Booking Holdings Inc.

CONSOLIDATED BALANCE SHEETS

(In millions, except per share data)

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(1)Consists of foreign currency translation adjustments (see Note 12).

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

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, which 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 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 Unaudited Consolidated Financial 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, 2025. 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.

Reclassification

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

Stock Split

On April 2, 2026, the Company effected the 25-for-1 stock split of its common stock (the "Stock Split") with a proportionate increase in the number of shares of authorized common stock, as approved by the Company's Board of Directors (the "Board") in January 2026. The shares of common stock retained their par value of $0.008. All share and per share information has been retroactively adjusted to reflect the Stock Split.

Recent Accounting Pronouncements

See "Recent Accounting Pronouncements Adopted" and "Other Recent Accounting Pronouncements" in Note 2 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the Financial Accounting Standards Board issued an Accounting Standards Update to simplify the application of the current expected credit loss model for current accounts receivable and current contract assets under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. The update provides a practical expedient when estimating expected credit losses that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. In the first quarter of 2026, the Company adopted the practical expedient and it did not have a material impact to its Consolidated Financial Statements.

2. REVENUES

Revenues by Type of Service

Approximately 90% of the Company's merchant revenues, agency revenues, and advertising and other revenues, in the aggregate, for the three and nine months ended September 30, 2026 and 90% and 89% for the three and nine months ended September 30, 2025, respectively, relate to online accommodation reservation services. Revenues from all other sources of merchant revenues, agency revenues, 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 mostly subject to refunds for cancellations.

3. STOCK-BASED COMPENSATION

Restricted stock units and performance share units granted by the Company during the nine months ended September 30, 2026 had an aggregate grant-date fair value of $646 million. Restricted stock units and performance share units that vested during the nine months ended September 30, 2026 had an aggregate fair value at vesting of $813 million. At September 30, 2026, there was $840 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 1.9 years.

The following table summarizes the activity in restricted stock units and performance share units during the nine months ended September 30, 2026:

(1)Probable outcome for performance-based awards is updated based upon changes in actual and forecasted operating results and the impact of modifications, if any.

4. NET INCOME PER SHARE

The Company computes basic net income per share by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using 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 are calculated using the treasury stock method. The denominators for the basic and diluted per share computations of "Net income applicable to common stockholders" presented in the Unaudited Consolidated Statements of Operations differ due to the impact of dilutive stock options, restricted stock units, and performance share units.

5. INVESTMENTS

The following table summarizes the Company's investments by major security type:

6. FAIR VALUE MEASUREMENTS

There are three levels of inputs to valuation techniques used to measure fair value:

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.

Assets and liabilities measured at fair value are classified in the categories described in the table below:

(1)Fair value measurement as of September 30, 2025. See Note 11 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 for additional information.

Investments

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

Derivatives

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. As of September 30, 2026 and December 31, 2025, the Company did not designate any derivatives as hedges for accounting purposes.

For the Company's foreign currency exchange derivatives outstanding as of September 30, 2026 and December 31, 2025, the notional amounts of the foreign currency purchases were $9.3 billion and $8.9 billion, respectively, and the notional amounts of the foreign currency sales were $4.1 billion and $6.0 billion, respectively. The notional amount of a foreign currency exchange derivative contract is the contracted amount of foreign currency to be exchanged and is not recorded in the balance sheets.

The effect of foreign currency exchange derivatives recorded in "Other income (expense), net" in the Unaudited Consolidated Statements of Operations is as follows:

Other Financial Assets and Liabilities

At September 30, 2026 and December 31, 2025, the Company's cash consisted of bank deposits. Cash equivalents principally include money market fund investments 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 fair value of the Company's outstanding senior notes.

