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What changed in Global Business Travel Group, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Global Business Travel Group, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+553 added−895 removedSource: 10-K (2024-03-13) vs 10-K (2023-03-21)

Top changes in Global Business Travel Group, Inc.'s 2023 10-K

553 paragraphs added · 895 removed · 469 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

161 edited+28 added−107 removed110 unchanged
Biggest changeIn particular, for information on the impact of the COVID-19 pandemic on business travel and the Company, see “Business — Recent Performance and COVID-19 Update” and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations — Key Factors Affecting Our Results of Operations — Impact of the COVID-19 Pandemic.” 11 Table of Contents Although the COVID-19 pandemic significantly disrupted our operations in 2020, 2021 and 2022, during our years of normalized operations, we have delivered strong revenue and Adjusted EBITDA growth: GBT consolidated total revenue, net income (loss) and Adjusted EBITDA (1) ($m) (1) Statutory Financial Results as reported at actual rates Key Factors Affecting Our Results of Operations Industry Overview and Competitive Landscape Over the past 60 years, travel and tourism has been one of the largest and fastest-growing economic sectors, representing $9.2 trillion in spend, or 10.4% of global GDP in 2019, according to the World Travel & Tourism Council (“Travel & Tourism: Economic Impact 2021,” April 2021).
Biggest changeKey Factors Affecting Our Results of Operations Industry Overview and Competitive Landscape Over the past 60 years, travel and tourism has been one of the largest and fastest-growing economic sectors, representing $9.5 trillion in spend, or 9.2% of global gross domestic product ("GDP") in 2023, according to the World Travel & Tourism Council (“Travel & Tourism: Economic Impact 2023,” April 2023).
(the “Borrower”), GBT III, as the original parent guarantor, Morgan Stanley Senior Funding, Inc., as administrative agent and as collateral agent, and the lenders and letter of credit issuers from time to time party thereto, which initially provided for $250 million of Senior Secured Initial Term Loans and the $50 million Senior Secured Revolving Credit Facility.
(the “Borrower”), GBT III, as the original parent guarantor, Morgan Stanley Senior Funding, Inc., as administrative agent and as collateral agent, and the lenders and letter of credit issuers from time to time party thereto, which initially provided for $250 million of senior secured initial term loans ("Senior Secured Initial Term Loans") and the $50 million senior secured revolving credit facility ("Senior Secured Revolving Credit Facility").
Any voluntary prepayment or debt incurrence mandatory prepayment event with respect to any loan under the Senior Secured New Tranche B-3 Term Loan Facilities or the Senior Secured New Tranche B-4 Term Loan Facility shall be subject to the following prepayment premium: (i) a make-whole amount with respect to any such prepayment prior to the 18-month anniversary of the initial borrowing date under the Senior Secured New Tranche B-4 Term Loan Facility equal to 2.25% of the principal amount of the loans under the Senior Secured New Tranche B-3 Term Loan Facilities or the Senior Secured New Tranche B-4 Term Loan Facility being prepaid plus the present value of the amount of interest that would have been paid on such loan for the period from the date of such prepayment through the end of such 18-month period, and (ii) 2.25% of the principal amount of the loans under the Senior Secured New Tranche B-3 Term Loan Facilities or the Senior Secured New Tranche B-4 Term Loan Facility being prepaid with respect to any such prepayment on or after the 18-month anniversary, but prior to the 30-month anniversary, of the initial borrowing date under the Senior Secured New Tranche B-4 Term Loan Facility.
Any voluntary prepayment or debt incurrence mandatory prepayment event with respect to any loan under the Senior Secured New Tranche B-3 Term Loan Facilities or the Senior Secured New Tranche B-4 Term Loan Facility shall be subject to the following prepayment premium: (i) a make-whole amount with respect to any such prepayment prior to the 18-month anniversary of the initial borrowing date under the Senior Secured New Tranche B-4 Term Loan Facility equal to 2.25% of the principal amount of the loans under the Senior Secured New Tranche B-3 Term Loan Facilities or the Senior Secured New Tranche B-4 Term Loan Facility being prepaid plus the present value of the amount of interest that would have been paid on such loan for the period from the date of such prepayment through the end of such 18-month period, and (ii) 2.25% of the principal amount of the loans under the Senior Secured New Tranche B-3 Term Loan Facilities or the Senior Secured New Tranche B-4 Term Loan Facility being prepaid with respect to any such prepayment on or after the 18-month anniversary, but prior to the 30-month anniversary, of the initial borrowing date under the Senior 18 Secured New Tranche B-4 Term Loan Facility.
