Booking Holdings Inc. [BKNG] Filings

10-Q 1 bkng-20220630.htm 10-Q bkng-20220630

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 June 30, 2022

☐ 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)


Delaware			06-1528493
(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

BKNG

The NASDAQ Global Select Market

2.150% Senior Notes Due 2022

BKNG 22

The NASDAQ Stock Market LLC

2.375% Senior Notes Due 2024

BKNG 24

The NASDAQ Stock Market LLC

0.100% Senior Notes Due 2025

BKNG 25

The NASDAQ Stock Market LLC

1.800% Senior Notes Due 2027

BKNG 27

The NASDAQ Stock Market LLC

0.500% Senior Notes Due 2028

BKNG 28

The 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 July 27, 2022:


Common Stock, par value $0.008 per share						39,706,248
(Class)						(Number of Shares)

Booking Holdings Inc.

Form 10-Q

For the Three Months Ended June 30, 2022


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements			3

Consolidated Balance Sheets at June 30, 2022 (Unaudited) and December 31, 2021			3
Consolidated Statements of Operations (Unaudited) For the Three and Six Months Ended June 30, 2022 and 2021			4
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) For the Three and Six Months Ended June 30, 2022 and 2021			5
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) For the Three and Six Months Ended June 30, 2022 and 2021			6
Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended June 30, 2022 and 2021			8
Notes to Unaudited Consolidated Financial Statements			9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			31

Item 3. Quantitative and Qualitative Disclosures About Market Risk			49

Item 4. Controls and Procedures			50

PART II - OTHER INFORMATION

Item 1. Legal Proceedings			52

Item 1A. Risk Factors			52

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			52

Item 6. Exhibits			53

SIGNATURES			54

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Booking Holdings Inc.

CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share data)


	June 30, 2022		December 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	11,841	$	11,127

Accounts receivable, net (Allowance for expected credit losses of $102 and $101, respectively)	2,249		1,358
Prepaid expenses, net (Allowance for expected credit losses of $30 and $29, respectively)	492		404
Other current assets	342		256
Total current assets	14,924		13,145
Property and equipment, net	858		822
Operating lease assets	445		496
Intangible assets, net	1,925		2,057
Goodwill	2,842		2,887
Long-term investments	2,381		3,175
Other assets, net (Allowance for expected credit losses of $5 and $18, respectively)	1,118		1,059
Total assets	$	24,493	$	23,641
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	2,240	$	1,586
Accrued expenses and other current liabilities	2,364		1,765
Deferred merchant bookings	4,395		906
Short-term debt	1,283		1,989
Total current liabilities	10,282		6,246
Deferred income taxes	805		905
Operating lease liabilities	323		351
Long-term U.S. transition tax liability	711		825
Other long-term liabilities	180		199
Long-term debt	8,190		8,937
Total liabilities	20,491		17,463
Commitments and contingencies (see Note 13)

Stockholders' equity:
Common stock, $0.008 par value, Authorized shares: 1,000,000,000 Issued shares: 63,766,460 and 63,584,444, respectively	—		—
Treasury stock, 23,618,459 and 22,518,391 shares, respectively	(26,664)		(24,290)
Additional paid-in capital	6,278		6,159
Retained earnings	24,640		24,453
Accumulated other comprehensive loss	(252)		(144)
Total stockholders' equity	4,002		6,178
Total liabilities and stockholders' equity	$	24,493	$	23,641

See Notes to Unaudited Consolidated Financial Statements.

