2021 for which the grant date under Accounting Standards Codification ("ASC") 718, Compensation - Stock Compensation, was not established as of December 31, 2021. Among other conditions, for the grant date to be established, a mutual understanding is required to be reached between the Company and the employee of the key terms and conditions of the award, including the performance targets. The performance targets for each of the annual performance periods under the award are set at the beginning of the respective year.

(2) Excludes 9,692 performance share units awarded during the nine months ended September 30, 2022 for which the grant date under ASC 718 has not been established as of September 30, 2022.

(3) Includes 7,856 performance share units awarded during the year ended December 31, 2021 for which the grant date under ASC 718 was established.

(4) Probable outcome for performance-based awards is updated based upon changes in actual and forecasted operating results or expected achievement of performance goals, as applicable, and the impact of modifications.

The following table summarizes the activity in stock options during the nine months ended September 30, 2022:

Employee Stock OptionsNumber of SharesWeighted-average Exercise PriceAggregate Intrinsic Value (in millions)Weighted-average Remaining Contractual Term (in years)
Balance, December 31, 2021135,851$1,407$1358.3
Exercised(5,306)$1,374
Forfeited(7,074)$1,411
Balance, September 30, 2022123,471$1,408$297.6
Exercisable at September 30, 2022624$891$—1.5

4. NET INCOME PER SHARE

The Company computes basic net income per share by dividing net income applicable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income per share is based upon the weighted-average number of common and common equivalent shares outstanding during the period. Only dilutive common equivalent shares that decrease the net income per share are included in the computation of diluted net income per share.

Common equivalent shares related to stock options, restricted stock units, and performance share units are calculated using the treasury stock method. Performance share units are included in the weighted-average common equivalent shares based on the number of shares that would be issued if the end of the reporting period were the end of the performance period, if the result would be dilutive.

The Company's convertible senior notes have net share settlement features requiring the Company, upon conversion, to settle the principal amount of the debt for cash and the conversion premium for cash or shares of the Company's common stock, at the Company's option. If the conversion prices for the convertible senior notes exceed the Company's average stock price for the period, the convertible senior notes generally have no impact on diluted net income per share. For periods prior to January 1, 2022, the treasury stock method was used for convertible senior notes in the calculation of diluted net income per share. Following the adoption of the accounting standards update on January 1, 2022 (see Note 1), the if-converted method is used for all periods after that date.

A reconciliation of the weighted-average number of shares outstanding used in calculating diluted net income per share is as follows (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Weighted-average number of basic common shares outstanding39,56441,06840,32641,032
Weighted-average dilutive stock options, restricted stock units and performance share units107178149202
Assumed conversion of convertible senior notes—9629125
Weighted-average number of diluted common and common equivalent shares outstanding39,67141,34240,50441,359

For the three and nine months ended September 30, 2022, 15,392 and 5,346 potential common shares, respectively, and for the nine months ended September 30, 2021, 15,434 potential common shares related to restricted stock units and performance share units, as applicable, were excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive for the respective period.

5. INVESTMENTS

The following table summarizes the Company's investments by major security type at September 30, 2022 (in millions):

CostGross Unrealized Gains /Upward AdjustmentsGross Unrealized Losses /Downward AdjustmentsCarrying Value
Short-term investments:
Debt securities:
International government securities$3$—$—$3
U.S. government securities (1)93—(1)92
Corporate debt securities21——21
Total debt securities117—(1)116
Total short-term investments$117$—$(1)$116
Long-term investments:
Debt securities:
International government securities$73$—$(1)$72
U.S. government securities173—(3)170
Corporate debt securities371—(8)363
Total debt securities617—(12)605
Equity securities:
Equity securities with readily determinable fair values1,1651,249(522)1,892
Equity securities of private companies78259(184)153
Total equity securities1,2431,508(706)2,045
Total long-term investments$1,860$1,508$(718)$2,650

(1) Includes investments in U.S. municipal bonds.

The following table summarizes the Company's investments by major security type at December 31, 2021 (in millions):

CostGross Unrealized Gains/Upward AdjustmentsGross Unrealized Losses/Downward AdjustmentsCarrying Value
Short-term investments:
Debt securities:
Corporate debt securities$25$—$—$25
Total debt securities25——25
Total short-term investments$25$—$—$25
Long-term investments:
Equity securities:
Equity securities with readily determinable fair values$1,165$1,990$(305)$2,850
Equity securities of private companies66259—325
Total equity securities1,2312,249(305)3,175
Total long-term investments$1,231$2,249$(305)$3,175

The Company has classified its investments in international government securities, U.S. government securities, and corporate debt securities as available-for-sale debt securities. The aggregate unrealized gains and losses, net of tax, are reflected in "Accumulated other comprehensive loss" in the Consolidated Balance Sheets. The Company's investment policy seeks to

preserve capital and maintain sufficient liquidity to meet operational and other needs of the business. At September 30, 2022, the Company’s long-term investments in available-for-sale debt securities had maturity dates between 1 and 2 years. The Company invests in international government securities with high credit quality. At September 30, 2022, investments in international government securities principally included debt securities issued by the governments of Germany, France, Norway, Sweden, and Canada.

Equity securities with readily determinable fair values include the Company's investments in Meituan, Grab Holdings Limited ("Grab"), and DiDi Global Inc. ("DiDi"), with fair values of $1.7 billion, $111 million, and $72 million, respectively, at September 30, 2022 and $2.3 billion, $301 million, and $195 million, respectively, at December 31, 2021, which are included in "Long-term investments" in the Consolidated Balance Sheets.

Net unrealized (losses) gains related to these investments for the three and nine months ended September 30, 2022 and 2021 were as follows (in millions):

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Meituan (1)$(294)$(772)$(629)$(509)
Grab (2)44(190)130
DiDi (1)(44)(249)(123)(94)

(1) Included in "Other income (expense), net" in the Unaudited Consolidated Statements of Operations.

(2) Net unrealized gains (losses) for the three and nine months ended September 30, 2022 are included in "Other income (expense), net" in the Unaudited Consolidated Statements of Operations and net unrealized gains for the three and nine months ended September 30, 2021 are included in Net unrealized (losses) gains on available-for-sale securities in the Unaudited Consolidated Statements of Comprehensive Income.

During the three and nine months ended September 30, 2021, prior to the business combination transaction involving Grab Holdings Inc., Grab and Altimeter Growth Corp. (the "Grab Transaction"), the Company's investment in Grab was classified as a debt security for accounting purposes. In December 2021, the Company's investment in preferred shares were converted to Class A ordinary shares of Grab and such ordinary shares began publicly trading on the NASDAQ Stock Market. As a result, the Company's investment was classified as equity securities with readily determinable fair values.

In June 2022, DiDi delisted its American Depository Shares ("ADSs") from the New York Stock Exchange. The shares are currently trading in the over-the-counter market with trade prices publicly reported by OTC Markets Group Inc.

As of November 1, 2022, the market price of Meituan's shares decreased by 16% as compared to its market price on September 30, 2022.

