EX-99.1 2 tm2314965d1_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

 

American Express Global Business Travel Reports Q1 2023 Financial Results

 

NEW YORK – May 9, 2023 – American Express Global Business Travel, which is operated by Global Business Travel Group, Inc. (NYSE: GBTG) (“Amex GBT” or the “Company”), the world’s leading B2B travel platform, today announced financial results for the first quarter ended March 31, 2023.

 

First Quarter 2023 Highlights

 

Strong Revenue and Adjusted EBITDA Growth

 

·Revenue totaled $578 million, an increase of 65% versus Q1 2022.
·Adjusted EBITDA1 totaled $99 million, with an Adjusted EBITDA Margin2 of 17%. Net loss totaled $(27) million.

 

Strong SME Growth

 

·SME transactions grew 61% versus Q1 2022 to reach 88% of 2019 pro forma3 levels.
·LTM (ended March 31, 2023) SME New Wins Value4 totaled $2.2 billion per annum.
·Approximately 30% of LTM SME New Wins Value came from the unmanaged category.

 

Significant New Wins and Continued Share Gains

 

·Total transactions grew 61% versus Q1 2022 to reach 76% of 2019 pro forma3 levels. Workday adjusted5 total transaction recovery was 74% of 2019 pro forma3 levels.
·LTM Total New Wins Value4 totaled $3.4 billion per annum.
·95% LTM customer retention rate.

 

Paul Abbott, Amex GBT Chief Executive Officer, stated: “Nearly one year after going public, we are delivering on the commitments we made. We reported strong first quarter 2023 results driven by continued growth in business travel, share gains and ongoing momentum in the SME customer segment. Our strong growth, combined with our proven ability to deliver high operating leverage and margin expansion, lead us to expect continued strong results in Q2 and for the full year.”

 

 

1Adjusted EBITDA is a non-GAAP financial measure. Please refer to the section below titled “Non-GAAP Financial Measures” for more information.

2Adjusted EBITDA Margin is a non-GAAP financial measure. Please refer to the section below titled “Non-GAAP Financial Measures” for more information.

3Pro forma assumes Egencia, Ovation and DER acquisitions completed on January 1, 2019.

4LTM New Wins Value represents the estimated annual value of wins over the twelve months ended March 31, 2023, based on current Total Transaction Value (TTV) recovery levels.

51.5 extra workdays in Q1 2023 vs. Q1 2019.

 

1

 

 

First Quarter 2023 Financial Summary

 

   Three Months Ended     
   March 31,   % 
(in millions, except percentages; unaudited)  2023   2022   B/(W) 
Total Transaction Value (TTV)  $7,422   $3,943    88%
Transaction Growth   61%          
Revenue  $578   $350    65%
Travel Revenue  $467   $257    82%
Product and Professional Services Revenue  $111   $93    19%
Total operating expenses  $587   $446    (32)%
Net loss  $(27)  $(91)   NM 
Net cash used in operating activities  $(77)  $(154)   NM 
EBITDA6  $45   $(53)   NM 
Adjusted EBITDA1  $99   $(28)   NM 
Adjusted Operating Expenses7  $479   $377    (27)%
Free Cash Flow8  $(109)  $(175)   NM 

 

NM = Not Meaningful

 

First Quarter 2023 Financial Highlights

 

Revenue increased $228 million, or 65%, versus the same period in 2022. Within this, Travel Revenue increased $210 million, or 82%, primarily due to growth in Total Transaction Value driven by continued growth in business travel and recovery from residual impacts of COVID-19. Product and Professional Services Revenue increased $18 million, or 19%, primarily due to increased management fees and meetings and events revenue driven by strengthened demand.

 

Total operating expenses increased $141 million, or 32%, versus the same period in 2022, primarily due to increased cost of revenue to support transaction growth, higher investment in sales and marketing headcount, increased technology and content expenses, higher general and administrative costs and increased restructuring costs, partially offset by cost savings and synergies.

 

Net loss improved $64 million versus the same period in 2022, primarily due to a decrease in operating loss, partially offset by higher interest expense and a lower benefit from income taxes.

 

Adjusted EBITDA1 improved $127 million versus the same period in 2022, primarily due to revenue growth, partially offset by increased Adjusted Operating Expenses6.

