Booking Holdings Inc.(以下簡稱"公司")的管理層負責本文件中包含的未經審計的合併基本報表的管理,該報表是根據美國通用會計準則("U.S. GAAP")編制的,包括公司管理認爲對財務狀況和經營成果進行公正呈現所必需的所有正常和重複性調整。公司編制了未經審計的合併基本報表,並遵循證券交易委員會有關中期報告的要求。根據這些規定的規定,公司對美國通用會計準則通常要求的年度財務報表內容進行了概述或省略了某些腳註或其他財務信息。這些未經審計的合併基本報表應與公司年度報告Form 10-k for the year ended December 31, 2023中的合併基本報表一起閱讀。
In April 2020, the Company issued $863到2025年5月到期的可轉換的優先債券,總額爲 0.75%(即「2025年5月票據」)。2025年5月票據可按一定條件轉換爲公司的普通股,當前轉換價格爲每股$1,873 。2025年5月票據可在2024年11月1日之前,持有人的選擇下轉換,條件包括但不限於控股權變更,或者在前一個日曆季度最後一個交易日結束時連續至少 20 個交易日內連續出現,從2023年8月1日到2023年10月31日之間,可以整體或部分轉換2026票據的有條件轉換特徵被觸發。根據未來持續滿足該條件或其他轉換條件而定,2026票據在此期間之後是否可轉換將取決於。 30 個交易日,公司普通股收盤價格超過了轉換價格的 130%,即前一個季度最後一個交易日生效的票據轉換價格。如果在2025年5月票據到期之前或之日收購公司的所有或絕大部分普通股,且支付給公司普通股持有人的對價主要爲全現金,公司將需要以額外的普通股形式向2025年5月票據持有人支付額外股份,總價值範圍從$0增加到$235根據交易日期和公司當時的股價,交易金額可能在數百萬美元之間。從2024年11月1日開始,持有人將有權按着公司的股價將2025年5月債券全部或部分轉換。2025年5月債券在到期前無法被公司贖回。在特定情況下,持有人可能要求公司回購2025年5月債券。2025年5月債券的利息在每年的5月1日和11月1日支付。如果債券持有人選擇行使轉換權,公司將提供現金償還債券本金,並提供普通股或現金,選擇其中一項用以償還高於本金的轉換價值。截至2024年9月30日和2023年12月31日,2025年5月債券的估計公允價值分別爲億美元,被視爲「2級」公允價值衡量(見註釋6)。根據公司普通股的收盤價所計算的規定衡量期間的銷售價格,2025年5月債券自2023年第二季度開始可按持有人的選擇進行轉換,並在2024年第四季度繼續可進行轉換。1.9私人股權和其他投資的金額分別爲52.27億美元和53.98億美元,截至2023年7月31日和2023年1月31日。1.6 十百萬美元,具體金額取決於交易日期和當時公司的股票價格。從2024年11月1日開始,持有人將有權全部或部分轉換2025年5月份的債券,無論當時公司的股價如何。在到期前公司不能贖回2025年5月份的債券。在特定情況下,持有人可以要求公司用現金回購2025年5月份的債券。2025年5月份債券的利息將在每年的5月1日和11月1日支付。如果債券持有人選擇行使轉換權,公司將提供現金償還債券本金,並提供普通股或現金,任選其一用以支付高於本金的轉換價值。截至2024年9月30日和2023年12月31日,2025年5月份債券的估計公允價值分別爲億美元,且被視爲「2級」公允價值衡量(見註釋6)。根據公司普通股的收盤銷售價,自2023年第二個日曆季度開始,持有人即可選擇轉換2025年5月份的債券,且持續至2024年第四個日曆季度。
公司截至2024年9月30日三個月和九個月的有效稅率是 12.3%和16.0%,相比之下,截至2023年6月30日分別爲 20.3%和19.8分別爲截至2023年9月30日三個月和九個月的%。公司2024年有效稅率與美國聯邦法定稅率的 21%有所不同,主要是由於荷蘭創新盒子稅的優惠(下文有討論)以及減少公司2018年聯邦一次性視爲遣返責任,根據美國減稅和就業法案(「稅法」),由於最近美國稅務法院在Varian Medical Systems, Inc.訴Commissioner的裁定導致的,部分抵消高國際稅率、未承認的稅收優惠和與公司國際收益相關的美國聯邦和州稅。公司2023年的有效稅率與美國聯邦法定稅率的 21%有所不同,主要是由於荷蘭創新盒子稅的優惠,部分抵消高國際稅率和某些不可抵扣的費用。
截至2024年9月30日的三個月和九個月內,公司的有效稅率低於截至2023年9月30日的三個月和九個月的有效稅率,主要是由於根據稅法減少了公司2018年的一次性聯邦視爲遣返責任,這是由於最近美國稅務法院在Varian Medical Systems, Inc.訴Commissioner的裁決結果,部分抵消了未識別的稅收優惠和因公司國際收入而產生的更高未認定稅收優惠和更高的美國聯邦和州稅收。公司在截至2024年9月30日的三個月和九個月內記錄了淨減稅支出爲$250百萬美元,涉及其2018年聯邦一次性視爲遣返責任。
Our 2024 effective tax rates differ from the U.S. federal statutory tax rate of 21%, primarily due to the benefit of the Netherlands Innovation Box Tax (discussed below) and a reduction to our 2018 federal one-time deemed repatriation liability, pursuant to the U.S. Tax Cuts and Jobs Act ("Tax Act"), resulting from a recent U.S. Tax Court decision in Varian Medical Systems, Inc. v. Commissioner, partially offset by higher international tax rates, unrecognized tax benefits, and U.S. federal and state tax associated with our international earnings. Our 2023 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, partially offset by higher international tax rates and certain non-deductible expenses.