Investments in equity securities without readily determinable fair values are measured at cost less impairment, if any. Such investments are also required to be measured at fair value as of the date of certain observable transactions for the identical or a similar investment of the same issuer. The Company's investments in equity securities of private companies at September 30, 2022 and December 31, 2021, includes the $51 million originally invested in Yanolja Co., Ltd. ("Yanolja"). The investment had a carrying value of $306 million as of December 31, 2021. Considering the recent significant adverse changes in the market valuations of companies in the travel and technology industries, the Company evaluated its investment in Yanolja for impairment and recognized an impairment charge of $184 million during the three months ended June 30, 2022, resulting in an adjusted carrying value of $122 million at June 30, 2022 and September 30, 2022 (see Note 6).

6. FAIR VALUE MEASUREMENTS

Financial assets and liabilities measured at fair value on a recurring basis at September 30, 2022 and nonrecurring fair value measurements are classified in the categories described in the table below (in millions):

Level 1Level 2Level 3Total
Recurring fair value measurements
ASSETS:
Cash equivalents and restricted cash equivalents:
Money market fund investments$8,085$—$—$8,085
Time deposits and certificates of deposit85——85
Short-term investments:
International government securities—3—3
U.S. government securities—92—92
Corporate debt securities—21—21
Long-term investments:
International government securities—72—72
U.S. government securities—170—170
Corporate debt securities—363—363
Equity securities1,892——1,892
Derivatives:
Foreign currency exchange derivatives—21—21
Total assets at fair value$10,062$742$—$10,804
LIABILITIES:
Foreign currency exchange derivatives$—$35$—$35
Nonrecurring fair value measurements
Investment in equity securities of a private company (1)$—$—$122$122
Total nonrecurring fair value measurements$—$—$122$122

(1) During the three months ended June 30, 2022, the investment in Yanolja was written down to its estimated fair value of $122 million, resulting in an impairment charge of $184 million (see Note 5).

Financial assets and liabilities measured at fair value on a recurring basis at December 31, 2021 and nonrecurring fair value measurements are classified in the categories described in the table below (in millions):

Level 1Level 2Total
Recurring fair value measurements (1)
ASSETS:
Cash equivalents and restricted cash equivalents:
Money market fund investments$10,410$—$10,410
Time deposits and certificates of deposit25—25
Short-term investments:
Corporate debt securities—2525
Long-term investments:
Equity securities2,850—2,850
Derivatives:
Foreign currency exchange derivatives—55
Total assets at fair value$13,285$30$13,315
LIABILITIES:
Foreign currency exchange derivatives$—$11$11
Nonrecurring fair value measurements
Investments in equity securities of private companies (2)$—$325$325
Total nonrecurring fair value measurements$—$325$325

(1) The Company did not have any Level 3 fair value measurements at December 31, 2021.

(2) During the year ended December 31, 2021, the Company recorded upward adjustments to its investments in equity securities of private companies, including Yanolja, based on observable price changes in orderly transactions for identical or similar investments of the same issuer.

There are three levels of inputs to measure fair value. The definition of each input is described below:

Level 1: Quoted prices in active markets that are accessible by the Company at the measurement date for identical assets and liabilities.

Level 2: Inputs that are observable, either directly or indirectly. Such prices may be based upon quoted prices for identical or comparable securities in active markets or inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available.

Rollforward of Level 3 Recurring Fair Value Measurements

The following table summarizes the fair value adjustments for debt securities measured using significant unobservable inputs (Level 3) (in millions):

For the Nine Months Ended September 30, 2021
Balance, beginning of year$200
Unrealized gains included in other comprehensive (loss) income (1)130
Balance, end of period$330

(1) The Company's investment in Grab (see Note 5) had an estimated fair value of $330 million and $200 million at September 30, 2021 and December 31, 2020, respectively. At September 30, 2021, the Company measured this investment using Level 3 inputs and management's estimates that incorporated market participant expectations of future cash flows alongside the Grab Transaction value and other relevant information.

Investments

See Note 5 for additional information related to the Company's investments.

The valuation of the Company's investment in debt securities is considered a "Level 2" valuation because the Company has access to quoted prices for identical or comparable securities, but does not have visibility into the volume and frequency of trading for this investment. A market approach is used for recurring fair value measurements and the valuation techniques use inputs that are observable, or can be corroborated by observable data, in an active marketplace.

Investments in private companies measured using Level 3 inputs

The Company's investments measured using Level 3 inputs primarily consist of investments in privately-held companies that are classified as equity securities without readily determinable fair values. Fair values of privately-held securities are estimated using a variety of valuation methodologies, including both market and income approaches. The Company uses valuation techniques appropriate for the type of investment and the information available about the investee as of the valuation date to determine fair value. Recent financing transactions in the investee, such as new investments in preferred stock, are generally considered the best indication of the enterprise value and therefore used as a basis to estimate fair value. However, based on a number of factors, such as the proximity in timing to the valuation date or the volume or other terms of these financing transactions, the Company may also use other valuation techniques to supplement this data, including the income approach. When a recent financing transaction occurs and represents fair value, the Company also uses the calibration process, as appropriate, when estimating fair value on subsequent measurement dates. Calibration is the process of using observed transactions in the investee company's own instruments to ensure that the valuation techniques that will be employed to value the investee company investment on subsequent measurement dates begin with assumptions that are consistent with the original observed transaction as well as any more recent observed transactions in the instruments issued by the investee company.

In July 2021, Yanolja announced a new round of funding which was completed in October 2021 along with certain other transactions. As a result of these observable transactions, the Company increased the carrying value of its investment in

Yanolja to $306 million as of December 31, 2021. Considering the recent significant adverse changes in the market valuations of companies in the travel and technology industries, the Company evaluated its investment in Yanolja for impairment and recognized an impairment charge of $184 million during the three months ended June 30, 2022, resulting in an adjusted carrying value of $122 million at June 30, 2022 and September 30, 2022. As discussed below, the Company used unobservable inputs to determine fair value. The Company used a combination of the market approach and the income approach in estimating the fair value of its investment in Yanolja as of June 30, 2022. The market approach estimates value using prices and other relevant information generated by market transactions involving identical or comparable companies. The income approach estimates value based on the expectation of future cash flows that a company will generate. These future cash flows are discounted to their present values using a discount rate based on a company’s weighted-average cost of capital, and is adjusted to reflect the risks inherent in its cash flows. The key unobservable inputs and ranges used include, for the market approach, percentage decrease in the calibrated EBITDA multiple (36%) and for the income approach, the weighted average cost of capital (10%-14%) and terminal EBITDA multiple (14x-16x). Significant changes in any of these inputs in isolation would result in significantly different fair value measurements. Generally, a change in the assumption used for EBITDA multiples would result in a directionally similar change in the fair value and a change in the assumption used for weighted average cost of capital would result in a directionally opposite change in the fair value.

The determination of the fair values of investments, where the Company is a minority shareholder and has access to limited information from the investee, reflects numerous assumptions that are subject to various risks and uncertainties, including key assumptions regarding the investee’s expected growth rates and operating margin, as well as other key assumptions with respect to matters outside of the Company's control, such as discount rates and market comparables. It requires significant judgments and estimates and actual results could be materially different than those judgments and estimates utilized in the fair value estimate. Future events and changing market conditions may lead the Company to re-evaluate the assumptions reflected in the valuation which may result in a need to recognize an additional impairment charge that could have a material adverse effect on the Company's results of operations.

