Global Business Travel Group Inc
For the period ended Sep 30, 2024. Filed Nov 5, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 5, 2024
GBTG$9.500.0%Stored close · as of Sep 28, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001820872-24-000041
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-05.
0001820872-24-000048
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 168 previous paragraphs and 173 current paragraphs.
109 unchanged; 44 reworded; 14 added; 13 removed; 2 previous and 6 current paragraphs rearranged.
Tables are not compared: 17 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
For the three months ended September 30, 2024, our total revenue increased by $26 million, or 5%, due to an increase in both Travel Revenue and Product and professional services revenue. The increase in total revenue was driven by 5% Transaction Growth, offset by a small decline of 30 bps in yield to 7.7%. Revenue yield was in line with expectations and declined modestly due to mix of non-TTV driven revenue, higher mix of digital transactions and phasing of supplier revenue performance obligations. On a full-year basis, revenue yield is expected to decline 15 to 20 basis points year over year.
Current report
Travel Revenue increased by $23 million, or 5%, primarily due to 5% increase in Transaction Growth and 9% increase in TTV. Product and professional services revenue increased $3 million, or 2%, primarily due to increases in management fees.
Current report
For the three months ended September 30, 2024, depreciation and amortization decreased by $7 million, or 15%, as certain intangible assets were fully amortized during the three months ended September 30, 2024.
Current report
During the three months ended September 30, 2024, we repaid the entire principal amount of term loans outstanding under our Original Credit Agreement, including early prepayment penalty, and recognized a loss on early extinguishment of debt of $38 million.
Current report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Current report
For the nine months ended September 30, 2024, depreciation and amortization decreased $7 million, or 5%, as certain intangible assets were fully amortized during 2024.
Current report
During the nine months ended September 30, 2024, we repaid the entire principal amount of term loans outstanding under our Original Credit Agreement, including early prepayment penalty, and recognized a loss on early extinguishment of debt of $38 million.
Current report
Other Loss, net
Current report
For the nine months ended September 30, 2024, other loss, net, remained stable and comprised of $5 million of foreign exchange loss and $4 million of non-service components of our net periodic pension cost related to our defined benefit pension plans.
Current report
Our senior secured credit facility agreement contains customary restrictive financial and operating covenants (see note 7 -Long-term Debt to our consolidated financial statements included elsewhere in this Form 10-Q).
Current report
Debt Ratings
Current report
Share Repurchase Program
Current report
In October 2024, our Board of Directors authorized our management to repurchase shares of the Company’s Class A common stock through December 31, 2027 in an amount not to exceed $300 million. Under the share repurchase program, we are authorized to repurchase, on a discretionary basis and from time-to-time, outstanding shares of our Class A common stock by means of open market transactions, privately negotiated transactions and/or by other means deemed appropriate or advisable by our management. The timing, manner, price and amount of any repurchases will be subject to our discretion and depend on a variety of factors, including the market price of our Class A common stock, general market and economic conditions, regulatory requirements and other business considerations. The share repurchase program may be suspended, modified or discontinued at any time, and we have no obligation to repurchase any amount of our Class A common stock under the program.
Current report
As of November 1, 2024, no shares have been repurchased under the share repurchase program and $300 million remains available to be utilized under the share repurchase program. The share repurchase transaction that we entered into in August 2024, was not part of this share repurchase program, and was a separately negotiated transaction with a shareholder (see Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds).
Removed paragraphs (13)
Previous report
For the three months ended June 30, 2024, our total revenue increased by $33 million, or 6%, due to an increase in both Travel Revenue and Product and professional services revenue. The increase in total revenue was driven by 4% Transaction Growth and 5% TTV growth, with yield remaining stable at 8.1%. Yield is calculated as total revenue divided by TTV.
Previous report
Travel Revenue increased by $27 million, or 6%, primarily due to volume growth, with travel yield remaining stable. Product and professional services revenue increased $6 million, or 5%, primarily due to $3 million increase in management fees and $3 million from increased consulting and other professional services revenue.
Previous report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Previous report
For the six months ended June 30, 2024, depreciation and amortization remained stable.