Our effective tax rates for the three and nine months ended September 30, 2024 were lower compared to the effective tax rates for the three and nine months ended September 30, 2023, primarily due to a reduction to our 2018 federal one-time deemed repatriation liability, pursuant to the Tax Act, resulting from a recent U.S. Tax Court decision in Varian Medical Systems, Inc. v. Commissioner, partially offset by higher unrecognized tax benefits and higher U.S. federal and state tax associated with our international earnings. We recorded a net tax expense reduction of $250 million during the three and nine months ended September 30, 2024 related to our 2018 federal one-time deemed repatriation liability.
During the three and nine months ended September 30, 2024 and 2023, a majority of our income was reported in the Netherlands, where Booking.com is based. Under 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 nine months ended September 30, 2024 and 2023 qualified for Innovation Box Tax treatment, which had a beneficial impact on the effective tax rates for these periods. For additional information relating to Booking.com's Innovation Box Tax treatment, including associated risks, please see Part I, Item 1A, Risk Factors - "We may not be able to maintain our 'Innovation Box Tax' benefit" in our Annual Report on Form 10-K for the year ended December 31, 2023.
Liquidity and Capital Resources
Our primary source of funds for operations is the cash flow that we generate from operations. We use our cash for a variety of needs, including ongoing investments in our business, share repurchases, dividends, repayment of debt, and capital expenditures. Our continued access to sources of liquidity depends on multiple factors. See Part I, Item 1A, Risk Factors - "Our liquidity, credit ratings, and ongoing access to capital could be materially and negatively affected by global financial conditions and events" in our Annual Report on Form 10-K for the year ended December 31, 2023. Our financial results and prospects are almost entirely dependent on facilitating the sale of travel-related services. Marketing expenses and personnel expenses are the most significant operating expenses for our business. We rely on marketing channels to generate traffic to our websites. See our Unaudited Consolidated Statements of Operations and "Trends" and "Results of Operations" above for additional information on marketing expenses and personnel expenses including stock-based compensation expenses.
At September 30, 2024, we had $16.3 billion in cash, cash equivalents, and investments, of which approximately $11.1 billion is held by our international subsidiaries. Cash, cash equivalents, and long-term investments held by our international subsidiaries are denominated primarily in Euros, U.S. Dollars, and British Pounds Sterling. See Notes 5 and 6 to our Unaudited Consolidated Financial Statements for additional information about our cash equivalents and investments. Our investment policy seeks to preserve capital and maintain sufficient liquidity to meet operational and other needs of the business.
Deferred merchant bookings of $4.9 billion at September 30, 2024 includes cash payments received from travelers in advance of us completing our performance obligations and are comprised principally of amounts estimated to be payable to travel service providers as well as our estimated future revenue for our commission or margin and fees. The amounts are mostly subject to refunds for cancellations.