Derivatives

The Company's derivative instruments are valued using pricing models. Pricing models take into account the contract terms as well as multiple inputs where applicable, such as interest rate yield curves, option volatility, and foreign currency exchange rates. The valuation of derivatives is considered a "Level 2" fair value measurement. The Company's derivative instruments are typically short-term in nature. The Company reports the fair values of its derivative assets and liabilities on a gross basis in the Consolidated Balance Sheets in "Other current assets" and "Accrued expenses and other current liabilities," respectively.

In the normal course of business, the Company is exposed to the impact of foreign currency fluctuations which it mitigates by following established risk management policies and procedures, including the use of derivatives. The Company enters into foreign currency forward contracts to hedge its exposure to the impact of movements in foreign currency exchange rates primarily on its transactional balances denominated in currencies other than the functional currency and does not use derivatives for trading or speculative purposes. As of September 30, 2022 and December 31, 2021, the Company did not designate any foreign currency exchange derivatives as hedges for accounting purposes.

The table below provides estimated fair values and notional amounts of foreign currency exchange derivatives outstanding at September 30, 2022 and December 31, 2021 (in millions). The notional amount of a foreign currency forward contract is the contracted amount of foreign currency to be exchanged and is not recorded in the balance sheets.

September 30, 2022December 31, 2021
Estimated fair value of derivative assets$21$5
Estimated fair value of derivative liabilities$35$11
Notional amount:
Foreign currency purchases$1,960$840
Foreign currency sales$2,064$1,857

The effect of foreign currency exchange derivatives recorded in "Other income (expense), net" in the Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021 is as follows (in millions):

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Losses on foreign currency exchange derivatives$58$10$114$18

Other Financial Assets and Liabilities

At September 30, 2022 and December 31, 2021, the Company's cash consisted of bank deposits. Cash equivalents principally include money market fund investments, time deposits, and certificates of deposit and their carrying value generally approximates the fair value as they are readily convertible to known amounts of cash. Other financial assets and liabilities, including restricted cash, accounts payable, accrued expenses, and deferred merchant bookings, are carried at cost which approximates their fair values because of the short-term nature of these items. Accounts receivable and other financial assets measured at amortized cost are carried at cost less an allowance for expected credit losses to present the net amount expected to be collected (see Note 7). See Note 9 for the estimated fair value of the Company's outstanding senior notes, including the estimated fair value of the Company's convertible senior notes.

7. ACCOUNTS RECEIVABLE AND OTHER FINANCIAL ASSETS

Accounts receivable in the Consolidated Balance Sheets at September 30, 2022 and December 31, 2021 includes receivables from customers of $1.7 billion and $1.1 billion, respectively, and receivables from payment processors and networks of $621 million and $343 million, respectively. The remaining balance principally relates to receivables from marketing affiliates. The Company’s receivables are short term in nature. In addition, the Company had prepayments to certain customers of $15 million and $67 million included in "Prepaid expenses, net" and $26 million and $18 million included in "Other assets, net" in the Consolidated Balance Sheets at September 30, 2022 and December 31, 2021, respectively. The amounts mentioned above are stated on a gross basis, before deducting the allowance for expected credit losses.

Significant judgments and assumptions are required to estimate the allowance for expected credit losses and such assumptions may change in future periods, particularly the assumptions related to the business prospects and financial condition of customers and marketing affiliates, including the impact of the COVID-19 pandemic, macroeconomic conditions, and the Company’s ability to collect the receivable or recover the prepayment.

The following table summarizes the activity of the allowance for expected credit losses on receivables (in millions):

Nine Months Ended September 30,
20222021
Balance, beginning of year$101$166
Provision charged to expense10444
Write-offs and adjustments(75)(96)
Foreign currency translation adjustments(11)(4)
Balance, end of period$119$110

In addition to the allowance for expected credit losses on receivables, the Company recorded an allowance for expected credit losses on prepayments to certain customers, which are included in "Prepaid expenses, net" and "Other assets,

net" in the Consolidated Balance Sheets. The following table summarizes the activity of the allowance for expected credit losses on prepayments to customers (in millions):

Nine Months Ended September 30,
20222021
Balance, beginning of year$47$55
Provision charged to expense(16)(2)
Write-offs and adjustments(4)(3)
Balance, end of period$27$50

8. INTANGIBLE ASSETS AND GOODWILL

The Company's intangible assets at September 30, 2022 and December 31, 2021 consist of the following (in millions):

September 30, 2022December 31, 2021
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying AmountAmortization Period
Supply and distribution agreements$1,340$(612)$728$1,407$(591)$8163 - 20 years
Technology291(176)115297(151)1462 - 7 years
Internet domain names35(32)341(36)55 - 20 years
Trade names1,790(781)1,0091,814(724)1,0904 - 20 years
Other intangible assets2(2)—2(2)—Up to 15 years
Total intangible assets$3,458$(1,603)$1,855$3,561$(1,504)$2,057

Intangible assets are amortized on a straight-line basis. Amortization expense was $55 million and $167 million for the three and nine months ended September 30, 2022, respectively, and $40 million and $122 million for the three and nine months ended September 30, 2021, respectively.

A substantial portion of the Company's intangible assets and goodwill relates to the acquisitions of OpenTable, KAYAK, and Getaroom. The purchase price allocation for the acquisition of Getaroom has not been completed at September 30, 2022 (see Note 14).

The balance of goodwill as of September 30, 2022 and December 31, 2021 is net of cumulative impairment charges of $2.0 billion. The Company tests goodwill for impairment on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company tests goodwill at the reporting unit level and the annual tests are performed as of September 30. As of September 30, 2022, the Company performed its annual goodwill impairment test and concluded that there was no impairment of goodwill.

9. DEBT

Revolving Credit Facility

In August 2019, the Company entered into a $2.0 billion five-year unsecured revolving credit facility with a group of lenders. The revolving credit facility provides for the issuance of up to $80 million of letters of credit as well as borrowings of up to $100 million on same-day notice, referred to as swingline loans. Other than swingline loans, which are available only in U.S. Dollars, borrowings and letters of credit under the revolving credit facility may be made in U.S. Dollars, Euros, British Pounds Sterling, and any other foreign currency agreed to by the lenders. The proceeds of loans made under the facility can be used for working capital and general corporate purposes, including acquisitions, share repurchases, and debt repayments. At September 30, 2022 and December 31, 2021, there were no borrowings outstanding and $11 million and $4 million, respectively, of letters of credit issued under this revolving credit facility.

The revolving credit facility contains a maximum leverage ratio covenant, compliance with which is a condition to the Company's ability to borrow thereunder. A 2020 amendment to the credit facility increased the permitted maximum leverage ratio through and including the three months ending March 31, 2023. Under the amendment, the Company may not declare or

make any cash distribution or repurchase any of its shares (with certain exceptions including in connection with tax withholding related to shares issued to employees) unless it is in compliance on a pro forma basis with the maximum leverage ratio covenant then in effect. Such restriction ends upon delivery of financial statements required for the three months ending June 30, 2023, or the Company has the ability to terminate this restriction earlier if it demonstrates compliance with the original maximum leverage ratio covenant in the revolving credit facility.