7. ACCOUNTS RECEIVABLE AND OTHER FINANCIAL ASSETS

Accounts receivable in the Consolidated Balance Sheets at September 30, 2026 and December 31, 2025 includes receivables from customers of $2.6 billion and $2.1 billion, respectively, and receivables from payment processors and networks of $1.4 billion. The remaining balance principally relates to receivables from marketing affiliates. The amounts mentioned above are stated on a gross basis, before deducting the allowance for expected credit losses. In addition, the Company had prepayments to certain accommodation travel service provider customers of $119 million and $77 million primarily included in "Prepaid expenses, net" in the Consolidated Balance Sheets at September 30, 2026 and December 31, 2025, respectively.

The following table summarizes the activity of the allowance for expected credit losses on receivables:

8. INTANGIBLE ASSETS AND GOODWILL

The carrying value of the Company's intangible assets, which consists primarily of trade names and supply and distribution agreements, was $759 million and $918 million at September 30, 2026 and December 31, 2025, respectively, and is stated net of accumulated amortization of $1.8 billion and $1.7 billion, respectively. Amortization expense of intangible assets was $93 million and $164 million for the three and nine months ended September 30, 2026, respectively, and $53 million and $161 million for the three and nine months ended September 30, 2025, respectively.

The carrying value of the Company's goodwill at September 30, 2026 and December 31, 2025 was $2.7 billion and is stated net of cumulative impairment charges of $2.2 billion. The Company tests goodwill for impairment at the reporting unit level on an annual basis as of September 30 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. During the three and nine months ended September 30, 2025, the Company recognized a goodwill impairment charge of $180 million and intangible-asset impairment charges of $277 million related to KAYAK. These impairment charges are recorded in "Impairment" in the Unaudited Consolidated Statements of Operations. See Note 11 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 for information related to the impairment.

9. DEBT

See Note 12 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 for information related to the Company's debt.

Revolving Credit Facility

The Company's unsecured revolving credit facility extends a revolving line of credit of up to $2 billion to the Company. At September 30, 2026 and December 31, 2025, there wereno borrowings outstanding and $10 million and $19 million, respectively, of letters of credit issued under the revolving credit facility.

Senior Notes

At September 30, 2026 and December 31, 2025, the Company had outstanding senior notes with varying maturities for an aggregate principal amount of $20.2 billion and $18.9 billion, respectively. The carrying values differ from the outstanding principal amounts due to unamortized debt discounts and debt issuance costs of $158 million and $146 million as of September 30, 2026 and December 31, 2025, respectively. At September 30, 2026, senior notes with an aggregate principal amount of $2.0 billion were payable within the next twelve months. The aggregate principal amount and carrying value of the Company's outstanding Euro-denominated debt at September 30, 2026 was $19.0 billion and $18.8 billion, respectively, and at December 31, 2025 was $17.4 billion and $17.2 billion, respectively.

At September 30, 2026 and December 31, 2025, the fair value of outstanding debt was approximately $19.3 billion and $18.9 billion, respectively, and was considered a "Level 2" fair value measurement, which was estimated based upon actual trades at the end of the reporting period or the most recent trade available (see Note 6). The fair value of the Company's debt differs from the outstanding principal amount at September 30, 2026 and December 31, 2025 primarily due to interest rate fluctuations.

The following table summarizes the information related to the senior notes issued in May 2026:

(1)Represents the coupon interest rate adjusted for deferred debt issuance costs and premiums or discounts existing at the origination of the debt.

The proceeds from the issuance of these senior notes are available for general corporate purposes, including to repurchase shares of the Company's common stock and to redeem or repay outstanding indebtedness.

In June 2026, the Company paid $1 billion on the maturity of the 3.6% Senior Notes due June 2026. In addition, the Company paid the applicable accrued and unpaid interest relating to these notes.

Interest expense related to nonconvertible senior notes consists primarily of coupon interest expense of $190 million and $543 million for the three and nine months ended September 30, 2026, respectively, and $163 million and $468 million for the three and nine months ended September 30, 2025, respectively.

