Table of Contents

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 MARCH 31,JUNE 30, 2023

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: 001-39576

Global Business Travel Group, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware

98-0598290

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

666 3rd Avenue, 4th Floor

New YorkNY 10017

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (480646909-1740344-1290

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Class A common stock, par value $0.0001 per share

GBTG

The New York Stock Exchange

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, 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  

As of May 5,August 7, 2023, the registrant had 69,912,660465,033,204 shares of Class A common stock, par value $0.0001 per share, and 394,448,481 shares of Class B common stock, par value $0.0001 per share outstanding.

Table of Contents

Table of Contents

    

Page

PART I. FINANCIAL INFORMATION

Item 1.

Consolidated Financial Statements

Consolidated Balance Sheets as of March 31,June 30, 2023 (Unaudited) and December 31, 2022

2

Consolidated Statements of Operations for the Three and Six Months Ended March 31,June 30, 2023 and 2022 (Unaudited)

3

Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended March 31,June 30, 2023 and 2022 (Unaudited)

4

Consolidated Statements of Cash Flows for the ThreeSix Months Ended March 31,June 30, 2023 and 2022 (Unaudited)

5

Consolidated Statements of Changes in Total Stockholders’ Equity for the Three and Six Months Ended March 31,June 30, 2023 and 2022 (Unaudited)

6

Notes to the Consolidated Financial Statements (Unaudited)

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

2931

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

4348

Item 4.

Controls and Procedures

4449

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

4550

Item 1A.

Risk Factors

4550

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

4550

Item 3.

Defaults Upon Senior Securities

4550

Item 4.

Mine Safety Disclosures

4550

Item 5.

Other Information

4550

Item 6.

Exhibits

4651

Signatures

4752

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. Consolidated Financial Statements

GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED BALANCE SHEETS

    

March 31, 

    

December 31, 

    

June 30, 

    

December 31, 

(in $ millions, except share and per share data)

2023

2022

2023

2022

(Unaudited)

(Unaudited)

Assets

  

  

  

  

Current assets:

 

  

 

  

 

  

 

  

Cash and cash equivalents

$

320

$

303

$

335

$

303

Accounts receivable (net of allowance for credit losses of $27 and $23 as of March 31, 2023 and December 31, 2022, respectively)

 

928

 

765

Accounts receivable (net of allowance for credit losses of $26 and $23 as of June 30, 2023 and December 31, 2022, respectively)

 

953

 

765

Due from affiliates

 

28

 

36

 

38

 

36

Prepaid expenses and other current assets

 

174

 

130

 

161

 

130

Total current assets

 

1,450

 

1,234

 

1,487

 

1,234

Property and equipment, net

 

228

 

218

 

228

 

218

Equity method investments

 

14

 

14

 

13

 

14

Goodwill

 

1,198

 

1,188

 

1,207

 

1,188

Other intangible assets, net

 

616

 

636

 

597

 

636

Operating lease right-of-use assets

 

60

 

58

 

51

 

58

Deferred tax assets

 

339

 

333

 

340

 

333

Other non-current assets

 

44

 

47

 

57

 

47

Total assets

$

3,949

$

3,728

$

3,980

$

3,728

Liabilities and stockholders’ equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

$

350

$

253

$

386

$

253

Due to affiliates

 

85

 

48

 

52

 

48

Accrued expenses and other current liabilities

 

426

 

452

 

447

 

452

Current portion of operating lease liabilities

 

17

 

17

 

17

 

17

Current portion of long-term debt

 

4

 

3

 

6

 

3

Total current liabilities

 

882

 

773

 

908

 

773

Long-term debt, net of unamortized debt discount and debt issuance costs

 

1,351

 

1,219

 

1,353

 

1,219

Deferred tax liabilities

 

20

 

24

 

19

 

24

Pension liabilities

 

145

 

147

 

146

 

147

Long-term operating lease liabilities

 

62

 

61

 

58

 

61

Earnout derivative liabilities

87

90

106

90

Other non-current liabilities

 

50

 

43

 

51

 

43

Total liabilities

 

2,597

 

2,357

 

2,641

 

2,357

Commitments and Contingencies (see note 11)

 

 

 

 

Stockholders’ equity:

 

 

 

 

Class A common stock (par value $0.0001; 3,000,000,000 shares authorized; 69,498,992 shares and 67,753,543 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively)

 

 

Class B common stock (par value $0.0001; 3,000,000,000 shares authorized; 394,448,481 shares issued and outstanding as of both March 31, 2023 and December 31, 2022)

 

 

Class A common stock (par value $0.0001; 3,000,000,000 shares authorized; 70,429,526 shares and 67,753,543 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively)

 

 

Class B common stock (par value $0.0001; 3,000,000,000 shares authorized; 394,448,481 shares issued and outstanding as of both June 30, 2023 and December 31, 2022) (1)

 

 

Additional paid-in capital

346

334

373

334

Accumulated deficit

 

(177)

 

(175)

 

(191)

 

(175)

Accumulated other comprehensive loss

 

(7)

 

(7)

 

(5)

 

(7)

Total equity of the Company’s stockholders

 

162

 

152

 

177

 

152

Equity attributable to non-controlling interest in subsidiaries

 

1,190

 

1,219

 

1,162

 

1,219

Total stockholders’ equity

 

1,352

 

1,371

 

1,339

 

1,371

Total liabilities and stockholders’ equity

$

3,949

$

3,728

$

3,980

$

3,728

(1)See note 20 - Subsequent Events

See notes to consolidated financial statements

2

Table of Contents

GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED STATEMENTSTATEMENTS OF OPERATIONS

(Unaudited)

Three months ended

March 31, 

(in $ millions, except share and per share data)

    

2023

    

2022

Revenue

$

578

$

350

Costs and expenses:

Cost of revenue (excluding depreciation and amortization shown separately below)

241

173

Sales and marketing

103

74

Technology and content

98

90

General and administrative

76

63

Restructuring charges

23

2

Depreciation and amortization

46

44

Total operating expenses

587

446

Operating loss

(9)

(96)

Interest expense

(34)

(19)

Fair value movement on earnout derivative liabilities

3

Other income, net

5

Loss before income taxes and share of losses from equity method investments

(35)

(115)

Benefit from income taxes

8

25

Share of losses from equity method investments

(1)

Net loss

(27)

(91)

Less: net loss attributable to non-controlling interests in subsidiaries

(25)

(91)

Net loss attributable to the Company’s Class A common stockholders

$

(2)

$

Basic loss per share attributable to the Company’s Class A common stockholders

$

(0.03)

Weighted average number of shares outstanding - Basic

 

60,376,708

 

Diluted loss per share attributable to the Company’s Class A common stockholders

 

$

(0.06)

 

Weighted average number of shares outstanding - Diluted

454,825,189

Three months ended

Six months ended

June 30, 

June 30, 

(in $ millions, except share and per share data)

    

2023

    

2022

    

2023

    

2022

Revenue

$

592

$

486

$

1,170

$

836

Costs and expenses:

Cost of revenue (excluding depreciation and amortization shown separately below)

242

199

483

372

Sales and marketing

102

85

205

159

Technology and content

102

97

200

187

General and administrative

88

84

164

147

Restructuring charges

7

(5)

30

(3)

Depreciation and amortization

49

45

95

89

Total operating expenses

590

505

1,177

951

Operating income (loss)

2

(19)

(7)

(115)

Interest expense

(35)

(24)

(69)

(43)

Fair value movement on earnouts and warrants derivative liabilities

(19)

36

(16)

36

Other (loss) income, net

(5)

2

2

Loss before income taxes and share of losses from equity method investments

(57)

(5)

(92)

(120)

Benefit from income taxes

2

4

10

29

Share of losses from equity method investments

(1)

(2)

Net loss

(55)

(2)

(82)

(93)

Less: net loss attributable to non-controlling interests in subsidiaries

(41)

(23)

(66)

(114)

Net (loss) income attributable to the Company’s Class A common stockholders

$

(14)

$

21

$

(16)

$

21

Basic (loss) earnings per share attributable to the Company’s Class A common stockholders

$

(0.23)

$

0.44

$

(0.27)

$

0.44

Weighted average number of shares outstanding - Basic

 

61,852,280

 

48,867,969

61,118,570

48,867,969

Diluted loss per share attributable to the Company’s Class A common stockholders

 

$

(0.23)

 

$

$

(0.27)

$

(0.21)

Weighted average number of shares outstanding - Diluted

61,852,280

444,320,221

61,118,570

444,320,221

See notes to consolidated financial statements

3

Table of Contents

GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

    

Three months ended

March 31, 

(in $ millions)

    

2023

    

2022

Net loss

$

(27)

$

(91)

Other comprehensive (loss) income, net of tax:

  

  

Change in currency translation adjustments, net of tax

 

9

 

(16)

Unrealized gains on cash flow hedge, net of tax

 

 

Unrealized (loss) gains on cash flow hedges arising during the period

(11)

9

Unrealized gains on cash flow hedges reclassed to interest expense

(2)

Other comprehensive loss, net of tax

 

(4)

 

(7)

Comprehensive loss

 

(31)

 

(98)

Less: Comprehensive loss attributable to non-controlling interests in subsidiaries

 

(29)

 

(98)

Comprehensive loss attributable to the Company’s Class A common stockholders

$

(2)

$

    

Three months ended

 

Six months ended

June 30, 

June 30, 

(in $ millions)

    

2023

    

2022

    

2023

    

2022

Net loss

$

(55)

$

(2)

 

$

(82)

$

(93)

Other comprehensive (loss) income, net of tax:

  

  

 

Change in currency translation adjustments, net of tax

 

4

 

(74)

13

(90)

Unrealized gains on cash flow hedge, net of tax:

 

 

Unrealized gains on cash flow hedges arising during the period

14

4

3

13

Unrealized gains on cash flow hedges reclassed to interest expense

(2)

(4)

Amortization of actuarial (loss) gain and prior service cost in net periodic pension cost, net of tax

 

(1)

 

1

(1)

1

Other comprehensive income (loss), net of tax

 

15

 

(69)

11

(76)

Comprehensive loss

 

(40)

 

(71)

(71)

(169)

Less: Comprehensive loss attributable to non-controlling interests in subsidiaries

 

(28)

 

(88)

(57)

(186)

Comprehensive (loss) income attributable to the Company’s Class A common stockholders

$

(12)

$

17

$

(14)

$

17

See notes to consolidated financial statements

4

Table of Contents

GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three months ended

March 31, 

(in $ millions)

    

2023

    

2022

Operating activities:

 

  

 

  

Net loss

$

(27)

$

(91)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

Depreciation and amortization

 

46

 

44

Deferred tax benefit

 

(9)

 

(26)

Equity-based compensation

 

19

 

3

Allowance for credit losses

6

Fair value movements on earnout derivative liabilities

 

(3)

 

Other

 

 

12

Defined benefit pension funding

(7)

(6)

Changes in working capital

 

 

Accounts receivables

 

(163)

 

(189)

Prepaid expenses and other current assets

 

(47)

 

(3)

Due from affiliates

 

8

 

9

Due to affiliates

 

37

 

Accounts payable, accrued expenses and other current liabilities

63

93

Net cash used in operating activities

 

(77)

 

(154)

Investing activities:

 

 

Purchase of property and equipment

 

(32)

 

(21)

Net cash used in investing activities

(32)

(21)

Financing activities:

 

 

Proceeds from senior secured term loans

 

131

 

Repayment of senior secured term loans

 

(1)

 

(1)

Repayment of finance lease obligations

 

(2)

 

(2)

Payment of debt financing costs

 

(2)

 

Payment of offering costs

(4)

Other

(4)

Net cash from (used in) financing activities

 

122

 

(7)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

4

 

(3)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

17

 

(185)

Cash, cash equivalents and restricted cash, beginning of period

316

525

Cash, cash equivalents and restricted cash, end of period

$

333

$

340

Supplemental cash flow information:

 

 

Cash refund for income taxes (net of payments)

$

2

$

1

Cash paid for interest (net of interest received)

$

33

$

18

Dividend accrued on preferred shares

$

$

5

Non-cash additions for operating lease right-of-use assets

$

5

$

Deferred offering costs accrued during the period

$

$

4

Six months ended

June 30, 

(in $ millions)

    

2023

    

2022

Operating activities:

 

  

 

  

Net loss

$

(82)

$

(93)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

Depreciation and amortization

 

95

 

89

Deferred tax benefit

 

(13)

 

(31)

Equity-based compensation

 

41

 

8

Allowance for credit losses

7

1

Fair value movement on earnouts and warrants derivative liabilities

 

16

 

(36)

Other

 

5

 

4

Defined benefit pension funding

 

(14)

 

(19)

Proceeds from termination of interest rate swap

23

Changes in working capital:

 

 

Accounts receivable

 

(193)

 

(346)

Prepaid expenses and other current assets

 

(36)

 

(8)

Due from affiliates

 

 

(15)

Due to affiliates

 

8

 

Accounts payable, accrued expenses and other current liabilities

135

114

Net cash used in operating activities

 

(31)

 

(309)

Investing activities:

 

 

Purchase of property and equipment

 

(59)

 

(42)

Other

(5)

Net cash used in investing activities

(64)

(42)

Financing activities:

 

 

Proceeds from reverse recapitalization, net

 

 

269

Redemption of preference shares

 

 

(168)

Proceeds from senior secured term loans

 

131

 

200

Repayment of senior secured term loans

 

(1)

 

(1)

Repayment of finance lease obligations

 

(2)

 

(2)

Payment of debt financing costs

 

(2)

 

Other

(3)

Net cash from financing activities

 

123

 

298

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

4

 

(16)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

32

 

(69)

Cash, cash equivalents and restricted cash, beginning of period

316

525

Cash, cash equivalents and restricted cash, end of period

$

348

$

456

Supplemental cash flow information:

 

 

Cash refund for income taxes (net of payments)

$

$

1

Cash paid for interest (net of interest received)

$

70

$

38

Dividend accrued on preferred shares

$

$

8

Non-cash additions for operating lease right-of-use assets

$

5

$

Non-cash additions for finance lease

$

3

$

Issuance of shares to settle liability

$

4

$

Cash, cash equivalents and restricted cash consist of:

March 31, 

December 31, 

June 30, 

December 31, 

(in $ millions)

    

2023

    

2022

    

2023

    

2022

Cash and cash equivalents

$

320

$

303

$

335

$

303

Restricted cash (included in other non-current assets)

 

13

 

13

 

13

 

13

Cash, cash equivalents and restricted cash

$

333

$

316

$

348

$

316

See notes to consolidated financial statements

5

Table of Contents

GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL STOCKHOLDERS’ EQUITY

(Unaudited)

Equity

Accumulated

 attributable to

Class A

Class B

Additional

 other

Total equity of

non-controlling

Total 

common stock

common stock

 paid-in

Accumulated

 comprehensive

the Company’s

 interest in 

stockholders’

(in $ millions, except share and per share data)

    

Number

    

Amount

    

Number

    

Amount

 capital

    

deficit

    

 loss

    

 stockholders

    

subsidiaries

    

 equity

Balance as of December 31, 2022

67,753,543

394,448,481

$

334

$

(175)

$

(7)

$

152

$

1,219

$

1,371

Equity-based compensation

19

19

19

Shares issued, net, on vesting of / exercise of equity awards (see note 14)

2,849,386

1

1

1

Shares withheld for taxes in relation to vesting of / exercise of equity awards (see note 14)

(1,103,937)

(8)

(8)

(8)

Other comprehensive loss, net of tax

(4)

(4)

Net loss

(2)

(2)

(25)

(27)

Balance as of March 31, 2023

69,498,992

394,448,481

$

346

$

(177)

$

(7)

$

162

$

1,190

$

1,352

Equity

Accumulated

 attributable to

Class A

Class B

Additional

 other

Total equity of

non-controlling

Total 

common stock

common stock (1)

 paid-in

Accumulated

 comprehensive

the Company’s

 interest in 

stockholders’

(in $ millions, except share data)

    

Number

    

Amount

    

Number

    

Amount

 capital

    

deficit

    

 loss

    

 stockholders

    

subsidiaries

    

 equity

Balance as of December 31, 2022

67,753,543

394,448,481

$

334

$

(175)

$

(7)

$

152

$

1,219

$

1,371

Equity-based compensation

19

19

19

Shares issued, net, on vesting of / exercise of equity awards (see note 14)

2,849,386

1

1

1

Shares withheld for taxes in relation to vesting of / exercise of equity awards (see note 14)

(1,103,937)

(8)

(8)

(8)

Other comprehensive loss, net of tax

(4)

(4)

Net loss

(2)

(2)

(25)

(27)

Balance as of March 31, 2023

69,498,992

394,448,481

$

346

$

(177)

$

(7)

$

162

$

1,190

$

1,352

Equity-based compensation

22

22

22

Shares issued on vesting of / exercise of equity awards (see note 14)

355,125

1

1

1

Shares issued to settle liability (see note 19)

575,409

4

4

4

Other comprehensive income, net of tax

2

2

13

15

Net loss

(14)

(14)

(41)

(55)

Balance as of June 30, 2023

70,429,526

394,448,481

373

(191)

(5)

177

1,162

1,339

    

    

Equity

Accumulated

 attributable to

Voting ordinary

Non-Voting

Profit

Class A

Class B

Additional

 other

Total equity of

non-controlling

Total 

shares

ordinary shares

shares

common stock

common stock

 paid-in

Accumulated

 comprehensive

the Company’s

 interest in 

stockholders’

(in $ millions except share and per share data)

    

Number

    

Amount

    

Number

    

Amount

    

Number

    

Amount

    

Number

    

Amount

    

Number

    

Amount

    

capital

    

deficit

    

 loss

    

 stockholders

    

subsidiaries

    

 equity

Balance as of December 31, 2021

36,000,000

8,413,972

800,000

$

2,560

$

(1,065)

$

(162)

$

1,333

$

1

$

1,334

Dividend on preferred shares

(5)

(5)

(5)

Equity-based compensation

3

3

3

Other comprehensive loss, net of tax

(7)

(7)

(7)

Net loss

(91)

(91)

(91)

Balance as of March 31, 2022

36,000,000

8,413,972

800,000

$

2,558

$

(1,156)

$

(169)

$

1,233

$

1

$

1,234

    

    

Equity

Accumulated

 attributable to

Voting ordinary

Non-Voting

Profit

Class A

Class B

Additional

 other

Total equity of

non-controlling

Total 

shares

ordinary shares

shares

common stock

common stock

 paid-in

Accumulated

 comprehensive

the Company’s

 interest in 

stockholders’

(in $ millions, except share data)

    

Number

    

Amount

    

Number

    

Amount

    

Number

    

Amount

    

Number

    

Amount

    

Number

    

Amount

    

capital

    

deficit

    

 loss

    

 stockholders

    

subsidiaries

    

 equity

Balance as of December 31, 2021

36,000,000

8,413,972

800,000

$

2,560

$

(1,065)

$

(162)

$

1,333

$

1

$

1,334

Dividend on preferred shares

(5)

(5)

(5)

Equity-based compensation

3

3

3

Other comprehensive loss, net of tax

(7)

(7)

(7)

Net loss

(91)

(91)

(91)

Balance as of March 31, 2022

36,000,000

8,413,972

800,000

2,558

(1,156)

(169)

1,233

1

1,234

Dividend on preferred shares

(3)

(3)

(3)

Equity-based compensation prior to reverse recapitalization

2

2

2

Additional shares issued to Expedia

59,111

6

6

6

Net loss prior to reverse recapitalization

(30)

(30)

(30)

Other comprehensive loss, net of tax, prior to reverse recapitalization

(40)

(40)

(40)

Reverse recapitalization, net

(36,000,000)

(8,473,083)

(800,000)

56,945,033

394,448,481

(2,322)

1,037

183

(1,102)

1,197

95

Equity-based compensation after the reverse recapitalization

3

3

3

Net income after the reverse recapitalization

21

21

7

28

Other comprehensive loss, net of tax, after the reverse recapitalization

(4)

(4)

(25)

(29)

Balance as of June 30, 2022

56,945,033

394,448,481

$

244

$

(128)

$

(30)

$

86

$

1,180

$

1,266

(1)See note 20 - Subsequent Events

See notes to consolidated financial statements

6

Table of Contents

GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)(UNAUDITED)

(1)   Business Description and Basis of Presentation

Global Business Travel Group, Inc. (“GBTG”), and its consolidated subsidiaries, including GBT JerseyCo Limited (“GBT JerseyCo” and all together the “Company”), is a leading platform serving travel primarily for business purposes and provides a full suite of differentiated, technology-enabled solutions to business travelers and clients, suppliers of travel content (such as airlines, hotels, ground transportation and aggregators) and third-party travel agencies. The Company manages end-to-end logistics of business travel and provides a link between businesses and their employees, travel suppliers, and other industry participants.

On December 2, 2021, GBT JerseyCo entered into a business combination agreement (“Business Combination Agreement”) with GBTG (formerly known as Apollo Strategic Growth Capital (“APSG”or “APSG”), a special purpose acquisition company, listed on the New York Stock Exchange (the “Business Combination”). The Business Combination closed on May 27, 2022 and GBT JerseyCo became a direct subsidiary of APSG. Further, APSGGBTG. The Business Combination was renamedaccounted for as “Globala reverse recapitalization, whereby GBT JerseyCo was considered the accounting acquirer in the transaction and the predecessor entity of GBTG. Accordingly, no assets or liabilities were measured at fair value, and no goodwill or other intangible assets were recognized as a result of the Business Travel Group, Inc.”Combination.