Previous report
Fair Value Movements on Earnout and Warrant Derivative Liabilities
Previous report
Other (Loss) Income, net
Previous report
For the six months ended June 30, 2024, other income, net, increased by $6 million due to favorable foreign exchange movement.
Previous report
The A&R Credit Agreement contains various affirmative and negative covenants, which are similar to those as existed as of June 30, 2024 under the Original Credit Agreement, including certain financial covenants (see below) and limitations
Previous report
(subject to exceptions) on the ability of the Loan Parties (as defined under the A&R Credit Agreement) 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; and (ix) enter into certain burdensome agreements.
Previous report
The A&R Credit Agreement also contains a financial covenant applicable solely to the Revolving Credit Facility that requires the first lien net leverage ratio to be less than or equal to 3.50 to 1.00 as of the last day of any fiscal quarter on which the aggregate principal amount of outstanding loans and letters of credit under the Revolving Credit Facility exceeds 35% of the aggregate principal amount of the Revolving Credit Facility (subject to a $10 million exclusion for utilization of the letter of credit sublimit). The A&R 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 A&R Credit Agreement) has occurred and the Loan Parties are unable to comply with such covenant as a result of such event.
Previous report
Interest Rate Margin
Previous report
Under the A&R Credit Agreement, the Loans will bear interest based on SOFR (or an alternative reference rate for amounts denominated in a currency other than U.S. dollars), or, at the Initial Borrower’s option, in the case of amounts denominated in U.S. dollars, at the Base Rate (as defined in the A&R Credit Agreement), plus, as applicable, a margin of (i) in the case of Term Loans, 3.00% per annum for SOFR-based Loans (or 2.00% per annum for Base Rate-based Loans) and (ii) in the case of the Revolving Loans, 2.75% per annum for SOFR-based Loans (or 1.75% per annum for Base Rate-based Loans).
Previous report
Commitment Fee Margin and Debt Ratings
Reworded paragraphs (44)
Previous wording
•other factors detailed under the heading “Risk Factors” in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 13, 2024 ("Annual Report on Form 10-K").
Current wording
•other factors detailed under the heading “Risk Factors” in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 13, 2024 ("Annual Report on Form 10-K"), as well as other risks and uncertainties detailed from time to time in our subsequent Quarterly Reports on Form 10-Q or other filings with the SEC.
Previous wording
We operate American Express Global Business Travel, a leading business-to-business software and services company in travel, expense and meetings & events. We provide a full suite of differentiated, technology-enabled solutions to business travelers and business clients, suppliers of travel content (such as airlines, hotels, ground transportation providers and aggregators) and third-party travel agencies. We differentiate our value proposition through our commitment to deliver unrivaled choice, value and experience, and our brand promise.
Current wording
We operate American Express Global Business Travel, a leading software and services company for travel, expense and meetings & events. We provide a full suite of differentiated, technology-enabled solutions to business travelers and business clients, suppliers of travel content (such as airlines, hotels, ground transportation providers and aggregators) and third-party travel agencies. We differentiate our value proposition through our commitment to deliver unrivaled choice, value and experience, and our brand promise.
Previous wording
For the three months ended June 30, 2024, TTV increased by $375 million, or 5%, to $7,724 million compared to the three months ended June 30, 2023. For the six months ended June 30, 2024 TTV increased by $1,058 million, or 7%, to $15,829 million compared to the six months ended June 30, 2023. The increase in TTV during these periods was primarily due to Transaction Growth and an increase in average transaction price driven by a higher mix in international transactions and higher hotel room rates.
Current wording
For the three months ended September 30, 2024, TTV increased by $629 million, or 9%, to $7,752 million compared to the three months ended September 30, 2023. For the nine months ended September 30, 2024 TTV increased by $1,687 million, or 8%, to $23,581 million compared to the nine months ended September 30, 2023. The increase in TTV during these periods was primarily due to Transaction Growth and an increase in average transaction price driven by a higher mix in international transactions and higher hotel room rates.
