10-KPeriod: FY2012

Booking Holdings Inc. Annual Report, Year Ended Dec 31, 2012

Filed February 27, 2013For Securities:BKNG

Summary

Booking Holdings Inc. (formerly Priceline.com Inc.) reported strong financial performance in its 2012 10-K filing, driven primarily by its international operations, particularly Booking.com, which accounted for a substantial majority of gross bookings and operating income. The company highlighted robust growth across its brands, including Agoda.com and Rentalcars.com, and emphasized its strategy to maintain global leadership in online hotel and accommodation reservations. While the company experienced significant growth, it also faces increasing competition from established tech giants like Google and Apple, as well as emerging online travel companies. The report details ongoing legal proceedings related to hotel occupancy taxes and the company's strategy to navigate these challenges. The company is also in the process of acquiring KAYAK Software Corporation, a significant strategic move expected to close in the first half of 2013.

Financial Highlights

52 data points
Beta

Revenue

$5.26B

77.6% Gross Margin

Net Income

$1.42B

27.1% Net Margin

EPS (Diluted)

$1.11

Total Assets

$6.57B

Cash & Equivalents

$1.54B

Free Cash Flow

$1.73B

Financial Statements
Beta
Revenue$5.26B
Cost of Revenue$1.18B
Gross Profit$4.08B
Operating Expenses$2.25B
Operating Income$1.83B
Interest Expense$62.06M
Net Income$1.42B
EPS (Basic)$1.14
EPS (Diluted)$1.11
Shares Outstanding (Basic)1.25B
Shares Outstanding (Diluted)1.28B

Key Highlights

  • 1International operations are the primary growth engine, contributing 82% of gross bookings and 92% of operating income in 2012.
  • 2Booking.com is the world's largest hotel and accommodation reservation website, serving customers globally.
  • 3The company is actively expanding its service offerings and geographic reach, with a focus on international markets.
  • 4A significant pending acquisition of KAYAK Software Corporation for $1.8 billion was announced in November 2012, signaling strategic expansion into meta-search.
  • 5The company faces intense competition from online travel agencies, meta-search sites, and technology giants.
  • 6Ongoing legal proceedings related to hotel occupancy taxes represent a notable risk, with an accrual of $56 million as of December 31, 2012.
  • 7Online advertising expenses continue to rise, driven by international brand growth and recent lower returns on investment, while the company aims to maintain brand awareness and traffic generation.

Frequently Asked Questions

Booking Holdings' (then Priceline.com Inc.) primary driver of revenue and profit in 2012 was its international operations, particularly through its Booking.com brand, which accounted for approximately 82% of gross bookings and 92% of consolidated operating income.

Key risks and challenges include intense competition from established online travel agencies, meta-search engines, and large technology companies (like Google and Apple), fluctuations in the travel industry due to economic conditions and unforeseen events, increasing online advertising costs with potentially lower returns on investment, and significant ongoing legal proceedings related to hotel occupancy taxes.

The acquisition of KAYAK Software Corporation, a leading meta-search service, for $1.8 billion, is a significant strategic move aimed at expanding Booking Holdings' presence in the travel search market. This acquisition, announced in November 2012 and expected to close in the first half of 2013, would enhance the company's offerings and competitive position.

The company recognizes the substantial shift of business to mobile platforms and is investing in developing new, user-friendly mobile offerings and optimizing its mobile websites. It views mobile bookings as a crucial opportunity for continued growth and necessary to maintain market share against competitors and new entrants.