GBTG is a Delaware corporation and tax resident in the United States of America (“U.S.”).

The Company has one reportable segment.

Simplification of organization and capital structure

As of June 30, 2023 and prior to giving effect to the Corporate Simplification (as defined below):

(a)GBTG conductsheld its business throughinvestments in GBT JerseyCo (a tax resident in the United Kingdom (“U.K.”)) and its subsidiaries inthrough an umbrella partnership-C corporation structure (“Up-C structure”). and  GBT JerseyCo is tax resident in the United Kingdom (“U.K.”). GBT JerseyCo iswas considered as a partnership for U.S. tax purposes and its members consistspurposes;
(b)GBT JerseyCo’s holders of GBTG,B Ordinary Shares were American Express Travel Holdings Netherlands Coöperatief U.A. (“Amex Coop”), a resident of the Netherlands, Juweel Investors (SPC) Limited (a successor entity of Juweel Investors Limited) (“Juweel”), a resident of Cayman Islands, and EG Corporate Travel Holdings LLC (“Expedia”) (collectively,, and collectively, with Amex Coop and Juweel the “Continuing JerseyCo Owners”);
(c)GBTG owned A Ordinary Shares of GBT JerseyCo carrying 100% of voting interest and approximately 15% of economic interest in GBT JerseyCo, and Continuing JerseyCo Owners owned B Ordinary Shares of GBT JerseyCo carrying no voting interest and approximately 85% of economic interests in GBT JerseyCo; and
(d)Continuing JerseyCo Owners owned Class B Common Stock of GBTG carrying approximately 85% of voting interest and nominal economic interest in GBTG, and other public stockholders owned GBTG’s Class A Common Stock carrying approximately 15% of economic and voting interest in GBTG.

On July 10, 2023, GBTG entered into a series of transactions that simplified its organizational structure by eliminating the Company’s Up-C structure (the “Corporate Simplification”).

The Company has one reportable segment. See note 20 – Subsequent Events for further details.

Impact of COVID-19

The outbreakThere have been improvements in the Company’s business and operating conditions since the outset of the novel strainCOVID-19 pandemic in March 2020; however, the Company cannot predict the long-term effects of the coronavirus (“COVID-19”) severely restricted the level of economic activity around the world beginning in 2020. Government measures implemented then to contain the spread of COVID-19, such as imposing restrictionspandemic on travel and business operations, limited business travel significantly below 2019 levels.

Since then, many countries have vaccinated a reasonable proportion of their population and the spread of the virus is now being contained to varying degrees in different countries. With the evolution of milder COVID-19 variants, availability of multiple vaccine booster doses and increasing familiarity with the virus, many COVID-19 relatedits business. As travel restrictions have been lifted with countries aroundrelaxed and travel patterns return, the world reopening their borders for foreign travel and clients becoming more comfortable traveling. This has led to a moderation, and to an extent, recovery, of the more severe declines in business travel bookings experienced at the height of the pandemic and during periods of resurgence. The Company has seen gradual improvement in its transactionkey volume sincemetrics during 2022 and through the third quarterfirst half of 2021, and while the global travel activity has since shown a recovery trend, it still remains below 2019 levels.2023. Although the Company’s results for the three months ended March 31,first quarter of 2022 included a strong recovery from the pandemic, when compared to the same periods in 2020 and 2021, the Omicron variant of COVID-19 limited the recovery of the Company’s business during that period, such thatperiod. Consequently, the results for the threesix months ended March 31,June 30, 2023 reflect notable improvementinclude upside from such recovery in comparison.comparison to the same period in the prior year. The Company incurred a net loss of $27$82 million and had cash outflows from operations of $77$31 million during the threesix months ended March 31,June 30, 2023, compared to a net loss of $91$93 million and cash outflows from operations of $154$309 million during the threesix months ended March 31,June 30, 2022.

Overall, the full duration and total impact of COVID-19 remains uncertain and it is difficult to predict how the recovery will unfold for the travel industry and, in particular, the Company’s business, going forward. The severity and duration of resurgence of COVID-19 variants, as well as uncertainty over the efficacy of the vaccines against such new variants of the virus, may contribute to delays in economic recovery.

7

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)(UNAUDITED)

Governments of multiple countries extendedimplemented several programs to help businesses during the COVID-19 pandemic through loans, wage subsidies, tax relief or deferrals and other financial aid. The Company participated in several of these government programs. During the three and six months ended March 31, 2023, andJune 30, 2022, the Company recognized in its consolidated statements of operations government grants and other assistance benefits for salaries and wages of $0$1 million and $6$7 million, respectively, as a reduction of expenses. There were no government grants recognized in the consolidated statement of operations during the six months ended June 30, 2023. As of both March 31,June 30, 2023, and December 31, 2022, the Company had a receivable of $1 million and $13 million, respectively, in relation to such government grants, which is included in the accounts receivable balance in the consolidated balance sheets. These relate to payments that are expected to be received under the government programs where the Company has met the qualifying requirements and it is probable that payments will be received.

The Company believes its liquidity is important given the limited ability to predict its future financial performance due to the uncertaintyuncertainties associated with the recovery from the COVID-19 pandemic and/or resurgencepotential economic slowdown due to new variants. Since March 2020, theprevailing adverse macro-economic conditions. The Company has taken several measures to preserve and enhance its liquidity, including initiating a business response plan to the COVID-19 pandemic (voluntaryadditional term loans in January 2023 (see note 10 – Long-term Debt) and involuntary redundancies, flexible workings, mandatory pay reductions, consolidating facilities, etc.),restructuring initiatives (see note 9 –Restructuring and entering into several financial transactions, including debt financing / refinancing transactions and the consummation of the Business Combination.Related Costs). Apart from the expectation of the recovery in its business operations, the Company continues to further explore other capital market transactions, process rationalizations and cost reduction measures to improve its liquidity position. In January 2023, the Company amended its senior secured credit agreement to obtain additional term loans in a principal amount of $135 million to further strengthen its liquidity position (see note 10 – Long-term Debt). The Company also announced a restructuring plan to further streamline its operations and to build efficiencies in its operating model that will result in a reduction in its work force and cost savings (see note 9 –Restructuring).

Based on the Company’s current and expected operating plan, existing cash and cash equivalents, the recovery of business travel indicated by recent volume trends, the Company’s mitigation measures taken or planned to strengthen its liquidity and financial position, along with the Company’s available funding capacity and cash flows from operations, the Company believes it has adequate liquidity to meet the future operating, investingoperational and financingother needs of the business for a minimum period of twelve months.

Basis of Presentation

The Company’s consolidated financial statements include the accounts of GBTG, its wholly- ownedwholly-owned subsidiaries and entities controlled by GBTG, including GBT JerseyCo. There are no entities that have been consolidated due to control through operating agreements, financing agreements or as the primary beneficiary of a variable interest entity. The Company reports the non-controlling ownership interests in subsidiaries that are held by third-party owners as equity attributable to non-controlling interests in subsidiaries on the consolidated balance sheets. The portion of income or loss attributable to third-party owners for the reporting periods is reported as net income (loss) attributable to non-controlling interests in subsidiaries on the consolidated statements of operations. The Company has eliminated intercompany transactions and balances in its consolidated financial statements.

For the periods prior to the Business Combination, the consolidated financial statements of the Company comprise the accounts of GBT JerseyCo and its wholly-owned subsidiaries. All intercompany accounts and transactions among GBT JerseyCo and its consolidated subsidiaries were eliminated.

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial reporting. As such, certain notes or other information that are normally required by U.S. GAAP have been omitted if they substantially duplicate the disclosures contained in the Company’s annual audited consolidated financial statements. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2022, included in the Annual Report on Form 10-K filed with the Securities and Exchange Commission, United States (the “SEC”) on March 21, 2023 (the “Annual Report on Form 10-K”). The Company has included all normal recurring items and adjustments necessary for a fair presentation of the results of the interim period. The Company’s interim unaudited consolidated financial statements are not necessarily indicative of results that may be expected for any other interim period or for the full year.

8

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, supplier revenue, allowance for credit losses, depreciable lives of property and equipment, acquisition purchase price allocations including valuation of acquired intangible assets and goodwill and contingent consideration, fair value determination of equity-based compensation, valuation of operating lease right-of-use (“ROU”) assets, impairment of goodwill, other intangible assets, long-lived assets, capitalized client incentives and investments in equity method investments, valuation allowances on deferred income

8

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

taxes, valuation of pensions, interest rate swaps, earnout shares and contingencies. Actual results could differ materially from those estimates.

The COVID-19 pandemic has created and may continue to create significant uncertainty in macroeconomic conditions, which may cause further business disruptions and adversely impact the Company’s results of operations. As a result, manyMany of the Company’s estimates and assumptions require increased judgment.judgment as a result of several macroeconomic conditions, including those resulting from long-term recovery from the COVID-19 pandemic. As events continue to evolve and additional information becomes available, the Company’s estimates may change materially in future periods.

(2)   Recently Issued Accounting Pronouncements

Accounting Pronouncements - Adopted

Contracts with Customers Acquired in a Business Combination

In October 2021, the Financial Accounting Standard Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” to add contract assets and contract liabilities acquired in a business combination to the list of exceptions to the recognition and measurement principles that apply to business combinations and to require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with the revenue recognition guidance. This updated guidance amends the current business combination guidance where an acquirer generally recognizes such items at fair value on the acquisition date. The guidance is to be applied prospectively to all business combinations that occur on or after the date of initial application. The Company adopted this guidance on January 1, 2023, as required, and there was no impact on the Company’s consolidated financial statements upon the adoption of this guidance.

Reference rate reforms

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides expedients and exceptions to existing guidance on contract modifications and hedge accounting that is optional to facilitate the market transition from a reference rate, including the London Interbank Offered Rate (“LIBOR”) expected to be discontinued because of reference rate reform, to a new reference rate. The provisions of this ASU impactsimpact contract modifications and other changes that occur while LIBOR is phased out. The guidance is effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06, “Reference Rate Reform: Deferral of the Sunset Date of Topic 848.” As a result of the U.K. Financial Conduct Authority’s decision to extend the cessation date for publishing LIBOR rates from December 31, 2021 to June 30, 2023, the FASB decided to defer the sunset date of this topic from December 31, 2022 to December 31, 2024.

On January 25, 2023, the Company’s senior secured credit agreement was amended, which, among other things, replaced LIBOR with Secured Overnight Financing Rate (“SOFR”) as the benchmark rate applicable to each of its senior secured tranche B-3 term loan facility and the senior secured revolving credit facility (see note 10 - Long-term Debt). The Company also amended its interest rate swap agreement to change its reference rate from LIBOR to SOFR (see note 17 - Derivatives and Hedging). The Company evaluated and applied optional expedients available under this guidance, as applicable, for such transactions and there was no material impact on the Company'sCompany’s consolidated financial statements. The Company continues to evaluate and monitor developments and its assessment of this guidance during the LIBOR transition period.

9

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)(UNAUDITED)

(3)   Revenue from Contracts with Customers

The Company disaggregates revenue based on (i) Travel Revenue which include all revenue relating to servicing a transaction, which can be air, hotel, car rental, rail or other travel-related booking or reservation, and (ii) Product and Professional Services Revenue which include all revenue relating to using the Company’s platform, products and value-added services. The following table presents the Company’s disaggregated revenue by nature of service. Sales and usage-based taxes are excluded from revenue.

    

Three months ended March 31, 

    

Three months ended June 30, 

 

Six months ended June 30, 

(in $ millions)

    

2023

    

2022

    

2023

    

2022

    

2023

    

2022

Travel revenue

$

467

$

257

$

479

$

388

$

946

$

645

Products and professional services revenue

 

111

 

93

 

113

 

98

 

224

 

191

Total revenue

$

578

$

350

$

592

$

486

$

1,170

$

836

Payments from customers are generally received within 30-60 days of invoicing or from their contractual date agreed under the terms of contract. The Company evaluates collectability of accounts receivable based on a combination of factors and records reserves as described further in note 4 - Allowance for Expected Credit Losses.

Contract Balances

Contract assets represent the Company’s right to consideration in exchange for services transferred to a customer when that right is conditioned on the Company’s future performance obligations. Contract liabilities represent the Company’s obligation to transfer services to a customer for which the Company has received consideration (or the amount is due) from the customer.

The opening and closing balances of the Company’s accounts receivables,receivable, net, and contract liabilities are as follows:

    

    

Contract

    

Contract

    

    

Contract

liabilities

liabilities

liabilities

Accounts

Client

Deferred

Accounts

Client

Deferred

receivable,

incentives, net

revenue

receivable,

incentives, net

revenue

(in $ millions)

    

net (1)

    

(non-current)

    

(current)

    

net (1)

    

(non-current)

    

(current)

Balance as of March 31, 2023

$

915

$

18

$

28

Balance as of June 30, 2023

$

952

$

28

$

27

Balance as of December 31, 2022

$

752

$

19

$

19

$

752

$

19

$

19

(1)

Accounts receivable, net, exclude balances not related to contracts with customers.

Deferred revenue is recorded when a performance obligation has not been satisfied but an invoice has been raised. Cash payments received from customers in advance of the Company completing its performance obligations are included in deferred revenue in the Company’s consolidated balance sheets. The Company generally expects to complete its performance obligations under the contracts within one year. During the threesix months ended March 31,June 30, 2023, the cash payments received or due in advance of the satisfaction of the Company’s performance obligations were offset by $10 million of revenue recognized that was included in the deferred revenue balance as of December 31, 2022.

Remaining Performance Obligations

As of March 31,June 30, 2023, the aggregate amount of the transaction price allocated to the Company’s remaining performance obligations was approximately $11$8 million, which the Company expects to recognize as revenue as performance obligations are satisfied over the next ninesix months.

The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected term of one year or less.

10

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)(UNAUDITED)

(4)   Allowances for Expected Credit Losses

The Company estimates expected credit losses upon recognition of the financial assets, which primarily comprise accounts receivable. The Company has identified the relevant risk characteristics of its customers and the related receivables, which include size, type (e.g., business clients vs. travel supplier and credit card vs. non-credit card customers) or geographic location of the customer, or a combination of these characteristics. The Company has considered the historical credit loss experience, current economic conditions, forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses on its accounts receivables.receivable. Other key factors that influence the expected credit loss analysis include customer demographics and payment terms offered in the normal course of business to customers. This is assessed at each quarter based on the Company’s specific facts and circumstances. The movement in Company’s allowance for credit losses for the threesix months ended March 31,June 30, 2023, is set out below:

(in $ millions)

    

Amount

    

Amount

Balance as of December 31, 2022

$

23

$

23

Provision for expected credit losses during the period

 

6

 

7

Write-offs

 

(3)

 

(6)

Foreign exchange

 

1

 

2

Balance as of March 31, 2023

$

27

Balance as of June 30, 2023

$

26

TheUncertain macroeconomic factors, including rising interest rates, potential recession or economic downturn, can have a significant effect on the allowance for credit losses as such conditions could potentially result in the restructuring or bankruptcy of customers. Further, the impact of the COVID-19 pandemic on the global economy and other general increases in aging balances has impacted the Company’s estimate of expected credit losses. Uncertain macroeconomic factors, including the potential recession or economic downturn, and reducing government funding following the peak of COVID-19 in 2020, can have a significant effect on additions to the allowance as the continuing impact of the pandemic could potentially result in the restructuring or bankruptcy of customers. Given thesuch uncertainties, surrounding the duration and effects of COVID-19, the Company cannot provide assurance that the assumptions used in its estimates will be accurate and actual write-offs may vary from such estimates of credit losses.

(5)   Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of:

March 31, 

December 31, 

June 30, 

December 31, 

(in $ millions)

    

2023

    

2022

    

2023

    

2022

Prepaid travel expenses

$

100

$

52

$

80

$

52

Income tax receivable

 

25

 

26

 

26

 

26

Value added and similar taxes receivables

 

10

 

11

 

11

 

11

Other prepayments and receivables

 

39

 

41

 

44

 

41

Prepaid expenses and other current assets

$

174

$

130

$

161

$

130

(6)   Property and Equipment, Net

Property and Equipment consist of:

March 31, 

December 31, 

June 30, 

December 31, 

(in $ millions)

    

2023

    

2022

    

2023

    

2022

Capitalized software for internal use

$

386

$

365

$

408

$

365

Computer equipment

 

72

 

71

 

63

 

71

Leasehold improvements

 

49

 

49

 

51

 

49

Furniture, fixtures and other equipment

 

6

 

5

 

9

 

5

Capital projects in progress

 

12

 

5

 

6

 

5

 

525

 

495

 

537

 

495

Less: accumulated depreciation and amortization

 

(297)

 

(277)

 

(309)

 

(277)

Property and equipment, net

$

228

$

218

$

228

$

218

11

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)(UNAUDITED)

Depreciation and amortization expense related to fixed assets was $23$27 million and $21$22 million for the three months ended March 31,June 30, 2023 and 2022, respectively, and $50 million and $43 million for the six months ended June 30, 2023 and 2022, respectively. Depreciation and amortization expense includes amortization related to capitalized software for internal use amounting to $16$18 million and $14$15 million for the three months ended March 31,June 30, 2023 and 2022, respectively, and $34 million and $29 million for the six months ended June 30, 2023 and 2022, respectively.

(7)   Goodwill and Other Intangible Assets, Net

The following table sets forth changes in goodwill during the threesix months ended March 31,June 30, 2023:

(in $ millions)

    

Amount

    

Amount

Balance as of December 31, 2022

$

1,188

$

1,188

Currency translation adjustments

 

10

 

19

Balance as of March 31, 2023

$

1,198

Balance as of June 30, 2023

$

1,207

There were no goodwill impairment losses recorded during the three and six months ended March 31,June 30, 2023 and 2022 and there are no accumulated goodwill impairment losses as of March 31,June 30, 2023.

The following table sets forth the Company’s other intangible assets with definite lives as of March 31,June 30, 2023 and December 31, 2022:

    

March 31, 2023

    

December 31, 2022

    

June 30, 2023

    

December 31, 2022

Accumulated

Accumulated

Accumulated

Accumulated

(in $ millions)

    

Cost

    

depreciation

    

Net

    

Cost

    

depreciation

    

Net

    

Cost

    

depreciation

    

Net

    

Cost

    

depreciation

    

Net

Trademarks/tradenames

$

114

$

(68)

$

46

$

116

$

(69)

$

47

$

114

$

(70)

$

44

$

116

$

(69)

$

47

Business client relationships

 

795

(259)

536

788

(240)

548

 

799

(274)

525

788

(240)

548

Supplier relationships

 

253

(220)

33

253

(213)

40

 

254

(226)

28

253

(213)

40

Travel partner network

 

4

(3)

1

4

(3)

1

 

4

(4)

4

(3)

1

Other intangible assets

$

1,166

$

(550)

$

616

$

1,161

$

(525)

$

636

$

1,171

$

(574)

$

597

$

1,161

$

(525)

$

636

Amortization expense relating to definite-lived intangibles was $22 million and $23 million for each of the three months ended March 31,June 30, 2023 and 2022, respectively, and $45 million and $46 million for the six months ended June 30, 2023 and 2022, respectively, which is included in depreciation and amortization in the consolidated statements of operations.

(8)   Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of:

March 31, 

December 31, 

June 30, 

December 31, 

(in $ millions)

    

2023

    

2022

    

2023

    

2022

Accrued payroll and related costs

$

153

$

196

$

165

$

196

Accrued operating expenses

 

147

147

 

151

147

Client deposits

48

56

42

56

Deferred revenue

28

19

27

19

Accrued restructuring costs (see note 9)

 

29

11

 

33

11

Value added and similar taxes payable

 

10

 

9

 

11

 

9

Income tax payable

 

4

4

 

4

4

Other payables

 

7

10

 

14

10

Accrued expenses and other current liabilities

$

426

$

452

$

447

$

452

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)(UNAUDITED)

(9)   Restructuring and Related Costs

Employee Severance Costs

On January 24, 2023, the Company announced changes to its internal operating model andmodel. The Company expects to incur total pre-tax restructuring and related charges of approximately $20 million to $25$30 million during the year ending December 31, 2023 in connection with the costs associated with implementing these changes, substantially all of which represent future cash expenditures for the payment of severance and related benefits costs resulting from a reduction in workforce. This strategic realignment and related actions are expected to be substantially complete by the end of 2023.

Facilities Consolidation and Rationalization

During the six months ended June 30, 2023, the Company undertook an initiative to consolidate and rationalize its office facilities at different geographical locations. The Company applied lease reassessment and modification guidance and evaluated the right-of-use assets for potential impairment. Where the Company plans to exit all or distinct portions of a facility and does not have the ability or intent to sublease, the Company accelerates the amortization of operating lease ROU asset and related leasehold improvements at those premises. Accelerated amortization is recognized from the date that the Company approves the plan to fully or partially vacate a facility, for which there is no intent or ability to enter into a sublease, through the final vacate date.

The accelerated amortization of operating lease ROU asset is recorded as a component of general and administrative expense in the Company’s consolidated statements of operations. Accelerated amortization of any related leasehold improvements is recorded as a component of depreciation and amortization in the Company’s consolidated statements of operations. Estimated future costs related to other non-lease components (e.g., common area maintenance charges) were accrued as part of restructuring expense and recorded as a liability on the facilities abandonment date.