Previous wording
For the three months ended June 30, 2024, Transaction Growth was 4% compared to three months ended June 30, 2023 and for the six months ended June 30, 2024, Transaction Growth was 5% compared to six months ended June 30, 2023. Increase in Transaction Growth during both periods was primarily due to share gains and increased demand for business travel from our clients, with strong global multinational customer base performance offset by slower growth in small and medium enterprise customer base. Transaction Growth for the three months ended June 2024 was slightly suppressed from the impact of the summer Olympics on travel to Paris.
Current wording
Transaction Growth was 5% for the three months and nine months period ended September 30, 2024 compared to the respective prior year period. Increase in Transaction Growth during both periods was primarily due to share gains and increased demand for business travel from our clients, with strong global multinational customer base performance offset by slower growth in small and medium enterprise customer base.
Previous wording
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.
Current wording
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
Previous wording
Set forth below is a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA.
Current wording
Set forth below is a reconciliation of net loss to EBITDA and Adjusted EBITDA.
Previous wording
(a)Includes (i) employee severance (reversals)/costs of $(3) million and $5 million for the three months ended June 30, 2024 and 2023, respectively, and $6 million and $28 million for the six months ended June 30, 2024 and 2023, 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 to facility abandonment of $2 million for each of the three and six months ended June 30, 2023.
Current wording
(a)Includes (i) employee severance costs of $2 million and $12 million for the three months ended September 30, 2024 and 2023, respectively, and $8 million and $40 million for the nine months ended September 30, 2024 and 2023, respectively, (ii) accelerated amortization of operating lease ROU assets of $4 million and $1 million for the three months ended September 30, 2024 and 2023, respectively and $4 million and $7 million for the nine months ended September 30, 2024 and 2023, respectively and (iii) contract costs related to facility abandonment of $2 million and $0 for the three months ended September 30, 2024 and 2023, respectively, and $2 million and $2 million for the nine months ended September 30, 2024 and, 2023, respectively.
Previous wording
(f)Adjusted Operating Expenses excludes (i) long-term incentive plan expense of $3 million and $5 million for the three months ended June 30, 2024 and 2023, respectively, and $6 million and $12 million for the six months ended June 30, 2024 and 2023, respectively, and (ii) legal and professional services costs of $4 million and $5 million for the three months ended June 30, 2024 and 2023, respectively, and $5 million and $10 million for the six months ended June 30, 2024 and 2023, respectively. Adjusted EBITDA additionally excludes (i) unrealized foreign exchange (gains) loss of $(1) million and $4 million for the three months ended June 30, 2024 and 2023, respectively, and $(9) million and $(2) million for the six months ended June 30, 2024 and 2023, respectively, and (ii) non-service component of our net periodic pension cost related to our defined benefit pension plans of $2 million and $1 million for the three months ended June 30, 2024 and 2023, respectively, and $3 million and $2 million for the six months ended June 30, 2024 and 2023, respectively.
Current wording
(f)Adjusted Operating Expenses excludes (i) long-term incentive plan expense of $0 and $4 million for the three months ended September 30, 2024 and 2023, respectively, and $6 million and $16 million for the nine months ended September 30, 2024 and 2023, respectively, and (ii) legal and professional services costs of $(1) million and $2 million for the three months ended September 30, 2024 and 2023, respectively, and $4 million and $12 million for the nine months ended September 30, 2024 and 2023, respectively. Adjusted EBITDA additionally excludes (i) unrealized foreign exchange loss of $14 million and $8 million for the three months ended September 30, 2024 and 2023, respectively, and $5 million and $6 million for the nine months ended September 30, 2024 and 2023, respectively, and (ii) non-service component of our net periodic pension cost related to our defined benefit pension plans of $1 million and $1 million for the three months ended September 30, 2024 and 2023, respectively, and $4 million and $3 million for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
For the three months ended June 30, 2024, cost of revenue (excluding depreciation and amortization) increased by $4 million, or 2%, due to (i) additional traveler care costs of $8 million to manage the increase in transaction volume and (ii) $6 million due to increase in vendor rates and merit salary increases, partially offset by (iii) $10 million reduction in expenses primarily due to cost savings initiatives.
Current wording
For the three months ended September 30, 2024, cost of revenue (excluding depreciation and amortization) decreased marginally by $1 million. Increase in traveler care costs of $11 million and vendor rates and merit salary increases of $8 million were offset by $20 million reduction in expenses primarily due to cost savings initiatives.
