Booking : Reports Financial Results for 1st Quarter 2019

Booking Holdings Reports Financial Results for 1st Quarter 2019

NORWALK, CT - May 9, 2019. . . Booking Holdings Inc. (NASDAQ: BKNG) today reported its 1st quarter 2019 financial results. First quarter gross travel bookings for Booking Holdings Inc. (the "Company," "Booking Holdings," "we," "our" or "us"), which refers to the total dollar value, generally inclusive of taxes and fees, of all travel services booked by its customers, net of cancellations, were $25.4 billion, an increase of 2% over a year ago (approximately 8% on a constant-currency basis).

Booking Holding's total revenues for the 1st quarter of 2019 were $2.8 billion, a 3% decrease from the prior year (an increase of approximately 3% on a constant-currency basis). Net income in the 1st quarter was $765 million, a 26% increase versus the prior year. Net income was $16.85 per diluted share, a 37% increase as compared to the prior year. Net income in the 1st quarter of 2019 and 2018 include net unrealized gains on marketable equity securities before tax of $451 million and $55 million, respectively.

Non-GAAP net income in the 1st quarter was $508 million, a 14% decrease versus the prior year. Non-GAAP net income was $11.17 per diluted share, a 7% decrease as compared to the prior year. Adjusted EBITDA for the 1st quarter was $718 million, a 10% decrease versus a year ago. The section below entitled "Non-GAAPFinancial Measures" provides definitions and information about the use of non-GAAP financial measures in this press release, and the attached financial and statistical supplement reconciles non-GAAP financial information with Booking Holdings' financial results under GAAP.

"Q1 was a solid start to the year," said Glenn Fogel, Chief Executive Officer of Booking Holdings. "We recorded 217 million room nights booked in the quarter, which is up 10% year-over-year." Looking forward, Mr. Fogel said, "We continue to execute against a very large market opportunity and will manage our business with a long-term view in order to capture it."

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Booking Holdings' guidance for the 2nd quarter of 2019 is as follows:

Guidance Ranges

(U.S. Dollars in millions, except per share amounts)		Low		High
Metrics
Year over year growth - Room nights booked		6 %		8%
Year over year growth - Total gross travel bookings		(1)%		1%
Year over year growth - Total gross travel bookings (constant currency)		4 %		6%
GAAP
Year over year growth - Revenue		5 %		7%
Net income (1)(3)	$	920	$	940
Net income per diluted share (2)(3)	$	21.10	$	21.55
Non-GAAP
Year over year growth - Revenue		5 %		7%
Year over year growth - Revenue (constant currency)		10 %		12%
Non-GAAP Net income (1)	$	965	$	985
Non-GAAP Net income per diluted share (2)	$	22.15	$	22.60
Adjusted EBITDA	$	1,295	$	1,325

(1)Assumes an estimated effective tax rate for the 2nd quarter of 2019 of approximately 19%.

(2)Assumes a fully diluted share count of approximately 43.6 million shares.

(3)Guidance for the 2nd quarter of 2019 for GAAP net income and net income per diluted share excludes the impact of unrealized gains and losses on marketable equity securities and foreign currency transaction gains or losses on our Euro-denominated debt that is not designated as hedging instruments for accounting purposes, both of which are not predictable.

Non-GAAP adjustments for amortization expense of intangible assets, non-cash interest expense related to the amortization of debt discount and the tax impact of these non-GAAP adjustments are expected to increase non-GAAP net income over GAAP net income by approximately $45 million in the 2nd quarter of 2019, before considering the impact of unrealized gains or losses on marketable equity securities and foreign currency transaction gains or losses on our Euro-denominated debt that is not designated as hedging instruments for accounting purposes, both of which are not predictable.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) is comprised of GAAP net income excluding depreciation and amortization expense, interest income, interest expense, unrealized gains and losses on marketable equity securities, foreign currency transaction gains or losses on our Euro- denominated debt that is not designated as hedging instruments for accounting purposes and income tax expense. Adjusted EBITDA is estimated to be higher than GAAP net income by approximately $375 million to $385 million in the 2nd quarter of 2019, before considering the impact of unrealized gains or losses on marketable equity securities and foreign currency transaction gains or losses on our Euro- denominated debt that is not designated as hedging instruments for accounting purposes, both of which are not predictable.

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Non-GAAP Financial Measures

The Unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("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.

To supplement the Unaudited Consolidated Financial Statements, the Company uses the following non-GAAP financial measures: Non-GAAP total revenues, adjusted EBITDA, non-GAAP net income, non-GAAP net income per diluted share and free cash flow (net cash provided by operating activities less capital expenditures). The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

The Company uses non-GAAP financial measures for financial and operational decision-making and as a basis to evaluate performance and set targets for employee compensation programs. The Company believes that these non- GAAP financial measures are useful for analysts and investors to evaluate the Company's ongoing operating performance because they facilitate comparison of the Company's results for the current period and projected next- period results to those of prior periods and to those of its competitors (though other companies may calculate similar non-GAAP financial measures differently from those calculated by the Company). These non-GAAP financial measures, in particular adjusted EBITDA, non-GAAP net income and free cash flow are not intended to represent funds available for Booking Holdings' discretionary use and are not intended to represent or to be used as a substitute for operating income, net income or cash flow from operations as measured under GAAP. The items excluded from these non-GAAP measures but included in the calculation of their closest GAAP equivalent, are significant components of the Company's consolidated statements of operations and cash flows and must be considered in performing a comprehensive assessment of overall financial performance.