The table below sets forth accrued restructuring and related cost included in accrued expenses and other current liabilities, for the threesix months ended March 31,June 30, 2023:

    

Employee 

    

Facility -

    

Facility -

    

(in $ millions)

    

Employee related

    

Facility

    

Total

Related (1)

Non-Lease Related (1)

Lease Related (2)

Total

Balance as of December 31, 2022

$

8

$

3

$

11

$

8

$

3

$

$

11

Accruals

 

23

23

 

28

2

9

39

Non-cash items

(9)

(9)

Cash settled

 

(5)

(5)

 

(8)

(8)

Balance as of March 31, 2023

$

26

$

3

$

29

Balance as of June 30, 2023

$

28

$

5

$

$

33

(1)Charges are recorded within restructuring in the consolidated statements of operations and the liability is included within accrued expenses and other current liabilities.
(2)Accelerated amortization of operating lease ROU assets of $6 million is included within general and administrative expense and accelerated amortization of leasehold improvements of $3 million is included within depreciation and amortization expense in the consolidated statements of operations.

13

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(10) Long-term Debt

The outstanding amount of the Company’s long-term debt consists of:

March 31, 

December 31, 

June 30, 

December 31, 

(in $ millions)

    

2023

    

2022

    

2023

    

2022

Senior Secured Credit Agreement

  

  

Principal amount of senior secured initial term loans (Maturity – August 2025) (1)

$

239

$

239

$

238

$

239

Principal amount of senior secured tranche B-3 term loans (Maturity – December 2026) (2)

 

1,000

1,000

 

1,000

1,000

Principal amount of senior secured tranche B-4 term loans (Maturity – December 2026) (3)

 

135

 

135

Principal amount of senior secured revolving credit facility (Maturity – September 2026) (4)

Other borrowings(5)

2

5

 

1,376

1,239

 

1,378

1,239

Less: Unamortized debt discount and debt issuance costs

 

(21)

(17)

 

(19)

(17)

Total debt, net of unamortized debt discount and debt issuance costs

 

1,355

1,222

 

1,359

1,222

Less: Current portion of long-term debt

 

(4)

(3)

 

(6)

(3)

Long-term debt, non-current, net of unamortized debt discount and debt issuance costs

$

1,351

$

1,219

$

1,353

$

1,219

(1)

Stated interest rate of LIBOR + 2.50% as of March 31,June 30, 2023 and December 31, 2022.

(2)

Stated interest rate of SOFR + 0.1% + 6.75% (with a SOFR floor of 1%) as of March 31,June 30, 2023 and LIBOR + 6.50% (with a LIBOR floor of 1%) as of December 31, 2022.

(3)

Stated interest rate of SOFR + 0.1% + 6.75% (with a SOFR floor of 1%) as of March 31,June 30, 2023.

(4)

Stated interest rate of SOFR + 0.1% + 6.25% (with a SOFR floor of 1%) as of March 31,June 30, 2023 and LIBOR + 2.25% as of December 31, 2022. The senior secured revolving credit facility will automatically terminate on May 14, 2025 if the senior secured initial term loans have not been refinanced, replaced or extended (with a resulting maturity date that is December 16, 2026 or later) or repaid in full prior to May 14, 2025.

(5)

Other borrowings primarily relate to finance leases and equipment sale and lease back transaction.

On January 25, 2023, the senior secured credit agreement was amended to provide for additional term loans, for general corporate purposes, in an aggregate principal amount equal to $135 million (the “tranche B-4 term loans”). The tranche B-4 term loans have substantially the same terms as the existing loans under the senior secured credit agreement’s tranche B-3 term loan facility. The tranche B-4 term loans (i) mature on December 16, 2026, (ii) are issued at a discount of approximately 3%, and (iii) are to be repaid in full on the maturity date.

The amendment further replaced LIBOR with SOFR as the benchmark rate applicable to each of the senior secured tranche B-3 term loan facility and the senior secured revolving credit facility and increased the applicable interest rate margins under such facilities. The tranche B-4 term loans and the existing loans under the senior secured tranche B-3 term loan facility will accrue interest at a variable interest rate based on SOFR plus a leverage-based margin ranging from 5.25% to 6.75% per annum, and loans under the

13

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

senior secured revolving credit facility will accrue interest at a variable interest rate based on SOFR plus a leverage-based margin ranging from 4.75% to 6.25% per annum. A SOFR floor of 1.00% applies to the tranche B-4 term loans and each of the senior secured tranche B-3 term loan facility and the senior secured revolving credit facility.

The amendment also extended the maturity of the senior secured revolving credit facility from August 2023 to September 2026, subject to a springing maturity provision. The senior secured revolving credit facility will automatically terminate on May 14, 2025 if the senior secured initial term loans have not been refinanced, replaced or extended (with a resulting maturity date that is December 16, 2026 or later) or repaid in full prior to May 14, 2025. Additionally, the amendment suspended the financial covenant restriction on the draw-down of the revolving credit facility until July 1, 2024, and replaced it with certain other borrowing conditions. Subject to meeting such borrowing conditions, the Company can draw-down the entire $50 million of revolving credit facility.

14

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

During each of the threesix months ended March 31,June 30, 2023 and 2022, the Company repaid the contractual quarterly installment of $1 million of the principal amount of senior secured initial term loans.

At the option of Group Services B.V., a wholly owned subsidiary of GBTG (the “Borrower”), upon prior written notice, amounts borrowed under one or more of the senior secured credit facilities (as selected by the Borrower) may be voluntarily prepaid, and/or unused commitments thereunder may be voluntarily reduced or terminated, in each case, in whole or in part, at any time without premium or penalty (other than (i) any applicable prepayment premium required to be paid pursuant to the senior secured credit agreement, and (ii) customary breakage costs in connection with certain prepayments of loans bearing interest at a rate based on LIBOR/SOFR). Subject to certain exceptions set forth in the senior secured credit agreement, the Borrower is required to prepay the senior secured term loans with (i) 50% (subject to leverage-based step-downs) of annual excess cash flow (as defined in the senior secured credit agreement) in excess of a threshold amount, (ii) 100% (subject to leverage-based step-downs) of the net cash proceeds from certain asset sales and casualty events, subject to customary reinvestment rights, (iii) 100% of the net cash proceeds from the incurrence of certain indebtedness and (iv) other than in connection with the consummation of the business combination pursuant to the Business Combination Agreement, 50% of the net cash proceeds from the consummation of any initial public offering (or similar transaction) of the common stock of GBT UK TopCo Limited (or a parent entity thereof).

The senior secured revolving credit facility has (i) a $30 million sublimit for extensions of credit denominated in certain currencies other than U.S. dollars, (ii) a $10 million sublimit for letters of credit, and (iii) a $10 million sublimit for swingline borrowings. Extensions of credit under the senior secured revolving credit facility are subject to customary borrowing conditions and to additional conditions during the covenant suspension period provided by the January 2023 amendment described above. The Borrower is required to pay a fee of 0.375% per annum on the average daily unused commitments under the senior secured revolving credit facility, payable quarterly in arrears. As of both March 31,June 30, 2023, the Company had utilized $7 million for letters of credit and had the balance of $43 million that remained undrawn under the senior secured revolving credit facility. As of December 31, 2022, no borrowings or letters of credit were outstanding under the senior secured revolving credit facility.

Interest on the senior secured credit facilities is payable quarterly in arrears (or, if earlier in the case of LIBOR and SOFR loans, at the end of the applicable interest period). The effective interest rate on the senior secured term loans for the threesix months ended March 31,June 30, 2023 was approximately 11.2%11.3%.

Security; Guarantees

GBT UK TopCo Limited, a wholly-owned direct subsidiary of GBT JerseyCo, and certain of its direct and indirect subsidiaries, as guarantors (such guarantors, collectively with the Borrower, the “Loan Parties”), provide an unconditional guarantee, on a joint and several basis, of all obligations under the senior secured credit facilities and under cash management agreements and swap contracts with the lenders or their affiliates (with certain limited exceptions). Subject to certain cure rights, as of the end of each fiscal quarter, at least 70% of the consolidated total assets of the Loan Parties and their subsidiaries must be attributable, in the aggregate, to the Loan Parties; provided that such coverage test shall instead be calculated based on 70% of Consolidated EBITDA (as defined in the senior secured credit agreement) of the Loan Parties and their subsidiaries for the four prior fiscal quarters, commencing with the first quarterly test date after January 2021 on which Consolidated EBITDA of the Loan Parties and their subsidiaries exceeds $100 million. Further, the lenders have a first priority security interest in substantially all of the assets of the Loan Parties.

14

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Covenants

The senior secured credit agreement contains various affirmative and negative covenants, including certain financial covenants (see below) and limitations (subject to exceptions) on the ability of the Loan Parties and their subsidiaries to: (i) incur indebtedness or issue preferred stock; (ii) incur liens on their assets; (iii) consummate certain fundamental changes (such as acquisitions, mergers, liquidations or changes in the nature of the business); (iv) dispose of all or any part of their assets; (v) pay dividends or other distributions with respect to, or repurchase, any equity interests of any Loan Party or any equity interests of any direct or indirect parent company or subsidiary of any Loan Party; (vi) make investments, loans or advances; (vii) enter into transactions with affiliates and certain other permitted holders; (viii) modify the terms of, or prepay, any of their subordinated or junior lien indebtedness; (ix) make certain changes to a Loan Party’s entity classification for U.S. federal income tax purposes or certain intercompany transfers of a Loan Party’s assets if, as a result thereof, an entity would cease to be a Loan Party due to adverse tax consequences; (x) enter into swap contracts; and (xi) enter into certain burdensome agreements.

15

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Certain restricted payments and debt incurrences that would otherwise be permitted under the senior secured credit agreement cannot be made during the suspension period implemented pursuant to the January 2023 amendment described above. Any such prohibited payment or incurrence would trigger an automatic reduction to zero of the commitments under the senior secured revolving credit facility for the duration of the suspension period, which would give rise to prepayment and/or cash collateral requirements in respect of then-current utilization of the senior secured revolving credit facility. Additionally, any such payment or incurrence would constitute a violation of the senior secured credit agreement if any revolving loans would be outstanding immediately thereafter.

The senior secured credit agreement also requires that an aggregate amount of Liquidity (as defined in the senior secured credit agreement) equal to at least $200 million be maintained as of the end of each calendar month. Liquidity is calculated as the aggregate amount of unrestricted cash and cash equivalents of the Loan Parties and their subsidiaries plus, under certain circumstances, the unused amount available to be drawn under the senior secured revolving credit facility.

The senior secured credit agreement also contains an additional financial covenant applicable solely to the senior secured revolving credit facility. After giving effect to the January 2023 amendment described above, such financial covenant requires the first lien net leverage ratio (calculated in a manner set forth under the senior secured credit agreement) to be less than or equal to 3.50 to 1.00 as of the last day of any fiscal quarter on which (a) the suspension period is not in effect and (b) the aggregate principal amount of outstanding loans and letters of credit under the senior secured revolving credit facility exceeds 35% of the aggregate principal amount of the senior secured revolving credit facility. The senior secured credit agreement provides that such financial covenant is suspended for a limited period of time if an event that constitutes a “Travel MAC” (as defined in the senior secured credit agreement) has occurred and the Loan Parties are unable to comply with such covenant as a result of such event. Such financial covenant did not apply for the period ended March 31,June 30, 2023.

As of March 31,June 30, 2023, the Loan Parties and their subsidiaries were in compliance with all applicable covenants under the senior secured credit agreement.

Events of Default

The senior secured credit agreement contains default events (subject to certain materiality thresholds and grace periods), which could require early prepayment, termination of the senior secured credit agreement or other enforcement actions customary for facilities of this type. As of March 31,June 30, 2023, no event of default existed under the senior secured credit agreement.

(11) Commitments and Contingencies

Purchase Commitment

In the ordinary course of business, the Company makes various commitments to purchase goods and services from specific suppliers, including those related to capital expenditures. As of March 31,June 30, 2023, the Company had approximately $206$205 million of outstanding non-cancellable purchase commitments, primarily relating to service, hosting and licensing contracts for information technology, of which $85$84 million relates to the twelve months ending March 31,June 30, 2024. These purchase commitments extend through 2031.

15

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Guarantees

The Company has obtained bank guarantees in respect of certain travel suppliers and real estate lease agreements amounting to $19$26 million. Certain of these bank guarantees require the Company to maintain cash collateral which has been presented as restricted cash within other non-current assets in the Company’s consolidated balance sheet.

Legal Contingencies

The Company recognizes legal fees as expense when the legal services are provided.

Based on its current knowledge, and taking into consideration its litigation-related liabilities, the Company believes it is not a party to any pending legal proceeding or governmental examination that would have a material adverse effect on the Company’s consolidated financial condition or liquidity.

16

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(12) Income Taxes

As discussed in note 1 – Business Description and Basis of Presentation, GBTG is a Delaware corporation and tax resident in the U.S. GBTG holds itsan equity interests and conducts its business throughinterest in GBT JerseyCo and its subsidiaries in ansubsidiaries. Pursuant to the Corporate Simplification, the Up-C structure. GBT JerseyCo is incorporated inStructure was eliminated on July 10, 2023 and subject to Jersey company law, is a tax resident in the U.K. and is treated as a consequence GBT JerseyCo’s U.S. tax partnership for U.S. income tax purposes.status was terminated (see note 1 – Business Description and Basis of Presentation and note 20 – Subsequent Events). As such, GBT JerseyCo generally is notof June 30, 2023, GBTG was subject to U.S. income tax under current U.S. tax laws. However, GBTG, being a U.S. tax resident shareholder oftaxation on its 15% equity interest in GBT JerseyCo,JerseyCo; however, from July 10, 2023, it is subject to U.S. partnership tax lawtaxation on 100% of its share of equity interest in GBT JerseyCo. GBTG is required to calculate

For the three and six months ended June 30, 2023, the Company’s income tax benefit was $2 million and $10 million, respectively, and its U.S.effective tax position on its share of the GBT JerseyCo’s consolidated results.

rate was 3% and 11%, respectively. GBTG’s effective tax rate for the three and six months ended June 30, 2023 differs from, and is lower than, the U.S. federal statutory tax rate of 21% primarily due to different jurisdictional tax rates in which the Company operates, together with the impact of permanent differencesnon-taxable fair value loss on earnouts derivative liability and GBTG’s incremental layer of taxation due to its Up-C structure.typical items such as return-to-tax provisions, additional state and local taxes and other non-deductible expenses.

For the three and six months ended March 31, 2023 andJune 30, 2022, the Company’sGBTG’s income tax benefit was $8$4 million and $25$29 million, respectively, and its effective tax rate was 23.88%80% and 21.74%25%, respectively. The impactrespectively, primarily due to non-taxable fair value gain on earnouts and warrants derivative liability recorded during the effective tax ratesecond quarter of any permanent items and GBTG’s standalone tax position is more significant in the three months ended March 31, 2023 as the pre-tax loss is lower than the three months ended March 31, 2022.

The Inflation Reduction Act (“IRA”) was enacted into law on August 16, 2022. Included in the IRA is a provision to implement a 15% corporate alternative minimum tax on corporations whose average annual adjusted financial statement income during the most recently-completedrecently completed three-year period exceeds $1.0 billion. This provision became effective for the Company from January 1, 2023, and did not have any material impact on the Company’s tax provision. The Company believes the impact of IRA is likely to be minimal for the foreseeable future.

(13) Earnout Shares

Certain stockholders and employees are entitled to additional consideration in the form of “earnout shares” of the Company’s Class A common stock, (and Class B common stock, with equal number of B ordinary shares of GBT JerseyCo, where the earnout shares have been given to certain stockholders) to be issued in tranches, when the Company’s Class A common stock’s price achieves certain market share price milestones within specified periods following the Business Combination transaction.

The earnout shares to stockholders are accounted under Accounting Standard Codification 815, “DerivativesDerivatives and Hedging”Hedging (“ASC 815”). Such guidance provides that because the earnout shares do not meet the criteria for equity treatment thereunder, earnout shares must be recorded as a liability. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the earnout shares liability will be adjusted to fair value, with the change in fair value recognized in the Company’s consolidated statements of operations.

The fair value of the earnout shares was estimated using the Monte Carlo simulation of the stock prices based on historical and implied market volatility of a peer group of public companies.(see note 18 - Fair Value Measurements).

16

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of March 31,June 30, 2023 the fair value of the earnout shares liability was estimated to be $87$106 million. The Company recognized a loss on the fair value change in earnout shares liability of $19 and $16 million in its consolidated statement of operations for the three and six months ended June 30, 2023, respectively. The Company recognized a gain on the fair value change in earnout shares liability of $3$23 million in its consolidated statement of operations for the three and six months ended March 31, 2023.June 30, 2022.

(14) Equity-Based Compensation

Management Incentive Plan

In December 2022, the Company initiated an exchange offer which provided eligible participants with the opportunity to exchange certain outstanding stock options under the Global Business Travel Group, Inc. Management Incentive Plan for restricted share units (“RSUs”) under the Global Business Travel Group, Inc. 2022 Equity Incentive Plan (the “2022 Plan”) on the terms and conditions as set out in the exchange offer. The exchange offer also required mandatory exercise of in-the-money stock options granted prior to

17

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

December 1, 2021, by individuals who participated in the exchange offer. The exchange offer expired on January 26, 2023. Pursuant to the terms of exchange offer:

10,088,754 stock options were cancelled,

2,699,885 stock options were automatically exercised on a cashless basis and

4,817,144 RSUs were granted under the 2022 Plan.ThePlan. The RSUs generally vest one-third on each of the first three anniversaries of the grant date, subject to continued employment by the participant through the applicable vesting date and are subject to such other terms and conditions as set forth in the applicable restricted stock unit award agreement.

Simultaneously with the closing of the exchange offer, certain individuals who were ineligible to participate in the exchange offer exercised an aggregate of 2,059,984 stock options and were granted an aggregate amount of 1,344,935 RSUs under the 2022 Plan as approved by the compensation committee.

The table below presents the activity of the Company’s stock options for the threesix months ended March 31,June 30, 2023:

    

    

    

Weighted

    

    

    

    

Weighted

    

Weighted

average

Weighted

average

average 

 remaining 

Aggregate 

average 

 remaining 

Aggregate 

Number of

exercise price 

contractual 

intrinsic value 

Number of

exercise price per

contractual 

intrinsic value 

stock options

stock per option

term

(in $ millions)

stock options

stock option

term (in years)

(in $ millions)

Balance as of December 31, 2022

 

36,397,677

$

7.66

 

  

 

  

 

36,397,677

$

7.66

 

  

 

  

Cancelled pursuant to exchange offer

 

(10,088,754)

$

10.36

 

  

 

  

 

(10,088,754)

$

10.36

 

  

 

  

Exercised (1)

 

(4,906,239)

$

6.12

 

  

 

  

 

(5,103,012)

$

6.17

 

  

 

  

Balance as of March 31, 2023

 

21,402,684

$

7.07

 

  

 

  

Exercisable as of March 31, 2023

 

18,746,193

$

6.61

 

3.3

$

8

Expected to vest as of March 31, 2023

 

2,656,491

$

10.31

 

8.3

 

Forfeited

(122,725)

$

14.58

Balance as of June 30, 2023

 

21,083,186

$

7.04

 

  

 

  

Exercisable as of June 30, 2023

 

18,680,906

$

6.62

 

3.1

$

17

Expected to vest as of June 30, 2023

 

2,402,280

$

10.26

 

8.3

 

(1)The stock options exercised in the exchange offer, or simultaneously with the closing of the exchange offer, were settled on a cashless basis and were net-share settled such that the Company withheld shares with value equivalent to no more than the employee’s maximum statutory obligation for applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld to cover the stock option costs and taxes were 4,469,741 shares and were based on the value of the shares on their respective exercise dates. Total payment for the employees’ tax obligations to taxing authorities was $2 million and is reflected as a financing activity within the consolidated statements of cash flows.
(1)The stock options exercised in the exchange offer, or simultaneously with the closing of the exchange offer, were settled on a cashless basis and were net-share settled such that the Company withheld shares with value equivalent to no more than the employee’s maximum statutory obligation for applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld to cover the stock option costs and taxes were 4,469,741 shares and were based on the value of the shares on their respective exercise dates. Total payment for the employees’ tax obligations to taxing authorities was $2 million and is reflected as a financing activity within the consolidated statements of cash flows. Further, as of June 30, 2023, for 30,000 options exercised, the shares were issued in July 2023.

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)(UNAUDITED)

2022 Equity Incentive Plan

During the threesix months ended March 31,June 30, 2023, apart from the RSUs granted as part of the stock option exchange offer discussed above, the Company granted 11,825,19012,008,862 RSUs under the 2022 Plan to certain of its key employees and directors pursuant to the Company’s annual grant program. The RSUs generally vest one-third annually on the first three anniversaries of the grant date. The vesting is conditional upon continued employment of the grantee through the applicable vesting period and subject to such other terms and conditions as set forth in the applicable restricted stock unit award agreement. The RSUs do not accrue dividends or dividend equivalent rights associated with the underlying stock. The fair value of the RSUs is determined to be the market price of the Company’s Class A Common Stock at the date of grant. The table below presents the activity of the Company’s RSUs for the threesix months ended March 31,June 30, 2023:

    

    

Weighted

    

    

Weighted

average grant 

average grant 

(in $millions)

Number of RSUs

date fair value

Number of RSUs

date fair value

Balance as of December 31, 2022

 

11,288,745

$

7.56

 

11,288,745

$

7.56

Granted

 

17,987,269

$

6.63

 

18,170,941

$

6.64

Forfeited

 

(157,990)

$

7.28

 

(964,540)

$

7.39

Vested (1)

 

(2,084,239)

$

7.52

 

(2,272,591)

$

7.54

Balance as of March 31, 2023

 

27,033,785

$

6.95

Balance as of June 30, 2023

 

26,222,555

$

6.93

(1)The RSUs were net-share settled such that the Company withheld shares with value equivalent to no more than the employee’s maximum statutory obligation for applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld were 775,288 shares and were based on the value of the RSUs on their respective vesting dates as determined by the Company’s closing stock price. Total payment for the employees’ tax obligations to taxing authorities was $6 million and is reflected as a financing activity within the consolidated statements of cash flows.
(1)The RSUs were net-share settled such that the Company withheld shares with value equivalent to no more than the employee’s maximum statutory obligation for applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. A total of 775,288 shares were withheld and were based on the value of the RSUs on their respective vesting dates as determined by the Company’s closing stock price. Total payment for the employees’ tax obligations to taxing authorities was $6 million and is reflected as a financing activity within the consolidated statements of cash flows.