 

Adjusted Operating Expenses7 increased $102 million, or 27%, versus the same period in 2022, primarily due to increased cost of revenue to support transaction growth, higher investment in sales and marketing headcount, increased technology and content expenses and higher general and administrative costs, partially offset by cost savings and synergies.

 

Net cash used in operating activities decreased $77 million, primarily due to reduced net losses before considering non-cash charges, partially offset by higher cash interest paid and increased usage of working capital associated with transaction volume growth.

 

Free Cash Flow8 improved by $66 million, due to the decrease in net cash used in operating activities, partially offset by increased cash outflow for the purchase of property and equipment.

 

 

6EBITDA is a non-GAAP financial measure. Please refer to the section below titled “Non-GAAP Financial Measures” for more information.

7Adjusted Operating Expenses is a non-GAAP financial measure. Please refer to the section below titled “Non-GAAP Financial Measures” for more information.

8Free Cash Flow is a non-GAAP financial measure. Please refer to the section below titled “Non-GAAP Financial Measures” for more information.

 

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Net Debt9: As of March 31, 2023, total debt was $1,355 million, compared to $1,222 million as of December 31, 2022. Net Debt was $1,035 million as of March 31, 2023, compared to Net Debt of $919 million as of December 31, 2022. The increase in Net Debt of $116 million was primarily driven by $135 million of additional principal amount of senior secured tranche B-4 term loans borrowed during the three months ended March 31, 2023, partially offset by a $17 million increase in cash and cash equivalents.

 

2023 Guidance

 

   Q2 2023 Guidance  Full-Year 2023 Guidance
Revenue  $555M – $575M  $2.17B – $2.22B
Year-over-Year Growth  14% – 18%  17% – 20%
Adjusted EBITDA1  $85M – $100M  $330M – $370M
Adjusted EBITDA Margin3  15% – 17%  15% – 17%

 

The Company’s Q2 2023 and full-year 2023 guidance considers various material assumptions. Because the guidance is forward-looking and reflects numerous estimates and assumptions with respect to future industry performance under various scenarios as well as assumptions for competition, general business, economic, market and financial conditions and matters specific to the business of Amex GBT, all of which are difficult to predict and many of which are beyond the control of Amex GBT, actual results may differ materially from the guidance due to a number of factors, including the ultimate inaccuracy of any of the assumptions described above and the risks and other factors discussed in the section entitled “Forward-Looking Statements” below and the risk factors in the Company’s SEC filings.

 

Adjusted EBITDA guidance for the three months ending June 30, 2023 consists of expected net loss for the three months ending June 30, 2023, adjusted for; (i) interest expense of approximately $35-40 million; (ii) benefit for income taxes of approximately $5-10 million; (iii) depreciation and amortization of property and equipment of approximately $45-50 million; (iv) restructuring costs of approximately $5-10 million; (v) integration expenses and costs related to mergers and acquisitions of approximately $15-22 million; (vi) non-cash equity-based compensation and long-term incentive plan costs of $30-35 million, and; (vii) other adjustments, including litigation and professional services  costs, non-service component of our net periodic pension benefit related to our defined benefit pension plans and foreign exchange gains and losses of $0-5 million. We are unable to reconcile Adjusted EBITDA to net income (loss) determined under U.S. GAAP due to the unavailability of information required to reasonably predict certain reconciling items such as impairment of long-lived assets and right-of-use assets, fair value movement on earnout derivative liabilities and/or loss on early extinguishment of debt and the related tax impact of these adjustments. The exact amount of these adjustments is not currently determinable but may be significant.

