Global Business Travel Group, Inc. [GBTG] Filings

10-Q 1 gbtg-20230331x10q.htm FORM 10-Q

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, 2023


☐	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 York, NY 10017 (Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (480) 909-1740

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, 2023, the registrant had 69,912,660 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, 2023 (Unaudited) and December 31, 2022	2
	Consolidated Statements of Operations for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	3
	Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	5
	Consolidated Statements of Changes in Total Stockholders’ Equity for the Three Months Ended March 31, 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	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	44

	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	46
Signatures		47

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. Consolidated Financial Statements

GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED BALANCE SHEETS


	March 31,		December 31,
(in $ millions, except share and per share data)	2023		2022
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	320	$	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
Due from affiliates		28		36
Prepaid expenses and other current assets		174		130
Total current assets		1,450		1,234
Property and equipment, net		228		218
Equity method investments		14		14
Goodwill		1,198		1,188
Other intangible assets, net		616		636
Operating lease right-of-use assets		60		58
Deferred tax assets		339		333
Other non-current assets		44		47
Total assets	$	3,949	$	3,728
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	350	$	253
Due to affiliates		85		48
Accrued expenses and other current liabilities		426		452
Current portion of operating lease liabilities		17		17
Current portion of long-term debt		4		3
Total current liabilities		882		773
Long-term debt, net of unamortized debt discount and debt issuance costs		1,351		1,219
Deferred tax liabilities		20		24
Pension liabilities		145		147
Long-term operating lease liabilities		62		61
Earnout derivative liabilities		87		90
Other non-current liabilities		50		43
Total liabilities		2,597		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)		—		—
Additional paid-in capital		346		334
Accumulated deficit		(177)		(175)
Accumulated other comprehensive loss		(7)		(7)
Total equity of the Company’s stockholders		162		152
Equity attributable to non-controlling interest in subsidiaries		1,190		1,219
Total stockholders’ equity		1,352		1,371
Total liabilities and stockholders’ equity	$	3,949	$	3,728

See notes to consolidated financial statements

Table of Contents

GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED STATEMENT 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

See notes to consolidated financial statements

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)	$	—

See notes to consolidated financial statements

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


Cash, cash equivalents and restricted cash consist of:
	March 31,		December 31,
(in $ millions)	2023		2022
Cash and cash equivalents	$	320	$	303
Restricted cash (included in other non-current assets)		13		13
Cash, cash equivalents and restricted cash	$	333	$	316

See notes to consolidated financial statements

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
	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

See notes to consolidated financial statements

Table of Contents

GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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 Apollo Strategic Growth Capital (“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, APSG was renamed as “Global Business Travel Group, Inc.”

GBTG is a Delaware corporation and tax resident in the United States of America (“U.S.”). GBTG conducts its business through GBT JerseyCo and its subsidiaries in an umbrella partnership-C corporation structure (“Up-C structure”). GBT JerseyCo is tax resident in the United Kingdom (“U.K.”). GBT JerseyCo is considered as a partnership for U.S. tax purposes and its members consists of GBTG, 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, with Amex Coop and Juweel the “Continuing JerseyCo Owners”).

The Company has one reportable segment.

Impact of COVID-19

The outbreak of the novel strain 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 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 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 related travel restrictions have been lifted with countries around 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 improvement in its transaction volume since the third quarter of 2021, and while the global travel activity has since shown a recovery trend, it still remains below 2019 levels. Although the Company’s results for the three months ended March 31, 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 that the results for the three months ended March 31, 2023 reflect notable improvement in comparison. The Company incurred a net loss of $27 million and had cash outflows from operations of $77 million during the three months ended March 31, 2023, compared to a net loss of $91 million and cash outflows from operations of $154 million during the three months ended March 31, 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.

Table of Contents

GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Governments of multiple countries extended 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 months ended March 31, 2023, and 2022, the Company recognized in its consolidated statements of operations government grants and other assistance benefits for salaries and wages of $0 and $6 million, respectively, as a reduction of expenses. As of both March 31, 2023, and December 31, 2022, the Company had a receivable of $13 million 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 uncertainty associated with the recovery from the COVID-19 pandemic and/or resurgence due to new variants. Since March 2020, the Company has taken several measures to preserve its 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 entering into several financial transactions, including debt financing / refinancing transactions and the consummation of the Business Combination. 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, investing and financing 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- 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.

Table of Contents

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 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, many of the Company’s estimates and assumptions require increased judgment. 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 impacts 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's consolidated financial statements. The Company continues to evaluate and monitor developments and its assessment of this guidance during the LIBOR transition period.

Table of Contents

GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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,
(in $ millions)	2023		2022
Travel revenue	$	467	$	257
Products and professional services revenue		111		93
Total revenue	$	578	$	350

Payments from customers are generally received within 30-60 days of invoicing or from their contractual date agreed under the terms of contract.

