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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the quarterly period ended September 30, 2020
OR
         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the transition period from to
Commission File Number: 1-36691
Booking Holdings Inc.
(Exact name of registrant as specified in its charter) 
Delaware06-1528493
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
800 Connecticut Avenue
Norwalk, Connecticut 06854
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 299-8000
Former name, former address and former fiscal year, if changed, since last report: N/A
 _____________________________________________________________________________________________
 Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class: Trading Symbol(s)Name of each exchange on which registered:
Common Stock par value $0.008 per share BKNGThe NASDAQ Global Select Market
0.800% Senior Notes Due 2022BKNG 22AThe NASDAQ Stock Market LLC
2.150% Senior Notes Due 2022BKNG 22The NASDAQ Stock Market LLC
2.375% Senior Notes Due 2024BKNG 24The NASDAQ Stock Market LLC
1.800% Senior Notes Due 2027BKNG 27The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.   Yes No .
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes No .
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. 
Large accelerated filer
Accelerated filer Non-accelerated filer
Smaller reporting company
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes No
Number of shares of Common Stock outstanding at October 29, 2020:
Common Stock, par value $0.008 per share40,954,912
(Class)(Number of Shares)



Booking Holdings Inc.
Form 10-Q
 
For the Three Months Ended September 30, 2020
 
PART I - FINANCIAL INFORMATION 
  
Item 1. Financial Statements
  
Consolidated Balance Sheets at September 30, 2020 (Unaudited) and December 31, 2019
Consolidated Statements of Operations (Unaudited) For the Three and Nine Months Ended September 30, 2020 and 2019
Consolidated Statements of Comprehensive Income (Unaudited) For the Three and Nine Months Ended September 30, 2020 and 2019
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) For the Three and Nine Months Ended September 30, 2020 and 2019
Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended September 30, 2020 and 2019
Notes to Unaudited Consolidated Financial Statements
  
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
  
Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
Item 4. Controls and Procedures
  
PART II - OTHER INFORMATION 
  
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
  
SIGNATURES
2


PART I — FINANCIAL INFORMATION
Item 1.  Financial Statements

Booking Holdings Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except share and per share data)
 September 30,
2020
December 31,
2019
(Unaudited)
ASSETS  
Current assets:  
Cash and cash equivalents$11,197 $6,312 
Short-term investments (Available-for-sale debt securities:
Amortized cost of $998 at December 31, 2019)
 998 
Accounts receivable, net (Allowance for expected credit losses of $208 and $49, respectively)859 1,680 
Prepaid expenses and other current assets, net (Allowance for expected credit losses of $16 and $6, respectively)527 843 
Total current assets12,583 9,833 
Property and equipment, net744 738 
Operating lease assets568 620 
Intangible assets, net1,838 1,954 
Goodwill1,865 2,913 
Long-term investments (Includes available-for-sale debt securities:
Amortized cost of $775 and $2,192, respectively)
3,672 4,477 
Other assets, net (Allowance for expected credit losses of $38 at September 30, 2020)875 867 
Total assets$22,145 $21,402 
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current liabilities:  
Accounts payable$1,114 $1,239 
Accrued expenses and other current liabilities1,388 1,578 
Deferred merchant bookings487 1,561 
Convertible debt979 988 
Total current liabilities3,968 5,366 
Deferred income taxes1,006 876 
Operating lease liabilities401 462 
Long-term U.S. transition tax liability921 1,021 
Other long-term liabilities107 104 
Long-term debt 10,829 7,640 
  Total liabilities17,232 15,469 
Commitments and Contingencies (see Note 13)
Stockholders' equity:  
Common stock, $0.008 par value,
Authorized shares: 1,000,000,000
Issued shares: 63,398,711 and 63,179,471, respectively
  
Treasury stock, 22,444,443 and 21,762,070 shares, respectively(24,123)(22,864)
Additional paid-in capital5,779 5,756 
Retained earnings23,453 23,232 
Accumulated other comprehensive loss(196)(191)
  Total stockholders' equity4,913 5,933 
Total liabilities and stockholders' equity$22,145 $21,402 
See Notes to Unaudited Consolidated Financial Statements.
3