Employee Stock Purchase Plan (“ESPP”)

The ESPP allows eligible employees to purchase shares of the Company’s Class A Common Stock through payroll deductions of up to 15% of their eligible compensation. The offering periods underUnder the ESPP, there are two six-month offering periods - from February 15 through August 14 and August 15 through February 14 of each year. The price of the Company’s Class A Common Stock purchased under the ESPP is 85% of the fair market value of the Company’s Class A Common Stock on the end date of each six-month offering period. As of March 31,June 30, 2023, there were 11.1 million shares available for issuance under the ESPP. During the threesix months ended March 31,June 30, 2023, no shares were purchased under the ESPP.

Total equity-based compensation expense recognized in the Company’s consolidated statements of operations (i) for the three months ended March 31,June 30, 2023 and 2022 amount to $19$22 million and $3$5 million, respectively (net of tax of $14$16 million and $2$4 million, respectively), and (ii) for the six months ended June 30, 2023 and 2022 amount to $41 million and $8 million, respectively (net of tax of $30 million and $6 million, respectively) and were included as follows:

    

Three months ended

    

Three month ended 

    

Three months ended

    

Three months ended 

    

Six months ended

    

Six months ended

(in $ millions)

 March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

 

June 30, 2023

June 30, 2022

Cost of revenue (excluding depreciation and amortization)

$

1

$

$

1

$

$

2

$

Sales and marketing

 

7

 

1

 

11

 

2

18

3

Technology and content

 

3

 

 

5

 

1

8

1

General and administrative

 

8

 

2

 

5

 

2

13

4

Total

$

19

$

3

$

22

$

5

$

41

$

8

As of March 31,June 30, 2023, the Company expects compensation expense related to (i) unvested stock options of approximately $5$3 million to be recognized over the remaining weighted average period of 1.71.5 years, (ii) unvested RSUs of approximately $160$134 million to be recognized over the remaining weighted average period of 2.52.3 years and (iii) ESPP of less than $1 million to be recognized over a remaining service period of 4.51.5 months.

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)(UNAUDITED)

(15) Stockholders’ Equity

GBTG’s authorized capital stock consists of:

(i)3,000,000,000 shares of Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), of which 69,498,99270,429,526 shares are issued and outstanding as of March 31,June 30, 2023;
(ii)3,000,000,000 shares of Class B common stock, par value $0.0001 per share (the “Class B Common Stock”), of which 394,448,481 shares are issued and outstanding as of March 31,June 30, 2023 (see note 20 - Subsequent Events); and
(iii)6,010,000,000 shares of preferred stock, par value of $0.00001 per share, none of which is issued and outstanding as of March 31,June 30, 2023. Further (a) 3,000,000,000 shares of Class A-1 preferred stock are designated as Class A-1 preferred stock, none of which is issued and outstanding as of March 31,June 30, 2023, (b) 3,000,000,000 shares of Class B-1 preferred stock are designated as Class B-1 preferred stock, none of which is issued and outstanding as of March 31,June 30, 2023 and (c) the remaining 10,000,000 shares of preferred stock are undesignated preferred stock, none of which is issued and outstanding as of March 31,June 30, 2023.

Holders of Class A Common Stock and Class B Common Stock vote together as a single class on all matters submitted to the stockholders for their vote or approval, except as required by applicable law. In order to preserve the Up-C structure, the Exchange Agreement (see note 19 - Related Party Transactions) provides that GBTG and GBT JerseyCo will take (or, in some cases, forbear from taking) various actions, as necessary to maintain a one-to-one ratio between the number of issued and outstanding (x) Class A Common Stock of GBTG and the A ordinary shares of GBT JerseyCo and (y) Class B Common Stock of GBTG and the B ordinary shares of GBT JerseyCo.

Class A Common Stock

Voting: Holders of Class A Common Stock are entitled to one vote for each share on all matters submitted to the stockholders for their vote or approval.

Dividend: Holders of shares of Class A Common Stock are entitled to receive ratably, in proportion to the number of shares held by them, dividends and other distributions when, as, and if declared by the GBTG Board out of legally available funds, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock or loan agreements.

Liquidation: Further, in the case of the Company’s liquidation, dissolution or winding up and after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of shares of Class A Common Stock will be entitled to receive, ratably on a per share basis with other holders of Class A Common Stock (subject to the nominal economic rights of holders of the Class B Common Stock), the Company’s remaining assets available for distribution to stockholders.

Other rights: Except as set forth in the New Shareholders Agreement and the Exchange Agreement (see note 19 - Related Party Transactions), holders of shares of Class A Common Stock do not have preemptive, subscription, redemption or conversion rights.

Class B Common Stock

Voting: Holders of Class B Common Stock are entitled to one vote for each share on all matters submitted to the stockholders for their vote or approval.

Dividend: The shares of Class B Common Stock generally have only nominal economic rights (limited to the right to receive up to the par value in the event of a liquidation, dissolution or winding up of GBTG).

Liquidation: Holders of shares of Class B Common Stock have the right to receive, ratably on a per share basis with other holders of Class B Common Stock and holders of Class A Common Stock, a distribution from GBTG’s remaining assets available for

19

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

distribution to stockholders, up to the par value of such shares of Class B Common Stock, but otherwise are not entitled to receive any assets of GBTG in connection with any such liquidation, dissolution or winding up.

Other rights: Except as set forth in the New Shareholders Agreement and the Exchange Agreement (see note 19 - Related Party Transactions), holders of shares of Class B Common Stock do not have preemptive, subscription, redemption or conversion rights.

20

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Exchange Agreement: The Continuing JerseyCo Owners (or certain permitted transferees thereof) have the right, on the terms and subject to the conditions of the Exchange Agreement, to exchange their GBT JerseyCo B ordinary sharesOrdinary Shares (with automatic surrender for cancellation of an equal number of shares of GBTG’s Class B Common Stock) for shares of GBTG’s Class A Common Stock on a one-for-one basis, subject to customary adjustments for stock splits, dividends, reclassifications and other similar transactions or, in certain limited circumstances, at the option of the Exchange Committee, for cash. The Exchange Agreement also provides GBTG with the right to elect that such exchange be effected by the Continuing JerseyCo Owners (or certain permitted transferees thereof) transferring their GBT JerseyCo B Ordinary Shares and GBTG’s Class B Common Stock to the Company in exchange for the issuance by GBTG to such Continuing JerseyCo Owners of shares of GBTG’s Class A Common Stock (a “direct exchange”). On July 10, 2023, the Continuing JerseyCo Owners exercised such rights under the Exchange Agreement with respect to all of their GBT JerseyCo B Ordinary Shares and shares of Class B Common Stock of GBTG and GBTG elected to effect the exchange as a direct exchange (see note 20 - Subsequent Events).

Preferred Stock

Voting: Holders of Class A-1 preferred stock and Class B-1 preferred stock have no voting rights except as otherwise from time to time required by law.

Generally, holders of Class A-1 preferred stock are entitled to the same rights and privileges, qualifications and limitations as holders of Class A Common Stock and holders of Class B-1 preferred stock are entitled to the same rights and privileges, qualifications and limitations as holders of Class B Common Stock. Further, Class A-1 preferred stock shall be identical in all respects to the Class A Common Stock and Class B-1 preferred stock shall be identical in all respects to the Class B Common Stock.

Distributions

There were no capital distributions to shareholders during the three and six months ended March 31,June 30, 2023 and 2022.

Registration Rights Agreement

In May 2022, GBTG, APSG Sponsor, L.P. (the “Sponsor”), certain of APSG’s then existing board members (the “Insiders”) and the Continuing JerseyCo Owners entered into an amended and restated registration rights agreement (the “Registration Rights Agreement”), pursuant to which, among other things, GBTG has registered for resale, pursuant to Rule 415 under the Securities Act, certain shares of Class A Common Stock and other equity securities of GBTG that are held by the holders party to the Registration Rights Agreement from time to time.

Sponsor Side Letter

In connection with the Business Combination Agreement, on December 2, 2021, the Sponsor, the Insiders, GBTG and GBT JerseyCo entered into a side letter (as amended on May 27, 2022, “Sponsor Side Letter”) which, among other things, contain certain restrictions on the transfer by the Sponsor and the Insiders with respectpursuant to the Class A Common Stock issued to each of them at the closing of the Business Combination (such shares issued to the Sponsor, the “Sponsor Shares”). The Sponsor and the Insiders are not permitted to transfer their Class A Common Stock, subject to certain permitted exceptions, until the earlier to occur of (a) one year following the closing date of the Business Combination and (b) the date upon which the volume-weighted average price (“VWAP”) of Class A common stock exceeds $12.00 per share for any 20 trading days within a period of 30 consecutive trading days.

20

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Further, approximately 8 million of the Sponsor Shares were deemed unvested and were subject to certain triggering events to occur within five years following the closing (the “Sponsor Side Letter Vesting Period”) for these shares to vest. If, within the Sponsor Side Letter Vesting Period, the VWAP of Class A Common Stock is greater than or equal to $12.50 for any 20 trading days within a period of 30 consecutive trading days, approximately 5 million of the unvested Sponsor Shares will vest. If, within the Sponsor Side Letter Vesting Period, the VWAP of Class A Common Stock is greater than or equal to $15.00 for any 20 trading days within a period of 30 consecutive trading days the remaining approximately 3 million of the unvested Sponsor Shares will vest. To the extent that either of the aforementioned triggering events do not occur within the Sponsor Side Letter Vesting Period, such Sponsor Shares will be forfeited to and terminated by GBTG. The registered holder(s) of the unvested Sponsor Shares continue to be entitled to all of the rights of ownership thereof, including the right to vote and receive dividends and other distributions in respect thereof. The number of shares and the price targets listed above will be equitably adjusted for stock splits, reverse stock splits, dividends (cash or stock), reorganizations, recapitalizations, reclassifications, combinations or other like changes or transactions with respect to the Class A Common Stock. These shares are accounted for as part of earnout shares discussed above in note 13 – Earnout Shares.

Class A Common Stock purchased by the Sponsor in connection with the “private investment in public entity” transaction is not subject to the vesting or transfer restrictions described above.

21

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) represents certain components of revenues, expenses, gains and losses that are included in comprehensive income (loss) but are excluded from net income (loss). Other comprehensive income (loss) amounts are recorded directly as an adjustment to total equity, net of tax. The changes in the accumulated other comprehensive loss, net of tax, were as follows:

Unrealized gain on

Unrealized gain on

Currency

Defined

cash flow hedge and

Total accumulated

Currency

Defined

cash flow hedge and

Total accumulated

 translation 

 benefit plan

 hedge of investments 

 other comprehensive

 translation 

 benefit plan

 hedge of investments 

 other comprehensive

(in $ millions)

    

adjustments

    

 related

    

 in foreign subsidiary

    

 loss

    

adjustments

    

 related

    

 in foreign subsidiary

    

 loss

Balance as of December 31, 2022

$

(10)

$

(1)

$

4

$

(7)

$

(10)

$

(1)

$

4

$

(7)

Net changes during the period, net of tax benefit $0

9

(13)

(4)

Net changes during the period, net of tax benefit of $0

13

(1)

(1)

11

Allocated to non-controlling interest

(7)

11

4

(11)

1

1

(9)

Balance as of March 31, 2023

$

(8)

$

(1)

$

2

$

(7)

Balance as of June 30, 2023

$

(8)

$

(1)

$

4

$

(5)

Unrealized gain on 

Unrealized gain on 

    

Currency 

    

Defined 

    

cash flow hedge and 

Total accumulated 

    

Currency 

    

Defined 

    

cash flow hedge and 

Total accumulated 

translation 

benefit plan 

hedge of investments 

other comprehensive 

translation 

benefit plan 

hedge of investments 

other comprehensive 

(in $ millions)

    

adjustments

    

related

    

in foreign subsidiary

    

loss

    

adjustments

    

related

    

in foreign subsidiary

    

loss

Balance as of December 31, 2021

$

(38)

$

(128)

$

4

$

(162)

$

(38)

$

(128)

$

4

$

(162)

Net changes during the period, net of tax benefit $0

 

(16)

 

 

9

 

(7)

Balance as of March 31, 2022

$

(54)

$

(128)

$

13

$

(169)

Net changes prior to reverse recapitalization, net of tax benefit of $0

 

(59)

 

 

12

 

(47)

Allocated to non-controlling interest

85

112

(14)

183

Net changes post reverse recapitalization, net of tax benefit of $0

(4)

(4)

Balance as of June 30, 2022

$

(16)

$

(16)

$

2

$

(30)

Amounts in accumulated other comprehensive loss are presented net of the related tax impact. Reclassifications out of accumulated other comprehensive losses related to (i) actuarial losses and prior service costs (component of net periodic pension benefit (cost)) is included within other income (expense), net, and (ii) gain on termination of cash flow hedge is included within interest expense, in the Company’s consolidated statements of operations.

(16) Earnings (Loss) Per Share

Basic earnings (loss) per share is based on the average number of shares of Class A Common Stock outstanding during the period. Diluted earnings (loss) per share is based on the average number of shares of Class A Common Stock used for the basic earnings per share calculation, adjusted for the dilutive effect of stock options and RSUs using the “treasury stock” method, and earnout shares and GBTG’s Class B Common Stock that convert into potential shares of Class A Common Stock, using the “if converted” method, to the extent they are dilutive. The Company analyzed the calculations of net loss per share for periods prior to the Business Combination and determined that the values would not be meaningful to the users of these unaudited consolidated financial statements as it did not represent equity structure post Business Combination transaction.

21

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As discussed in note 13 – Earnout Shares, theThe Company has issued and outstanding approximately 1523 million earnout shares, which are subject to forfeiture if the achievement of certain stock price thresholds are not met. In accordance with ASC 260, “Earnings Per Share,” earnout shares are excluded from weighted-average shares outstanding to calculate basic earnings (loss) per share as they are considered contingently issuable shares due to their potential forfeiture. Earnout shares will be included in weighted-average shares outstanding to calculate basic earnings (loss) per share as of the date their stock price thresholds are met and they are no longer subject to forfeiture. Additionally, dividends accrued on earnout shares, if any, will be forfeited if the pricing thresholds for earnout shares are not met during the specified time period.

As the Company had net loss for the period, approximately 21 million of stock options and 2726 million of RSUs have been excluded from the calculation of diluted loss per share for the three and six months ended June 30, 2023, as their inclusion would have resulted in anti-dilutive effect on loss per share.

GBTG’s Class B Common Stock generally has only nominal economic rights (limited to the right to receive up to the par value in the event of a liquidation, dissolution or winding up of GBTG). As such, basic earnings (loss) per share of Class B Common Stock have

22

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

not been presented. However, asAs these shares can be converted to Class A Common Stock under the provisions of the Exchange Agreement, Class B Common Stock has been included in the calculations of diluted earnings (loss) per share.are considered as potential dilutive securities.

The following table reconciles the numerators and denominators used in the computation of basic and diluted earnings (loss) per share from continuing operations:

    

Three months ended

    

Three months ended

    

Six months ended

    

Six months ended

(in $ millions, except share and per share data)

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Numerator – Basic and diluted (loss) earnings per share:

 

  

 

  

Net (loss) income attributable to the Company’s Class A common stockholders (A)

$

(14)

$

21

$

(16)

$

21

Add: Net loss attributable to non-controlling interests in subsidiaries

 

(41)

(23)

(66)

 

(114)

Net loss attributable to the Company’s Class A common stockholders - Diluted (B)

$

(55)

$

(2)

$

(82)

$

(93)

Denominator – Basic and diluted weighted average number of shares outstanding:

 

  

 

  

Weighted average number of Class A Common Stock outstanding – Basic (C)

 

61,852,280

48,867,969

61,118,570

 

48,867,969

Assumed exercise of GBTG stock options

 

1,003,771

 

1,003,771

Assumed conversion of Class B Common Stock (1)

 

394,448,481

 

394,448,481

Weighted average number of Class A Common Stock outstanding – Diluted (D)

 

61,852,280

444,320,221

61,118,570

 

444,320,221

Basic (loss) earnings per share attributable to the Company’s Class A common stockholders: (A) / (C)

$

(0.23)

$

0.44

$

(0.27)

$

0.44

Diluted loss per share attributable to the Company’s Class A common stockholders: (B) / (D)

$

(0.23)

$

$

(0.27)

$

(0.21)

(1)

ThreeFor the three and six months ended

(in $ millions, except share and per share data)

March 31, June 30, 2023,

Numerator – Basic and diluted earnings (loss) per share:

Net loss attributable to the Company’s Class A common stockholders (A)

$

(2)

Add: Net loss attributable to non-controlling interests in subsidiaries

(25)

Net loss attributable to the Company’s Class A common stockholders - Diluted (B)

$

(27)

Denominator – Basic and diluted weighted average number of shares outstanding:

Weighted average number of Class A Common Stock outstanding – Basic (C)

60,376,708

Assumed assumed conversion of Class B Common Stock (1)

394,448,481

Weighted average number of Class A Common Stock outstanding – Diluted (D)

454,825,189

Basichas been excluded as their inclusion would have been anti-dilutive to basic loss per share attributable to the Company’s Class A common stockholders: (A) / (C)

share.

$

(0.03)

Diluted loss per share attributable to the Company’s Class A common stockholders: (B) / (D)

$

(0.06)

2223

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)(UNAUDITED)

(17) Derivatives and Hedging

Except as mentioned below, the Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company does not hold or issue financial instruments for speculative or trading purposes. The Company does not offset derivative assets and liabilities within the consolidated balance sheets.

Interest Rate Swap

The Company is subject to market risk exposure arising from changes in interest rates on debt, which bears interest at variable rates. The Company has interest rate risk primarily related to its senior secured term loans under the senior secured credit agreement, which bear interest at a variable rate that is currently based on three-months LIBOR or SOFR (subject to certain benchmark replacement provisions and certain interest rate floors, as applicable). In order to protect against potential higher interest costs resulting from anticipated increases in the benchmark rate for the senior secured tranche B-3 term loans, GBT Group Services B.V., a wholly owned subsidiary of GBTG and the borrower under the senior secured credit agreement, has entered into the following interest rate swap contracts that fixed the benchmark interest rate with respect to a portion of the senior secured tranche B-3 term loans:

Notional Amount

    

    

    

(in $ millions)

Period

Fixed Interest Rate

$ 600(1)

 

March 2023 to March 2025

 

3.680

%

$ 300(2)

 

March 2023 to March 2027

 

4.295

%

(1)The terms of $600 million notional amount of interest rate swap were initially linked to LIBOR as the benchmark rate, with SOFR-based rate replacing LIBOR as the benchmark rate for such swap, commencing June 2023. In March 2023, the Company amended the terms of the agreement to replace LIBOR with SOFR as the benchmark rate that commenced from March 2023 and changed the fixed rate from 3.6856% to 3.6800%.The. The interest rate swap is designated as a cash flow hedge that is highly effective at offsetting the increases in cash outflows when three-month SOFR based-rate exceeds 3.680%.

In June 2022, the Company terminated a previous interest rate swap contract, entered into in February 2022, that was designated as a cash flow hedge (and had similar terms as the current $600 million notional amount of interest rate swap) realizing $23 million in cash. Under ASC 815, the Company has determined that the total amount of $23 million credited to the accumulated other comprehensive income in connection with the termination of the previous interest rate swap contract will be included in the consolidated statement of operations proportionately until March 2025 as an offset to interest expense as the interest payments are made over this period. As a result, during the three and six months ended March 31,June 30, 2023, the Company has reclassified $2 million and $4 million, respectively, from accumulated other comprehensive loss and recognized it as a credit to interest expense.expense in its consolidated statement of operations.

(2)In February 2023, the Company entered into another interest rate swap contract for a notional amount of $300 million. The terms of the agreement require the Company to receive a variable rate of three months SOFR, with a floor of 0.90%, and pay fixed rate of 4.295%.

The above interest rate swap contracts are considered as cash flow hedges with changes in the fair value of the interest rate swaps, net of tax, being recognized in other comprehensive income (loss) and reclassified out of accumulated other comprehensive income (loss) into interest expense when the hedged interest obligations affect earnings.

Warrants and Earnout Shares

As a result of the Business Combination, GBTG has issued and outstanding earnout shares (see note 13 – Earnout Shares). For a period from the date of the Business Combination until October 2022, the Company also had warrants issued and outstanding, which were exchanged in full for shares of Class A Common Stock in October 2022. The non-employee earnout shares are classified as derivative liabilities under ASC 815 and are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.