Booking Holdings Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Agency revenues	$	2,301	$	1,328	$	3,751	$	2,045
Merchant revenues	1,749		661		2,799		1,034
Advertising and other revenues	244		171		439		222
Total revenues	4,294		2,160		6,989		3,301
Operating expenses:
Marketing expenses	1,737		988		2,884		1,449
Sales and other expenses	465		206		804		318
Personnel, including stock-based compensation of $108, $90, $201 and $199, respectively	635		686		1,231		1,238
General and administrative	207		134		365		253
Information technology	137		93		271		180
Depreciation and amortization	107		108		218		221
Restructuring, disposal, and other exit costs	6		1		42		9

Total operating expenses	3,294		2,216		5,815		3,668
Operating income (loss)	1,000		(56)		1,174		(367)

Interest expense	(76)		(81)		(144)		(179)
Other income (expense), net	220		96		(735)		227

Income (loss) before income taxes	1,144		(41)		295		(319)
Income tax expense (benefit)	287		126		138		(97)
Net income (loss)	$	857	$	(167)	$	157	$	(222)
Net income (loss) applicable to common stockholders per basic common share	$	21.15	$	(4.08)	$	3.86	$	(5.42)
Weighted-average number of basic common shares outstanding (in 000's)	40,512		41,054		40,715		41,014
Net income (loss) applicable to common stockholders per diluted common share	$	21.07	$	(4.08)	$	3.84	$	(5.42)
Weighted-average number of diluted common shares outstanding (in 000's)	40,665		41,054		40,927		41,014

See Notes to Unaudited Consolidated Financial Statements.

Booking Holdings Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income (loss)	$	857	$	(167)	$	157	$	(222)
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustments	(70)		8		(108)		(22)
Losses on cash flow hedges	—		11		—		—
Net unrealized gains on available-for-sale securities	1		98		—		97
Total other comprehensive (loss) income, net of tax	(69)		117		(108)		75
Comprehensive income (loss)	$	788	$	(50)	$	49	$	(147)

See Notes to Unaudited Consolidated Financial Statements.

Booking Holdings Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 and 2021

(In millions, except share data)


	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
	Shares (in 000's)	Amount		Shares (in 000's)	Amount
Balance, March 31, 2022	63,759	$	—	(23,005)	$	(25,390)	$	6,163	$	23,783	$	(183)	$	4,373

Net income	—	—		—	—		—		857		—		857
Foreign currency translation adjustments, net of tax	—	—		—	—		—		—		(70)		(70)

Net unrealized gains on available-for-sale securities, net of tax	—	—		—	—		—		—		1		1


Exercise of stock options and vesting of restricted stock units and performance share units	7	—		—	—		2		—		—		2
Repurchase of common stock	—	—		(613)	(1,274)		—		—		—		(1,274)
Stock-based compensation and other stock-based payments	—	—		—	—		113		—		—		113


Balance, June 30, 2022	63,766	$	—	(23,618)	$	(26,664)	$	6,278	$	24,640	$	(252)	$	4,002

	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss
	Shares (in 000's)	Amount		Shares (in 000's)	Amount								Total
Balance, December 31, 2021	63,584	$	—	(22,518)	$	(24,290)	$	6,159	$	24,453	$	(144)	$	6,178
Cumulative effect of adoption of accounting standards update	—	—		—	—		(96)		30		—		(66)
Net income	—	—		—	—		—		157		—		157
Foreign currency translation adjustments, net of tax	—	—		—	—		—		—		(108)		(108)




Exercise of stock options and vesting of restricted stock units and performance share units	182	—		—	—		5		—		—		5
Repurchase of common stock	—	—		(1,100)	(2,374)		—		—		—		(2,374)
Stock-based compensation and other stock-based payments	—	—		—	—		210		—		—		210


Balance, June 30, 2022	63,766	$	—	(23,618)	$	(26,664)	$	6,278	$	24,640	$	(252)	$	4,002


	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
	Shares (in 000's)	Amount		Shares (in 000's)	Amount
Balance, March 31, 2021	63,562	$	—	(22,511)	$	(24,274)	$	5,965	$	23,233	$	(160)	$	4,764

Net loss	—	—		—	—		—		(167)		—		(167)
Foreign currency translation adjustments, net of tax	—	—		—	—		—		—		8		8
Losses on cash flow hedges, net of tax	—	—		—	—		—		—		11		11
Net unrealized gains on available-for-sale securities, net of tax	—	—		—	—		—		—		98		98