Previous wording
For the three months ended June 30, 2024, sales and marketing expenses decreased by $3 million, or 4%, due to (i) $5 million benefit from cost saving initiatives, offset by (ii) $2 million increased costs to support growth plans in hotel acceleration and small and medium enterprise customer base.
Current wording
For the three months ended September 30, 2024, sales and marketing expenses increased by $4 million, or 5%, due to (i) higher employee costs of $2 million to support additional transaction volume and (ii) $2 million increased costs to support growth plans in hotel acceleration and small and medium enterprise customer base.
Previous wording
For the three months ended June 30, 2024, technology and content costs increased by $9 million, or 8%, due to (i) higher employee costs of $3 million as a result of increased employee headcounts related to our strategic investments and (ii) $6 million increased costs to support growth plans in hotel acceleration and small and medium enterprise customer base.
Current wording
For the three months ended September 30, 2024, technology and content costs increased by $9 million, or 10%, primarily due to (i) $3 million increased costs to support growth plans in hotel acceleration and small and medium enterprise customer base and (ii) $5 million increase in data processing fees and higher employee costs as a result of increased employee headcounts related to our strategic investments.
Previous wording
For the three months ended June 30, 2024, general and administrative expenses decreased by $6 million, or 7%, primarily due to (i) benefits from cost saving initiatives of $4 million, (ii) reduction in integration costs of $3 million, (iii) reduction from prior year costs resulting from accelerated amortization of operating lease ROU assets of $6 million, offset by (iv) increase in mergers and acquisitions costs of $6 million largely driven by the potential CWT acquisition.
Current wording
For the three months ended September 30, 2024, general and administrative expenses decreased by $2 million, or 3%, primarily due to (i) benefits from cost saving initiatives of $6 million, (ii) reduction in integration costs of $3 million, and (iii) $3 million reduction in other corporate expenses, partially offset by (iv) increase in mergers and acquisitions costs of $11 million driven by the potential CWT acquisition.
Previous wording
For the three months ended June 30, 2024, restructuring reversals of $(3) million related to employee severance costs was primarily due to true up of estimates.
Current wording
For the three months ended September 30, 2024, restructuring charges of $4 million related to employee severance costs was primarily due to reduction in workforce to improve operational efficiencies and accrual of certain contract termination costs related to leased facilities abandonment.
Previous wording
For the three months ended June 30, 2024, interest expense decreased by $3 million or 10%. The increase in variable interest rates did not have material impact due to interest rate swaps being in place. Further, fixed rate margins were lower during the three months ended June 30, 2024 compared to three months ended June 30, 2023 due to improved leverage ratios under the Original Credit Agreement based on which margins were set.
Current wording
For the three months ended September 30, 2024, interest expense decreased by $8 million or 24%. The fixed rate margins were lower during the three months ended September 30, 2024 compared to three months ended September 30, 2023 due to (i) improved leverage ratios under the Original Credit Agreement based on which margins were set and (ii) refinancing of term loans in July 2024 with lower fixed rate margins. The changes in variable interest rates did not have material impact due to interest rate swaps being in place.
Previous wording
During the three months ended June 30, 2024, the fair value movement of our derivative liabilities related to our earnout shares resulted in a charge of $10 million to our consolidated statements of operations compared to a charge of $19 million during the three months ended June 30, 2023. The increase in fair value of earnout derivative liability during the three months ended June 30, 2024, was mainly driven by the increase in our stock price as of June 30, 2024.
Current wording
During the three months ended September 30, 2024, the fair value movement of our derivative liabilities related to our earnout shares resulted in a charge of $22 million to our consolidated statements of operations compared to a credit of $39 million during the three months ended September 30, 2023. The increase in fair value of earnout derivative liability during the three months ended September 30, 2024, was mainly driven by the increase in our stock price as of September 30, 2024.
Previous wording
For the three months ended June 30, 2024, other loss, net, decreased by $4 million primarily due to favorable foreign exchange movement.
Current wording
For the three months ended September 30, 2024, other loss, net,increased by $6 million primarily due to unfavorable foreign exchange movement.