The Company recognized the following activity related to the conversion option of the convertible senior notes that matured in May 2025 in its Unaudited Consolidated Statement of Operations:

10. TREASURY STOCK AND DIVIDENDS

At September 30, 2026, the Company had a total remaining authorization of $12.4 billion related to the $20 billion share repurchase program authorized by the Board in 2025. Additionally, the Board 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:

The cash remitted for shares withheld on stock award vesting is included in financing activities in the Unaudited Consolidated Statements of Cash Flows and may differ from the aggregate cost of the shares withheld for taxes for each period due to the timing in remitting the taxes. As of September 30, 2026 and December 31, 2025, the Company recorded estimated liabilities of $90 million and $52 million, respectively, related to excise taxes on share repurchases, which are included in "Accrued expenses and other current liabilities" in the Consolidated Balance Sheets.

During the nine months ended September 30, 2026 and 2025, the Board declared quarterly cash dividends of $0.42 and $0.38, respectively, per share of common stock and the Company paid $978 million and $941 million, respectively, in total cash dividends. In November 2026, the Board declared a cash dividend of $0.42 per share of common stock, payable on December 31, 2026 to stockholders of record as of the close of business on December 11, 2026.

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.

The Company's effective tax rates for the three and nine months ended September 30, 2026 were 20.6% and 22.1%, respectively, compared to 20.8% and 20.0% for the three and nine months ended September 30, 2025, respectively. The Company's 2026 effective tax rates differ from the U.S. federal statutory tax rate of 21%, primarily due to higher international tax rates, a valuation allowance relating to the carryforward of U.S. federal interest expense and certain other deferred tax assets, certain non-deductible expenses, unrecognized tax benefits, and U.S. federal and state tax associated with the Company's international earnings, partially offset by the benefit of the Netherlands Innovation Box Tax (discussed below). The Company's 2025 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 and U.S. state income taxes, partially offset by higher international tax rates, certain non-deductible expenses, and U.S. federal and state tax associated with the Company's international earnings.

The Company's effective tax rate for the three months ended September 30, 2026 was lower than the effective tax rate for the three months ended September 30, 2025, primarily due to lower U.S. federal tax associated with the Company's international earnings and certain lower discrete tax expenses, partially offset by a valuation allowance relating to the carryforward of U.S. federal interest expense and certain higher non-deductible expenses.

The Company's effective tax rate for the nine months ended September 30, 2026 was higher than the effective tax rate for the nine months ended September 30, 2025, primarily due to a valuation allowance relating to the carryforward of U.S. federal interest expense, certain higher discrete tax expenses, and higher unrecognized tax benefits, partially offset by lower U.S. federal tax associated with the Company's international earnings.

The One Big Beautiful Bill Act (the "BBB Act") made changes to certain international, foreign tax credit, and domestic tax provisions in the U.S. effective in 2025 and 2026. Certain provisions of the BBB Act that are effective in 2026 and impact the Company's effective tax rate include U.S. interest expense limitation rules and utilization of additional foreign tax credits in calculating U.S. federal tax associated with the Company's international earnings.

During the three and nine months ended September 30, 2026 and 2025, 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 of 25.8%. A portion of Booking.com's earnings during the three and nine months ended September 30, 2026 and 2025 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, 2026 and December 31, 2025 was $308 million and $250 million, respectively. As of September 30, 2026, net unrecognized tax benefits of $297 million, if recognized, would impact the effective tax rate. As of September 30, 2026 and December 31, 2025, total gross interest and penalties accrued was $8 million and $7 million, respectively. The increase in unrecognized tax benefits primarily relates to certain 2018 U.S. federal taxes of the Company that may be impacted by the April 2026 U.S. Tax Court decision in Varian Medical Systems, Inc. vs. Commissioner. The majority of unrecognized tax benefits are included in "Other assets, net" in the Unaudited Consolidated Balance Sheet as of September 30, 2026.

12. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS BY COMPONENT

The table below presents the changes in the balances of accumulated other comprehensive loss ("AOCI") by component:

In 2025 and certain earlier periods, the Company designated certain portions of the aggregate principal value of the Euro-denominated debt (see Note 9) 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, 2025, the portion of Euro-denominated debt designated as a net investment hedge ranged in value from $2.3 billion to $4.8 billion.