Exercise of stock options and vesting of restricted stock units and performance share units	13	—		—	—		3		—		—		3
Repurchase of common stock	—	—		(4)	(9)		—		—		—		(9)
Stock-based compensation and other stock-based payments	—	—		—	—		96		—		—		96
Reclassification adjustment for convertible debt in mezzanine	—	—		—	—		(5)		—		—		(5)

Balance, June 30, 2021	63,575	$	—	(22,515)	$	(24,283)	$	6,059	$	23,066	$	(43)	$	4,799

	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss
	Shares (in 000's)	Amount		Shares (in 000's)	Amount								Total
Balance, December 31, 2020	63,406	$	—	(22,447)	$	(24,128)	$	5,851	$	23,288	$	(118)	$	4,893

Net loss	—	—		—	—		—		(222)		—		(222)
Foreign currency translation adjustments, net of tax	—	—		—	—		—		—		(22)		(22)

Net unrealized gains on available-for-sale securities, net of tax	—	—		—	—		—		—		97		97


Exercise of stock options and vesting of restricted stock units and performance share units	169	—		—	—		4		—		—		4
Repurchase of common stock	—	—		(68)	(155)		—		—		—		(155)
Stock-based compensation and other stock-based payments	—	—		—	—		209		—		—		209
Reclassification adjustment for convertible debt in mezzanine	—	—		—	—		(5)		—		—		(5)

Balance, June 30, 2021	63,575	$	—	(22,515)	$	(24,283)	$	6,059	$	23,066	$	(43)	$	4,799

See Notes to Unaudited Consolidated Financial Statements.

Booking Holdings Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)


	Six Months Ended June 30,
	2022		2021
OPERATING ACTIVITIES:
Net income (loss)	$	157	$	(222)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	218		221
Provision for expected credit losses and chargebacks	113		37
Deferred income tax benefit	(165)		(120)
Net losses (gains) on equity securities	806		(427)
Stock-based compensation expense and other stock-based payments	201		204
Operating lease amortization	81		91

Unrealized foreign currency transaction gains related to Euro-denominated debt	(68)		(54)


Loss on early extinguishment of debt	—		242
Other	40		47
Changes in assets and liabilities:
Accounts receivable	(1,116)		(820)
Prepaid expenses and other current assets	(181)		(173)
Deferred merchant bookings and other current liabilities	4,861		1,973

Long-term assets and liabilities	(568)		(54)
Net cash provided by operating activities	4,379		945
INVESTING ACTIVITIES:
Purchase of investments	(12)		(15)

Additions to property and equipment	(195)		(124)
Other investing activities	(36)		3
Net cash used in investing activities	(243)		(136)
FINANCING ACTIVITIES:




Proceeds from the issuance of long-term debt	—		2,015

Payments on maturity and redemption of debt	(1,102)		(1,982)
Payments for repurchase of common stock	(2,288)		(150)

Other financing activities	13		(21)
Net cash used in financing activities	(3,377)		(138)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(44)		(1)
Net increase in cash and cash equivalents and restricted cash and cash equivalents	715		670
Total cash and cash equivalents and restricted cash and cash equivalents, beginning of period	11,152		10,582
Total cash and cash equivalents and restricted cash and cash equivalents, end of period	$	11,867	$	11,252
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for income taxes (see Note 18)	$	337	$	406
Cash paid during the period for interest	$	145	$	164

See Notes to Unaudited Consolidated Financial Statements.

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 ("SEC") 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, 2021.

The Unaudited Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries, including acquired businesses from the dates of acquisition. All intercompany 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 "Other income (expense), net" 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.