Previous wording
Benefit from Income Taxes
Current wording
(Provision for) Benefit from Income Taxes
Previous wording
For the six months ended June 30, 2024 and 2023, we had income tax (expense) benefit of $(1) million and $10 million, respectively and the effective tax rate was (13)% and 11%, respectively. Our effective tax rate is different than the U.S. federal statutory corporate income tax rate of 21% due to permanent differences between financial accounting income and income for tax purposes, changes to the valuation allowance and certain U.S minimum taxes expected to arise for the full year. The impact of these items has a large impact on the effective tax rate due to the low pre-tax net income.
Current wording
For the three months ended September 30, 2024 and 2023, we had income tax (expense) benefit of $(54) million and $2 million, respectively. Our effective tax rate is different than the U.S. federal statutory corporate income tax rate of 21% due to non-deductible expenses and changes to the valuation allowance for deferred tax assets.
Previous wording
The following is a discussion of our results of the consolidated statements of operations for the six months ended June 30, 2024 and 2023:
Current wording
The following is a discussion of our results of the consolidated statements of operations for the nine months ended September 30, 2024 and 2023:
Previous wording
For the six months ended June 30, 2024, our total revenue increased by $65 million, or 6%, due to an increase in both Travel Revenue and Product and professional services revenue. The increase in total revenue was driven by 5% increase in Transaction Growth, offset by a modest decline of 10bps in yield to 7.8% due to mix of non-TTV driven revenue and higher digital transactions.
Current wording
For the nine months ended September 30, 2024, our total revenue increased by $91 million, or 5%, due to an increase in both Travel Revenue and Product and professional services revenue. The increase in total revenue was driven by 5% increase in Transaction Growth, offset by a modest decline of 20 bps in yield to 7.8% due to mix of non-TTV driven revenue and higher digital transactions. On a full-year basis, revenue yield is expected to decline 15 to 20 basis points year over year.
Previous wording
Travel Revenue increased by $52 million, or 5%, primarily due to 5% increase in Transaction Growth and 7% increase in TTV. Product and Professional Services Revenue increased $13 million, or 6%, due to $8 million increase in management fees and $5 million from increased consulting and other professional services revenue.
Current wording
Travel Revenue increased by $75 million, or 5%, primarily due to 5% increase in Transaction Growth and 8% increase in TTV. Product and Professional Services Revenue increased $16 million, or 5%, due to $14 million increase in management fees and $2 million from increased consulting and other professional services revenue.
Previous wording
For the six months ended June 30, 2024, cost of revenue (excluding depreciation and amortization) increased by $7 million, or 1%, due to (i) additional traveler care costs of $14 million to manage the increase in transaction volume and a merit increase of $11 million in salaries and benefits, offset by (ii) $18 million reduction in expenses primarily due to cost savings initiatives.
Current wording
For the nine months ended September 30, 2024, cost of revenue (excluding depreciation and amortization) increased by $6 million, or 1%, due to (i) additional traveler care costs of $35 million to manage the increase in transaction volume and (ii) a merit increase of $19 million in salaries and benefits, offset by (iii) $48 million reduction in expenses primarily due to cost savings initiatives.
Previous wording
For the six months ended June 30, 2024, sales and marketing expenses decreased by $7 million, or 4%, primarily due to cost saving initiatives.
Current wording
For the nine months ended September 30, 2024, sales and marketing expenses decreased by $3 million, or 1%, primarily due to cost saving initiatives.
Previous wording
For the six months ended June 30, 2024, technology and content costs increased by $16 million, or 7%, primarily due to (i) increase in employee headcount related to our strategic investments, incentives and merit salary increase of $8 million and (ii) $5 million increase to support growth plans in hotel acceleration and small and medium enterprise customer base.
Current wording
For the nine months ended September 30, 2024, technology and content costs increased by $25 million, or 8%, primarily due to (i) $12 million increase to support growth plans in hotel acceleration and small and medium enterprise customer base, (ii) $7 million increase due to additional employee headcount related to our strategic investments, incentives and merit salary increase, and (iii) $5 million increase in data processing fees.