 

Adjusted EBITDA guidance for the year ending December 31, 2023 consists of expected net loss for the year ending December 31, 2023, adjusted for; (i) interest expense of approximately $140-150 million; (ii) benefit for income taxes of approximately $25-35 million; (iii) depreciation and amortization of property and equipment of approximately $185-190 million; (iv) restructuring costs of approximately $20-25 million related to moving to a global, customer needs driven operating model and $10-15 million primarily relating to impairment of operating lease right-of-use assets for consolidation of real estate footprint; (v) integration expenses and costs related to mergers and acquisitions of $45-60 million; (vi) non-cash equity-based compensation and long-term incentive plan costs of $95-105 million, and; (vii) other adjustments, including litigation and professional services  costs, non-service component of our net periodic pension benefit related to our defined benefit pension plans and foreign exchange gains and losses of $5-10 million. We are unable to reconcile Adjusted EBITDA to net income (loss) determined under U.S. GAAP due to the unavailability of information required to reasonably predict certain reconciling items such as impairment of long-lived assets and right-of-use assets, fair value movement on earnout derivative liabilities and/or loss on early extinguishment of debt and the related tax impact of these adjustments. The exact amount of these adjustments is not currently determinable but may be significant.

 

 

9Net Debt is a non-GAAP financial measure. Please refer to the section below titled “Non-GAAP Financial Measures” for more information.

 

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Webcast Information

 

Amex GBT will host its first quarter 2023 investor conference call today at 9:00 a.m. E.T. The live webcast and accompanying slide presentation can be accessed on the Amex GBT Investor Relations website at investors.amexglobalbusinesstravel.com. A replay of the event will be available on the website for at least 90 days following the event.

 

Glossary of Terms

 

See the “Glossary of Terms” for the definitions of certain terms used within this press release.

 

Non-GAAP Financial Measures

 

The Company refers to certain financial measures that are not recognized under GAAP in this press release, including EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Operating Expenses, Free Cash Flow and Net Debt. See “Non-GAAP Financial Measures” below for an explanation of these non-GAAP financial measures and “Tabular Reconciliations for Non-GAAP Financial Measures” below for reconciliations of the non-GAAP financial measures to the comparable GAAP measures.

 

About American Express Global Business Travel

 

American Express Global Business Travel is the world’s leading B2B travel platform, providing software and services to manage travel, expenses, and meetings & events for companies of all sizes. We have built the most valuable marketplace in B2B travel to deliver unrivalled choice, value and experiences. With travel professionals in more than 140 countries, our customers and travelers enjoy the powerful backing of American Express Global Business Travel.

 

Visit amexglobalbusinesstravel.com for more information about Amex GBT. Follow @amexgbt on Twitter, LinkedIn and Instagram.

 

Contacts

 

Media:

Martin Ferguson

Vice President Global Communications and Public Affairs, American Express Global Business Travel

martin.ferguson@amexgbt.com

 

Investors:

Barry Sievert

Vice President Investor Relations

investor@amexgbt.com

 

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GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED STATEMENTS 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 earnouts 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      

 

5

 

 

GLOBAL BUSINESS TRAVEL GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

         
   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          
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 noncontrolling interest in subsidiaries   1,190    1,219 
Total stockholders’ equity   1,352    1,371 
Total liabilities and stockholders’ equity  $3,949   $3,728 

 

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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 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 

 

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Glossary of Terms

 

B2B refers to business-to-business.

 

Customer retention rate is calculated based on Total Transaction Value (TTV).

 

LTM refers to the last twelve months.

 

SME refers to clients Amex GBT considers small-to-medium-sized enterprises, which Amex GBT generally defines as having an expected annual spend on air travel of less than $20 million. This criterion can vary by country and client needs.

 

SME New Wins Value is calculated using expected annual average Total Transaction Value (TTV) over the contract term from new small-to-medium-sized enterprise (“SME”) client wins over the last twelve months, based on current recovery levels.

 

Total New Wins Value is calculated using expected annual average Total Transaction Value (TTV) over the contract term from all new client wins over the last twelve months, based on current recovery levels.

 

Total Transaction Value or 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.

 

Transaction recovery represents the total number of transactions, including air, hotel, car rental, rail or other travel-related transactions, recorded at the time of booking and calculated on a gross basis to include cancellations, refunds and exchanges, in the current period as a percentage of the comparative period in 2019.

 

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. We use EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses 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 use Free Cash Flow and Net Debt as liquidity measures and 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.

 

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.

 

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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, 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 earnouts 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, 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;
·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;
·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.

 

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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 flows 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 flows 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 flows from operating activities as a measure of liquidity.

 

We define Net Debt as total debt outstanding consisting of 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.