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,
 2020201920202019
Agency revenues$1,723 $3,435 $3,504 $7,991 
Merchant revenues837 1,313 1,741 2,875 
Advertising and other revenues80 292 313 861 
Total revenues2,640 5,040 5,558 11,727 
Operating expenses:  
Marketing expenses731 1,415 1,793 3,975 
Sales and other expenses129 276 637 739 
Personnel, including stock-based compensation of $80, $79, $163 and $232, respectively517 566 1,453 1,686 
General and administrative148 225 453 596 
Information technology71 71 219 206 
Depreciation and amortization115 117 344 352 
Restructuring and other exit costs41  75  
Impairment of goodwill573  1,062  
Total operating expenses2,325 2,670 6,036 7,554 
Operating income (loss)315 2,370 (478)4,173 
Other income (expense):  
Interest income5 44 49 113 
Interest expense(98)(70)(258)(204)
Net gains (losses) on marketable equity securities730 (49)1,258 419 
Impairment of investment  (100) 
Foreign currency transactions and other(117)68 (149)37 
Total other income (expense)520 (7)800 365 
Income before income taxes835 2,363 322 4,538 
Income tax expense34 413 98 844 
Net income$801 $1,950 $224 $3,694 
Net income applicable to common stockholders per basic common share$19.56 $46.01 $5.46 $84.84 
Weighted-average number of basic common shares outstanding (in 000's)40,935 42,389 40,983 43,540 
Net income applicable to common stockholders per diluted common share$19.49 $45.54 $5.44 $84.06 
Weighted-average number of diluted common shares outstanding (in 000's)41,081 42,831 41,142 43,947 

See Notes to Unaudited Consolidated Financial Statements.

4


Booking Holdings Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
Net income $801 $1,950 $224 $3,694 
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments, net of tax
42 (35)(3)(63)
Net unrealized (losses) gains on available-for-sale securities, net of tax
(5) (2)114 
Total other comprehensive income (loss), net of tax37 (35)(5)51 
Comprehensive income$838 $1,915 $219 $3,745 

See Notes to Unaudited Consolidated Financial Statements.
5


Booking Holdings Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 and 2019
(In millions, except share data)
 
Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Loss
Shares
(in 000's)
AmountShares
(in 000's)
AmountTotal
Balance, June 30, 202063,391 $ (22,442)$(24,119)$5,699 $22,652 $(233)$3,999 
Net income— — — — — 801 — 801 
Foreign currency translation adjustments, net of tax— — — — — — 42 42 
Net unrealized losses on available-for-sale securities, net of tax— — — — — — (5)(5)
Exercise of stock options and vesting of restricted stock units and performance share units8  — —  — —  
Repurchase of common stock— — (2)(4)— — — (4)
Stock-based compensation and other stock-based payments— — — — 80 — — 80 
Balance, September 30, 202063,399 $ (22,444)$(24,123)$5,779 $23,453 $(196)$4,913 
 Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Loss 
 Shares
(in 000's)
AmountShares
(in 000's)
AmountTotal
Balance, December 31, 201963,179 $ (21,762)$(22,864)$5,756 $23,232 $(191)$5,933 
Cumulative effect of adoption of accounting standards update— — — — — (3)— (3)
Net Income— — — — — 224 — 224 
Foreign currency translation adjustments, net of tax— — — — — — (3)(3)
Net unrealized losses on available-for-sale securities, net of tax— — — — — — (2)(2)
Issuance of convertible senior notes— — — — 96 — — 96 
Conversion of debt— — — — (245)— — (245)
Exercise of stock options and vesting of restricted stock units and performance share units220  — — 6 — — 6 
Repurchase of common stock— — (682)(1,259)— — — (1,259)
Stock-based compensation and other stock-based payments— — — — 166 — — 166 
Balance, September 30, 202063,399 $ (22,444)$(24,123)$5,779 $23,453 $(196)$4,913 