2324

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)(UNAUDITED)

As of March 31,June 30, 2023, the number of non-employee earnout shares issued and outstanding were approximately 1523 million. The following table presents the balance sheet location and fair value of the Company’s derivative instruments, on a gross basis, under ASC 815:

    

Balance sheet

    

Balance sheet

(in $millions)

    

Location

    

March 31, 2023

    

December 31, 2022

    

Location

    

June 30, 2023

    

December 31, 2022

Derivatives designated as hedging instruments

  

 

  

 

  

  

 

  

 

  

Interest rate swaps

Other non-current assets

$

6

 

$

10

Other non-current assets

$

13

 

$

10

Interest rate swaps

Other non-current (liabilities)

$

(7)

 

 

Other non-current (liabilities)

$

(1)

 

 

Derivatives not designated as hedging instruments

Earnout shares

Earnout derivative liabilities

$

87

 

$

90

Earnout derivative liabilities

$

106

 

$

90

The table below presents the impact of changes in fair values of derivatives on other comprehensive income (loss) and on net income (loss):

Amount of gain/(loss) recognized in

Statement of 

Amount of gain/(loss) recognized in

Amount of gain/(loss) recognized in

Statement of 

Amount of gain/(loss) recognized in

other comprehensive loss

operations location

statements of operations

other comprehensive income (loss)

operations location

statements of operations

Three months ended

Three months ended

Three months ended

Six months ended

Three months ended

Six months ended

March 31

March 31

June 30

June 30

June 30

June 30

    

2023

    

2022

    

2023

    

2022

    

2023

    

2022

    

2023

    

2022

    

2023

    

2022

    

2023

    

2022

Derivatives designated as hedging instruments

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Interest rate swaps

$

(11)

NA

Interest rate swap

$

14

$

4

$

3

$

13

NA

Interest rate swaps reclassed to statement of operations

(2)

Interest expense

$

2

(2)

(4)

Interest expense

$

2

$

4

Derivatives not designated as hedging instruments

 

  

 

  

 

 

  

 

  

 

 

  

 

  

 

 

  

 

 

  

Earnout shares

 

 

Fair value movement on earnout derivative liabilities

3

 

Earnout Shares

 

 

 

 

Fair value movement on earnouts and warrants derivative liabilities

(19)

 

23

(16)

 

23

Warrants

 

 

 

 

Fair value movement on earnouts and warrants derivative liabilities

 

 

13

 

 

13

$

(13)

$

5

 

$

(17)

 

$

36

$

(12)

 

$

36

During the three and six months ended March 31,June 30, 2023, the Company has reclassified $2 million and $4 million, respectively, from accumulated other comprehensive loss and recognized it as a credit to interest expense. The total gain of $8 million on the interest rate swap contract is expected to be reclassified to net earnings as a credit to interest expense within the next 12 months.

(18) Fair Value Measurements

Financial instruments which are measured at fair value, or for which a fair value is disclosed, are classified in the fair value hierarchy, as outlined below, on the basis of the observability of the inputs used in the fair value measurement:

Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 — Valuations based on quoted prices in active markets for similar assets or liabilities, quoted prices in non-active markets or for which all significant inputs, other than quoted prices, are observable either directly or indirectly, or for which unobservable inputs are corroborated by market data.

Level 3 — Valuations based on inputs that are unobservable and significant to overall fair value measurement.

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)(UNAUDITED)

As of March 31,June 30, 2023, the Company’s financial assets and liabilities recorded at fair value on a recurring basis consist of its derivative instruments— interest rate swaps and non-employee earnout shares. The fair value of the Company’s interest rate swaps has been primarily calculated by using a discounted cash flow analysis by taking the present value of the fixed and floating rate cash flows utilizing the appropriate forward LIBOR and/or SOFR curves and the counterparty’s credit risk, which was determined to be not material. The fair value of non-employee earnout shares is determined using the Monte Carlo method.

Presented below is a summary of the gross carrying value and fair value of the Company’s assets and liabilities measured at a fair value on a recurring basis:

Asset/ (Liability)

Asset/ (Liability)

    

Fair Value

    

March 31, 

    

December 31, 

    

Fair Value

    

June 30, 

    

December 31, 

(in $ millions)

    

 Hierarchy

    

2023

    

2022

    

 Hierarchy

    

2023

    

2022

Interest rate swaps asset

Level 2

$

6

$

10

Level 2

$

13

$

10

Interest rate swaps liability

Level 2

(7)

Level 2

(1)

Non-employee earnout shares

Level 3

(87)

(90)

Level 3

(106)

(90)

The fair value of earnout shares was estimated using the Monte Carlo method. Inherent in the Monte Carlo method are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimated the volatility of the earnout shares based on impliedweighted average of its own share price volatility fromand implied historical volatility of select peer companies’ common stock that matches the expected remaining life of the earnout shares. The risk-free interest rate was based on the U.S. Treasury zero-coupon yield curve for a maturity similar to the expected remaining life of the earnout shares. The expected life of the earnout shares was assumed to be equivalent to their remaining contractual term. The Company anticipated the dividend rate will remain at zero.

The following table presents the assumptions used for the measurement of the fair value of outstanding earnout shares liabilities:

March 31, 

December 31, 

 

June 30, 

December 31, 

 

    

2023

    

2022

 

    

2023

    

2022

 

Stock price ($)

$

6.63

$

6.75

$

7.23

$

6.75

Risk-free interest rate

 

3.69

%  

 

4.06

%

 

4.33

%  

 

4.06

%

Volatility

 

45

%  

 

42.5

%

 

47.5

%  

 

42.5

%

Expected term (years)

 

4.2

 

4.4

 

3.9

 

4.4

Expected dividends

 

0.0

%  

 

0.0

%

 

0.0

%  

 

0.0

%

Fair value ($) (per earnout share – Tranche 1)

$

4.15

$

4.30

$

5.00

$

4.30

Fair value ($) (per earnout share – Tranche 2)

$

3.46

$

3.58

$

4.26

$

3.58

The following table presents changes in Level 3 financial liabilities measured at fair value during the threesix months March 31,June 30, 2023:

    

Earnout Shares

    

Earnout Shares

Balance as of December 31, 2022

$

90

$

90

Change in fair value

 

(3)

 

16

Balance as of March 31, 2023

$

87

Balance as of June 30, 2023

$

106

2526

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)(UNAUDITED)

The Company does not measure its debt at fair value in its consolidated balance sheets. Where the fair value of the Company’s long-term debt is determined based on quoted prices for identical or similar debt instruments when traded as assets, it is categorized within Level 2 of the fair value hierarchy. Where quoted prices are not available, fair value is estimated using discounted cash flows and market-based expectation of interest rates, credit risks and the contractual term of the debt instruments and is categorized within Level 3 of the fair value hierarchy.

The fair values of the Company’s outstanding senior secured term loans are as follows:

Fair 

March 31, 2023

December 31, 2022

Fair 

June 30, 2023

December 31, 2022

Value 

Carrying

Fair

Carrying 

Fair

Value 

Carrying

Carrying 

(in $ millions)

    

Hierarchy

    

amount (1)

    

value

    

amount (1)

    

value

    

Hierarchy

    

amount (1)

    

Fair value

    

amount (1)

    

Fair value

Senior secured initial term loans

 

Level 2

$

235

$

224

$

235

$

220

 

Level 2

$

235

$

229

$

235

$

220

Senior secured tranche B-3 term loans

 

Level 3

$

987

$

1,017

$

987

$

1,017

 

Level 3

$

988

$

1,018

$

987

$

1,017

Senior secured tranche B-4 term loans

 

Level 3

$

131

$

137

$

$

 

Level 3

$

131

$

137

$

$

(1)Outstanding principal amount of the relevant class of senior secured term loans less unamortized debt discount and debt issuance costs with respect to such loans.

The carrying amounts of cash and cash equivalents, accounts receivable, due from affiliates, other current assets, accounts payable, due to affiliates and accrued expenses and other current liabilities approximate fair value due to the short-term maturities of these assets and liabilities.

Certain assets and liabilities, including long-lived assets, goodwill and other intangible assets, are measured at fair value on a non-recurring basis.

(19) Related Party Transactions

The following summaries relate to certain related party transactions entered into by the Company with certain of its shareholders, its shareholders affiliates and the Company’s affiliates.

Commercial Agreements

The Company has various commercial agreements with the affiliates of Amex Coop. In respect of such agreements, included in the operating costs are costs of approximately $7$8 million and $5$7 million for the three months ended March 31,June 30, 2023 and 2022, respectively, and costs of $15 million and $11 million in charges from affiliates of Amex Coop for the six months ended June 30, 2023 and 2022, respectively. Revenues also include revenue from affiliates of Amex Coop of approximately $6 million and $5 million for the three months ended March 31,June 30, 2023 and 2022, respectively, and revenue of $12 million and $10 million for the six months ended June 30, 2023 and 2022, respectively. Amounts payable to affiliates of Amex Coop under these agreements, which include amounts collected by the Company on behalf of affiliates of Amex Coop, as of March 31,June 30, 2023 and December 31, 2022, were $61$35 million and $24 million, respectively. Amounts receivable from affiliates of Amex Coop under these agreements was $5were $8 million and $15 million as of March 31,June 30, 2023 and December 31, 2021,2022, respectively. The parties had amended the terms of certain of these commercial arrangements that were effective upon the closing of the Business Combination in May 2022.

Apart from above, there are certain tax indemnity and other agreements between the Company and affiliates of Amex Coop. Amounts payable to affiliates of Amex Coop in respect of such agreements was $2 million as of both March 31, 2023 and December 31, 2022.

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)(UNAUDITED)

License of American Express Marks

Effective upon closing of the Business Combination in May 2022, GBT Travel Services UK Limited (“GBT UK”), an indirect wholly owned subsidiary of GBTG, and an affiliate of Amex Coop, entered into a long-term, 11-year amended and restated trademark license agreement (unless earlier terminated or extended) pursuant to which GBT UK was granted an exclusive, non-assignable, worldwide, royalty-free license to use, and the right to sublicense to all wholly owned operating subsidiaries of GBTG and other permitted sublicensees the right to use, the American Express trademarks used in the American Express Global Business Travel brand, and the American Express GBT Meetings & Events brands for business travel, meetings and events, business consulting and other services related to business travel (“Business Travel Services”). The amended and restated trademark license agreement also provides GBTG the flexibility to operate non-Business Travel Services businesses under brands that do not use any trademarks owned by American Express, subject to certain permissibility and other requirements.

Exchange Agreement

GBTG, GBT JerseyCo and the Continuing JerseyCo Owners entered into an Exchange Agreement (the “Exchange Agreement”) which provides a right to the Continuing JerseyCo Owners to exchange their B ordinary shares inOrdinary Shares of GBT JerseyCo for Class A Common Stock of GBTG on a one-for-one basis, with surrender and cancellation of Class B Common Stock held by them in GBTG. Alternatively, if approvedThe Exchange Agreement also provides GBTG with the right to elect that such exchange be effected by the “Exchange Committee” (comprisingContinuing JerseyCo Owners (or certain permitted transferees thereof) transferring their GBT JerseyCo B Ordinary Shares and GBTG’s Class B Common Stock to the Company in exchange for the issuance by GBTG to such Continuing JerseyCo Owners of disinterested and independent board of directors of GBTG), such B ordinary shares can be settled in cash. If the Exchange Committee elects to settle B ordinary shares in cash, the cash must be funded only through issuance of GBTG’s Class A Common Stock.Stock (a “direct exchange”). On July 10, 2023, the Continuing JerseyCo Owners exercised such rights under the Exchange Agreement with respect to all of their GBT JerseyCo B Ordinary Shares and shares of Class B Common Stock of GBTG and GBTG elected to effect the exchange as a direct exchange. See note 20 – Subsequent Events.

New Shareholders Agreement

At the closing of the Business Combination in May 2022, GBTG, GBT JerseyCo and the Continuing JerseyCo Owners entered into a Shareholders Agreement (the “New Shareholders“Shareholders Agreement”). The New Shareholders Agreement sets forth various restrictions, limitations and other terms concerning the transfer of equity securities of GBTG and GBT JerseyCo by the parties thereto (other than, in most circumstances, the A ordinary sharesOrdinary Shares of GBT JerseyCo). Among other matters, and subject to certain terms, conditions and exceptions, the New Shareholders Agreement prohibits each Continuing JerseyCo Owner, severally and not jointly, from effecting transfers of such equity securities to certain specified restricted persons, as well as transfers that would violate applicable securities laws or cause GBT JerseyCo to be treated other than as a pass-through entity for U.S. federal income tax purposes.

laws. The New Shareholders Agreement specifies the initial composition of the GBTG Board, effective immediately upon the closing andalso sets out the composition and appointment of the GBTG Board. The New Shareholders Agreement also requires (subject to certain specified conditionsBoard, and exceptions including those described below) the approval of each Continuing JerseyCo Owner for GBTG or its subsidiaries to take certain actions, including: (i) the redemption, cancellation or repayment of any equity securities of GBTG or GBT JerseyCo, other than on a pro rata basis from all shareholders; (ii) dividends or distributions, other than on a pro rata basis; (iii) any share exchanges, splits, combinations and similar actions with respect to one or more, but not all, classes or series of GBTG or GBT JerseyCo shares; (iv) amendments to GBT JerseyCo’s organizational documents that relate specifically and solely to rights, priorities and privileges of the B ordinary shares or the C ordinary shares of GBT JerseyCo, as applicable; or (v) any agreement or commitment to do any of the foregoing. Further, the New Shareholders Agreement provides for various provisions for transfer of shares, shareholder rights and termination of such rights, cash distributionsrights. On July 10, 2023, the Continuing JerseyCo Owners entered into a letter agreement amending the Shareholders Agreement (the “SHA Amendment”) to, satisfy tax liabilitiesamong other things, (i) reflect that the C Ordinary Shares of GBT JerseyCo owned by the GBT JerseyCo’s shareholders, etc. subject to certain terms and conditions asContinuing JerseyCo Owners will be, upon the Class A Common Stock of GBTG meeting the price thresholds set outforth in the agreement.Business Combination Agreement over the period of time set forth in the Business Combination Agreement, cancelled in exchange for shares of Class A Common Stock of GBTG, rather than into B Ordinary Shares of GBT JerseyCo and shares of Class B Common Stock of GBTG, which would be exchangeable for shares of Class A Common Stock of GBTG under the Exchange Agreement and (ii) modify tax related provisions to reflect that GBT JerseyCo will no longer be treated as a partnership for U.S. tax purposes.

Advisory Services Agreement

Certares Management Corp. (“Certares”), an indirect equity owner of the Company, provided certain advisory services to the Company under the Advisory Services Agreement which was terminated upon the closing of the Business Combination in May 2022. For the three and six months ended March 31,June 30, 2022,the Company accrued fees under this agreement of less than $1 million.million and $1 million, respectively. As of both March 31,June 30, 2023 and December 31, 2022, the Company had $5 million as amounts payable to Certares under this agreement.

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Commercial and Operating Agreements with Expedia

An affiliate of GBTG and an affiliate of Expedia entered into a ten-year term marketing partner agreement to provide GBTG’s business clients with access to Expedia group’s hotel content. As a result of this agreement, the Company recognized revenue of $38 $44

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

million and $19$41 million for the three months ended March 31,June 30, 2023 and 2022, respectively, and $82 million and $60 million for the six months ended June 30, 2023 and 2022, respectively. The Company had $19$23 million and $18 million receivable from the affiliate of Expedia as of March 31,June 30, 2023 and December 31, 2022, respectively.

GBT UK has entered into a Transition Services Agreement with Expedia, Inc. (the “Egencia TSA”), pursuant to which Expedia, Inc. (an affiliate of Expedia) and its affiliates provide certain transition services to GBT UK and its affiliates to facilitate an orderly transfer of Egencia from Expedia to the Company. For the three months ended March 31, 2023 and 2022, theThe total cost charged to the Company for the three months ended June 30, 2023 and 2022, was approximately $8$6 million and $11$9 million, respectively, thatand for the six months ended June 30, 2023 and 2022, was $14 million and $20 million, respectively, which was included in the Company’s consolidated statements of operations.operations within technology and content expense. As of March 31,June 30, 2023 and December 31, 2022 the Company had a payable to Expedia Inc. of $7$6 million and $8 million, respectively. Further, as of both March 31,June 30, 2023 and December 31, 2022, Egencia had a net receivable of $4$5 million from Expedia, primarily on account of net cash collected from customers by Expedia on behalf of Egencia.

As of both March 31, 2023 and December 31, 2022,During the Company had $15 million payable to Expedia on account of a loss contingency recognized in 2022. In April 2023, the Company settled $3 million of the liability by issuing its Class A Common Stock (see note 20 – Subsequent Events).

(20) Subsequent Events

In Aprilthree months ended June 30, 2023, pursuant to an agreement with Expedia, the Company issued 413,668575,409 shares of Class A Common Stock to Expedia to settle, in part, $3$4 million of liability for loss contingency accrued in 2022. As of June 30, 2023, and December 31, 2022, the Company had $11 million and $15 million, respectively, that remained payable to Expedia in respect of this loss contingency.

Loan to equity affiliate

During the six months ended June 30, 2023, the Company provided a loan of $5 million to one of its equity affiliates of which $2 million is receivable in the next twelve months.

(20) Subsequent Events

Corporate Simplification

On July 10, 2023, GBTG entered into a series of transactions that simplified its organizational structure by eliminating the Company’s Up-C structure. As part of this Corporate Simplification, the Continuing JerseyCo Owners transferred all of their respective B Ordinary Shares of GBT JerseyCo and shares of Class B Common Stock of GBTG to GBTG in exchange for GBTG issuing to each Continuing JerseyCo Owner shares of its Class A Common Stock.

On July 10, 2023, GBTG also entered into an amendment to the Business Combination Agreement with GBT JerseyCo (the “BCA Amendment”) and the SHA Amendment, to provide, among other things, that the C Ordinary Shares of GBT JerseyCo owned by the Continuing JerseyCo Owners will be, upon the Class A Common Stock of GBTG meeting the price thresholds set forth in the Business Combination Agreement over the period of time set forth in the Business Combination Agreement, cancelled in exchange for shares of Class A Common Stock of GBTG, rather than into B Ordinary Shares of GBT JerseyCo and shares of Class B Common Stock of GBTG, which would be exchangeable for shares of Class A Common Stock of GBTG under the Exchange Agreement. The BCA Amendment also provides that certain rights of holders of the C Ordinary Shares of GBT JerseyCo with respect to dividends and distributions and with respect to potential payments upon the winding up of GBT JerseyCo that had been obligations of GBT JerseyCo under its organizational documents prior to the Corporate Simplification are now direct obligations of GBTG. Reciprocal amendments are reflected in the Fifth Amended and Restated Memorandum of Association of GBT JerseyCo and the Fourth Amended and Restated Articles of Association of GBT JerseyCo.

As a result of the Corporate Simplification:

GBTG issued Class A Common Stock to the Continuing JerseyCo Owners in exchange for all of the issued and outstanding B Ordinary Shares of GBT JerseyCo and all of the issued and outstanding shares of Class B Common Stock of GBTG held by them;
GBTG became the sole holder of all the issued and outstanding A Ordinary Shares of GBT JerseyCo; and

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GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

there are no shares of Class B Common Stock of GBTG or B Ordinary Shares of GBT JerseyCo that remain issued and outstanding.

The Corporate Simplification will result in:

no net income (loss) or shareholder’s equity being allocated to the Continuing JerseyCo Owners (as non-controlling interests) in the consolidated financial statements of the Company; and
tax distributions that were payable by GBT JerseyCo to the Continuing JerseyCo Owners under the Shareholders’ Agreement (arising from the U.S. tax partnership arrangement) will cease, with GBTG now assuming 100% of income tax liability for any incremental U.S. tax payable related to GBT JerseyCo’s income from international operations.

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ItemITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

Certain statements made in this Quarterly Report on Form 10-Q (“Form 10-Q”) are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this Quarterly Report on Form 10-Q (“Form 10-Q”) are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors:

changes to projected financial information or our ability to achieve our anticipated growth rate and execute on industry opportunities;
our ability to maintain our existing relationships with customers and suppliers and to compete with existing and new competitors;
various conflicts of interest that could arise among us, affiliates and investors;
our success in retaining or recruiting, or changes required in, our officers, key employees or directors;
factors relating to our business, operations and financial performance, including market conditions and global and economic factors beyond our control;
the impact of the COVID-19 pandemic, geopolitical conflicts and related changes in base interest rates, inflation and significant market volatility on our business, the travel industry, travel trends and the global economy generally;
the sufficiency of our cash, cash equivalents and investments to meet our liquidity needs;
the effect of a prolonged or substantial decrease in global travel on the global travel industry;
political, social and macroeconomic conditions (including the widespread adoption of teleconference and virtual meeting technologies which could reduce the number of in-person business meetings and demand for travel and our services); and
the effect of legal, tax and regulatory changes.changes;
the decisions of market data providers, indices and individual investors; and
other factors detailed under the heading “Risk Factors” in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K.10-K filed with the SEC on March 21, 2023 (Annual Report on Form 10-K).

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

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You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements, and the related notes, included elsewhere in this Form 10-Q. The discussion and analysis below presents our historical results as of and for the periods ended on, the dates indicated. The historical financials below, for the period prior to the Business Combination, are those of GBT JerseyCo Limited and its subsidiaries that became predecessors of GBTG upon the consummation of the Business Combination and, depending on the context, “we,” “us,” or “our,” could mean GBT JerseyCo and its subsidiaries or GBTG and its subsidiaries.