Outstanding Debt

Outstanding debt at September 30, 2022 consists of the following (in millions):

September 30, 2022Outstanding Principal AmountUnamortized Debt Discount and Debt Issuance CostCarrying Value
Current liabilities:
2.15% (€750 Million) Senior Notes due November 2022$735$—$735
2.75% Senior Notes due March 2023500(1)499
Total current liabilities$1,235$(1)$1,234
Long-term debt:
2.375% (€1 Billion) Senior Notes due September 2024$980$(4)$976
3.65% Senior Notes due March 2025500(1)499
0.1% (€950 Million) Senior Notes due March 2025931(3)928
0.75% Convertible Senior Notes due May 2025863(10)853
3.6% Senior Notes due June 20261,000(3)997
1.8% (€1 Billion) Senior Notes due March 2027980(3)977
3.55% Senior Notes due March 2028500(2)498
0.5% (€750 Million) Senior Notes due March 2028735(4)731
4.625% Senior Notes due April 20301,500(9)1,491
Total long-term debt$7,989$(39)$7,950

Outstanding debt at December 31, 2021 consists of the following (in millions):

December 31, 2021Outstanding Principal AmountUnamortized Debt Discount and Debt Issuance CostCarrying Value
Current Liabilities:
0.8% (€1 Billion) Senior Notes due March 2022$1,137$—$1,137
2.15% (€750 Million) Senior Notes due November 2022853(1)852
Total current liabilities$1,990$(1)$1,989
Long-term debt:
2.75% Senior Notes due March 2023$500$(1)$499
2.375% (€1 Billion) Senior Notes due September 20241,137(5)1,132
3.65% Senior Notes due March 2025500(1)499
0.1% (€950 Million) Senior Notes due March 20251,080(4)1,076
0.75% Convertible Senior Notes due May 2025863(99)764
3.6% Senior Notes due June 20261,000(4)996
1.8% (€1 Billion) Senior Notes due March 20271,137(3)1,134
3.55% Senior Notes due March 2028500(2)498
0.5% (€750 Million) Senior Notes due March 2028853(5)848
4.625% Senior Notes due April 20301,500(9)1,491
Total long-term debt$9,070$(133)$8,937

Fair Value of Debt

At September 30, 2022 and December 31, 2021, the estimated fair value of the outstanding debt was approximately $8.9 billion and $12.1 billion, respectively, and was considered a "Level 2" fair value measurement (see Note 6). Fair value was estimated based upon actual trades at the end of the reporting period or the most recent trade available as well as the Company's stock price at the end of the reporting period. As of September 30, 2022, the outstanding principal amount of the Company's debt exceeds the fair value of debt mainly due to the increase in interest rates partially offset by the conversion premium on the convertible senior notes due in May 2025. The estimated fair value of the Company's debt in excess of the outstanding principal amount at December 31, 2021 primarily relates to the conversion premium on the convertible senior notes due in May 2025 and the outstanding senior notes due in April 2030.

Convertible Senior Notes

In April 2020, the Company issued $863 million aggregate principal amount of convertible senior notes due in May 2025 with an interest rate of 0.75% (the "May 2025 Notes"). The Company paid $19 million in debt issuance costs during the year ended December 31, 2020 related to this offering. The May 2025 Notes are convertible, subject to certain conditions, into the Company's common stock at a conversion price of $1,886.44 per share. The May 2025 Notes are convertible, at the option of the holder, prior to November 1, 2024, upon the occurrence of specific events, including but not limited to a change in control, or if the closing sales price of the Company's common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is more than 130% of the conversion price in effect for the notes on the last trading day of the immediately preceding quarter. In the event that all or substantially all of the Company's common stock is acquired on or prior to the maturity of the May 2025 Notes in a transaction in which the consideration paid to holders of the Company's common stock consists of all or substantially all cash, the Company would be required to make additional payments in the form of additional shares of common stock to the holders of the May 2025 Notes in an aggregate value ranging from $0 to $235 million depending upon the date of the transaction and the then current stock price of the Company. Starting on November 1, 2024, holders will have the right to convert all or any portion of the May 2025 Notes, regardless of the Company's stock price. The May 2025 Notes may not be redeemed by the Company prior to maturity. The holders may require the Company to repurchase the May 2025 Notes for cash in certain circumstances. Interest on the May 2025 Notes is payable on May 1 and November 1 of each year. If the note holders exercise their option to convert, the Company delivers cash to repay the principal amount of the notes and delivers shares of common stock or cash, at its option, to satisfy the conversion value in excess of the principal amount. Based on the closing price of the Company's common stock for the prescribed measurement periods for the three months ended September 30, 2022 and December 31, 2021, the contingent

conversion thresholds on the May 2025 Notes were not exceeded and therefore the notes were not convertible. At September 30, 2022 and December 31, 2021, the estimated fair value of the May 2025 Notes was $1.0 billion and $1.3 billion, respectively, and was considered a "Level 2" fair value measurement (see Note 6).

In August 2014, the Company issued $1.0 billion aggregate principal amount of Convertible Senior Notes due September 2021 with an interest rate of 0.9% (the "September 2021 Notes"). In September 2021, in connection with the maturity of the outstanding September 2021 Notes, the Company paid $1.0 billion to satisfy the aggregate principal amount due and paid an additional $86 million conversion premium in excess of the principal amount.

On January 1, 2022, the Company adopted the new accounting standards update relating to convertible instruments (see Note 1). The adoption of the new accounting standards update resulted in a decrease of $6 million and $19 million in "Interest expense" and "Income before income taxes" in the Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2022, respectively. The following table summarizes the interest expense and weighted-average effective interest rates related to the convertible senior notes (in millions, except for interest rates). The remaining period for amortization of debt issuance costs and debt discount, as applicable, is the period until the stated maturity date for the respective debt.

For the Three Months Ended September 30,For the Nine Months Ended September 30,
2022202120222021
Coupon interest expense$2$3$5$11
Amortization of debt discount and debt issuance costs112336
Total interest expense$3$15$8$47
Weighted-average effective interest rate1.2%3.9%1.2%3.7%

Other Senior Notes

In March 2022, the Company repaid $1.1 billion on the maturity of senior notes with an interest rate of 0.8% and an aggregate principal amount of 1.0 billion Euros.

In March 2021, the Company issued Senior Notes due March 2025 with an interest rate of 0.1% for an aggregate principal amount of 950 million Euros and Senior Notes due March 2028 with an interest rate of 0.5% for an aggregate principal amount of 750 million Euros. The proceeds from the issuance of these senior notes were used to redeem the Senior Notes due April 2025 (the "April 2025 Notes") and the Senior Notes due April 2027 (the "April 2027 Notes").

In April 2021, the Company paid $1.1 billion and $868 million to redeem the April 2025 Notes and the April 2027 Notes, respectively. In addition, the Company paid the applicable accrued and unpaid interest. The Company recorded a loss before tax of $242 million in the Unaudited Consolidated Statements of Operations for the nine months ended September 30, 2021, on the early extinguishment of these senior notes.

Other senior notes had a total carrying value of $8.3 billion and $10.2 billion at September 30, 2022 and December 31, 2021, respectively. Debt discount and debt issuance costs are amortized using the effective interest rate method over the period from the origination date through the stated maturity date.

The following table summarizes the interest expenses related to other senior notes (in millions):

For the Three Months Ended September 30,For the Nine Months Ended September 30,
2022202120222021
Coupon interest expense$54$60$168$198
Amortization of debt discount and debt issuance costs2278
Total interest expense$56$62$175$206

The Company designates certain portions of the aggregate principal value of the Euro-denominated debt as a hedge of the foreign currency exposure of the net investment in certain Euro functional currency subsidiaries. For the nine months ended

September 30, 2022 and 2021, the carrying value of the portion of Euro-denominated debt, designated as a net investment hedge, ranged from $4.2 billion to $5.6 billion and from $2.5 billion to $4.3 billion, respectively.