Previous wording
For the six months ended June 30, 2024, general and administrative expenses increased by $8 million, or 5%, primarily due to (i) $25 million related to mergers and acquisitions costs for the potential acquisition of CWT, offset by (ii) $8 million decrease resulting from cost saving initiatives, (iii) $6 million of prior year costs incurred resulting from accelerated amortization of operating lease ROU assets and (iv) a $5 million reduction related to lower integration expenses.
Current wording
For the nine months ended September 30, 2024, general and administrative expenses increased by $6 million, or 3%, primarily due to (i) $36 million related to mergers and acquisitions costs for the potential acquisition of CWT, offset by (ii) $15 million decrease resulting from cost saving initiatives, (iii) an $8 million reduction related to lower integration expenses' (iv) a $4 million reduction in other corporate expenses and (iv) $3 million of prior year costs incurred resulting from accelerated amortization of operating lease ROU assets .
Previous wording
For the six months ended June 30, 2024, restructuring charges of $6 million related to employee severance costs primarily due to reduction in workforce to improve operational efficiencies.
Current wording
For the nine months ended September 30, 2024, restructuring charges of $10 million related to employee severance costs primarily due to reduction in workforce to improve operational efficiencies and accrual of certain contract termination costs related to leased facilities abandonment.
Previous wording
For the six months ended June 30, 2024, interest expense decreased by $4 million or 6%. The increase in variable interest rates did not have material impact due to interest rate swaps being in place. Further, fixed rate margins were lower during the six months ended June 30, 2024 compared to six months ended June 30, 2023 due to improved leverage ratios under the Original Credit Agreement based on which margins were set.
Current wording
For the nine months ended September 30, 2024, interest expense decreased by $12 million or 12%. The fixed rate margins were lower during the nine months ended September 30, 2024 compared to nine months ended September 30, 2023 due to (i) improved leverage ratios under the Original Credit Agreement based on which margins were set and (ii)
Previous wording
During the six months ended June 30, 2024, the fair value movement of our derivative liabilities related to our earnout shares resulted in a credit of $8 million to our consolidated statement of operations compared to a charge of $16 million during the six months ended June 30, 2023. The decrease in fair value of earnout derivative liability was mainly driven by the lower remaining expected term of the earnout shares as of June 30, 2024.
Current wording
During the nine months ended September 30, 2024, the fair value movement of our derivative liabilities related to our earnout shares resulted in a charge of $14 million to our consolidated statements of operations compared to a credit of $23 million during the nine months ended September 30, 2023. The increase in fair value of earnout derivative liability was mainly driven by the increase in our stock price as of September 30, 2024.
Previous wording
For the three months ended June 30, 2024 and 2023, we had income tax benefit of $26 million and $2 million, respectively. Our effective tax rate is different than the U.S. federal statutory corporate income tax rate of 21% due to permanent differences between financial accounting income and income for tax purposes, changes to the valuation allowance and certain U.S minimum taxes expected to arise for the full year. The impact of these items has a large impact on the effective tax rate due to the low pre-tax net income.
Current wording
For the nine months ended September 30, 2024 and 2023, we had income tax (expense) benefit of $(55) million and $12 million, respectively. Our effective tax rate is different than the U.S. federal statutory corporate income tax rate of 21% due to changes to the valuation allowance for deferred tax assets, non-deductible expenses and certain U.S minimum taxes.
Previous wording
We maintain a level of liquidity sufficient to allow us to meet our cash needs in the short-term. Over the long-term, we manage our cash and capital structure with an intention to maintain our financial condition and flexibility for future strategic initiatives. Our principal sources of liquidity are typically cash flows generated from operations, cash available under the credit facilities as well as cash and cash equivalent balances on hand. As of June 30, 2024 and December 31, 2023, our cash and cash equivalent balances were $515 million and $476 million, respectively. During the six months ended June 30, 2024 and 2023, our net cash from (used in) operating activities was $122 million and $(31) million, respectively, and our Free Cash Flow was $73 million and $(90) 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). As of June 30, 2024, we had $50 million of senior secured revolving credit facility that remained undrawn. On July 26, 2024, we amended and restated the Original Credit Agreement, which increased our revolving credit facility to $360 million (see note 17 -Subsequent Events, to our consolidated financial statements included elsewhere in this Form 10-Q).