13. COMMITMENTS, CONTINGENCIES, AND LEGAL PROCEEDINGS

Competition and Consumer Protection Reviews

The Company is and has been the subject of investigations or inquiries by national competition authorities and other authorities regarding competition law matters, consumer protection issues, and other areas, such as with respect to the scope of its contractual parity provisions with partners, pricing tools or programs offered to partners, or the ranking criteria used in displaying results to consumers, and from time to time has made commitments regarding future business practices or activities. For example, the Company has previously made voluntary commitments related to showing prices inclusive of all mandatory taxes and charges, providing information about the effect of money earned on search result rankings, and adjusting how discounts and statements concerning popularity or availability are shown. Some investigations have resulted in fines and the Company could incur additional fines and/or be restricted in certain of its business practices in the future. To the extent that investigations or inquiries result in commitments, fines, damages, or other remedies or changes to its business, the Company's business, financial condition, and results of operations could be harmed.

In October 2026, the European Commission opened an investigation into whether certain practices by Booking.com related to platform disclosures and security may violate the Digital Services Act ("DSA"). If the investigation were to find a violation of the DSA, or as part of a negotiated resolution, the Company may face significant fines, may be required to change its business practices, and may face follow-on investigations or litigation.

In July 2026, the Federal Trade Commission (the "FTC") staff informed Priceline that they intended to recommend that the FTC file a complaint against Priceline and a business-to-business affiliate partner of Priceline that asserted unfair or deceptive business practices related to disclosures, fees, customer support, and billing practices. Priceline is in discussions with the FTC to seek to resolve this matter. Although a settlement has not been agreed and litigation remains possible, a negotiated resolution would be likely to include an agreement by Priceline to pay a certain amount to the FTC directly as well as to provide monetary restitution to certain U.S. consumers, in addition to a commitment by Priceline to change certain of its business practices. The Company recorded a reduction in revenue of $900 million and accrued a loss of $100 million related to this matter, which is included in "Total revenues" and "General and administrative" expenses, respectively, in the Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2026. The related liability is included in "Accrued expenses and other current liabilities" in the Unaudited Consolidated Balance Sheet as of September 30, 2026. The FTC may seek monetary penalties and restitution in excess of these amounts, and there could be litigation or regulatory processes in other jurisdictions related to similar claims, which could harm the Company's business, results of operations, and reputation.

In 2024, the Comisión Nacional de los Mercados y la Competencia in Spain (the "CNMC") imposed a fine and restricted certain of Booking.com's business practices such as those relating to contractual parity provisions and the ranking criteria that Booking.com can use to determine how to rank hotels in its display to consumers. Booking.com does not agree with the rationale stated in the decision and the restrictions imposed, and has filed an appeal. In February 2025, the Spanish National Court ruled that the CNMC decision, including payment of the fine, is suspended pending the outcome of the appeal. The CNMC and certain third parties have sought to clarify the scope of the court's ruling, including its suspensory effect. Although the Company disagrees with the rationale stated in the CNMC decision, it recorded a liability for this matter with $469 million and $485 million included in "Other long-term liabilities" in the Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025, respectively.

In 2017, the Swiss Price Surveillance Office (the "Swiss PSO") opened an investigation into the level of commissions of Booking.com in Switzerland. In 2025, Booking.com received a negative decision ordering a reduction of its average commission level for hotels located in Switzerland, which Booking.com disagrees with and has appealed. The Swiss PSO order is suspended pending the outcome of the appeal, and the ordered reduction in commissions would only be effective for athree-year period after a negative final judgment. The French Directorate General for Competition Policy, Consumer Affairs, and Fraud Control ("DGCCRF") directed Agoda to change certain of its business practices by year-end 2026 and additional discussions with the DGCCRF regarding implementation of the final order are ongoing. In June 2025, the Hellenic Competition Commission (in Greece) opened a formal investigation into whether certain practices by Booking.com may produce adverse effects for hotels and other online travel agencies and discussions with that Commission are ongoing. In August 2025, the Hungarian Competition Authority opened an investigation into whether certain practices by Booking.com may mislead consumers and discussions with that Authority are ongoing. If any of the investigations were to find that the Company's practices violated the respective laws, or as part of a negotiated resolution, the Company may face significant fines, restrictions on its business practices, follow-on investigations or litigation, and/or be required to make other commitments.