10. TREASURY STOCK

At September 30, 2022 and December 31, 2021, the Company had a total remaining authorization of $6.2 billion and $10.4 billion, respectively, to repurchase its common stock under a program authorized by the Company's Board of Directors in 2019 to repurchase up to $15.0 billion of the Company's common stock. The Company expects to complete repurchases under the authorization in about two years from when the Company resumed repurchases in January 2022, assuming the travel recovery continues and the Company remains in compliance with the maximum leverage ratio covenant then in effect under the credit facility amendment. See Note 9 for a description of the impact of the 2020 credit facility amendment on the Company's ability to repurchase shares. Additionally, the Board of Directors has given the Company the general authorization to repurchase shares of its common stock withheld to satisfy employee withholding tax obligations related to stock-based compensation.

The following table summarizes the Company's stock repurchase activities during the three and nine months ended September 30, 2022 and 2021 (in millions, except for shares, which are reflected in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
SharesAmountSharesAmountSharesAmountSharesAmount
Authorized stock repurchase programs1,064$1,959—$—2,090$4,178—$—
General authorization for shares withheld on stock award vesting37237716270158
Total1,067$1,9662$32,167$4,34070$158

Stock repurchases of $60 million in September 2022 were settled in October 2022. In addition, in October 2022, the Company repurchased approximately $595 million of its common stock.

For the nine months ended September 30, 2022 and 2021, the Company remitted employee withholding taxes of $160 million and $159 million, respectively, to the tax authorities, which is different from the aggregate cost of the shares withheld for taxes for each period due to the timing in remitting the taxes. The cash remitted to the tax authorities is included in financing activities in the Unaudited Consolidated Statements of Cash Flows.

11. INCOME TAXES

Income tax expense consists of U.S. and international income taxes, determined using an estimate of the Company's annual effective tax rate, which is based upon the applicable tax rates and tax laws of the countries in which the income is generated. A deferred tax liability is recognized for all taxable temporary differences, and a deferred tax asset is recognized for all deductible temporary differences and operating loss and tax credit carryforwards. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company considers many factors when assessing the likelihood of future realization of the deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future income, tax planning strategies, the carryforward periods available for tax reporting purposes, and other relevant factors.

The Company's effective tax rates for the three and nine months ended September 30, 2022 were 23.4% and 26.2%, respectively, compared to 20.5% and 15.8% for the three and nine months ended September 30, 2021, respectively. The Company's 2022 effective tax rates differ from the U.S. federal statutory tax rate of 21%, primarily due to higher international tax rates, unrecognized tax benefits, valuation allowance related to certain unrealized losses on equity securities, and certain non-deductible expenses, partially offset by the benefit of the Netherlands Innovation Box Tax (discussed below). The Company's 2021 effective tax rates differed from the U.S. federal statutory tax rate of 21%, primarily due to the benefit of the Netherlands Innovation Box Tax, partially offset by higher international tax rates, U.S. federal and state tax associated with the Company's international earnings, and certain non-deductible expenses.

The Company's effective tax rates for the three and nine months ended September 30, 2022 were higher than the three and nine months ended September 30, 2021, primarily due to higher unrecognized tax benefits, and a decrease in the benefit of the Netherlands Innovation Box Tax, partially offset by lower U.S. federal and state tax associated with the Company’s international earnings, certain lower non-deductible expenses, and lower international tax rates.

During the three and nine months ended September 30, 2022 and 2021, a majority of the Company's income was reported in the Netherlands, where Booking.com is based. According to Dutch corporate income tax law, income generated from qualifying innovative activities is taxed at a rate of 9% ("Innovation Box Tax") rather than the Dutch statutory rate. Effective January 1, 2022, the Netherlands corporate income tax rate increased from 25% to 25.8%. A portion of Booking.com's earnings during the three and nine months ended September 30, 2022 and 2021 qualified for Innovation Box Tax treatment, which had a beneficial impact on the Company's effective tax rates for these periods.

The aggregate amount of unrecognized tax benefits for all matters at September 30, 2022 and December 31, 2021 was $223 million and $120 million, respectively. The unrecognized tax benefits, if recognized, would impact the effective tax rate. As of September 30, 2022 and December 31, 2021, total gross interest and penalties accrued was $42 million and $30 million, respectively. The majority of these unrecognized tax benefits are included in "Accrued expenses and other current liabilities" in the Consolidated Balance Sheet as of September 30, 2022. The increase in unrecognized tax benefits, as well as a significant portion of the Company’s total unrecognized tax benefits, primarily relate to Booking.com’s French tax assessments (see Note 13). While the timing of resolution of these tax assessments through litigation, settlement, or administrative appeals is uncertain, it is reasonably possible that there could be developments over the next 12 months that would result in a significant change to the balance of the gross unrecognized tax benefits.

12. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS BY COMPONENT

The tables below present the changes in the balances of accumulated other comprehensive loss ("AOCI") by component for the three and nine months ended September 30, 2022 and 2021 (in millions):

Foreign currency translation adjustmentsUnrealized losses on cash flow hedges (1)Net unrealized gains (losses) on available-for-sale securitiesTotal AOCI, net of tax
Foreign currency translationNet investment hedges (2)Total, net of taxBefore taxTaxTotal, net of taxBefore taxTaxTotal, net of tax
Before taxTax (3)Before taxTax
Three Months Ended September 30, 2022
Balance, June 30, 2022$(717)$112$470$(119)$(254)$—$—$—$3$(1)$2$(252)
Other comprehensive (loss) income ("OCI") before reclassifications(402)51293(69)(127)———(13)3(10)(137)
Amounts reclassified to net income————————(3)1(2)(2)
OCI for the period(402)51293(69)(127)———(16)4(12)(139)
Balance, September 30, 2022$(1,119)$163$763$(188)$(381)$—$—$—$(13)$3$(10)$(391)
Nine Months Ended September 30, 2022
Balance, December 31, 2021$(276)$67$91$(28)$(146)$—$—$—$3$(1)$2$(144)
OCI before reclassifications(843)96672(160)(235)———(13)3(10)(245)
Amounts reclassified to net income————————(3)1(2)(2)
OCI for the period(843)96672(160)(235)———(16)4(12)(247)
Balance, September 30, 2022$(1,119)$163$763$(188)$(381)$—$—$—$(13)$3$(10)$(391)
Foreign currency translation adjustmentsUnrealized losses on cash flow hedges (1)Net unrealized gains (losses) on available-for-sale securitiesTotal AOCI, net of tax
Foreign currency translationNet investment hedges (2)Total, net of taxBefore taxTaxTotal, net of taxBefore taxTaxTotal, net of tax
Before taxTax (3)Before taxTax
Three Months Ended September 30, 2021
Balance, June 30, 2021$(82)$50$(95)$16$(111)$—$—$—$130$(62)$68$(43)
Other comprehensive (loss) income ("OCI") before reclassifications(110)1093(23)(30)———1—1(29)
OCI for the period(110)1093(23)(30)———1—1(29)
Balance, September 30, 2021$(192)$60$(2)$(7)$(141)$—$—$—$131$(62)$69$(72)
Nine Months Ended September 30, 2021
Balance, December 31, 2020$11$47$(184)$37$(89)$—$—$—$3$(32)$(29)$(118)
OCI before reclassifications(203)13182(44)(52)(15)4(11)128(30)9835
Amounts reclassified to net income (1)—————15(4)11———11
OCI for the period(203)13182(44)(52)———128(30)9846
Balance, September 30, 2021$(192)$60$(2)$(7)$(141)$—$—$—$131$(62)$69$(72)

(1) Relates to the reverse treasury lock agreements with an aggregate notional amount of $1.8 billion entered in March 2021 to hedge the risk of changes in the cash flows related to the planned redemption, in April 2021, of the Senior Notes due April 2025 and the Senior Notes due April 2027. The agreements were designated as cash flow hedges and settled in April 2021. The reclassified losses, before tax, are included in "Other income (expense), net" and the related reclassified tax benefits are included in "Income tax expense" in the Unaudited Consolidated Statements of Operations.