Non-GAAP net income is net income with the following adjustments:

•excludes an immaterial adjustment to merchant revenues related to prior periods due to a correction in the timing of revenue recognition on a component of merchant revenue,

•excludes the impact, if any, of significant charges or benefits associated with judgments, rulings, settlements and/or certain adjustments related to prior periods arising from travel transaction tax (e.g., hotel occupancy taxes, excise taxes, sales taxes, etc.) proceedings or other litigation or obligations,

•excludes the impact of significant loyalty program adjustments, such as the favorable $27 million adjustment to total revenues in the 1st quarter of 2018 related to changes introduced in that same quarter to OpenTable's loyalty program,

•excludes amortization expense of intangible assets,

•excludes the impact, if any, of significant charges related to the impairment of goodwill or intangible assets,

•excludes non-cash interest expense related to the amortization of debt discount and gains or losses on early extinguishment of debt, if any, related to our convertible debt,

•excludes the impact, if any, of significant gains or losses on the sale of cost-method investments and significant charges related to other-than-temporary impairments of such investments,

•excludes unrealized gains and losses on marketable equity securities, which are recognized in net income,

•excludes the income tax impact related to the one-time deemed repatriation liability and remeasurement of deferred tax assets and liabilities as a result of the U.S. Tax Cuts and Jobs Act enacted in December 2017, if any, and

•the income tax impact of the non-GAAP adjustments mentioned above.

In addition to the adjustments listed above regarding non-GAAP net income, adjusted EBITDA excludes depreciation expense, interest income, interest expense and income tax expense.

We evaluate certain operating and financial measures on both an as-reported and constant-currency basis. We calculate constant currency by converting our current-year period results for transactions recorded in currencies other than U.S. Dollars using the corresponding prior-year period monthly average exchange rates rather than the current-year period monthly average exchange rates.

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The attached financial and statistical supplement includes reconciliations of our financial results under GAAP to non-GAAP financial information for the three months ended March 31, 2019 and 2018.

Information About Forward-Looking Statements

This press release contains forward-looking statements, including information providing guidance of expected future period financial performance. These forward-looking statements reflect the views of the Company's management regarding current expectations and projections about future events and are based on currently available information and current foreign currency exchange rates. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed, implied or forecasted in any such forward-looking statements. Expressions of future goals and similar expressions including, "may," "will," "should," "could," "aims," "seeks," "expects," "plans," "anticipates," "intends," "believes," "estimates," "predicts," "potential," "targets," and "continue," reflecting something other than historical fact are intended to identify forward-looking statements.

The following factors, among others, could cause the Company's actual results to differ materially from those described in the forward-looking statements:

--adverse changes in general market conditions for travel services, including the effects of macroeconomic conditions, terrorist attacks, natural disasters, health concerns, civil or political unrest or other events outside our control;

--the effects of increased competition;

--fluctuations in foreign exchange rates and other risks associated with doing business in multiple currencies;

--our ability to successfully manage our growth and expand our global business;

--our ability to respond to and keep up with the rapid pace of technological and market changes;

--our performance marketing efficiency and the general effectiveness of our marketing efforts;

--IT systems-related failures, data privacy risks and obligations, and/or security breaches;

--any change by our search and meta-search partners in how they present travel search results or conduct their auctions for search placement in a manner that is competitively disadvantageous to us;

--any write-downs or impairments of goodwill or intangible assets related to acquisitions or investments;

--adverse changes in relationships with travel service providers and restaurants;

--our ability to attract and retain qualified personnel; and

--tax, legal and regulatory risks.

For a detailed discussion of these and other factors that could cause the Company's actual results to differ materially from those described in the forward-looking statements, please refer to the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and any subsequently filed Quarterly Reports on Form 10-Q. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

About Booking Holdings Inc.

Booking Holdings (NASDAQ: BKNG) is the world leader in online travel and related services, provided to consumers and partners in over 230 countries and territories through six primary brands-Booking.com,KAYAK, priceline, agoda.com, Rentalcars.comand OpenTable. The mission of Booking Holdings is to help people experience the world.

For more information, visit BookingHoldings.comand follow us on Twitter @BookingHoldings.

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For Press Information: Leslie Cafferty [phone] [e-mail]

For Investor Relations: Michael Noonan [phone] [e-mail]

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Booking Holdings Inc.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share data)

		March 31,		December 31,
		2019			2018
ASSETS
Current assets:
Cash and cash equivalents	$	2,334	$	2,624
Short-term investments in marketable securities		1,981			3,660
Accounts receivable, net of allowance for doubtful accounts of $61 at each date		1,491			1,523
Prepaid expenses and other current assets		1,271			600
Total current assets		7,077			8,407
Property and equipment, net		695			656
Operating lease assets		635			-
Intangible assets, net		2,078			2,125
Goodwill		2,907			2,910
Long-term investments		8,445			8,408
Other assets		529			181
Total assets	$	22,366		$	22,687
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	934	$	1,134
Accrued expenses and other current liabilities		1,877			1,399
Deferred merchant bookings		1,797			1,022
Convertible debt		968			-
Total current liabilities		5,576			3,555
Deferred income taxes		513			370
Operating lease liabilities		488			-
Long-term U.S. transition tax liability		1,166			1,166
Other long-term liabilities		89			162
Long-term debt		7,619			8,649
Total liabilities		15,451			13,902
Commitments and Contingencies
Stockholders' equity:
Common stock, $0.008 par value; authorized 1,000,000,000 shares, 63,121,930 and		-			-
62,948,762 shares issued, respectively
Treasury stock, 18,935,914 and 17,317,126 shares, respectively		(17,567)			(14,711)
Additional paid-in capital		5,519			5,445
Retained earnings		19,132			18,367
Accumulated other comprehensive loss		(169)			(316)
Total stockholders' equity		6,915			8,785
Total liabilities and stockholders' equity	$	22,366		$	22,687

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