Overview

We operate American Express Global Business Travel, the world’s leading B2B travel platform. We provide a full suite of differentiated, technology-enabled solutions to business travelers and clients, suppliers of travel content (such as airlines, hotels, ground transportation and aggregators) and third-party travel agencies. We differentiate our value proposition through our commitment to deliver unrivaled choice, value and experience with the powerful backing of American Express GBT.

We are at the center of the global B2B travel ecosystem, managing the end-to-end logistics of business travel and providing an important link between businesses, their employees, travel suppliers and other industry participants. We service our clients in the following ways:

Our portfolio of travel management solutions, built around and targeting the needs of key client segments we serve, provide extensive access to flights, hotel rooms, car rentals and other travel services as well as meeting and events solutions, including exclusive negotiated content, supported by a full suite of services that allows our clients to design and operate an efficient travel program and solve complex travel requirements across all stages of the business process from planning, booking, on trip, and post trip activities.
Our award-winning client facing proprietary platforms are built to deliver business value through optimized user experiences across the act of business travel. These platforms, accessible over Web and Mobile interfaces and powered by our data management infrastructure, are built by one of the world’s largest product engineering teams dedicated to driving technical innovation across the business travel industry. These client facing platforms are known to the market as:
oEgencia: primarily focuses on digital-first clients (more than 90% of transactions were served through digital channels in 2022) who value a simple, easy to use and standardized end-to-end solution.
oThe GBT platform: is a modular solution primarily focused on flexibility of service offerings; seamlessly integrating a wide range of third-party and proprietary software and services into one complete travel solution designed and built around the needs of each customer.
GBT Partner Solutions extends our platform to Network Partners, travel management companies and independent advisors, by offering them access to our differentiated content and technology. Through GBT Partner Solutions, we aggregate business travel demand serviced by our Network Partners at low incremental cost, which we believe enhances the economics of our platform, generates increased return on investment and expands our geographic and segment footprint.
GBT Supply MarketPlaceMarket Place provides travel suppliers with efficient access to business travel clients serviced by our diverse portfolio of leading travel management solutions and Network Partners. We believe this access allows travel suppliers to benefit from premium demand (which we generally view as demand that is differentially valuable and profitable to suppliers) without incurring the costs associated with directly marketing to, and servicing, the complex needs of our business clients. Our travel supplier relationships generate efficiencies and cost savings that can be passed on to our business clients.

In June 2014, American Express established the JV comprising the legacy GBT JerseyCo operations with a predecessor of Juweel and a group of institutional investors led by an affiliate of Certares. Since the formation of the JV in 2014, we have evolved from a leading travel management company into a complete B2B travel platform, becoming one of the leading marketplaces in travel for business clients and travel suppliers. Before June 2014, our operations were owned by American Express and primarily consisted of providing business travel solutions for business clients.

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On December 2, 2021, GBT JerseyCo entered into the Business Combination Agreement with APSG.Global Business Travel Group, Inc. or “GBTG”) (formerly known as Apollo Strategic Growth Capital or “APSG”). The Business Combination closed on May 27, 2022 and GBT JerseyCo became a direct subsidiary of GBTG through the transaction contemplated by the Business Combination Agreement. GBTG is a Delaware corporation and tax resident in the U.S. GBTG conducts its business through GBT JerseyCo, inwhich up until July 10, 2023, was through an Up-C structure. GBT JerseyCo is tax residentOn July 10, 2023, GBTG entered into a series of transactions that simplified the capital and organizational structure by eliminating the Up-C structure. See note 20 – Subsequent Events to our consolidated financial statements included in the U.K.this Form 10-K.

In May 2022, we executed long-term commercial agreements with American Express, including the A&R Trademark License Agreement, pursuant to which we continue to license the American Express trademarks used in the American Express Global Business Travel brand, and the American Express GBT Meetings & Events brand for business travel, meetings and events, business consulting and other services related to business travel, in each case on an exclusive and worldwide basis. The term of the A&R Trademark License Agreement is for 11 years from the closing date,until May 2033, unless earlier terminated or extended. The American Express brand, consistently ranked as one of the most valuable brands in the world, brings with it a reputation for service excellence. We believe our partnership with American Express has been an important component of our value proposition. Under our commercial agreements with American Express, we exclusively provide business travel and meetings and events services to American Express personnel, subject to limited exceptions, engage in mutual global lead generation activities with American Express for our respective services and continue to exclusively promote American Express payment products to our clients and to make those products available for use by our own personnel in connection with our business.

Key Factors Affecting Our Results of Operations

As a result of a number of factors, our historical results of operations are not comparable from period to period and may not be comparable to our financial results of operations in future periods. Set forth below is a brief discussion of the key factors impacting the comparability of our results of operations.

Industry Trends

The travel industry can generally be divided into two sectors: (i) the leisure travel sector, which serves individuals who make reservations for vacation and personal travel, and (ii) the business travel sector, which serves organizations that require travel by employees and other travelers for business needs and meetings. We focus primarily on the business travel sector, which is approximately twice as valuable as the leisure travel sector because business travel customers purchase more premium seats, more flexible tickets, more long-haul international trips and more last-minute bookings.

Impact of the COVID-19 Pandemic

The outbreak of COVID-19 severely restrictedThere have been improvements in our business and operating conditions since the level of economic activity around the world beginning in 2020. Government measures implemented then to contain the spread of COVID-19, such as imposing restrictions on travel and business operations, limited business travel significantly below 2019 levels.

Since then, many countries have vaccinated a reasonable proportion of their population, and the spread theoutset of the virus is now being contained to varying degreesCOVID-19 pandemic in different countries. WithMarch 2020; however, we cannot predict the evolutionlong-term effects of milder COVID-19 variants, availability of multiple vaccine booster doses and increasing familiarity with the virus, many COVID-19 relatedpandemic on our business. As travel restrictions have been lifted with countries around the world reopening their borders for foreignrelaxed and travel and clients becoming more comfortable traveling. This has led to a moderation, and to an extent recovery, of the more severe declines in business travel bookings experienced at height of the pandemic and periods of resurgence. Wepatterns return, we have seen gradual improvement in our transactionkey volume sincemetrics during 2022 and through the third quarterfirst half of 2021 and while the global travel activity has since shown a recovery trend it still remains below 2019 levels.2023. Although our results for the three months ended March 31,first quarter of 2022 included a strong recovery from the pandemic, when compared to the same periods in 2020 and 2021, the Omicron variant of COVID-19 limited the recovery of our business during that period, such that theperiod. Consequently, our results for the threesix months ended March 31,June 30, 2023 reflect notable improvementinclude upside from such recovery in comparison.comparison to the same period in the prior year.

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Key Operating and Financial Metrics

We monitor the following key operating and financial metrics to help us evaluate our business, measure our performance, identify trends affecting our business, prepare financial projections and make strategic decisions. The following key operating and financial metrics, which we believe are useful in evaluating our business, are used by management to monitor and analyze the operational and financial performance of our business:

Three months ended

Change favorable /

 

Three months ended

Change favorable /

Six months ended

Change favorable /

 

March 31, 

(unfavorable)

 

June 30, 

(unfavorable)

June 30, 

(unfavorable)

 

(in $ millions, except percentages)

    

2023

    

2022

    

$

    

%

 

    

2023

    

2022

    

$

    

%

    

2023

    

2022

    

$

    

%

 

Key Operating Metrics

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

TTV

$

7,422

$

3,943

$

3,479

88

%

$

7,349

$

6,527

$

822

13

%  

$

14,771

 

$

10,470

$

4,301

 

41

%

Transaction Growth

 

61

%

389

%

 

12

%

347

%

 

32

%

363

%  

 

 

Key Financial Metrics

 

 

 

 

 

 

Revenue

 

578

350

228

65

%

 

592

486

106

22

%  

 

1,170

 

836

 

334

 

40

%

Total operating expense

587

446

(141)

(32)

%

590

505

(85)

(17)

%  

 

1,177

 

951

 

(226)

 

(24)

%

Net loss

 

(27)

(91)

64

70

%

 

(55)

(2)

(53)

n/m

 

(82)

 

(93)

 

11

 

n/m

Net cash used in operating activities

 

(77)

(154)

77

50

%

Net cash provided by (used in) operating activities

 

46

(155)

201

n/m

 

(31)

 

(309)

 

278

 

n/m

EBITDA

 

45

(53)

98

184

%

 

27

63

(36)

(55)

%  

 

72

 

10

 

62

 

682

%

Adjusted EBITDA

 

99

(28)

127

455

%

 

106

47

59

126

%  

 

205

 

19

 

186

 

980

%

Adjusted Operating Expenses

 

479

377

(102)

(27)

%

 

486

438

(48)

(11)

%  

 

965

 

815

 

(150)

 

(18)

%

Free Cash Flow

 

(109)

(175)

66

37

%

 

19

(176)

195

n/m

 

(90)

 

(351)

 

261

 

74

%

As of 

As of 

As of 

As of 

March 31, 

December 31,

June 30, 

December 31,

    

2023

    

2022

    

2023

    

2022

Net Debt

$

1,035

$

919

$

1,024

$

919

n/m = Percentage calculated is not meaningful

Key Operating Metrics

We consider Total Transaction Value (“TTV”) (as defined below), followed by Transaction Growth (Decline) (as defined below), to be two significant non-financial metrics that are broadly used in the travel industry to help understand revenue and expense trends. These metrics are used by our management to (1) manage the financial planning and performance of our business, (2) evaluate the effectiveness of our business strategies, (3) make budgeting decisions, and (4) compare our performance to the performance of our peer companies. We also believe that TTV, followed by Transaction Growth (Decline), may assist potential investors and financial analysts in understanding the drivers of growth in our revenues and changes in our operating expenses across reporting periods.

TTV

TTV refers to the sum of the total price paid by travelers for air, hotel, rail, car rental and cruise bookings, including taxes and other charges applied by suppliers at point of sale, less cancellations and refunds.

For the three months ended March, 31June 30, 2023 TTV increased by $3,479$822 million, or 88 %,13%, to $7,422$7,349 million compared to the three months ended March 31,June 30, 2022. For the six months ended June 30, 2023, TTV increased by $4,301 million, or 41%, compared to the six months ended June 30, 2022. The increase in TTV during the three and six months ended June 30, 2023, was primarily due to Transaction Growth, assisted in part by upside resulting from the liftingimpact of travel restrictions that were introduced by governments in response toOmicron variant of the COVID-19 pandemic, which remained in place duringaffected the results of three months ended March 31, 2022 due to the COVID-19 Omicron variant.2022.

Transaction Growth (Decline)

Transaction Growth (Decline) represents year-over-year growth or decline as a percentage of the total transactions, including air, hotel, car rental, rail or other travel-related transactions, recorded at the time of booking, and is calculated on a gross basis to include

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cancellations, refunds and exchanges. To calculate year-over-year growth or decline, we compare the total number of transactions in the comparative previous period/ year to the total number of transactions in the current periodperiod/year in percentage terms.

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For the three months ended March 31,June 30, 2023, Transaction Growth of 61%was 12% compared to three months ended June 30, 2022. For the six months ended June 30, 2023, Transaction Growth was 32% compared to the six months ended June 30, 2022. Transaction Growth during these periods was primarily due to the lifting of travel restrictions that were introduced by governmentsincreased demand from business clients and an increase in response to the COVID-19 pandemic, which remained in place during the three months ended March 31, 2022 due to the COVID-19 Omicron variant.international travel.

Non-GAAP Financial Measures

We report our financial results in accordance with GAAP. Our non-GAAP financial measures are provided in addition, to, and should not be considered as an alternative, to other performance or liquidity measure derived in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and you should not consider them either in isolation or as a substitute for analyzing our results as reported under GAAP. In addition, because not all companies use identical calculations, the presentations of our non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.

Management believes that these non-GAAP financial measures provide users of our financial information with useful supplemental information that enables a better comparison of our performance or liquidity across periods. In addition, we use certain of these non-GAAP financial measures as performance measures as they are important metrics used by management to evaluate and understand the underlying operations and business trends, forecast future results and determine future capital investment allocations. We also use certain of our non-GAAP financial measures as indicators of our ability to generate cash to meet our liquidity needs and to assist our management in evaluating our financial flexibility, capital structure and leverage. These non-GAAP financial measures supplement comparable GAAP measures in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and/or to compare our performance and liquidity against that of other peer companies using similar measures.

EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses

We define EBITDA as net income (loss) before interest income, interest expense, gain (loss) on early extinguishment of debt, benefit from (provision for) income taxes and depreciation and amortization.

We define Adjusted EBITDA as net income (loss) before interest income, interest expense, gain (loss) on early extinguishment of debt, benefit from (provision for) income taxes and depreciation and amortization and as further adjusted to exclude costs that management believes are non-core to the underlying business of the Company, consisting of restructuring costs (including charges resulting from facilities consolidation), integration costs, costs related to mergers and acquisitions, non-cash equity-based compensation, long-term incentive plan costs, certain corporate costs, fair value movements on earnout derivative liabilities, foreign currency gains (losses), non- service components of net periodic pension benefit (costs) and gains (losses) on disposal of businesses.

We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue.

We define Adjusted Operating Expenses as total operating expenses excluding depreciation and amortization and costs that management believes are non-core to the underlying business of the Company, consisting of restructuring costs (including charges resulting from facilities consolidation), integration costs, costs related to mergers and acquisitions, non-cash equity-based compensation, long-term incentive plan costs and certain corporate costs.

EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses are supplemental non-GAAP financial measures of operating performance that do not represent and should not be considered as alternatives to net income (loss) or total operating expenses, as determined under GAAP. In addition, these measures may not be comparable to similarly titled measures used by other companies.

These non-GAAP measures have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of the Company’s results or expenses as reported under GAAP. Some of these limitations are that these measures do not reflect:

changes in, or cash requirements for, our working capital needs or contractual commitments;

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our interest expense, or the cash requirements to service interest or principal payments on our indebtedness;
our tax expense, or the cash requirements to pay our taxes;

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recurring, non-cash expenses of depreciation and amortization of property and equipment and definite-lived intangible assets and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future;
the non-cash expense of stock-based compensation, which has been, and will continue to be for the foreseeable future, an important part of how we attract and retain our employees and a significant recurring expense in our business;
restructuring, mergers and acquisition and integration costs, all of which are intrinsic of our acquisitive business model; and
impact on earnings or changes resulting from matters that are non-core to our underlying business, as we believe they are not indicative of our underlying operations.

EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses should not be considered as a measure of liquidity or as a measure determining discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations.

We believe that the adjustments applied in presenting EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses are appropriate to provide additional information to investors about certain material non-cash and other items that management believes are non-core to our underlying business.

We use these measures as performance measures as they are important metrics used by management to evaluate and understand the underlying operations and business trends, forecast future results and determine future capital investment allocations. These non-GAAP measures supplement comparable GAAP measures in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. We also believe that EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses are helpful supplemental measures to assist potential investors and analysts in evaluating our operating results across reporting periods on a consistent basis.

Set forth below is a reconciliation of net loss to EBITDA and Adjusted EBITDA.

Three months ended March 31, 

 

Three months ended June 30, 

Six months ended June 30, 

 

(in $ millions)

    

2023

    

2022

 

    

2023

    

2022

    

2023

    

2022

 

Net loss

$

(27)

$

(91)

 

$

(55)

$

(2)

$

(82)

$

(93)

 

Interest expense

 

34

19

 

35

24

 

69

 

43

Benefit from income taxes

 

(8)

(25)

 

(2)

(4)

 

(10)

 

(29)

Depreciation and amortization

 

46

44

 

49

45

 

95

 

89

EBITDA

 

45

(53)

 

27

63

 

72

 

10

Restructuring (a)

 

23

2

Restructuring and related charges (a)

 

13

(5)

 

36

 

(3)

Integration costs (b)

 

8

9

 

10

8

 

18

 

17

Mergers and acquisitions (c)

 

1

 

1

 

 

2

Equity-based compensation (d)

 

19

3

 

22

5

 

41

 

8

Fair value movements on earnout derivative liabilities (e)

 

(3)

Fair value movement on earnouts and warrants derivative liabilities (e)

 

19

(36)

 

16

 

(36)

Other adjustments, net (f)

 

7

10

 

15

11

22

21

Adjusted EBITDA

$

99

$

(28)

$

106

$

47

$

205

$

19

Net loss Margin

(5)

%

(26)

%

(9)

%

(7)

%

(11)

%

Adjusted EBITDA Margin

 

17

%

(8)

%

 

18

%

10

%

 

18

%

 

2

%

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Set forth below is a reconciliation of total operating expenses to Adjusted Operating Expenses:

Three months ended March 31, 

Three months ended June 30, 

Six months ended June 30, 

(in $ millions)

    

2023

    

2022

    

2023

    

2022

    

2023

    

2022

Total operating expenses

$

587

$

446

$

590

$

505

$

1,177

$

951

Adjustments:

 

 

 

 

Depreciation and amortization

 

(46)

(44)

 

(49)

(45)

 

(95)

 

(89)

Restructuring (a)

 

(23)

(2)

Restructuring and related charges (a)

 

(13)

5

 

(36)

 

3

Integration costs (b)

 

(8)

(9)

 

(10)

(8)

 

(18)

 

(17)

Mergers and acquisitions (c)

 

(1)

 

(1)

 

 

(2)

Equity-based compensation (d)

 

(19)

(3)

 

(22)

(5)

 

(41)

 

(8)

Other adjustments, net (f)

 

(12)

(10)

 

(10)

(13)

 

(22)

 

(23)

Adjusted Operating Expenses

$

479

$

377

$

486

$

438

$

965

$

815

(a)RepresentsIncludes (i) employee severance costs/(reversals) of $5 million and $(5) million for the three months ended June 30, 2023 and 2022, respectively, and $28 million and $(3) million for the six months ended June 30, 2023 and 2022, respectively, (ii) accelerated amortization of operating lease ROU assets of $6 million for each of the three and six months ended June 30, 2023 and (iii) contract costs related expenses due to restructuring activities.facility abandonment of $2 million for each of the three and six months ended June 30, 2023.
(b)Represents expenses related to the integration of businesses acquired.
(c)Represents expenses related to business acquisitions, including potential business acquisitions, and includes pre-acquisition due diligence and related activities costs.
(d)Represents non-cash equity-based compensation expense related to equity incentive awards to certain employees.
(e)Represents fair value movements on earnoutearnouts and warrants derivative liabilities during the periods.
(f)Adjusted Operating Expenses excludes (i) long-term incentive plan expense of $7$5 million and $9$11 million for the three months ended March 31,June 30, 2023 and 2022, respectively, and $12 million and $20 million for the six months ended June 30, 2023 and 2022, respectively (ii) litigation and professional services costs of $5 million and $1$2 million for the three months ended March 31,June 30, 2023 and 2022, respectively, and $10 million and $3 million for the six months ended June 30, 2023 and 2022, respectively. Adjusted EBITDA additionally excludes (i) unrealized foreign exchange loss (gains) loss of $(6)$4 million and $0 for the three months ended June 30, 2023 and 2022, respectively, and $(2) million and $2 million for the threesix months ended March 31,June 30, 2023 and 2022, respectively and (ii) non-service component of our net periodic pension benefitcost (benefit) related to our defined benefit pension plans of $1$ 1 million and $(2) million for the three months ended March 31,June 30, 2023 and 2022, respectively, and $2 million and $(4) million for the six months ended June 30, 2023 and 2022, respectively.

For a discussion of Free Cash Flow and Net Debt, see “Liquidity and Capital Resources — Free Cash Flow” and “Liquidity and Capital Resources — Net Debt.”

Components of Results of Operations

Revenue

We generate revenue in two primary ways — (1) Travel Revenues received from clients and travel suppliers and (2) Product and Professional Services Revenues received from clients, travel suppliers and Network Partners.

Travel Revenues: Travel Revenues include all revenue relating to servicing a travel transaction, which can be air, hotel, car rental, rail or other travel-related bookings or reservations, cancellations, exchanges or refunds. The major components of our Travel Revenues are:

Client Fees: We typically charge clients transaction fees for arranging travel.

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Supplier Fees: Travel suppliers pay us for distributing and promoting their content. The mechanism varies by supplier, but the amount is usually a volume-linked fee. This includes fees from the three major global distribution services providers.

Product and Professional Services Revenues: We receive revenue from clients, travel suppliers and Network Partners for using our platform, products and value-added services.

Management Fees: Many clients request a contractually fixed, dedicated staffing pool to serve their travelers for part or all of their business travel. In these cases, we use a cost-recovery-plus-margin pricing structure instead of a transaction fee. Client management resources and overhead allocations are also included in this management fee.
Products Revenues: We provide a broad range of business travel management tools used by clients to manage their travel programs. Revenue for these solutions usually takes the form of recurring subscriptions or management fees.

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Table of Contents

Consulting and Meetings and Events Revenues: Consulting revenues (including outsourcing to us of part, or all, of a client’s travel program management) are usually a fixed fee for delivery of a certain engagement (such as company travel policy design). Meetings and events revenue is based on fees for booking, planning and managing meetings and events.
Other Revenues: Other revenues typically include certain marketing and advertising fees from travel suppliers, as well as direct revenues from our Network Partners (excluding certain supplier fees that are indirectly driven by Network Partners’ contribution to aggregate volumes).

Costs and Expenses

Cost of Revenue

Cost of revenue primarily consists of (i) salaries and benefits of our travel counsellors, meetings and events teams and their supporting functions and (ii) the cost of outsourcing resources in transaction processing and the processing costs of online booking tools.