 

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Tabular Reconciliations for Non-GAAP Measures

 

Reconciliation of net loss to EBITDA and Adjusted EBITDA:

 

   Three Months Ended March 31, 
($ in millions)  2023   2022 
Net loss  $(27)  $(91)
Interest expense   34    19 
Benefit from income taxes   (8)   (25)
Depreciation and amortization   46    44 
EBITDA   45    (53)
Restructuring charges(a)   23    2 
Integration costs(b)   8    9 
Mergers and acquisitions(c)   —    1 
Equity-based compensation(d)   19    3 
Fair value movements on earnouts derivative liabilities(e)   (3)   — 
Other adjustments, net(f)   7    10 
Adjusted EBITDA  $99   $(28)
           
Net loss margin   (5)%   (26)%
Adjusted EBITDA Margin   17%   (8)%

 

Reconciliation of total operating expenses to Adjusted Operating Expenses:

 

   Three Months Ended March 31, 
($ in millions)  2023   2022 
Total operating expenses  $587   $446 
Adjustments:          
Depreciation and amortization   (46)   (44)
Restructuring charges(a)   (23)   (2)
Integration costs(b)   (8)   (9)
Mergers and acquisitions(c)   —    (1)
Equity-based compensation(d)   (19)   (3)
Other adjustments, net(f)   (12)   (10)
Adjusted Operating Expenses  $479   $377 

 

a)Represents severance and related expenses due to restructuring activities.
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 earnouts derivative liabilities during the periods.
f)Adjusted Operating Expenses excludes (i) long-term incentive plan expense of $7 million and $9 million for the three months ended March 31, 2023 and 2022, respectively, (ii) litigation and professional services costs of $5 million and $1 million for the three months ended March 31, 2023 and 2022, respectively. Adjusted EBITDA additionally excludes (i) unrealized foreign exchange (gains) loss of $(6) million and $2 million for the three months ended March 31, 2023 and 2022, respectively, and (ii) non-service component of our net periodic pension benefit related to our defined benefit pension plans of $1 million and $(2) million for the three months ended March 31, 2023 and 2022, respectively.

 

Reconciliation of net cash used in operating activities to Free Cash Flow:

 

   Three Months Ended March 31, 
($ in millions)  2023   2022 
Net cash used in operating activities  $(77)  $(154)
Less: Purchase of property and equipment   (32)   (21)
Free Cash Flow  $(109)  $(175)

 

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Reconciliation of Net Debt:

 

   As of 
($ in millions)  March 31, 2023   December 31, 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    1,239 
Less: Unamortized debt discount and debt issuance costs   (21)   (17)
Total debt, net of unamortized debt discount and debt issuance costs   1,355    1,222 
Less: Cash and cash equivalents   (320)   (303)
Net Debt  $1,035   $919 

 

1)Stated interest rate of LIBOR + 2.50% as of March 31, 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, 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, 2023.
4)Stated interest rate of SOFR + 0.1% + 6.25% (with a SOFR floor of 1%) as of March 31, 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.

 

Forward-Looking Statements

 

This communication contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding our financial position, business strategy, the plans and objectives of management for future operations and second quarter and full-year guidance. These statements constitute projections, forecasts and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 communication 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: (1) changes to projected financial information or our ability to achieve our anticipated growth rate and execute on industry opportunities; (2) our ability to maintain our existing relationships with customers and suppliers and to compete with existing and new competitors; (3) various conflicts of interest that could arise among us, affiliates and investors; (4) our success in retaining or recruiting, or changes required in, our officers, key employees or directors; (5) factors relating to our business, operations and financial performance, including market conditions and global and economic factors beyond our control; (6) 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; (7) the sufficiency of our cash, cash equivalents and investments to meet our liquidity needs; (8) the effect of a prolonged or substantial decrease in global travel on the global travel industry; (9) 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); (10) the effect of legal, tax and regulatory changes; and (11) other risks and uncertainties described in the Company’s Form 10-K, filed with the SEC on March 21, 2023, and in the Company’s other SEC filings. 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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Disclaimer

 

An investment in Global Business Travel Group, Inc. is not an investment in American Express. American Express shall not be responsible in any manner whatsoever for, and in respect of, the statements herein, all of which are made solely by Global Business Travel Group, Inc.

 

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