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At September 30, 2024, we had a remaining transition tax liability of $487 million as a result of the Tax Act, which included $257 million reported as "Long-term U.S. transition tax liability" and $230 million included in "Accrued expenses and other current liabilities" in the Unaudited Consolidated Balance Sheet. This liability will be paid over the next two years. Due to a recent U.S. Tax Court decision in Varian Medical Systems, Inc. vs. Commissioner, a portion of our total transition tax liability may be refunded. In accordance with the Tax Act, generally, future repatriation of our international cash will not be subject to a U.S. federal income tax liability as a dividend, but will be subject to U.S. state income taxes and international withholding taxes, which have been accrued by us.
See Note 9 to our Unaudited Consolidated Financial Statements for additional information related to our debt arrangements, including principal amounts, interest rates, and maturity dates. Our revolving credit facility extends a revolving line of credit up to $2 billion to us and provides for the issuance of up to $80 million of letters of credit, as well as up to $100 million of borrowings on same-day notice. The revolving credit facility contains a maximum leverage ratio covenant, compliance with which is a condition to our ability to borrow. At September 30, 2024 there were no borrowings outstanding and $26 million of letters of credit issued under the revolving credit facility. In March 2024, we issued senior notes with varying maturities for an aggregate principal amount of 2.8 billion Euros ($3.0 billion). The proceeds from the issuance of these senior notes are available for general corporate purposes, including to repurchase shares of our common stock and to redeem or repay outstanding indebtedness. In September 2024, we paid $1.1 billion on the maturity of the Senior Notes due September 2024. The convertible senior notes due in May 2025 are currently convertible at the option of the holder and have been classified as "Short-term debt" in the Unaudited Consolidated Balance Sheet as of September 30, 2024. If the note holders exercise their option to convert, we deliver cash to repay the principal amount of the notes and deliver shares of common stock or cash, at our option, to satisfy the conversion value in excess of the principal amount. The outstanding senior notes at September 30, 2024 had cumulative interest to maturity of $3.9 billion, with $529 million payable within the next twelve months.
See Note 10 to our Unaudited Consolidated Financial Statements for additional information related to our share repurchases and dividends declared and paid. During the nine months ended September 30, 2024, we repurchased shares of our common stock for an aggregate cost of $5.3 billion, including $330 million to repurchase shares of our common stock withheld to satisfy employee withholding tax obligations related to stock-based compensation. At September 30, 2024, we had a total remaining authorization of $8.8 billion related to a program authorized by our Board of Directors ("the Board") in 2023 to repurchase up to $20 billion of our common stock. We expect to complete the share repurchases under the remaining authorization by the end of 2026, assuming no major downturn in the travel market. Excise tax obligations that result from our share repurchases are accounted for as a cost of the treasury stock transaction. As of September 30, 2024, we recorded an estimated excise tax liability of $141 million. During the nine months ended September 30, 2024, we paid cash dividends of $885 million. In October 2024, the Board declared a cash dividend of $8.75 per share of common stock, payable on December 31, 2024 to stockholders of record as of the close of business on December 6, 2024.
At September 30, 2024, we had lease obligations of $814 million, of which $194 million is payable within the next twelve months. Additionally, at September 30, 2024, we had, in the aggregate, $1.0 billion of non-cancellable purchase obligations individually greater than $10 million, of which $220 million is payable within the next twelve months. Such purchase obligations relate to agreements to purchase goods and services that are enforceable and legally binding and that specify significant terms, including the quantities to be purchased, price provisions, and the approximate timing of the transaction.
At September 30, 2024, there were $652 million of standby letters of credit and bank guarantees issued on our behalf, which were obtained primarily for regulatory purposes. See Note 13 to our Unaudited Consolidated Financial Statements for additional information related to our commitments and contingencies.
We believe that our existing cash balances and liquid resources will be sufficient to fund our operating activities, capital expenditures, and other obligations through at least the next twelve months. However, if we are not successful in generating sufficient cash flow from operations or in raising additional capital when required in sufficient amounts and on terms acceptable to us, we may be required to reduce our planned capital expenditures and scale back the scope of our business plans, either of which could have a material adverse effect on our business, our ability to compete or our future growth prospects, financial condition, and results of operations. If additional funds were raised through the issuance of equity securities, the percentage ownership of our then current stockholders would be diluted. We may not generate sufficient cash flow from operations in the future, revenues growth or sustained profitability may not be realized, and future borrowings or equity sales may not be available in amounts sufficient to make anticipated capital expenditures, finance our strategies, or repay our indebtedness.