Sales and Marketing

Sales and marketing expenses primarily consistsconsist of (i) salaries and benefits of employees in our sales and marketing function and (ii) the expenses for acquiring and maintaining client partnerships, including account management, sales, marketing and consulting, as well as certain other functions that support these efforts.

Technology and Content

Technology and content expenses primarily consistsconsist of (i) salaries and benefits of employees engaged in our product and content development, back-end applications, support infrastructure and who maintain security of our networks and (ii) expenses associated with licensing software and information technology maintenance.

General and Administrative

General and administrative expenses consistsprimarily consist of (i) salaries and benefits of our employees in finance, legal, human resources and administrative support, (ii) integration expenses related to acquisitions, costs related to mergers and acquisitions primarily related to due diligence, legal and related professional services fees, (iii) facility costs and (iii)(iv) fees and costs related to accounting, tax and other professional services fees, legal related costs, and other miscellaneous expenses.

We have incurred, and expect to continue to incur, additional expenses as we grow our operations as a newly public company, including higher legal, corporate insurance, accounting and auditing expenses, and the additional costs of enhancing and maintaining our internal control environment through the adoption of new corporate policies. We also expect that generalprocedures and administrative expenses will continue to increase in absolute dollars as we expand our operations.policies.

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Three Months Ended March 31,June 30, 2023 Compared to Three Months Ended March 31,June 30, 2022

The following is a discussion of our results of the consolidated statements of operations for the three months ended March 31,June 30, 2023 and 2022:

Three months ended

Change

Three months ended

Change

March 31, 

favorable/(unfavorable)

June 30, 

favorable/(unfavorable)

(in $ millions)

    

2023

    

2022

    

$

    

%

    

2023

    

2022

    

$

    

%

Revenue

$

578

$

350

$

228

65

%

$

592

$

486

$

106

22

%

Costs and expenses:

 

 

Cost of revenue (excluding depreciation and amortization shown separately below)

 

241

173

(68)

(40)

%

 

242

199

(43)

(21)

%

Sales and marketing

 

103

74

(29)

(38)

%

 

102

85

(17)

(22)

%

Technology and content

 

98

90

(8)

(9)

%

 

102

97

(5)

(5)

%

General and administrative

 

76

63

(13)

(17)

%

 

88

84

(4)

(7)

%

Restructuring charges

 

23

2

(21)

n/m

 

7

(5)

(12)

(254)

%

Depreciation and amortization

 

46

44

(2)

(6)

%

 

49

45

(4)

(10)

%

Total operating expenses

 

587

446

(141)

(32)

%

 

590

505

(85)

(17)

%

Operating loss

 

(9)

(96)

87

91

%

Operating income (loss)

 

2

(19)

21

108

%

Interest expense

 

(34)

(19)

(15)

(75)

%

 

(35)

(24)

(11)

(51)

%

Fair value movements on earnout derivative liabilities

 

3

3

n/m

Other income, net

 

5

5

n/m

Fair value movement on earnouts and warrants derivative liabilities

 

(19)

36

(55)

(153)

%

Other (loss) income, net

 

(5)

2

(7)

(377)

%

Loss before income taxes and share of losses from equity method investments

 

(35)

(115)

80

69

%

 

(57)

(5)

(52)

n/m

Benefit from income taxes

 

8

25

(17)

(66)

%

 

2

4

(2)

57

%

Share of losses from equity method investments

 

(1)

1

88

%

 

(1)

1

121

%

Net loss

$

(27)

$

(91)

$

64

70

%

$

(55)

$

(2)

$

(53)

n/m

n/m — percentage calculated not meaningful

Revenues

Three months ended

Change

Three months ended

Change

March 31, 

favorable/(unfavorable)

June 30, 

favorable/(unfavorable)

(in $ millions)

    

2023

    

2022

    

$

    

%

    

2023

    

2022

    

$

    

%

Travel revenue

$

467

257

$

210

82

%

$

479

388

$

91

23

%

Products and professional services revenue

 

111

93

18

19

%

 

113

98

15

16

%

Total revenue

$

578

350

$

228

65

%

$

592

486

$

106

22

%

For the three months ended March 31,June 30, 2023, our total revenue increased by $228$106 million, or 65%22%, primarily due to a 13% increase in volume driven by the lifting of travel restrictions that were introduced by governmentsTTV and 0.6 percentage points increase in response to Omicron variant of COVID-19, during the three months ended March 31, 2022.revenue yield. Revenue yield during the three months ended March 31,June 30, 2023 was 7.8%8.1%. Yield is calculated as TTVtotal revenue divided by total revenue.TTV.

Travel Revenue increased by $210$91 million, or 82%23%, primarily due to Transaction Growth asgrowth in TTV driven by (i) an increase in business travel, restrictions that were introduced(ii) an improvement in yield driven by governments,supplier performance incentives and (iii) increase in response to Omicron variant of COVID-19, during the three months ended March 31, 2022 were lifted.international transactions.

Product and Professional Services Revenue increased $18$15 million, or 19%16%, primarily due to increased management fees and meetings and events revenue driven by strengthened demand.

Cost of Revenue

Three months ended

Change

Three months ended

Change

March 31, 

favorable/(unfavorable)

June 30, 

favorable/(unfavorable)

(in $ millions)

    

2023

    

2022

    

$

    

%

    

2023

    

2022

    

$

    

%

Cost of revenue (excluding depreciation and amortization)

$

241

$

173

$

(68)

(40)

%

$

242

$

199

$

(43)

(21)

%

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For the three months ended March 31,June 30, 2023, cost of revenue increased by $68$43 million, or 21%, due to increased salaries and benefits and other costs of revenue.

Salaries and benefits expenses related to cost of revenue increased by $29 million, or 18%, primarily due to an increase in the number of travel care employees and increased support staff resulting in an additional $27 million of expense.

Other cost of revenue increased by $14 million, or 31%, due to (i) $9 million increase in outsourcing of vendors, and (ii) $5 million related to increased merchant fees and data processing costs to meet the increase in transaction volumes.

Sales and Marketing

Three months ended

Change

June 30, 

favorable/(unfavorable)

(in $ millions)

    

2023

    

2022

    

$

    

%

Sales and marketing

$

102

$

85

$

(17)

(22)

%

For the three months ended June 30, 2023, sales and marketing expenses increased by $17 million, or 22%, due to increased salaries and benefits and other sales and marketing costs.

Salaries and benefits expenses related to sales and marketing increased by $16 million, or 24%, primarily due to (i) increase in hiring of additional personnel to manage and support our sales growth and, (ii) an increase of non-cash equity incentive expense of $9 million.

Other sales and marketing expenses increased marginally by $1 million.

Technology and Content

Three months ended

Change

June 30, 

favorable/(unfavorable)

(in $ millions)

    

2023

    

2022

    

$

    

%

Technology and content

$

102

$

97

$

(5)

(5)

%

For the three months ended June 30, 2023, technology and content costs increased by $5 million, or 5%, primarily due to incremental spend in other technology and content costs to meet the increase in transaction volume.

Salaries and benefits expenses related to technology and content increased marginally by $1 million.

Other technology and content costs increased by $4 million, or 9%, primarily due to incremental data processing costs to meet the increase in transaction volume.

General and Administrative

Three months ended

Change

June 30, 

favorable/(unfavorable)

(in $ millions)

    

2023

    

2022

    

$

    

%

General and administrative

$

88

$

84

$

(4)

(7)

%

For the three months ended June 30, 2023, general and administrative expenses increased by $4 million, or 7%, due to increases in both salaries and benefits expenses and other general and administrative costs.

Salaries and benefits expenses related to general and administrative increased by $5 million, or 16%, due to (i) a $3 million increase of non-cash equity incentives, (ii) $8 million increase related to hiring of additional personnel to manage integration, transformation and head office functions, offset by, (iii) $6 million lower long-term incentive expense.

Other general and administrative expenses decreased marginally by $1 million.

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Table of Contents

Restructuring charges

For the three months ended June 30, 2023, restructuring charges of $7 million primarily related to employee severance costs resulting from a reduction in workforce on account of changes to our internal operating model and accrual of certain contract termination costs related to facility abandonment.

Depreciation and Amortization

For the three months ended June 30, 2023, depreciation and amortization increased by $4 million, or 10%, primarily due to accelerated amortization of property and equipment resulting from abandonment of certain office facilities.

Interest Expense

For the three months ended June 30, 2023, interest expense increased by $11 million, or 51%, primarily due to a higher amount of outstanding term loan debt and higher interest rates during the three months ended June 30, 2023 compared to the three months ended June 30, 2022, partially offset by the benefit resulting from interest rate swaps.

Fair Value Movements on Earnouts and Warrants Derivative Liabilities

During the three months ended June 30, 2023, the fair value movement of our derivative liabilities related to our earnout shares resulted in a charge of $19 million to our consolidated statement of operations compared to a credit of $36 million (which also included fair value movement related to warrant derivative liabilities) during the three months ended June 30, 2022. The increase in fair value of earnout derivative liability was mainly driven by the increase in our stock price as of June 30, 2023.

Other (Loss) Income, net

For the three months ended June 30, 2023, other loss, net, increased by $7 million primarily due to unfavorable changes in foreign exchange rates, and increased costs related to non-service components of net periodic pension cost.

Benefit from Income Taxes

GBT JerseyCo is tax resident in the U.K. and as of June 30, 2023, is treated as a partnership for U.S. federal income tax purposes. Following the Corporate Simplification transaction, the Up-C Structure was eliminated and the partnership dissolved on July 10, 2023, and as a consequence, GBTG assumed 100% ownership of GBT JerseyCo.

We expect our U.S. income taxes liability to increase; however, this incremental income tax exposure is expected to be partially offset by us no longer having to make compensating tax distribution payments to the Continuing JerseyCo Owners. Therefore, we expect that there will be an immaterial effect on our overall net cash outflows. Any increase in cash outflows from operations due to increased U.S. income tax payments will be partially offset by a decrease in cash outflows from financing activities due to savings of tax distributions that GBT JerseyCo would have otherwise made to the Continuing JerseyCo Owners.

While GBTG’s increased ownership in GBT JerseyCo and the consequent increased exposure to the U.S. income taxes on our international operations can be expected to result in an increase to the amount of U.S. current tax expense that we will report in the future, we also expect an increase in the amount of deferred tax credits that will be available to offset that U.S. current income tax expense. Therefore, we expect the transaction will have an immaterial net impact on our overall effective tax rate.

Prior to July 10, 2023, GBTG, was subject to U.S. income taxes on its proportionate equity interest in GBT JerseyCo. For the three months ended June 30, 2023 and 2022, we had a benefit from income tax of $2 million and $4 million, respectively, and our effective tax rate was 3% and 80%, respectively. Our effective tax rates for the three months ended June 30, 2023 and 2022, differ from the U.S. federal statutory tax rate of 21% primarily due to the non-taxable fair value movement on earnouts and warrants derivative liabilities and typical items such as return-to-tax provisions, additional state and local taxes and other non-deductible expenses.

We believe we are well positioned to monetize both the historical and additional tax benefits in future periods.

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Table of Contents

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

The following is a discussion of our results of the consolidated statements of operations for the six months ended June 30, 2023 and 2022:

    

Six months ended

    

Change

 

June 30,

favorable/(unfavorable)

 

(in $ millions)

    

2023

    

2022

    

$

    

%  

 

Revenue

$

1,170

$

836

$

334

40

%

Costs and expenses:

 

  

 

  

 

  

  

Cost of revenue (excluding depreciation and amortization shown separately below)

 

483

 

372

 

(111)

(30)

%

Sales and marketing

 

205

 

159

 

(46)

(29)

%

Technology and content

 

200

 

187

 

(13)

(7)

%

General and administrative

 

164

 

147

 

(17)

(11)

%

Restructuring charges

 

30

 

(3)

 

(33)

n/m

Depreciation and amortization

 

95

 

89

 

(6)

(8)

%

Total operating expenses

 

1,177

 

951

 

(226)

(24)

%

Operating loss

 

(7)

 

(115)

 

108

94

%

Interest expense

 

(69)

 

(43)

 

(26)

(62)

%

Fair value movement on earnouts and warrants derivative liabilities

 

(16)

 

36

 

(52)

(144)

%

Other income, net

 

 

2

 

(2)

(124)

%

Loss before income taxes and share of losses from equity method investments

 

(92)

 

(120)

 

28

23

%

Benefit from income taxes

 

10

 

29

 

(19)

(65)

%

Share of losses from equity method investments

 

 

(2)

 

2

105

%

Net loss

$

(82)

$

(93)

$

11

12

%

n/m — percentage calculated not meaningful

Revenues

    

Six months ended

    

Change

 

June 30,

favorable/(unfavorable)

 

(in $ millions)

    

2023

    

2022

    

$

    

%  

 

Travel revenue

$

946

 

$

645

$

301

 

47

%

Products and professional services revenue

 

224

 

 

191

 

33

 

17

%

Total revenue

$

1,170

 

$

836

$

334

 

40

%

For the six months ended June 30, 2023, our total revenue increased by $334 million, or 40%, primarily due to a 41% increase in volumeTTV driven by the lifting of travel restrictions that were introduced by governments in response to the Omicron variant of COVID-19, during the three months ended March 31, 2022. Revenue yield during the six months ended June 30, 2023 was 7.9%.

Travel Revenue increased by $301 million, or 47%, primarily due to increases in TTV from continued growth in business travel and increases in international transactions.

Product and Professional Services Revenue increased $33 million, or 17%, primarily due to increased management fees and meetings and events revenue driven by strengthened demand.

Cost of Revenue

    

Six months ended

    

Change

 

June 30,

favorable/(unfavorable)

 

(in $ millions)

    

2023

    

2022

    

$

    

%  

 

Cost of revenue (excluding depreciation and amortization)

$

483

$

372

$

(111)

 

(30)

%

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Table of Contents

For the six months ended June 30, 2023, cost of revenue increased by $111 million, or 30%, to support Transaction Growth.

Salaries and benefits expenses related to cost of revenue increased by $38$67 million, or 28%23%, primarily due to (i) an increase in the number of travel care employees employed to meet the increased transactionsand support staff resulting in an additional $33$60 million of expense, and (ii) a decrease in government funds of $5$6 million received in connection with programs designed to minimize employment losses related to the COVID-19 pandemic, which were recorded as a reduction of salaries and benefits expenses during the threesix months ended March 31,June 30, 2022.

Other cost of revenue increased by $30$44 million, or 83%53%, primarily due to an(i) $21 million increase in professional fees relating to outsourcing costs, and (ii) a $12 million increase in data processing costs and merchant and professional fees to meet the increase in transaction volume driven by the recovery from the COVID-19 pandemic.volumes.

Sales and Marketing

Three months ended

Change

    

Six months ended

    

Change

 

March 31, 

favorable/(unfavorable)

June 30,

favorable/(unfavorable)

 

(in $ millions)

    

2023

    

2022

    

$

    

%

    

2023

    

2022

    

$

    

%  

 

Sales and marketing

$

103

$

74

$

(29)

(38)

%

$

205

$

159

$

(46)

 

(29)

%

For the threesix months ended March 31,June 30, 2023, sales and marketing expenses increased by $29$46 million, or 38%29%, primarily due to increase in volume driven by the lifting of travel restrictions that were introduced by governments, in response to Omicron variant of COVID-19, during the three months ended March 31, 2022.increased salaries and benefits and other sales and marketing costs.

Salaries and benefits expenses related to sales and marketing increased by $22$38 million, or 35%29%, primarily due to (i) an increase in salaries and benefits, including employee incentive costs, due to hiring of additional personnel to manage and support our sales growth, (ii) an increase of non-cash equity incentive expense of $6$15 million and (iii) a decrease in government funds of $3 million received in connection with programs designed to minimize employment losses related to the COVID-19 pandemic, which were recorded as a reduction of salaries and benefits expenses during the threesix months ended March 31,June 30, 2022.

Other sales and marketing expenses increased by $7$8 million, or 58%29% primarily due to incremental spend to meet the increase in transaction volumes.

Technology and Content

    

Six months ended

    

Change

 

June 30,

favorable/(unfavorable)

 

(in $ millions)

    

2023

    

2022

    

$

    

%  

 

Technology and content

$

200

$

187

$

(13)

 

(7)

%

For the six months ended June 30, 2023, technology and content costs increased by $13 million, or 7%, primarily due to incremental spend to meet the increase in transaction volume driven by the recovery from the COVID-19 pandemic.

Technology and Content

Three months ended

Change

March 31, 

favorable/(unfavorable)

(in $ millions)

    

2023

    

2022

    

$

    

%

Technology and content

$

98

$

90

$

(8)

(9)

%

For the three months ended March 31, 2023, technology and content costs increased by $8 million, or 9%, primarily due to increase in volume driven by the lifting of travel restrictions that were introduced by governments, in response to Omicron variant of COVID-19, during the three months ended March 31, 2022.volume.

Salaries and benefits expenses related to technology and content increased by $6$8 million, or 15%7%, primarily due to (i) increase in the salaries and benefits, including employee incentive costs, due to hiring of additional personnel to manage and support the increase in transaction volume, and (ii) ana $7 million increase of non-cash equity incentives of $3 million.incentives.

Other technology and content costs increased marginally by $2$5 million, or 4%.7% due to incremental data processing costs to meet the increase in transaction volume.

General and Administrative

Three months ended

Change

    

Six months ended

    

Change

 

March 31, 

favorable/ (unfavorable)

June 30,

favorable/(unfavorable)

 

(in $ millions)

    

2023

    

2022

    

$

    

%

    

2023

    

2022

    

$

    

%  

 

General and administrative

$

76

$

63

$

(13)

(17)

%

$

164

$

147

$

(17)

 

(11)

%

38

Table of Contents

For the threesix months ended March 31,June 30, 2023, general and administrative expenses increased by $13$17 million, or 17%11%, due to increases in both salaries and benefits expenses and other general and administrative costs.

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Table of Contents

Salaries and benefits expenses related to general and administrative increased by $3$10 million, or 6%13%, primarily due to (i) a $9 million increase ofin non-cash equity incentives.incentives, (ii) $10 million increase due to hiring of additional personnel to manage integration, transformation and head office functions, offset by, (iii) $9 million lower long-term incentive expense.

Other general and administrative expenses increased by $10$7 million, or 33%10%, primarily due to an increase in head office costs including professional fees, facilities costs resulting from accelerated amortization of operating lease ROU assets, data processing and certain other corporate expenses.

Restructuring charges

For the threesix months ended March 31,June 30, 2023, restructuring charges of $23$30 million primarily related to employee severance and related benefits costs resulting from a reduction in workforce on account of changes to our internal operating model.model and accrual of certain contract termination costs related to facility abandonment.

Depreciation and Amortization

For the threesix months ended March 31,June 30, 2023, depreciation and amortization increased marginally by $2$6 million, or 6%.8%, primarily due to accelerated amortization of property and equipment resulting from abandonment of certain office facilities and higher capitalization of property and equipment.

Interest Expense

For the threesix months ended March 31,June 30, 2023, interest expense increased by $15$26 million, or 75%62%, primarily due to a higher amount of outstanding term loan debt and higher interest rates during the threesix months ended March 31,June 30, 2023 compared to the threesix months ended March 31,June 30, 2022, partially offset by the benefit resulting from interest rate swaps.

Fair Value Movements on EarnoutEarnouts and Warrants Derivative Liabilities

During the threesix months ended March 31,June 30, 2023, the fair value movement of our derivative liabilities related to our non-employee earnout shares resulted in a creditcharge of $3$16 million to our consolidated statement of operations.operations compared to a credit of $36 million (which also included fair value movement related to warrant derivative liabilities) during the six months ended June 30, 2022. The increase in fair value of earnout derivative liability was mainly driven by the increase in our stock price as of June 30, 2023.

Other Income, net

For the threesix months ended March 31,June 30, 2023, other income, net, increaseddecreased marginally by $5 million primarily due to favorable changes in foreign exchange rates, offset by increased costs related to non-service components of net periodic pension cost.$2 million.

Benefit from Income Taxes

GBT JerseyCo is tax resident inFor the U.K.six months ended June 30, 2023 and is treated as a partnership for U.S. federal2022, we had benefit from income tax purposes. As a partnership, GBT JerseyCo is itself generally not subject to U.S. federal incomeof $10 million and $29 million, respectively, and our effective tax under current U.S. tax laws,rate was 11% and any taxable income or loss is passed through and included in the taxable income or loss of its members, including GBTG. GBTG is subject to U.S. federal income taxes with respect to its distributive share of the net taxable income or loss and any related tax credits of GBT JerseyCo. We are also subject to taxes for GBTG on a standalone basis in respect of any taxable gains or losses and deferred taxes related to its investment in GBT JerseyCo.

We are subject to taxes in the different jurisdictions in which we operate.25%, respectively. Our effective tax rate differsrates for the six months ended June 30, 2023 and 2022 differ from the U.S. federal statutory tax rate of 21% primarily due to different jurisdictional tax rates, together with the impact of permanent differencesnon-taxable fair value movement on earnouts and GBTG’s incremental layer of taxation due to our Up-C structure. For the three months ended March 31, 2023, our effective tax rate was 23.88% resulting in income tax benefit of $8 million that was primarily in relation to the pre-tax loss arising in GBT JerseyCo. The impact on the effective tax rate of any permanentwarrants derivative liabilities and typical items such as return-to-tax provisions, additional state and GBTG’s standalone tax position is more significant in the period as the pre-tax loss is lower in 2023 than 2022. Our effective income tax rate for the three months ended March 31, 2022 was 21.74%, primarily due to country rate differentials.local taxes and other non-deductible expenses.