(2) Net investment hedges balance at September 30, 2022 and earlier dates presented above, includes accumulated net losses from fair value adjustments of $35 million ($53 million before tax) associated with previously settled derivatives that were designated as net investment hedges. The remaining balances relate to foreign currency transaction gains (losses) and related tax benefits (expenses) associated with the Company's Euro-denominated debt that is designated as a hedge of the foreign currency exposure of the net investment in certain Euro functional currency subsidiaries (see Note 9).

(3) The tax benefits relate to foreign currency translation adjustments to the Company's one-time deemed repatriation tax liability recorded at December 31, 2017 and foreign earnings for periods after December 31, 2017 that are subject to U.S. federal and state income tax, resulting from the enactment of the U.S. Tax Cuts and Jobs Act (the "Tax Act").

13. COMMITMENTS AND CONTINGENCIES

Competition and Consumer Protection Reviews

At times, online platforms, including online travel platforms, have been the subject of investigations or inquiries by various national competition authorities ("NCAs") or other governmental authorities regarding competition law matters, consumer protection issues, or other areas of concern. The Company is and has been involved in many such investigations. For example, the Company has been and continues to be involved in investigations related to whether Booking.com's contractual parity arrangements with accommodation providers, sometimes also referred to as "most favored nation" or "MFN" provisions, are anti-competitive because they require accommodation providers to provide Booking.com with room rates, conditions or availability that are at least as favorable as those offered to other online travel companies ("OTCs") or through the accommodation provider's website. To resolve and close certain of the investigations, the Company has from time to time made commitments to the investigating authorities regarding future business practices or activities, such as agreeing to narrow the scope of its parity clauses, in order to resolve parity-related investigations. These investigations have resulted in fines and the Company could incur additional fines in the future. In addition, in September 2017, the Swiss Price Surveillance Office opened an investigation into the level of commissions of Booking.com in Switzerland and the investigation is ongoing. If there is an adverse outcome and Booking.com is unsuccessful in any appeal, Booking.com could be required to reduce its commissions in Switzerland. Most recently, in October 2022, the Comisión Nacional de los Mercados y la Competencia in Spain opened an investigation into whether certain practices by Booking.com may produce adverse effects for hotels and other online travel agencies. If the investigation finds that certain Booking.com practices violated Spanish competition law, Booking.com may face fines and/or be required to make other commitments. Some authorities are reviewing the online hotel booking sector more

generally through market inquiries and the Company cannot predict the outcome of such inquiries or any resulting impact on its business, results of operations, cash flows, or financial condition.

The Company is and has been involved in investigations or inquiries by NCAs or other governmental authorities involving consumer protection matters, including in the United Kingdom and the European Union. The Company has previously made certain voluntary commitments to competition authorities to resolve investigations or inquiries that have included showing prices inclusive of all mandatory taxes and charges, providing information about the effect of money earned on search result rankings on or before the search results page and making certain adjustments to how discounts and statements concerning popularity or availability are shown to consumers. In the future, it is possible new jurisdictions could engage the Company in discussions to implement changes to its business in those countries. The Company is unable to predict what, if any, effect any future similar commitments will have on its business, industry practices or online commerce more generally. To the extent that any other investigations or inquiries result in additional commitments, fines, damages or other remedies, the Company's business, financial condition, and results of operations could be harmed.

The Company is unable to predict how any current or future investigations or litigation may be resolved or the long-term impact of any such resolution on its business. For example, competition and consumer-law-related investigations, legislation, or issues could result in private litigation and the Company is currently involved in such litigation. More immediate results could include, among other things, the imposition of fines, payment of damages, commitments to change certain business practices, or reputational damage, any of which could harm the Company's business, results of operations, brands, or competitive position.

Tax Matters

French tax authorities conducted audits of Booking.com for the years 2003 through 2012, 2013 through 2015, and 2016 through 2018. In December 2015, the French tax authorities issued Booking.com assessments for unpaid income and value added taxes ("VAT") related to tax years 2006 through 2012 for approximately 356 million Euros ($348 million), the majority of which represents penalties and interest. The assessments assert that Booking.com had a permanent establishment in France. In December 2019, the French tax authorities issued an additional assessment of 70 million Euros ($69 million), including interest and penalties, for the 2013 tax year asserting that Booking.com had taxable income attributable to a permanent establishment in France. The French tax authorities also have issued assessments totaling 39 million Euros ($38 million), including interest and penalties, for certain tax years between 2011 and 2015 on Booking.com's French subsidiary asserting that the subsidiary did not receive sufficient compensation for the services it rendered to Booking.com in the Netherlands. In December 2021, the French tax authorities issued assessments on Booking.com’s French subsidiary totaling 78 million Euros ($76 million), including interest and penalties, for the tax years 2016 through 2018 asserting that the subsidiary did not receive sufficient compensation for the services it rendered to Booking.com. As a result of a formal demand from the French tax authorities for payment of the amounts assessed against Booking.com for the years 2006 through 2012, in January 2019, the Company paid the assessments of approximately 356 million Euros ($348 million) in order to preserve its right to contest those assessments in court. The payment, which is included in "Other assets, net" in the Consolidated Balance Sheets at September 30, 2022 and December 31, 2021, does not constitute an admission that the Company owes the taxes and will be refunded (with interest) to the Company to the extent the Company prevails. On February 8, 2022, the French Tax Court issued a decision in favor of Booking.com’s French subsidiary regarding the assessments of 3 million Euros ($3 million) for the tax years 2011 and 2012. In April 2022, the French tax authorities refunded the 3 million Euros ($3 million) deposit related to those assessments, plus interest, and filed their notice of appeal of the decision. In October 2020, the Company initiated court proceedings with respect to the 2003 through 2012 permanent establishment assessments. That case is still pending in the French Tax Court. Although the Company believes that Booking.com has been, and continues to be, in compliance with French tax law, and the Company is contesting the assessments, during the three months ended September 30, 2020, the Company contacted the French tax authorities regarding the potential to achieve resolution of the matter through a settlement. After assessing several potential outcomes and potential settlement amounts and terms, an expense for unrecognized tax benefit in the amount of 50 million Euros ($59 million) was recorded during the year ended December 31, 2020. During the three months ended September 30, 2022, as discussions continued, the Company recorded an additional expense for unrecognized tax benefit in the amount of 126 million Euros ($125 million), resulting in a total unrecognized tax benefit of 176 million Euros ($172 million) as of September 30, 2022 for the French tax matter. If a settlement ultimately would be reached, any excess of the payment previously made by the Company with respect to the reassessments for the tax periods 2006-2012 over the settlement amount for those tax periods would be refunded, the timing of which is uncertain at this time. The prepayments made by the Company are reflected in “Other assets, net” in the Company’s Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021.