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, net, and contract liabilities are as follows:


			Contract		Contract
			liabilities		liabilities
	Accounts		Client		Deferred
	receivable,		incentives, net		revenue
(in $ millions)	net ⁽¹⁾		(non-current)		(current)
Balance as of March 31, 2023	$	915	$	18	$	28
Balance as of December 31, 2022	$	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 three months ended March 31, 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, 2023, the aggregate amount of the transaction price allocated to the Company’s remaining performance obligations was approximately $11 million, which the Company expects to recognize as revenue as performance obligations are satisfied over the next nine months.

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

Table of Contents

GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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. 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 three months ended March 31, 2023, is set out below:


(in $ millions)	Amount
Balance as of December 31, 2022	$	23
Provision for expected credit losses during the period		6
Write-offs		(3)
Foreign exchange		1
Balance as of March 31, 2023	$	27

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 the 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,
(in $ millions)	2023		2022
Prepaid travel expenses	$	100	$	52
Income tax receivable		25		26
Value added and similar taxes receivables		10		11
Other prepayments and receivables		39		41
Prepaid expenses and other current assets	$	174	$	130

(6) Property and Equipment, Net

Property and Equipment consist of:


	March 31,		December 31,
(in $ millions)	2023		2022
Capitalized software for internal use	$	386	$	365
Computer equipment		72		71
Leasehold improvements		49		49
Furniture, fixtures and other equipment		6		5
Capital projects in progress		12		5
		525		495
Less: accumulated depreciation and amortization		(297)		(277)
Property and equipment, net	$	228	$	218

Table of Contents

GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Depreciation and amortization expense related to fixed assets was $23 million and $21 million for the three months ended March 31, 2023 and 2022, respectively. Depreciation and amortization expense includes amortization related to capitalized software for internal use amounting to $16 million and $14 million for the three months ended March 31, 2023 and 2022, respectively.

(7) Goodwill and Other Intangible Assets, Net

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


(in $ millions)	Amount
Balance as of December 31, 2022	$	1,188
Currency translation adjustments		10
Balance as of March 31, 2023	$	1,198

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

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


	March 31, 2023						December 31, 2022
			Accumulated						Accumulated
(in $ millions)	Cost		depreciation		Net		Cost		depreciation		Net
Trademarks/tradenames	$	114	$	(68)	$	46	$	116	$	(69)	$	47
Business client relationships		795		(259)		536		788		(240)		548
Supplier relationships		253		(220)		33		253		(213)		40
Travel partner network		4		(3)		1		4		(3)		1
Other intangible assets	$	1,166	$	(550)	$	616	$	1,161	$	(525)	$	636

Amortization expense relating to definite-lived intangibles was $23 million for each of the three months ended March 31, 2023 and 2022, 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,
(in $ millions)	2023		2022
Accrued payroll and related costs	$	153	$	196
Accrued operating expenses		147		147
Client deposits		48		56
Deferred revenue		28		19
Accrued restructuring costs (see note 9)		29		11
Value added and similar taxes payable		10		9
Income tax payable		4		4
Other payables		7		10
Accrued expenses and other current liabilities	$	426	$	452

Table of Contents

GLOBAL BUSINESS TRAVEL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(9) Restructuring

On January 24, 2023, the Company announced changes to its internal operating model and expects to incur total pre-tax restructuring and related charges of approximately $20 million to $25 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.

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


(in $ millions)	Employee related		Facility		Total
Balance as of December 31, 2022	$	8	$	3	$	11
Accruals		23		—		23
Cash settled		(5)		—		(5)
Balance as of March 31, 2023	$	26	$	3	$	29

(10) Long-term Debt

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


	March 31,		December 31,
(in $ millions)	2023		2022
Senior Secured Credit Agreement
Principal amount of senior secured initial term loans (Maturity – August 2025) ⁽¹⁾	$	239	$	239
Principal amount of senior secured tranche B-3 term loans (Maturity – December 2026) ⁽²⁾		1,000		1,000
Principal amount of senior secured tranche B-4 term loans (Maturity – December 2026) ⁽³⁾		135		—
Principal amount of senior secured revolving credit facility (Maturity – September 2026)⁽⁴⁾		—		—
Other borrowings		2		—
		1,376

Global Business Travel Group, Inc. [GBTG] Filings
10-Q	[2023-05-09]
10-K	[2023-03-21]
10-Q	[2022-11-10]
10-Q	[2022-08-11]
S-1	[2022-06-21]
10-Q	[2022-05-09]
10-K	[2022-03-01]
10-Q	[2021-11-10]
10-Q	[2021-08-13]
10-Q	[2021-06-21]
10-K	[2021-03-30]
10-Q	[2020-11-13]
S-1	[2020-09-16]