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Cash Flow Analysis
Net cash provided by operating activities for the nine months ended September 30, 2024 was $7.6 billion, resulting from net income of $4.8 billion, a favorable net impact from adjustments for non-cash and other items of $1.3 billion, and a favorable net change in working capital and other assets and liabilities of $1.5 billion. Non-cash and other items were principally associated with depreciation and amortization, stock-based compensation expense, provision for expected credit losses and chargebacks, operating lease amortization, and unrealized foreign currency transaction losses related to Euro-denominated debt. For the nine months ended September 30, 2024, deferred merchant bookings and other current liabilities increased by $2.3 billion and accounts receivable increased by $651 million, primarily due to higher business volumes. Merchant revenues increased while agency revenues decreased for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due to the ongoing shift from agency revenues to merchant revenues at Booking.com.
Net cash provided by operating activities for the nine months ended September 30, 2023 was $6.0 billion, resulting from net income of $4.1 billion, a favorable net impact from adjustments for non-cash and other items of $826 million, and a favorable net change in working capital and other assets and liabilities of $1.1 billion. Non-cash and other items were principally associated with deferred income tax benefit, depreciation and amortization, stock-based compensation expense, provision for expected credit losses and chargebacks, net losses on equity securities, and operating lease amortization. For the nine months ended September 30, 2023, deferred merchant bookings and other current liabilities increased by $2.6 billion and accounts receivable increased by $1.5 billion, primarily due to increases in business volumes.
Net cash provided by investing activities for the nine months ended September 30, 2024 was $204 million, resulting mainly from proceeds from the maturity of investments of $590 million, partially offset with additions to property and equipment of $353 million. Net cash provided by investing activities for the nine months ended September 30, 2023 was $1.5 billion, principally resulting from proceeds from the sale and maturity of investments of $1.8 billion, partially offset with additions to property and equipment of $251 million.
Net cash used in financing activities for the nine months ended September 30, 2024 was $4.3 billion, resulting mainly from payments for the repurchase of common stock of $5.3 billion, payment on the maturity of debt of $1.1 billion, and dividends of $885 million, partially offset with proceeds from the issuance of long-term debt of $3.0 billion. Net cash used in financing activities for the nine months ended September 30, 2023 was $6.4 billion, resulting from payments for the repurchase of common stock of $7.9 billion and payment on the maturity of debt of $500 million, partially offset with proceeds from the issuance of long-term debt of $1.9 billion.
Contingencies
For information related to tax matters, see Note 13 to our Unaudited Consolidated Financial Statements and Part I, Item IA, Risk Factors - "We may have exposure to additional tax liabilities" in our Annual Report on Form 10-K for the year ended December 31, 2023.
For information related to our contingent liabilities, see Note 13 to our Unaudited Consolidated Financial Statements.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-Q, including "Management's Discussion and Analysis of Financial Condition and Results of Operation" in Part I, Item 2, and the documents incorporated by reference contain forward-looking statements. These statements reflect our views regarding current expectations and projections about future events and conditions and are based on currently available information. They are not guarantees of future performance and are subject to risks, uncertainties, and assumptions that are difficult to predict including the Risk Factors identified in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023; therefore, our actual results could differ materially from those expressed or described in the forward-looking statements.
Expressions of future goals and expectations 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. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. However, readers should carefully review the reports and documents we file or furnish from time to time with the Securities and Exchange Commission, particularly our Annual Report on Form 10-K for the year ended December 31, 2023, our subsequent Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
We have exposure to several types of market risk, including changes in interest rates, foreign currency exchange rates, and equity prices. See Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information on our policies and how we manage our exposure to such risks.
See Note 9 to our Unaudited Consolidated Financial Statements for information about our convertible senior notes and other debt. Excluding the effect on the fair value of our convertible senior notes, a hypothetical 100 basis point (1.0%) decrease in interest rates would have resulted in an increase in the estimated fair value of our other debt of approximately $810 million at September 30, 2024. Our convertible senior notes are more sensitive to the equity market price volatility of our shares than changes in interest rates. The fair value of the convertible senior notes will likely increase as the market price of our shares increases and will likely decrease as the market price of our shares falls. Our convertible senior notes due in May 2025 are currently convertible at the option of the holder. If the note holders exercise their option to convert, we deliver cash to repay the principal amount of the notes and deliver shares of common stock or cash, at our option, to satisfy the conversion value in excess of the principal amount.