Current wording
We maintain a level of liquidity sufficient to allow us to meet our cash needs in the short-term. Over the long-term, we manage our cash and capital structure with an intention to maintain our financial condition and flexibility for future strategic initiatives. Our principal sources of liquidity are typically cash flows generated from operations, cash available under the credit facilities as well as cash and cash equivalent balances on hand. As of September 30, 2024 and December 31, 2023, our cash and cash equivalent balances were $524 million and $476 million, respectively. During the nine months ended September 30, 2024 and 2023, our net cash from operating activities was $207 million and $104 million, respectively, and our Free Cash Flow was $132 million and $17 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). On July 26, 2024, we amended and restated the Original Credit Agreement, which increased our revolving credit facility from $50 million to $360 million all of which remains undrawn as of September 30, 2024 (see note 7 -Long-term Debt, to our consolidated financial statements included elsewhere in this Form 10-Q).
Previous wording
We believe our liquidity is important given our limited ability to predict future financial performance due to the uncertainties of a potential economic slowdown. We have taken and continue to take several measures to preserve our liquidity (voluntary and involuntary redundancies, flexible workings, consolidating facilities, etc.), and entered into several financial transactions, including debt financing / refinancing transactions. In July 2024, we refinanced our existing term loan facility and extended the maturity of term loans until July 2031 (see note 17 -Subsequent Events to our consolidated financial statement included elsewhere in this Form 10-Q). We continue to explore other capital market transactions, process rationalizations and cost reduction measures to further strengthen our liquidity position.
Current wording
We believe our liquidity is important given our limited ability to predict future financial performance due to the uncertainties of a potential economic slowdown. We have taken and continue to take several measures to preserve our liquidity (voluntary and involuntary redundancies, flexible workings, consolidating facilities, etc.), and entered into several financial transactions, including debt financing / refinancing transactions. In July 2024, we refinanced our then existing term loan facility and extended the maturity of term loans until July 2031 (see note 7 -Long-term Debt to our consolidated financial statement included elsewhere in this Form 10-Q). We continue to explore other capital market transactions, process rationalizations and cost reduction measures to further strengthen our liquidity position.
Previous wording
Based on our current operating plan, existing cash and cash equivalents, increase in business volume trends, mitigation measures taken or planned to strengthen our liquidity and financial position, along with our available increased revolving credit funding capacity under the A&R Credit Agreement and cash flows from operations, we believe we have adequate liquidity to meet the future operating, investing and financing 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. Our full utilization of the Revolving Credit Facility, under the A&R Credit Agreement entered into in July 2024, may be effectively limited with the leverage-based financial covenant requirements.
Current wording
Based on our current operating plan, existing cash and cash equivalents, increase in business volume trends, mitigation measures taken or planned to strengthen our liquidity and financial position, along with our available increased revolving credit funding capacity under the A&R Credit Agreement and cash flows from operations, we believe we have adequate liquidity to meet the future operating, investing and financing 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 or undertake transactions to increase shareholder value. If we elect to pursue any such investments or transactions, 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. Our full utilization of the Revolving Credit Facility, under the A&R Credit Agreement entered into in July 2024, may be effectively limited with the leverage-based financial covenant requirements.
Previous wording
Cash Flows for the Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023
Current wording
Cash Flows for the Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023
Previous wording
As of June 30, 2024, we had $541 million of cash, cash equivalents and restricted cash, an increase of $52 million compared to December 31, 2023. The following discussion summarizes changes to our cash flows from operating, investing and financing activities for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Current wording
As of September 30, 2024, we had $550 million of cash, cash equivalents and restricted cash, an increase of $61 million compared to December 31, 2023. The following discussion summarizes changes to our cash flows from operating, investing and financing activities for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Previous wording
For the six months ended June 30, 2024 and June 30, 2023, net cash from (used in) operating activities was $122 million and $(31) million, respectively. The increase in cash flows from operating activities of $153 million was primarily due to an increase in operating income and favorable net change in working capital resulting from Egencia working capital optimization actions.