6


Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Loss
Shares
(in 000's)
AmountShares
(in 000's)
AmountTotal
Balance, June 30, 201963,144 $ (20,378)$(20,173)$5,599 $20,111 $(230)$5,307 
Net income— — — — — 1,950 — 1,950 
Foreign currency translation adjustments, net of tax— — — — — — (35)(35)
Exercise of stock options and vesting of restricted stock units and performance share units18  — —  — —  
Repurchase of common stock— — (699)(1,350)— — — (1,350)
Stock-based compensation and other stock-based payments— — — — 79 — — 79 
Balance, September 30, 201963,162 $ (21,077)$(21,523)$5,678 $22,061 $(265)$5,951 
 Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Loss 
 Shares
(in 000's)
AmountShares
(in 000's)
AmountTotal
Balance, December 31, 201862,949 $ (17,317)$(14,711)$5,445 $18,367 $(316)$8,785 
Net income— — — — — 3,694 — 3,694 
Foreign currency translation adjustments, net of tax— — — — — — (63)(63)
Net unrealized gains on available-for-sale securities, net of tax— — — — — — 114 114 
Exercise of stock options and vesting of restricted stock units and performance share units213  — — 1 — — 1 
Repurchase of common stock— — (3,760)(6,812)— — — (6,812)
Stock-based compensation and other stock-based payments— — — — 232 — — 232 
Balance, September 30, 201963,162 $ (21,077)$(21,523)$5,678 $22,061 $(265)$5,951 

See Notes to Unaudited Consolidated Financial Statements.

7


Booking Holdings Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
 Nine Months Ended
September 30,
 20202019
OPERATING ACTIVITIES:
Net income $224 $3,694 
Adjustments to reconcile net income to net cash provided by
operating activities:
 
Depreciation and amortization344 352 
Provision for expected credit losses and chargebacks307 108 
Deferred income tax expense101 39 
Net gains on marketable equity securities(1,258)(419)
Stock-based compensation expense and other stock-based payments179 245 
Operating lease amortization137 127 
Amortization of debt discount and debt issuance costs48 43 
Unrealized foreign currency transaction losses (gains) on Euro-denominated debt139 (54)
Impairment of goodwill1,062  
Impairment of investment100  
Other 9 
Changes in assets and liabilities, net of effect of acquisition: 
Accounts receivable554 (442)
Prepaid expenses and other current assets230 (247)
Deferred merchant bookings and other current liabilities(1,593)794 
Other long-term assets and liabilities 88 (461)
Net cash provided by operating activities662 3,788 
INVESTING ACTIVITIES: 
Purchase of investments(72)(696)
Proceeds from sale and maturity of investments2,997 7,940 
Additions to property and equipment(222)(281)
Acquisitions and other investments, net of cash acquired (9)
Net cash provided by investing activities2,703 6,954 
FINANCING ACTIVITIES:
Proceeds from revolving credit facility and short-term borrowings 400 
Repayments of revolving credit facility and short-term borrowings (425)
Proceeds from the issuance of long-term debt4,108  
Payments of debt issuance costs(38) 
Payments for conversion of debt(1,244) 
Payments for repurchase of common stock (1,299)(6,840)
Other financing activities5 (11)
Net cash provided by (used in) financing activities1,532 (6,876)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents(12)(26)
Net increase in cash and cash equivalents and restricted cash and cash equivalents4,885 3,840 
Total cash and cash equivalents and restricted cash and cash equivalents,
beginning of period (see Note 14)
6,332 2,645 
Total cash and cash equivalents and restricted cash and cash equivalents,
end of period (see Note 14)
$11,217 $6,485 
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for income taxes (see Note 14)$152 $986 
Cash paid during the period for interest$158 $171 
See Notes to Unaudited Consolidated Financial Statements.
8


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 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, 2019.
 
The Unaudited Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company 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 "Foreign currency transactions and other" 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, especially during the periods that are impacted by the COVID-19 pandemic.