We face exposure to movements in foreign currency exchange rates as the financial results and the financial condition of our businesses outside of the U.S., which represent a substantial majority of our financial results, are translated from local currencies (principally Euros and British Pounds Sterling) into U.S. Dollars. For example, our total gross bookings increased by 8% for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, but without the impact of changes in foreign currency exchange rates our total gross bookings increased year-over-year on a constant-currency basis by approximately 9%. Our total revenues increased by 10% for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, but without the impact of changes in foreign currency exchange rates, our total revenues increased year-over-year on a constant-currency basis by approximately 11%. See Notes 9 and 14 to our Unaudited Consolidated Financial Statements and Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information about foreign currency transaction gains and losses, changes in foreign currency exchange rates, the impact of such changes on the increase in our revenues and operating margins, and our designation of certain portions of our Euro-denominated debt as a hedge of the foreign currency exposure of the net investment in certain Euro functional currency subsidiaries.
See Notes 5 and 6 to our Unaudited Consolidated Financial Statements for information about our investments in equity securities of publicly-traded companies and private entities. A hypothetical 10% decrease in the fair values at September 30, 2024 of our investments in equity securities of publicly-traded companies and private entities would have resulted in a loss, before tax, of approximately $50 million being recognized in net income.
Item 4. Controls and Procedures
Under the supervision and with the participation of management, including our principal executive officer and our principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such a term is defined under Exchange Act Rule 13a-15(e). Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
In 2022, we began a multi-year implementation to integrate and upgrade certain financial systems and processes, including SAP S4 HANA. As a result of these improvements, there were changes to our internal control over financial reporting processes and procedures. However, there were no changes in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) that occurred during the three months ended September 30, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Further, as the phased integration and upgrade continues, there will be additional changes to our processes and procedures that are likely to impact our internal control over financial reporting.
We believe we are taking the necessary steps to monitor and maintain appropriate internal control over financial reporting during this period of change.
While we expect this implementation to strengthen our internal financial controls by automating certain manual processes and standardizing business processes and reporting across our organization, management will continue to evaluate and monitor our internal controls as the implementation continues.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
A description of any material legal proceedings to which we are a party, and updates thereto, is included in Note 13 to our Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for the three months ended September 30, 2024, and is incorporated into this Part II, Item 1 by reference thereto.
Item 1A. Risk Factors
Our operations and financial results are subject to various risks and uncertainties which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. For a discussion of such risks, please refer to Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table sets forth information relating to repurchases of our equity securities during the three months ended September 30, 2024:
ISSUER PURCHASES OF EQUITY SECURITIES
Period
Total Number of Shares (or Units) Purchased
Average
Price Paid per
Share (or Unit) (1)
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (Dollars in Billions)
July 1, 2024 –
142,510
(2)
$
3,894
142,510
$
10.0
(2)
July 31, 2024
146
(3)
$
3,905
N/A
N/A
August 1, 2024 –
204,921
(2)
$
3,587
204,921
$
9.3
(2)
August 31, 2024
2,200
(3)
$
3,450
N/A
N/A
September 1, 2024 –
116,577
(2)
$
3,945
116,577
$
8.8
(2)
September 30, 2024
152
(3)
$
3,981
N/A
N/A
Total
466,506
464,008
$
8.8
(1) These amounts exclude the 1% excise tax mandated by the Inflation Reduction Act on share repurchases.
(2) Pursuant to a stock repurchase program announced on February 23, 2023, whereby we were authorized to repurchase up to $20 billion of our common stock.
(3) Pursuant to a general authorization, not publicly announced, whereby we are authorized to repurchase shares of our common stock to satisfy employee withholding tax obligations related to stock-based compensation.
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Item 6. Exhibits
The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.
Certification of Ewout L. Steenbergen, the Executive Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Ewout L. Steenbergen, the Executive Vice President and Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104
Cover Page Interactive Data File - the cover page from this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL (included in Exhibit 101).
(a) Previously filed as an exhibit to the Current Report on Form 8-K filed on February 21, 2018 and incorporated herein by reference.
(b) Previously filed as an exhibit to the Current Report on Form 8-K filed on June 4, 2021 and incorporated herein by reference.
(c) Previously filed as an exhibit to the Current Report on Form 8-K filed on April 22, 2024 and incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
BOOKING HOLDINGS INC.
(Registrant)
Date:
October 30, 2024
By:
/s/ Ewout L. Steenbergen
Name: Ewout L. Steenbergen Title: Executive Vice President and Chief Financial Officer
(On behalf of the Registrant and as principal financial officer)