In December 2018 and December 2019, the Italian tax authorities issued assessments on Booking.com's Italian subsidiary for approximately 48 million Euros ($47 million) for the 2013 tax year and 58 million Euros ($57 million) for the 2014 tax year asserting that its transfer pricing policies were inadequate. The Company believes Booking.com has been and continues to be in compliance with Italian tax law. In September 2020, the Italian tax authorities approved the opening of a

Mutual Agreement Procedure ("MAP") between Italy and the Netherlands for the 2013 tax year and Booking.com has submitted a request that the 2014 tax year be added to the MAP. Based on the possibility of the 2013 and 2014 Italian assessments being settled through the MAP process, and, after considering potential resolution amounts, a net expense for unrecognized tax benefit of 4 million Euros ($5 million) was recorded during the three months ended September 30, 2020. In March 2021, the Italian authorities issued assessments on Booking.com's Italian subsidiary for approximately 31 million Euros ($31 million) for the 2015 tax year, again asserting that its transfer pricing policies were inadequate. Based on the Company's expectation that the Italian assessments for 2013, 2014, 2015, and any transfer pricing assessments received for subsequent open years will be settled through the MAP process, and after considering potential resolution amounts, an additional net expense for unrecognized tax benefit of 13 million Euros ($16 million) was recorded during the three months ended March 31, 2021. In August 2021, the Italian tax authorities issued a transfer pricing assessment on Booking.com's Italian subsidiary for approximately 114 million Euros ($112 million) for the periods 2016 through 2018. The Company has requested that the 2016 through 2018 assessments be added to the MAP. Because the unrecognized tax benefit recorded during the three months ended March 31, 2021 already reflected consideration of potential resolution amounts for Italian transfer pricing assessments for all open tax years, including 2016 through 2018, no additional unrecognized tax benefit has been recorded for the 2016 through 2018 assessments. In December 2019, the Company made a partial prepayment of 10 million Euros ($10 million) of the 2013 assessment to avoid any collection enforcement from the Italian tax authorities pending the appeal phase of the case. The payment, which is included in "Other assets, net" in the Consolidated Balance Sheets at September 30, 2022 and December 31, 2021, does not constitute an admission that the Company owes the taxes and will be refunded (with interest) to the Company to the extent that the Company prevails. A total of 5 million Euros ($6 million) of the net expense for unrecognized tax benefit recorded during the year ended December 31, 2021 and 2020 has been included as a partial reduction to the tax payment recorded in "Other assets, net" in the Consolidated Balance Sheets at September 30, 2022 and December 31, 2021. Similarly, during the nine months ended September 30, 2022 the Company made deposits totaling 64 million Euros ($63 million) for the 2014 through 2018 assessments. The payments are included in "Other assets, net" in the Consolidated Balance Sheet at September 30, 2022.

In June 2021, the investigative arm of the Italian tax authorities issued a Tax Audit Report for the 2013 through 2019 Italian VAT audit. While the Tax Audit Report does not constitute a formal tax assessment, it recommends that an assessment of 154 million Euros ($151 million), plus interest and penalties, should be made on Booking.com BV for VAT related to commissions charged to certain Italian accommodation providers. The Company believes that Booking.com has been, and continues to be, in compliance with Italian and EU VAT laws and the Company has not recorded any liability in connection with the Tax Audit Report. It is unclear what further actions, if any, the Italian authorities will take with respect to the VAT audit for the periods 2013 through 2019. Such actions could include closing the investigation, assessing Booking.com additional taxes and/or imposing interest, fines, penalties, or criminal proceedings.

In 2018 and 2019, Turkish tax authorities asserted that Booking.com has a permanent establishment in Turkey and issued tax assessments for the years 2012 through 2018 for approximately 851 million Turkish Lira ($46 million), which includes interest and penalties through September 30, 2022. The Company believes that Booking.com has been, and continues to be, in compliance with Turkish tax law, and the Company is contesting these assessments in court. Such lawsuits are in varying stages of litigation, and the Company has not recorded a liability in connection with these assessments. In December 2021, the Company paid approximately 118 million Turkish Lira ($6 million) of the assessments in order to preserve its right to contest a portion of the assessments in court. The payment, which is included in "Other assets, net" in the Consolidated Balance Sheets at September 30, 2022 and December 31, 2021, does not constitute an admission that the Company owes the taxes and will be refunded to the Company to the extent the Company prevails.

The Company is also involved in other tax-related audits, investigations, or litigation relating to income taxes, value-added taxes, travel transaction taxes (e.g., hotel occupancy taxes) and other taxes. Any taxes or assessments in excess of the Company's tax provisions, including the resolution of any tax proceedings or litigation, could have a material adverse impact on the Company's results of operations, cash flows, and financial condition.

Other Matters

Beginning in 2014, Booking.com received several letters from the Netherlands Pension Fund for the Travel Industry (Reiswerk) ("BPF") claiming that Booking.com is required to participate in the mandatory pension scheme of the BPF with retroactive effect to 1999, which has a higher contribution rate than the pension scheme in which Booking.com is currently participating. BPF instituted legal proceedings against Booking.com and in 2016 the District Court of Amsterdam rejected all of BPF's claims. BPF appealed the decision to the Court of Appeal, and, in May 2019, the Court of Appeal also rejected all of BPF's claims, in each case by ruling that Booking.com does not meet the definition of a travel intermediary for purposes of the mandatory pension scheme. BPF then appealed to the Netherlands Supreme Court. In April 2021, the Supreme Court overturned the previous decision of the Court of Appeal and held that Booking.com meets the definition of a travel intermediary

for the purposes of the mandatory pension scheme. The Supreme Court ruled only on the qualification of Booking.com as a travel intermediary for the purposes of the mandatory pension scheme and did not rule on the various other defenses brought forward by the Company against BPF's claims. The Supreme Court referred the matter to another Court of Appeal that will have to assess the other defenses brought forward by the Company. The Company intends to pursue a number of defenses in the subsequent proceedings and may ultimately prevail in whole or in part. While the Company continues to believe that Booking.com is in compliance with its pension obligations and that the Court of Appeal could ultimately rule in favor of Booking.com, given the Supreme Court’s decision, the Company believes it is probable that it has incurred a loss related to this matter. The Company is not able to reasonably estimate a loss or a range of loss because there are significant factual and legal questions yet to be determined in the subsequent proceedings. As a result, as of September 30, 2022, the Company has not recorded a liability in connection with a potential adverse ultimate outcome to this litigation. However, if Booking.com were to ultimately lose and all of BPF's claims were to be accepted (including with retroactive effect to 1999), the Company estimates that as of September 30, 2022, the maximum loss, not including any potential interest or penalties, would be approximately 326 million Euros ($320 million). Such estimated potential loss increases as Booking.com continues not to contribute to the BPF and depends on Booking.com's applicable employee compensation after September 30, 2022.