Impact of COVID-19

In response to the outbreak of the novel strain of the coronavirus, COVID-19 (the "COVID-19 pandemic"), many governments around the world have implemented, and continue to implement, a variety of measures to reduce the spread of COVID-19, including travel restrictions and bans, instructions to residents to practice social distancing, quarantine advisories, including quarantine restrictions after travel in certain locations, shelter-in-place orders, required closures of non-essential businesses and additional restrictions on businesses as part of re-opening plans. These government mandates have forced many of the customers on whom the Company’s business relies, including hotels and other accommodation providers, airlines and restaurants, to seek government support in order to continue operating, to curtail drastically their service offerings, to file for bankruptcy protection or to cease operations entirely. Further, these measures have materially adversely affected, and may further adversely affect, consumer sentiment and discretionary spending patterns, economies and financial markets, and the Company’s workforce, operations and customers.

The COVID-19 pandemic and the resulting economic conditions and government orders have resulted in a material decrease in consumer spending and an unprecedented decline in travel and restaurant activities and consumer demand for related services. The Company’s financial results and prospects are almost entirely dependent on the sale of such travel and restaurant-related services. The Company’s results for each of the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020 have been significantly and negatively impacted as compared to the corresponding periods in 2019.

Due to the uncertain and rapidly evolving nature of current conditions around the world, the Company is unable to predict accurately the impact that the COVID-19 pandemic will have on its business going forward. With the spread of COVID-19 to all major regions, the Company expects the COVID-19 pandemic and its effects to continue to have a significant adverse impact on its business for the duration of the pandemic, during any resurgence of the pandemic and during the subsequent economic recovery, which could be an extended period of time.

Given the volatility in global markets and the financial difficulties faced by many of the Company's travel service provider and restaurant customers and marketing affiliates, the Company has increased its provision for expected credit losses (also referred to as provision for bad debt or provision for uncollectible accounts) on receivables from and prepayments to its travel service provider and restaurant customers and marketing affiliates (see Note 7). Moreover, due to the high level of cancellations of existing reservations, the Company has incurred, and may continue to incur, higher than normal cash outlays to refund consumers for prepaid reservations (see Note 2). Any material increase in the Company’s provision for expected credit
9


losses and any material increase in cash outlays to consumers would have a corresponding adverse effect on the Company's results of operations and related cash flows.

As a result of the deterioration of the Company’s business due to the COVID-19 pandemic, the Company determined that a portion of its goodwill had experienced a decline in value at March 31, 2020 and recorded a significant impairment charge (see Note 8). In addition, the Company recorded a significant impairment charge at March 31, 2020 for one of the Company's long-term investments due to the impact of the COVID-19 pandemic on the business of the investee and the Company's estimate of the resulting decline in the value of the investment (see Notes 5 and 6). At September 30, 2020, the Company recorded an additional significant impairment charge to its goodwill (see Note 8). It is possible that the Company may have to record additional significant impairment charges in future periods.

See Note 9 for additional information about the Company’s existing debt arrangements, including $4.1 billion of debt issued in April 2020. The Company’s continued access to sources of liquidity depends on multiple factors, including global economic conditions, the condition of global financial markets, the availability of sufficient amounts of financing, the Company’s ability to meet debt covenant requirements, the Company’s operating performance and its credit ratings. If the Company’s credit ratings were to be downgraded, or financing sources were to ascribe higher risk to its rating levels, the Company or its industry, the Company’s access to capital and the cost of any financing would be negatively impacted. There is no guarantee that additional debt financing will be available in the future to fund the Company’s obligations, or that it will be available on commercially reasonable terms, in which case the Company may need to seek other sources of funding.

The extent of the effects of the COVID-19 pandemic on the Company’s business, results of operations, cash flows and growth prospects is highly uncertain and will ultimately depend on future developments. These include, but are not limited to, the severity, extent and duration of the pandemic and its impact on the travel and restaurant industries and consumer spending more broadly. Even if economic and operating conditions for the Company’s business improve, the Company cannot predict the long-term effects of the pandemic on its business or the travel and restaurant industries as a whole. If the travel and restaurant industries are fundamentally changed by the COVID-19 pandemic in ways that are detrimental to the Company’s operating model, the Company’s business may continue to be adversely affected even as the broader global economy recovers.

