BKNGBooking Holdings

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 in which it is currently participating. historically participated in. BPF instituted legal proceedings and in 2016 the District Court of Amsterdam rejected all of against Booking.com B.V. (which were continued by BPF's claims. BPF appealed the decision to the Court of Appeal, legal successor, Pension Fund PGB ("PGB")) and, in May 2019, the Court of Appeal also rejected all of BPF's claims, in each case by ruling that Booking did 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 B.V. met 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 B.V. 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 to assess the other defenses brought forward by the Company. In January 2024, that a Dutch Court of Appeal ruled that Booking.com B.V. is required to participate in the mandatory pension scheme of the BPF PGB with retroactive effect to 1999. The Company has filed an appeal of the decision to the Netherlands Supreme Court. Although the Company disagrees disagreed with and appealed the decision, it accrued losses of $ 276 million and $ 77 million for the years ended December 31, 2023 and 2024, respectively, included in "Personnel" expenses in the Consolidated Statements of Operations. The corresponding liability is included in "Accrued expenses and other current liabilities" in the Consolidated Balance Sheet as of December 31, 2024. After a loss final ruling by the Dutch Supreme Court in March 2025, Booking.com B.V. changed its pension scheme going forward and with retroactive effect to 1999, in line with the outcome of 253 the litigation and arrangement with PGB. During the year ended December 31, 2025, the Company paid $ 136 million Euros ($ 276 million), included to settle the pension liability as of December 31, 2024, reflecting the arrangement with PGB that became effective during the period. The impact of the reduction in the pension liability from December 31, 2024 of $ 176 million is recorded in "Personnel" expenses in the Consolidated Statement of Operations for the year ended December 31, 2023. During the year ended December 31, 2024, the Company recorded 2025. There may be additional estimated expenses of 72 million Euros ($ 77 million) included in "Personnel" expenses in the Consolidated Statements of Operations. The related liability is included in "Accrued expenses and other current liabilities" in the Consolidated Balance Sheets as of December 31, 2024 and 2023. On a go-forward basis, Booking.com B.V. expects to begin paying pension premiums claims with respect to the BPF scheme or to increase contributions to eligibility of certain employees in scope of the benefit of employees under its existing pension scheme. scheme, which may result in additional costs.

We are subject to competition and consumer protection laws and regulations around the world. These laws and regulations evolve, and their interpretation, application, and enforcement can also change, be unpredictable, or be affected by changing political or social pressures. As we expand our business into new areas, including building the Connected Trip vision and integrating Gen AI into our offerings, we may become subject to additional laws and regulations. We have been the subject of investigations or inquiries by national competition authorities ("NCAs") ("Competition Authorities") and other governmental authorities. authorities regarding competition law matters, consumer protection issues, and other areas. For example, we are involved in investigations related to whether certain of Booking.com's contractual parity arrangements with accommodation providers are anti-competitive because they require partners anti-competitive, including with respect to provide Booking.com with rates, conditions, and availability at least as favorable as those issues like contractual parity, pricing tools or programs offered to other OTCs partners, or by the partner itself. In July 2024, the Comisión Nacional de los Mercados y la Competencia (the "CNMC") ranking criteria used in Spain notified Booking.com of its decision displaying results to impose a fine and consumers. See Note 16 to restrict our Consolidated Financial Statements for information regarding certain business practices based on the allegation that certain practices by Booking.com may produce adverse effects for hotels and other OTCs. Booking.com does not agree with the rationale stated legal proceedings in the decision and which we are involved. To resolve certain of the restrictions imposed, and has filed an appeal. In September 2017 the Swiss Price Surveillance Office opened an investigation that may require Booking.com to reduce its commissions in Switzerland. To resolve and close certain of these investigations, proceedings or investigations we have been or are involved in, we have made commitments regarding future business practices or activities, such as agreeing activities including related to narrow the scope of our parity arrangements. While arrangements, the information we believe that provide about our search results ranking, and how we are complying with the commitments display prices, discounts, and popularity and availability statements. Though we have made, taken steps to comply with such commitments, investigating authorities or third parties may determine otherwise assert that our measures are insufficient and decide to may pursue legal further action to compel compliance or seek other remedies. We cooperate with regulators but we are unable to predict what, if any, effect any investigations or their resolution, including the effect of any commitments we might make, will have on our business, industry practices, or online commerce more generally. An unfavorable outcome in an investigation could encourage additional regulatory inquiries that could become widespread over time, significantly increasing the potential financial and reputational impact on us. To the Company. Additionally, these types of extent that investigations can or inquiries result and have resulted in the assessment of additional commitments, changes to our business practices, negative publicity, fines, damages from private litigation, or other remedies, it could have a material adverse effect on our business, financial condition, and negative publicity. results of operations.

In November the fourth quarter of 2024, we announced began the implementation of organizational changes to improve operating expense efficiency, increase organizational agility, free up resources that can be reinvested into further improving our intention offering to implement certain organizational changes, including modernizing processes travelers and systems, initiating an expected workforce reduction, optimizing procurement, partners, and seeking real estate savings better position our business for the long term (the "Transformation Program"). We believe it is important to make these organizational changes The Transformation Program resulted in order to drive further expense efficiency, create room for reinvestment approximately $250 million in projects and initiatives that will support savings in 2025. Given the growth stronger-than-expected early results of our business over the long run, and further improve our organizational agility. We expect the Transformation Program Program, in the third quarter of 2025, we raised our expectation for the ultimate annual run-rate savings to ultimately deliver about a range of $500 to $550 million from our previous guidance of $400 to $450 million in annual run rate savings over the next three years million, as compared to our 2024 expense base. We are As of the end of 2025, we have enabled approximately $550 million in the early stages of this program annual run-rate savings and we expect to realize these run-rate savings by the majority end of the run rate savings to be achieved after 2025. 2026. We expect that the restructuring costs and accelerated investments related to the Transformation Program will largely be incurred in by the next two to three years end of 2026 and are estimated to be, in the aggregate, approximately less than one times the expected annual run rate run-rate savings.

In December 2023, September 2025, the FASB issued an ASU to modernize the accounting standards update related to income taxes that requires additional disclosures on the rate reconciliation for software costs accounted for under ASC 350-40, Intangibles - Goodwill and taxes paid. The update requires disclosure of additional categories of information in the tax rate reconciliation table about federal, state and foreign income taxes and more details about certain items that meet a quantitative threshold. Income taxes paid (net of refunds received) are required to be disclosed disaggregated by federal (national), state and foreign taxes and also by jurisdiction based on a quantitative threshold. Other - Internal-Use Software. The update is effective for annual and interim financial statements beginning with the fiscal year 2025. In preparation for the adoption of the update, the 2028. The Company is currently evaluating the impact of the update to its the Consolidated Financial Statements and establishing the related processes and internal controls. Statements.