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, judgments, or issues have in the past resulted in and could in the future result in private litigation. The Company is currently involved in such litigation and/or aware of such potential litigation. For example, German hotels filed parity-related claims against Booking.com and that litigation is ongoing. In the Netherlands, two Dutch foundations filed such claims on behalf of European hotels and consumers, respectively, with the consumer claim further alleging that Booking.com and Agoda employed misleading practices. A similar claim regarding contractual parity provisions has been asserted against Booking.com on behalf of accommodation providers in the United Kingdom. Additionally, the Company is aware that additional claims based on contractual parity clauses may be brought in other jurisdictions such as Spain and France. The Company has defended against and intends to continue to defend itself against such claims. However, class action and mass claim litigation, whether related to competition, consumer, privacy, or other claims, can be time-consuming, costly, and unpredictable, regardless of merit. There may be evolving jurisprudence and less experience with such matters in certain of the markets where the Company is or may be involved in such litigation, making outcomes less certain and harder to forecast. If the Company were to be found liable, it could result in, among other things, 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

The Company is involved in various tax-related audits, investigations, and litigation relating to income taxes, value-added taxes, travel transaction taxes (e.g., hotel occupancy taxes), withholding taxes, and other taxes. A number of jurisdictions in France have brought claims against Booking.com in relation to local taxes, and additional claims may be brought in the future. While the Company expects to continue to defend against these claims, it could be subject to tax liabilities and significant penalties. During 2026, an audit commenced of the Company's refund claim relating to its 2018 federal one-time deemed repatriation liability, resulting from the 2024 U.S. Tax Court decision in Varian Medical Systems, Inc. vs. Commissioner.

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. In some cases, assessments may be significantly in excess of the Company's tax provisions, particularly in instances where the Company does not agree with the tax authority's assessment of how the tax laws may apply to the Company's business.

Other Matters

Beginning in 2014, Booking.com B.V. received several letters from the Netherlands Pension Fund for the Travel Industry (Reiswerk) ("BPF") claiming that it was 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 it historically participated in. BPF instituted legal proceedings against Booking.com B.V. (which were continued by BPF's legal successor, Pension Fund PGB ("PGB")) and, in January 2024, a Dutch Court of Appeal ruled that Booking.com B.V. is required to participate in the mandatory pension scheme of the PGB with retroactive effect to 1999. Booking.com B.V. appealed the decision but, after a final ruling by the Dutch Supreme Court in March 2025, changed its pension scheme going forward and with retroactive effect to 1999, in line with the outcome of the litigation and arrangement with PGB. In the first quarter of 2025, the Company reduced the pension liability to reflect the arrangement with PGB which became effective during that period. The impact of the reduction in the pension liability of $167 million is recorded in "Personnel" expenses in the Unaudited Consolidated Statement of Operations for the nine months ended September 30, 2025. There may be additional claims with respect to the eligibility of certain employees in scope of the scheme, which may result in certain additional costs.

From time to time, the Company notifies the competent authority, such as the Dutch data protection authority in accordance with its obligations under the General Data Protection Regulation, of certain data security incidents. For example, in April 2026 Booking.com notified certain data protection authorities when it detected that unauthorized third parties were able to access certain guests' booking information. Booking.com remediated the issue and is cooperating with relevant authorities. The Company is likely to face follow-on investigations or litigation arising out of data security incidents, and may receive a fine or be required to make commitments to data protection authorities, consumers, or partners.

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 could result in the expenditure of significant financial and managerial resources, divert management's attention, and adversely affect the Company's business, reputation, results of operations, and cash flows.

In the first quarter of 2026, the Company entered into favorable settlement agreements to resolve litigation matters in which it was a plaintiff, for which it received a benefit of $89 million. The benefit is recorded in "General and administrative" expenses in the Unaudited Consolidated Statement of Operations for the nine months ended September 30, 2026.