The Company accrues for certain legal contingencies where it is probable that a loss has been incurred and the amount can be reasonably estimated. Such accrued amounts are not material to the Company's balance sheets and provisions recorded have not been material to the Company's results of operations or cash flows.

From time to time, the Company notifies the Dutch data protection authority in accordance with its obligations under the E.U. General Data Protection Regulation of certain incidental and accidental personal data security incidents. Although the Company believes it has fulfilled its data protection regulatory obligations, should the Dutch data protection authority decide these incidents were the result of inadequate technical and organizational security measures, it could decide to impose a fine. The Company has been, is currently, and expects to continue to be, subject to legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of third-party intellectual property rights. Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources, divert management's attention from the Company's business objectives and adversely affect the Company's business, results of operations, financial condition, and cash flows.

Building Construction

As of December 31, 2021, the Company had a remaining obligation of 15 million Euros ($17 million) related to the turnkey agreement for the construction of Booking.com's future headquarters in the Netherlands, which has been substantially paid as of September 30, 2022. In addition to the turnkey agreement, the Company had remaining obligations of 67 million Euros ($66 million) at September 30, 2022 to be paid over the remaining initial term of the acquired land lease, which expires in 2065. The Company has made and will continue to make additional capital expenditures to fit out and furnish the office space. At September 30, 2022, the Company had 12 million Euros ($12 million) of outstanding commitments to vendors to fit out and furnish the office space.

Other Contractual Obligations

The Company had $439 million and $511 million of standby letters of credit and bank guarantees issued on behalf of the Company as of September 30, 2022 and December 31, 2021, respectively, including those issued under the revolving credit facility. These are obtained primarily for regulatory purposes. See Note 9 for information related to letters of credit issued under the revolving credit facility.

14. ACQUISITIONS

In November 2021, the Company entered into an agreement to acquire global flight booking provider Etraveli Group for approximately 1.6 billion Euros ($1.6 billion). Completion of the acquisition is subject to certain closing conditions, including regulatory approvals.

In December 2021, the Company acquired all of the outstanding stock of Getaroom, a business-to-business distributor of hotel rooms, in a cash transaction for $1.3 billion ($1.2 billion, net of cash acquired).

The accounting for the Getaroom acquisition is based on provisional amounts as the allocation of the consideration transferred was not complete for accounting purposes as of September 30, 2022. The following table summarizes the preliminary allocation of the consideration transferred. The amounts allocated to goodwill, intangibles and certain assets and liabilities, and the estimated useful lives of certain assets (and the related amortization expense) are subject to change as the

Company continues to identify and measure the assets acquired, liabilities assumed and consideration transferred and evaluate the preliminary valuation and underlying inputs and assumptions.

(in millions)
Current assets (1)$174
Identifiable intangible assets (2)423
Goodwill (3)1,020
Other noncurrent assets11
Current liabilities(199)
Deferred income taxes(92)
Other noncurrent liabilities (4)(41)
Total consideration$1,296

(1) Includes cash and restricted cash acquired of $116 million.

(2) Acquired definite-lived intangible assets consist of supply and distribution agreements with an estimated value of $299 million and weighted-average useful life of 10 years and technology assets with an estimated value of $124 million and weighted-average useful life of 4 years.

(3) Goodwill, which is not tax deductible, reflects the synergies expected from combining the technology and expertise of Getaroom and Priceline.

(4) Includes liabilities of $38 million principally related to travel transaction taxes.

15. RESTRUCTURING, DISPOSAL, AND OTHER EXIT COSTS

In response to the reduction in the Company's business volumes as a result of the impact of the COVID-19 pandemic (see Note 1), during the year ended December 31, 2020, the Company took actions at all its brands to reduce the size of its workforce to optimize efficiency and reduce costs. During the nine months ended September 30, 2021, the Company recorded restructuring expenses of $9 million in "Restructuring, disposal, and other exit costs" in the Unaudited Consolidated Statements of Operations.

During the nine months ended September 30, 2022, the Company transferred certain customer service operations of Booking.com to Majorel Group Luxembourg S.A. resulting in a loss of $40 million recorded in "Restructuring, disposal, and other exit costs" in the Unaudited Consolidated Statements of Operations.

16. GOVERNMENT GRANTS AND OTHER ASSISTANCE

Certain governments passed legislation to help businesses during the COVID-19 pandemic through loans, wage subsidies, tax relief, or other financial aid. During the year ended December 31, 2020 and the three months ended March 31, 2021, the Company participated in several of these programs and recognized, in the aggregate, government grants and other assistance benefits of $131 million, principally recorded as a reduction of "Personnel" expense in the Consolidated Statement of Operations for the respective periods. As of March 31, 2021, the Company had a receivable of $28 million for payments expected to be received for the programs where it had met the qualifying requirements. In June 2021, in light of the improving booking trends in certain countries, the Company announced its intention to voluntarily return assistance received through various government aid programs and completed the repayments by December 31, 2021. For the nine months ended September 30, 2021, the Company recorded expenses of $137 million in the Unaudited Consolidated Statements of Operations, principally in "Personnel" expense, to reflect the return of such assistance. The previously recorded receivable for payments expected to be received was also written off in June 2021.

17. OTHER INCOME (EXPENSE), NET

The components of other income (expense), net were as follows (in millions):

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Interest and dividend income$61$4$88$12
Net losses on equity securities (1)(336)(1,016)(1,142)(589)
Foreign currency transaction (losses) gains (2)(34)451292
Loss on early extinguishment of debt (3)———(242)
Other (4)4—2(13)
Other income (expense), net$(305)$(967)$(1,040)$(740)

(1) See Note 5 for additional information related to the net losses on equity securities and Note 6 for additional information related to the impairment of an investment in equity securities.

(2) Foreign currency transaction (losses) gains include gains of $2 million and $54 million for the three months ended September 30, 2022 and 2021, respectively, and gains of $70 million and $108 million for the nine months ended September 30, 2022 and 2021, respectively, related to Euro-denominated debt and accrued interest that were not designated as net investment hedges (see Note 9).

(3) See Note 9 for additional information related to the loss on early extinguishment of debt.

(4) The amounts for the nine months ended September 30, 2021 include losses on reverse treasury lock agreements which were designated as cash flow hedges (see Note 12).

18. OTHER

Unaudited Consolidated Statements of Cash Flows: Additional Information

Restricted cash and cash equivalents at September 30, 2022 and December 31, 2021 principally relate to the minimum cash requirement for the Company's travel-related insurance business. The following table reconciles cash and cash equivalents and restricted cash and cash equivalents reported in the Consolidated Balance Sheets to the total amounts shown in the Unaudited Consolidated Statements of Cash Flows (in millions):

September 30, 2022December 31, 2021
(Unaudited)
As included in the Consolidated Balance Sheets:
Cash and cash equivalents$9,021$11,127
Restricted cash and cash equivalents (1)2525
Total cash and cash equivalents and restricted cash and cash equivalents as shown in the Unaudited Consolidated Statements of Cash Flows$9,046$11,152

(1) Included in "Other current assets" in the Consolidated Balance Sheets.

During the nine months ended September 30, 2022 and 2021, the Company prepaid Netherlands income taxes of 266 million Euros ($279 million) and 149 million Euros ($175 million), respectively.

Noncash investing activity related to additions to property and equipment, including stock-based compensation and accrued liabilities, was $33 million for the nine months ended September 30, 2022 and 2021.

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