Impact of COVID-19

In response to the outbreak of COVID-19 (the "COVID-19 pandemic"), as well as subsequent outbreaks driven by new variants of COVID-19, governments and businesses around the world have implemented a variety of restrictive measures to reduce the spread of COVID-19. These measures have had a significant adverse effect on many of the customers on whom the Company's business relies, including hotels and other accommodation providers, airlines, and restaurants, as well as the Company's operations, employees, and consumers. The COVID-19 pandemic and the resulting implementation of restrictive measures resulted in a significant decline in travel activities and consumer demand for related services, in 2020 in particular. The Company's financial results and prospects are almost entirely dependent on the sale of travel-related services. The spread of new variants of COVID-19 has caused uncertainty as to when restrictions will be lifted, if additional restrictions may be initiated or reimposed, if there will be permanent changes to travel behavior patterns, and the timing of distribution and administration of COVID-19 vaccines and other medical interventions globally. See Note 2 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 for further information.

Even though there have been some improvements in the economic and operating conditions for the Company's business since the outset of the COVID-19 pandemic, the Company cannot predict the long-term effects of the pandemic on its business or the travel and restaurant industries as a whole.

Reclassification

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

Recent Accounting Pronouncements

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

On January 1, 2022, the Company adopted the new accounting standards update relating to convertible instruments and contracts in an entity's own equity. Compared to legacy U.S. GAAP, the accounting standards update reduces the number of accounting models for convertible debt instruments, requires fewer embedded conversion features to be separately recognized from the host contract, and amends certain guidance to reduce form-over-substance-based accounting conclusions. Under the updated guidance, upon the initial recognition of convertible debt, the Company presents the entire amount attributable to the debt as a liability. The initial carrying amount of the convertible debt liability is reduced by any direct and

incremental issuance costs paid to third parties that are associated with the convertible debt issuance. No amount attributable to the debt is initially recognized within equity unless the instrument is issued at a substantial premium. In calculating diluted earnings per share, the accounting standards update also requires the use of the if-converted method for the Company's convertible debt.

The Company adopted the accounting standards update on a modified retrospective basis applied to the 0.75% convertible senior notes due May 2025 (see Note 9) resulting in an increase of $30 million to "Retained earnings" as of January 1, 2022. The significant corresponding balance sheet changes as of that date were an increase of $86 million to "Long-term debt" and decreases of $96 million to "Additional paid-in capital" and $21 million to "Deferred income taxes". For the Company’s convertible debt, interest expense for the periods beginning after January 1, 2022 is reflected in the financial statements using interest rates that are closer to the coupon interest rate of the debt rather than the higher imputed interest expense that resulted from the separation of conversion features required by legacy U.S. GAAP. See Note 4 for additional information on net income per share calculations.

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions

In June 2022, the Financial Accounting Standards Board issued an accounting standards update with guidance on the fair value measurement of equity securities subject to contractual sale restrictions. The update clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The update also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The update also requires certain additional disclosures for equity securities subject to contractual sale restrictions. The amendments in this update are effective for the Company from January 1, 2024. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the impact of adopting the accounting standards update.

2. REVENUE

Disaggregation of Revenue

Geographic Information

The Company's revenue from its businesses outside of the U.S. consists of the results of Booking.com, agoda, and Rentalcars.com in their entirety and the results of the KAYAK and OpenTable businesses located outside of the U.S. This classification is independent of where the consumer resides, where the consumer is physically located while using the Company's services, or the location of the travel service provider or restaurant. For example, a reservation made through Booking.com (which is domiciled in the Netherlands) at a hotel in New York by a consumer in the United States is part of the results of the Company's businesses outside of the U.S. The Company's geographic information is as follows (in millions):


			Outside of the U.S.
	United States		The Netherlands		Other		Total
Total revenues for the three months ended June 30,
2022	$	594	$	3,340	$	360	$	4,294
2021	$	393	$	1,601	$	166	$	2,160

Total revenues for the six months ended June 30,
2022	$	1,069	$	5,309	$	611	$	6,989
2021	$	590	$	2,412	$	299	$	3,301

Revenue by Type of Service

Approximately 88% and 87% of the Company's revenues for the three and six months ended June 30, 2022, respectively, and 83% and 84% of the Company's revenues for the three and six months ended June 30, 2021, respectively, relate to online accommodation reservation services. Revenue from all other sources of online travel reservation services 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 subject to refunds for cancellations. The Company expects to complete its performance obligations generally within one year from the reservation date.