Current wording
For the nine months ended September 30, 2024 and September 30, 2023, net cash from operating activities was $207 million and $104 million, respectively. The increase in cash flows from operating activities of $103 million was primarily due to an increase in operating income and lower cash interest payments partially offset by higher cash income taxes.
Previous wording
During the six months ended June 30, 2024, cash used in investing activities decreased by $20 million due to (i) decrease in purchase of property and equipment of $10 million and (ii) $10 million resulting from current period repayment of prior period loan to an equity affiliate.
Current wording
During the nine months ended September 30, 2024, cash used in investing activities decreased by $23 million primarily due to (i) decrease in purchase of property and equipment of $12 million and (ii) $10 million resulting from proceeds received in 2024 for a loan given to an equity affiliate in 2023 .
Previous wording
During the six months ended June 30, 2024, net cash used in financing activities of $17 million was primarily due to: (i) $19 million cash paid for taxes withheld upon vesting of equity awards, offset by (ii) $5 million cash received from contributions for ESPP and exercise of stock options. During the six months ended June 30, 2023, net cash from financing activities of $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 (iii) $4 million repayment of principal amount of senior secured term loans and finance leases, and (iv) $8 million cash paid for taxes withheld upon vesting / exercise of equity awards.
Current wording
During the nine months ended September 30, 2024, net cash used in financing activities of $79 million was primarily due to: (i) $1,372 million of repayment of principal amount of term loans under the Original Credit Agreement upon refinancing of debt in July 2024 (ii) $55 million purchase of treasury shares (iii) $51 million related to debt refinancing costs and make-whole premium for early repayment of term loans and (iv) $22 million cash paid for taxes withheld upon vesting of equity awards, offset by (v) $1,397 million of proceeds from borrowings under the A&R Credit Agreement, net of discount, upon debt refinancing in July 2024 and (vi) $27 million cash received from contributions for ESPP and exercise of stock options. During the nine months ended September 30, 2023, net cash from financing activities of $121 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) $7 million received from exercise of stock options and contributions to ESPP, partially offset by (iii) $4 million repayment of principal amount of senior secured term loans and finance leases, and (iv) $14 million cash paid for taxes withheld upon vesting / exercise of equity awards.
Previous wording
Set forth below is a reconciliation of net cash from (used in) operating activities to Free Cash Flow.
Current wording
Set forth below is a reconciliation of net cash from operating activities to Free Cash Flow.
Previous wording
During the six months ended June 30, 2024, our Free Cash Flow improvement of $163 million was due to a $153 million increase in net cash from operating activities as discussed above and a decrease of $10 million of cash outflows related to purchases of property and equipment.
Current wording
During the nine months ended September 30, 2024, our Free Cash Flow improvement of $115 million was due to a $103 million increase in net cash from operating activities as discussed above and a decrease of $12 million of cash outflows related to purchases of property and equipment.
Previous wording
As of June 30, 2024, our Net Debt is lower by $36 million compared to Net Debt as of December 31, 2023, primarily due to $39 million increase in cash and cash equivalents balance.
Current wording
As of September 30, 2024, our Net Debt is lower by $26 million compared to Net Debt as of December 31, 2023, due to $48 million increase in cash and cash equivalents balance, offset by $22 million of net increase in total debt, net of unamortized debt discount and debt issuance costs, primarily resulting from refinanced term loans as discussed below.
Showing the first 40 of 44 pairs. Open the source sections for the rest.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Operating Expenses are helpful supplemental measures to assist potential investors and analysts in evaluating our operating results across reporting periods on a consistent basis.
Current report — wording carried from elsewhere
Loss on Early Extinguishment of Debt
Current report — wording carried from elsewhere
refinancing of term loans in July 2024 with lower fixed rate margins. The changes in variable interest rates did not have material impact due to interest rate swaps being in place.
Current report — wording carried from elsewhere
Loss on Early Extinguishment of Debt
Current report — wording carried from elsewhere
Fair Value Movements on Earnout Derivative Liabilities
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(Provision for) Benefit from Income Taxes
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
For the three months ended June 30, 2024, depreciation and amortization decreased marginally by $1 million or 3%.
Previous report — wording carried elsewhere
Benefit from (Provision for) Income Taxes