We believe we are well positioned to monetize both the historical and additional tax benefits in future periods.

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Liquidity and Capital Resources

Our principal sources of liquidity are typically cash flows generated from operations, cash available under the credit facilities under the senior secured credit agreement as well as cash and cash equivalent balances on hand. As of March 31,June 30, 2023 and December 31, 2022, our cash and cash equivalent balances were $320$335 million and $303 million, respectively. During the threesix months ended March 31,June 30, 2023 and 2022, our net cash used in operating activities was $77$31 million and $154$309 million, respectively, and our Free Cash Flow was $(109)$(90) million and $(175)$(351) million, respectively (See “— Free Cash Flow” for additional information about this non-GAAP measure and a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP). The $50As of June 30, 2023, we had $43 million of senior secured revolving credit facility that remained undrawn at March 31,as of June 30, 2023.

In January 2023, we amended our senior secured credit facility and borrowed an additional principal amount of $135 million under a new senior secured tranche B-4 term loan facility (see note 10 – Long-term Debt).

We believe our liquidity is important given the limited ability to predict our future financial performance due to the uncertainty associated with the COVID-19 pandemic anduncertainties of a potential economic slowdown due to prevailing adverse macro-economic conditions. Since March 2020,In past, we have taken several measures to preserve our liquidity including initiating a business response plan to the COVID-19 pandemic (voluntary and involuntary redundancies, flexible workings, mandatory pay reductions, consolidating facilities, etc.), and enteringentered into several financial transactions, including debt financing / refinancing transactions and the consummation of the Business Combination. We further continue to explore other capital market transactions, process rationalizations and cost reduction measures to improve our liquidity position.

Based on our current operating plan, existing cash and cash equivalents, recovery of business travel indicated by recent volume trends, our mitigation measures taken or planned to strengthen our liquidity and financial position, along with our available funding capacity and cash flows from operations, we believe we have adequate liquidity to meet the future operating, investingoperational and financingother needs of the business for a minimum period of twelve months. Although we believe that we will have a sufficient level of cash and cash equivalents to cover our working capital needs in the ordinary course of business and to continue to expand our business, we may, from time to time, explore additional financing sources to lower our cost of capital, which could include equity, equity-linked and debt financing. In addition, from time to time, we may evaluate acquisitions and other strategic opportunities. If we elect to pursue any such investments, we may fund them with internally generated funds, bank financing, the issuance of other debt or equity or a combination thereof. There is no assurance that such funding would be available to us on acceptable terms or at all. Furthermore, we cannot assure you that we would be able to satisfy or obtain a waiver of applicable borrowing conditions for borrowing additional amounts under the unused commitments under the senior secured credit agreement in the future. In addition, utilization of the senior secured revolving credit facility may be effectively limited to the extent we are unable to comply with the additional borrowing conditions that apply during the suspension period or with the leverage-and liquidity-based financial covenant requirements for such facility contained in the senior secured credit agreement when required.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

    

Three months ended

Change 

    

Six months ended

Change 

March 31, 

favorable / (unfavorable)

June 30, 

favorable / (unfavorable)

(in $ millions)

    

2023

    

2022

    

$

    

2023

    

2022

    

$

Net cash used in operating activities

$

(77)

$

(154)

$

77

$

(31)

$

(309)

$

278

Net cash used in investing activities

 

(32)

(21)

(11)

 

(64)

(42)

(22)

Net cash from (used in) financing activities

 

122

(7)

129

Net cash from financing activities

 

123

298

(175)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

4

(3)

7

 

4

(16)

20

Net increase (decrease) in cash, cash equivalents and restricted cash

$

17

$

(185)

$

202

$

32

$

(69)

$

101

Cash Flows for the ThreeSix Months Ended March 31,June 30, 2023 Compared to the ThreeSix Months Ended March 31,June 30, 2022

As of March 31,June 30, 2023, we had $333$348 million of cash, cash equivalents and restricted cash, an increase of $17$32 million compared to December 31, 2022. The following discussion summarizes changes to our cash flows from operating, investing and financing activities for the threesix months ended March 31,June 30, 2023 compared to the threesix months ended March 31,June 30, 2022.

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Operating Activities

For the threesix months ended March 31,June 30, 2023, net cash used in operating activities was $77$31 million compared to $154$309 million for the threesix months ended March 31,June 30, 2022. The increase in cash flows from operating activities of $77$278 million was primarily due to (i) reduced net losses before considering non-cash charges and (ii) favorable net change in working capital, partially offset by (iii) higher cash interest paid and increased usage(iv) reduction on account of working capital.cash received on termination of derivative contract during the six months ended June 30, 2022.

Investing Activities

During the threesix months ended March 31,June 30, 2023, cash used in investing activities increased by $11$22 million primarily due to increased investments in property and equipment.

Financing Activities

During the threesix months ended March 31,June 30, 2023, net cash from financing activities of $122$123 million was primarily due to: (i) $131 million of proceeds received from borrowings under the senior secured tranche B-4 term loan facilities, net of discount and (ii) $2 million received from exercise of stock options, partially offset by (ii) $3$4 million repayment of principal amount of senior secured term loans and finance leases, and (iii) $8 million cash paid for taxes withheld upon vesting / exercise of equity awards. During the threesix months ended March 31,June 30, 2022, net cash used infrom financing activities of $7$298 million was primarily due to $4to: (i) $269 million of costs related toproceeds from the Business Combination transaction and $3(ii) $200 million of repayment of a finance lease obligation and principal amount of quarterlyproceeds received from delayed draw term loan installmentloans borrowed under the senior secured credit agreement.tranche B-3 term loan facilities, partially offset by (iii) $168 million redemption of preferred share capital, including dividends accrued thereon.

Free Cash Flow

We define Free Cash Flow as net cash from (used in) operating activities, less cash used for additions to property and equipment.

We believe Free Cash Flow is an important measure of our liquidity. This measure is a useful indicator of our ability to generate cash to meet our liquidity demands. We use this measure to conduct and evaluate our operating liquidity. We believe it typically presents an alternate measure of cash flowsflow since purchases of property and equipment are a necessary component of our ongoing operations and it provides useful information regarding how cash provided by operating activities compares to the property and equipment investments required to maintain and grow our platform. We believe Free Cash Flow provides investors with an understanding of how assets are performing and measures management’s effectiveness in managing cash.

Free Cash Flow is a non-GAAP measure and may not be comparable to similarly named measures used by other companies. This measure has limitations in that it does not represent the total increase or decrease in the cash balance for the period, nor does it represent cash flow for discretionary expenditures. This measure should not be considered as a measure of liquidity or cash flowsflow from operations as determined under GAAP. This measure is not a measurement of our financial performance under GAAP and should not be considered in isolation or as an alternative to net income (loss) or any other performance measures derived in accordance with GAAP or as an alternative to cash flowsflow from operating activities as a measure of liquidity.

Set forth below is a reconciliation of net cash used in operating activities to Free Cash Flow.

    

Three months ended

Change

    

Six months ended

Change

March 31, 

favorable /

June 30, 

favorable /

(in $ millions)

    

2023

    

2022

    

(unfavorable)

    

2023

    

2022

    

(unfavorable)

Net cash used in operating activities

 

$

(77)

$

(154)

$

77

 

$

(31)

$

(309)

$

278

Less: Purchase of property and equipment

 

(32)

(21)

(11)

 

(59)

(42)

(17)

Free Cash Flow

$

(109)

$

(175)

$

66

$

(90)

$

(351)

$

261

For the threesix months ended March 31,June 30, 2023, Free Cash Flow was $ (109)$(90) million compared to Free Cash Flow of $(175)$(351) million for the threesix months ended March 31,June 30, 2022. The improvement of $66$261 million was due to a $77$278 million decrease in net cash used in operating activities as discussed above, offset by an increase of $11$17 million of cash outflows related to purchases of property and equipment.

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Net Debt

The following table summarizes our Net Debt position as of March 31,June 30, 2023 and December 31, 2022:

(in $ millions)

    

March 31, 2023

    

December 31, 2022

    

June 30, 2023

    

December 31, 2022

Senior Secured Credit Agreement

 

  

 

  

 

  

 

  

Principal amount of senior secured initial term loans (Maturity – August 2025) (1)

$

239

$

239

$

238

$

239

Principal amount of senior secured tranche B-3 term loans (Maturity – December 2026) (2)

 

1,000

1,000

 

1,000

1,000

Principal amount of senior secured tranche B-4 term loans (Maturity – December 2026) (3)

 

135

 

135

Principal amount of senior secured revolving credit facility (Maturity – September 2026)(4)

Other borrowings(5)

2

5

 

1,376

1,239

 

1,378

1,239

Less: Unamortized debt discount and debt issuance costs

 

(21)

(17)

 

(19)

(17)

Total debt, net of unamortized debt discount and debt issuance costs

 

1,355

1,222

 

1,359

1,222

Less: Cash and cash equivalents

 

(320)

(303)

 

(335)

(303)

Net Debt

$

1,035

$

919

$

1,024

$

919

(1)Stated interest rate of LIBOR + 2.50% as of March 31,June 30, 2023 and December 31, 2022.
(2)Stated interest rate of SOFR + 0.1% + 6.75% (with a SOFR floor of 1%) as of March 31,June 30, 2023 and LIBOR + 6.50% (with a LIBOR floor of 1.00%) as of December 31, 2022.
(3)Stated interest rate of SOFR + 0.1% + 6.75% (with a SOFR floor of 1%) as of March 31,June 30, 2023.
(4)Stated interest rate of SOFR + 0.1% + 6.25% (with a SOFR floor of 1%) as of March 31,June 30, 2023 and LIBOR + 2.25% as of December 31, 2022. The senior secured revolving credit facility will automatically terminate on May 14, 2025 if the senior secured initial term loans have not been refinanced, replaced or extended (with a resulting maturity date that is December 16, 2026 or later) or repaid in full prior to May 14, 2025.
(5)Other borrowings primarily relate to finance leases and equipment sale and lease back transaction.

We define Net Debt as total debt outstanding consisting of the current and non-current portion of long-term debt (defined as debt (excluding operating lease liabilities) with original contractual maturity dates of one year or greater), net of unamortized debt discount and unamortized debt issuance costs, minus cash and cash equivalents. Net Debt is a non-GAAP measure and may not be comparable to similarly named measures used by other companies. This measure is not a measurement of our indebtedness as determined under GAAP and should not be considered in isolation or as an alternative to assess our total debt or any other measures derived in accordance with GAAP or as an alternative to total debt. Management uses Net Debt to review our overall liquidity, financial flexibility, capital structure and leverage. Further, we believe that certain debt rating agencies, creditors and credit analysts monitor our Net Debt as part of their assessment of our business.

Total debt, net of unamortized debt discount and debt issuance costs, was $1,355$1,359 million as of March 31,June 30, 2023 and $1,222 million as of December 31, 2022. As of March 31,June 30, 2023, Net Debt was $1,035$1,024 million compared to Net Debt of $919 million as of December 31, 2022. The increase in Net Debt of $116$105 million was primarily driven by $135 million of additional principal amount of senior secured tranche B-4 term loans borrowed during the threesix months ended March 31,June 30, 2023, (see note 10 – Long-term Debt), offset by a $17$32 million increase in cash and cash equivalent balance as of March 31,June 30, 2023 compared to December 31, 2022.

As of March 31,June 30, 2023, we were in compliance with all applicable covenants under the senior secured credit agreement.

Contractual Obligations and Commitments

In January 2023, we obtained an additional $135 million principal amount of tranche B-4 term loans and our benchmark interest rates on tranche B-3 term loans were changed from LIBOR to SOFR, along with changes to margins. As a result, as of March 31, 2023, our total debt obligation, including interest, was $1,911 million, with $154 million due within the next 12 months. Interest on the term loan is based on the LIBOR / SOFR plus applicable margin and excludes the effect of interest rate swaps. For purposes of this disclosure, we have used LIBOR / SOFR and margin rates as of March 31, 2023 for all future periods.

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Table of Contents

Apart from above, thereThere has been no material change to our contractual obligations and commitments as compared to those disclosed in our Annual Report on Form 10-K.10-K and Quarterly Report on Form 10-Q filed with the SEC on May 9, 2023.

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Table of Contents

Critical Accounting Policies and Estimates

Our consolidated financial statements and the related notes included in this Form 10-Q are prepared in accordance with GAAP. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. There are certain critical estimates that we believe require significant judgment in the preparation of our consolidated financial statements. We consider an accounting estimate to be critical if: (i) it requires us to make an assumption because information was not available at the time or it included matters that were highly uncertain at the time we were making the estimate; and (ii) changes in the estimate or different estimates that we could have selected may have had a material impact on our financial condition or results of operations. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.

As discussed earlier in “Key Factors Affecting Our Results of Operations – Impact of the COVID-19 Pandemic,” the COVID-19 pandemic has created and may continue to create significant uncertainty in macroeconomic conditions, which may cause further business disruptions and adversely impact our results of operations. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods.

For the threesix months ended March 31,June 30, 2023, there were no material changes to our critical accounting policies and estimates presented in our Annual Report on Form 10-K. For additional information about our critical accounting policies and estimates, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates in our Annual Report on Form 10-K.

Recent Accounting Pronouncements

For information on recently issued accounting pronouncements, adopted and not yet adopted by us, see note 2 to our consolidated financial statements included in this Form 10-Q.

ItemITEM 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks in the ordinary course of our business, which primarily relate to fluctuations in interest rates, foreign currency exchange rates and inflation. We manage our exposure to interest rate risk by entering into derivative financial instruments for a portion of principal amount of our debt and our exposure to foreign currency exchange rates risk through internally established policies and procedures. The objective of our policies is to mitigate potential income statement, cash flow, and fair value exposures resulting from possible future adverse fluctuations in rates. We do not engage in trading, market making or other speculative activities in the derivatives markets to manage these risks.

Except as discussed below, there were no material changes in our market risk during the threesix months ended March 31,June 30, 2023. For additional information, see Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K.

Interest Rate Risk

We are exposed to market risk from changes in interest rates on debt, which bears interest at variable rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. Our debt has floating interest rates and we are exposed to changes in such floating interest rates. We have interest rate risk primarily related to borrowings under the senior secured credit agreement, which bear interest at a variable rate tied to LIBOR, SOFR or the applicable base rate plus a margin (subject to certain benchmark replacement provisions and certain interest rate floors, as applicable), and, during certain periods, the margin applicable to certain term loan facilities thereunder will be based on a pricing grid that varies with the total leverage ratio (calculated in a manner set forth in the senior secured credit agreement). Therefore, increases in interest rates may reduce our net income or increase our net loss by increasing the cost of debt. As of

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Table of Contents

March 31, June 30, 2023, $1,353$1,354 million of senior secured term loans were outstanding under the senior secured credit agreement, net of unamortized debt discount and unamortized debt issuance costs, and no borrowings or$7 million of letters of credit were outstanding under the senior secured revolving credit facility as of such date.

Based on the outstanding debt under the senior secured credit agreement as of March 31,June 30, 2023, and assuming that our mix of debt instruments and other variables remain unchanged, but including the impact of expected receipts or payments of cash flows resulting from interest rate swap contracts, a hypothetical 100 basis points increase or decrease in LIBOR / SOFR would have increased or decreased our interest expense by $5 million on an annualized basis. In February 2022, we entered into an interest rate swap for a notional amount of $600 million of debt for a period covering from March 2022 to March 2025 to hedge against future increases in the benchmark rate for the senior secured tranche B-3 term loan facilities. The terms of such swap were initially linked to LIBOR as the

48

Table of Contents

benchmark rate, with an adjusted SOFR-based rate replacing LIBOR as the benchmark rate for such swap commencing in June 2023. In June 2022, we terminated this February 2022 interest rate swap contract and realized $23 million of cash. We simultaneously entered into another swap contract with substantially the same terms and conditions as the February 2022 swap, except the fixed interest rate component was changed. In March 2023, we amended the terms to change the reference rate for the variable leg from LIBOR to SOFR to match the reference rate on the underlying debt that was amended in January 2023, and that is being hedged. Further, the interest rate on the fixed leg of the interest rate swap changed from 3.6858% to 3.6800%. The interest rate swap continues to be designated as a cash flow hedge that is highly effective at offsetting the increases in cash outflows when three-month SOFR exceeds 3.6800%.

In order to further hedge against future increases in the benchmark rate for the senior secured tranche B-3 term loan facilities, in February 2023, we entered into another interest rate swap agreement for a notional amount of $300 million of debt for a period covering from March 2023 to March 2027. The terms of the agreement require us to receive a variable rate of three months U.S SOFR, with a floor of 0.90%, and pay fixed rate of 4.295%. See note 10 Long-term Debt to our consolidated financial statements included elsewhere in this Form 10-Q for further discussion about our debt and interest rates. The interest rate swap contracts are considered as an accounting hedge under ASC 815. As of March 31,June 30, 2023, we had recognized $6$13 million of interest rate swap derivative asset and $7$1 million of interest rate swap derivative liability on our consolidated balance sheets.

ItemITEM 4. Controls and Procedures

Evaluation of disclosure controls and procedures.

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

Changes in internal control over financial reporting.

There were no changes to our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Table of Contents

PART II. OTHER INFORMATION.

ItemITEM 1. Legal Proceedings

We are involved in litigation and other proceedings that arise in the ordinary course of our business. Management believes that we do not have any pending litigation that, separately or in the aggregate, would have a material adverse effect on our results of operations, financial condition or cash flows.

ItemITEM 1A. Risk Factors

For the threesix months ended March 31,June 30, 2023, there were no material changes to the risk factors presented in our Annual Report on Form 10-K under Part I, Item IA. Risk Factors. For further discussion of our risk factors, which could materially affect our business, financial condition and/or results of operations, refer to the section title Risk Factors in our Annual Report on Form 10-K. These are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or results of operations.

ItemITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Egencia Equity Contribution Agreement

On April 19, 2023 and on June 23, 2023, we issued 413,668 shares of Class A Common Stock and 161,741 shares of Class A Common Stock, respectively, to Expedia in satisfaction of certain obligations owed by GBT JerseyCo to Expedia under the Equity Contribution Agreement, dated as of August 11, 2021, by and among Expedia, Inc., GBT JerseyCo and Juweel. A maximum of $15$11 million (based on a volume-weighted average price over a period prior to issuance)issuances) of Class A Common Stock (including(excluding the April 19, 2023 issuance)and June 23, 2023 issuances) may be further issued to Expedia from time to time in satisfaction of such obligations. The issuance wasissuances were made in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act. Such securities constitute registrable securities under the Registration Rights Agreement.

ItemITEM 3. Defaults Upon Senior Securities

None.

ItemITEM 4. Mine Safety Disclosures

Not applicable.

ItemITEM 5. Other Information

None.

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ItemITEM 6. Exhibits

Exhibit
Number

    

Description

2.1

Amendment No. 1 to Business Combination Agreement, dated as of July 10, 2023, by and between Global Business Travel Group, Inc. and GBT JerseyCo Limited (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K, filed with the SEC on July 10, 2023).

3.1

Certificate of Incorporation of Global Business Travel Group, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1 (Reg. No. 333-265748), filed with the SEC on June 21, 2022).

3.2

Bylaws of Global Business Travel Group, Inc. (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form S-1 (Reg. No. 333-265748), filed with the SEC on June 21, 2022).

10.1

Amendment, Incremental Agreement and Reaffirmation, dated as of January 25, 2023, among GBT Group Services B.V., as the borrower, the other loan parties and lenders party thereto, and Morgan Stanley Senior Funding, Inc., as administrative agent and as collateral agent (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed with the SEC on January 25, 2023).

10.2

Employment Contract, dated May 10, 2017, by and between GBT Travel Services UK Limited and Martine Gerow (incorporated by reference to Exhibit 10.20 of the Company’s Registration Statement on Form S-4 (Reg. 333-261820), filed with the SEC on December 21, 2021).

10.3

Supplemental Severance Agreement, dated December 2, 2021, by and between GBT Travel Services UK Limited and Martine Gerow (incorporated by reference to Exhibit 10.23 of the Company’s Registration Statement on Form S-4 (Reg. 333-261820), filed with the SEC on December 21, 2021).

10.4

Employment Agreement, dated August 7, 2014, by and between GBT III, B.V. and Eric J. Bock.

10.5

Severance Protection Agreement, dated November 29, 2021, by and between GBT US LLC and Eric J. Bock.

10.6

GBT US LLC Deferred Compensation Plan, dated December 31, 2020.

31.1*

Certification of the Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended

31.2*

Certification of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended

32.1**

Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2**

Certification of the Principal 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.

101.SCH*

XBRL Taxonomy Extension Schema Document

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*

XBRL Taxonomy Extension Labels Linkbase Document

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

104*

Cover Page Interactive Data File (embedded within the Inline XBRL document)

*

Filed herewith.herewith

**Furnished herewith

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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 hereunto duly authorized.

Global Business Travel Group, Inc.

Date: May 9,August 10, 2023

By:

/s/ Paul Abbott

Paul Abbott

Chief Executive Officer (Principal Executive Officer)

Date: May 9,August 10, 2023

By:

/s/ Martine GerowKaren Williams

Martine GerowKaren Williams

Chief Financial Officer (Principal Financial Officer)

4752