In response to the reduction in the Company's business volumes as a result of the impact of the COVID-19 pandemic, the Company has taken actions to reduce the size of its workforce to optimize efficiency and reduce costs. See Note 14 for additional information.

Certain governments have passed or are considering legislation to help businesses during the COVID-19 pandemic through loans, wage subsidies, tax relief or other financial aid, and some of these governments have extended or are considering extending these programs.  The Company has participated in several of these programs, including the Netherlands' wage subsidy program and the United Kingdom's job retention scheme. See Note 14 for additional information.

Change in Presentation and Reclassification
In the year ended December 31, 2019 and prior periods, the Company's marketing expenses were presented in the Consolidated Statements of Operations as "Performance marketing" and "Brand marketing" expenses. In the first quarter of 2020, the Company changed the presentation of marketing expenses by combining "Performance marketing" and "Brand marketing" into "Marketing expenses" in the Unaudited Consolidated Statement of Operations because of the increased convergence of performance marketing and brand marketing channels in areas including digital marketing and the Company's view of overall marketing expenditure as its investment in customer acquisition and retention.  The change in presentation had no impact on operating income or net income. The Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2019 has been recast to conform to the current year presentation.

In addition to the change in presentation for marketing expenses, certain amounts from prior periods have been reclassified to conform to the current period presentation.

Recent Accounting Pronouncements Adopted

Simplifying the Test for Goodwill Impairment

In January 2017, the Financial Accounting Standards Board ("FASB") issued a new accounting update to simplify the test for goodwill impairment. The revised guidance eliminates the previously required step two of the goodwill impairment test, which required a hypothetical purchase price allocation to measure goodwill impairment. Under the revised guidance, a goodwill impairment loss will be measured at the amount by which a reporting unit’s carrying amount exceeds its fair value,
10


not to exceed the carrying amount of goodwill. The Company adopted this update in the first quarter of 2020 and applied it on a prospective basis (see Note 8 for additional information on the goodwill impairment tests performed at March 31, 2020 and September 30, 2020).

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued a new accounting update on the measurement of credit losses for certain financial assets measured at amortized cost and available-for-sale debt securities. For financial assets measured at amortized cost, this update requires an entity to (1) estimate its lifetime expected credit losses upon recognition of the financial assets and establish an allowance to present the net amount expected to be collected, (2) recognize this allowance and changes in the allowance during subsequent periods through net income and (3) consider relevant information about past events, current conditions and reasonable and supportable forecasts in assessing the lifetime expected credit losses. For available-for-sale debt securities, this update made several targeted amendments to the existing other-than-temporary impairment model, including (1) requiring disclosure of the allowance for expected credit losses, (2) allowing reversals of the previously recognized credit losses until the entity has the intent to sell, is more-likely-than-not required to sell the securities or the maturity of the securities, (3) limiting impairment to the difference between the amortized cost basis and fair value and (4) not allowing entities to consider the length of time that fair value has been less than amortized cost as a factor in evaluating whether a credit loss exists. The Company adopted this update in the first quarter of 2020 and applied this update on a modified retrospective basis. Upon adoption of the new standard on January 1, 2020, the Company recorded a net decrease to its retained earnings of $3 million, net of tax. See Note 7 for additional information related to allowance for expected credit losses on accounts receivable and other financial assets and Note 5 for additional information related to investments in available-for-sale debt securities.

Other Recent Accounting Pronouncements

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

    In August 2020, the FASB issued a new accounting update relating to convertible instruments and contracts in an entity’s own equity. For convertible instruments, the accounting update reduces the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current U.S. GAAP. The accounting update amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. The accounting update also simplifies the diluted earnings per share calculation in certain areas.

    For public business entities, the update is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. Entities are allowed to apply this update on either a full or modified retrospective basis. The Company is curr