The Company accrues for certain other 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.

Other Contractual Obligations and Contingencies

The Company had $973 million and $874 million of standby letters of credit and bank guarantees issued on its behalf as of September 30, 2026 and December 31, 2025, respectively, including those issued under the revolving credit facility (see Note 9). These were obtained primarily in connection with certain of the litigation matters disclosed above and for regulatory purposes.

Booking.com facilitates the provision of partner liability insurance underwritten by third-party insurance providers, to protect certain alternative accommodation partners against liability claims and lawsuits for bodily injury or property damage that occur during a stay. While this partner liability insurance program, if applicable to the claim, provides coverage up to $1 million per occurrence (subject to limitations and exclusions), the Company retains certain potential financial risks and could be required to pay amounts in excess of policy limit.

14. SEGMENT REPORTING

See Note 17 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 for additional information on the Company's segment reporting. The following table presents information on the Company's reportable segment:

The following table presents the reconciliation of the Company's segment Adjusted EBITDA less Capex to Income before income taxes:

(1)See Note 13 for additional information.

(2)See the Unaudited Consolidated Statements of Operations.

(3)See Note 8 for additional information.

(4)See Note 17 for additional information.

(5)See Note 15 for additional information.

(6)See Note 9 for additional information.

(7)Primarily consists of the expenses of corporate headquarters and certain other functional departments.

Stock-based compensation included in the determination of segment Adjusted EBITDA less Capex was $129 million and $378 million for the three and nine months ended September 30, 2026, respectively, and $139 million and $406 million for the three and nine months ended September 30, 2025, respectively.

15. OTHER INCOME (EXPENSE), NET

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

(1)Includes gains of $127 million and $655 million for the three and nine months ended September 30, 2026, respectively, and losses of $9 million and $1.4 billion for the three and nine months ended September 30, 2025, respectively, related to Euro-denominated debt and accrued interest that were not designated as net investment hedges (see Note 12). Foreign currency transaction gains (losses) also includes gains and losses related to derivative contracts (see Note 6).

(2)See Note 9 for additional information.

(3)Includes net losses on equity securities with readily determinable fair values of $18 million and $150 million for the three and nine months ended September 30, 2026, respectively, and gains of $92 million and $116 million for the three and nine months ended September 30, 2025, respectively. See Note 5 for additional information.

16. SUPPLEMENTAL CASH FLOW INFORMATION

As of September 30, 2026 and December 31, 2025, cash and cash equivalents reported in the Consolidated Balance Sheets differ from the amounts of total cash and cash equivalents and restricted cash and cash equivalents as shown in the Unaudited Consolidated Statements of Cash Flows due to restricted cash and cash equivalents of $230 million and $66 million, respectively, which are included in "Other current assets" in the Consolidated Balance Sheets. Restricted cash and cash equivalents are primarily related to certain cash payments received from travelers on behalf of travel service providers and the associated cash flows are included in "Other financing activities" in the Unaudited Consolidated Statements of Cash Flows.

Noncash investing activity related to additions to property and equipment, including stock-based compensation and accrued liabilities, was $29 million and $39 million for the nine months ended September 30, 2026 and 2025, respectively. See Note 10 for additional information on noncash financing activity related to share repurchases.

During the nine months ended September 30, 2026 and 2025, the Company made income tax payments of $2.0 billion and $1.9 billion, respectively, and interest payments of $723 million and $747 million, respectively.

17. TRANSFORMATION COSTS

In the fourth quarter of 2024, the Company began the implementation of certain organizational changes as part of a transformation program and currently expects that the restructuring costs and accelerated investments related to the program will largely be incurred by the end of 2027. For the three and nine months ended September 30, 2026, Transformation costs include professional fees of $19 million and $63 million, respectively. For the three and nine months ended September 30, 2025, Transformation costs include employee termination benefits of $79 million and $105 million, respectively, and professional fees of $24 million and $67 million, respectively.