Incentive Programs

The Company provides various incentive programs such as referral bonuses, rebates, credits, and discounts. In addition, the Company offers loyalty programs, such as OpenTable's loyalty program, where participating consumers may be awarded loyalty points on current transactions that can be redeemed in the future. The estimated value of the incentives granted and the loyalty points expected to be redeemed is generally recognized as a reduction of revenue at the time they are granted. At June 30, 2022 and December 31, 2021, liabilities of $91 million and $58 million, respectively, for incentives granted and $12 million and $13 million, respectively, for the loyalty programs, were included in "Accrued expenses and other current liabilities" in the Consolidated Balance Sheets.

3. STOCK-BASED COMPENSATION

The Company maintains equity incentive plans that include broad-based grants of restricted stock units, performance share units granted to officers and certain other employees, and stock options granted to certain employees.

Restricted stock units and performance share units granted by the Company during the three and six months ended June 30, 2022 had an aggregate grant-date fair value of $13 million and $463 million, respectively. Restricted stock units and performance share units that vested during the three and six months ended June 30, 2022 had an aggregate fair value at vesting of $12 million and $375 million, respectively. At June 30, 2022, there was $725 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 2.1 years, and $14 million of estimated total future stock-based compensation expense related to unvested stock options to be recognized over a weighted-average period of 0.7 year.

The following table summarizes the activity in restricted stock units for employees and non-employee directors during the six months ended June 30, 2022:


Restricted Stock Units	Shares	Weighted-average Grant-date Fair Value
Unvested at December 31, 2021	281,924		$	1,914

Granted	167,102		$	2,103
Vested	(134,626)		$	1,778
Forfeited	(22,419)		$	2,056
Unvested at June 30, 2022	291,981		$	2,074

During the six months ended June 30, 2021, the Company modified the performance-based awards granted in 2018 and 2019 to its executive officers, to fix the number of shares to be issued, subject to other vesting conditions. The modification, in aggregate, resulted in additional stock-based compensation expense of $40 million, which was recognized over the remaining requisite service periods for the performance-based awards.

The following table summarizes the activity in performance share units for employees during the six months ended June 30, 2022:


Performance Share Units	Shares	Weighted-average Grant-date Fair Value
Unvested at December 31, 2021 (1)	108,323		$	2,123

Granted (2),(3)	50,443		$	2,210
Vested	(44,276)		$	1,859
Performance shares adjustment (4)	34,271		$	2,389
Forfeited	(1,521)		$	2,413
Unvested at June 30, 2022	147,240		$	2,293

(1) Excludes 12,251 performance share units awarded during the year ended December 31, 2021 for which the grant date under ASC 718, Compensation - Stock Compensation, was not established as of December 31, 2021. Among other conditions, for the grant date to be established, a mutual understanding is required to be reached between the Company and the employee of the key terms and conditions of the award, including the performance targets. The performance targets for each of the annual performance periods under the award are set at the beginning of the respective year.

(2) Excludes 9,692 performance share units awarded during the six months ended June 30, 2022 for which the grant date under ASC 718 has not been established as of June 30, 2022.

(3) Includes 7,856 performance share units awarded during the year ended December 31, 2021 for which the grant date under ASC 718 was established.

(4) Probable outcome for performance-based awards is updated based upon changes in actual and forecasted operating results or expected achievement of performance goals, as applicable, and the impact of modifications.

The following table summarizes the activity in stock options during the six months ended June 30, 2022:


Employee Stock Options	Number of Shares	Weighted-average Exercise Price			Aggregate Intrinsic Value (in millions)			Weighted-average Remaining Contractual Term (in years)
Balance, December 31, 2021	135,851		$	1,407		$	135	8.3

Exercised	(3,813)		$