In particular, we believe that the following long-term structural trends have emphasized the increasingly important role of a well-managed travel program in effectively and efficiently solving critical business problems: ● A growing emphasis on employee safety and well-being and the need for robust, high-quality, sophisticated solutions that help businesses deliver on their obligations to employees when they travel, increasing employee satisfaction; ● Business clients seeking partners with a demonstrated commitment to high-quality service and proven operational resilience despite periods of significant disruption and geopolitical uncertainty; ● The rising value of technology platforms that can adapt quickly to emerging needs and support an increasingly digitally enabled workforce, supported by investments in innovation; ● Business clients demanding a higher standard of cybersecurity, data privacy and third-party risk management and seeking business partners committed to protecting client and traveler data while meeting the highest ethical standards; ● Increasingly fragmented content, highlighting the attractiveness of a platform that delivers extensive access to content and simplifies the purchasing process; ● Business clients continuing to seek more control and visibility over their travel program costs, which benefits TMCs that offer a broader range of content and higher savings; and ● Business clients seeking partnerships with TMCs that share their ambitions for more responsible and sustainable travel with solutions and clear roadmaps that support these ambitions.
In particular, we believe that the following long-term structural trends have emphasized the increasingly important role of a well-managed travel program in effectively and efficiently solving critical business problems: • A growing emphasis on employee safety and well-being and the need for robust, high-quality, sophisticated solutions that help businesses deliver on their obligations to employees when they travel, increasing employee satisfaction; • Business clients seeking partners with a demonstrated commitment to high-quality service and proven operational resilience despite periods of significant disruption and geopolitical uncertainty; • The rising value of technology platforms that can adapt quickly to emerging needs and support an increasingly digitally enabled workforce, supported by investments in innovative solutions; • Business clients demanding a higher standard of cybersecurity, data privacy and third-party risk management and seeking business partners committed to protecting client and traveler data while meeting the highest ethical standards; • Increasingly fragmented content, highlighting the attractiveness of a platform that delivers extensive access to content and simplifies the purchasing process; • Business clients continuing to seek more control and visibility over their travel program costs, which benefits TMCs that offer a broader range of content and higher savings; and • Business clients seeking partnerships with TMCs that share their ambitions for more responsible and sustainable travel with solutions and clear roadmaps that support these ambitions.
In particular, the Egencia Acquisition: ● Substantially enhances our capabilities in the SME segment to significantly broaden its addressable client base; ● Complements our SME value proposition with Egencia’s software solution specifically built for “digital-first” SME clients who want a seamless program that delivers full traveler tools and control at a lower cost; and ● Provides leading edge traveler and client experience as well as innovation capability powered by an experienced, proven travel technology talent base.
In particular, the Egencia acquisition substantially enhances our capabilities in the SME segment to significantly broaden the addressable client base, complements our SME value proposition with its software solution specifically built for “digital-first” SME clients who want a seamless program that delivers full traveler tools and control at a lower cost and provides leading edge traveler and client experience as well as innovation capability powered by an experienced, proven travel technology talent base.
Cutting-Edge Proprietary Technology Platform Seamlessly Integrated into our Operations Business clients and travelers expect a single integrated global platform to drive seamless experiences and integration with their chosen systems. Our approach provides a differentiated mix of a full end-to-end proprietary solution set as well as a flexible architecture integrating the myriad third-party solutions that our clients request.
Cutting-Edge Proprietary Technology Platform Seamlessly Integrated into our Operations Business clients and travelers expect a single integrated global platform to drive seamless experiences and integration with their chosen systems. Our approach provides a differentiated mix of a full end-to-end proprietary solution 13 set as well as a flexible architecture integrating the myriad third-party solutions that our clients request.
If a bank holding company fails meet to these requirements, the bank holding company and any entities that are deemed “controlled” by the bank holding company for BHC Act purposes could be barred from making certain types of acquisitions or investments in reliance on such financial holding company status, and ultimately such entities could be required to discontinue certain activities permitted for financial holding companies.
If a bank holding company fails meet to these requirements, the bank holding company and any entities that are deemed “controlled” by the bank holding company for BHC Act purposes could be barred from making certain types of 24 acquisitions or investments in reliance on such financial holding company status, and ultimately such entities could be required to discontinue certain activities permitted for financial holding companies.
We supplement our diverse portfolio of leading travel management services, which target attractive segments in B2B travel, with our GBT Partner Solutions proposition. We believe that the combination of our brands and partner solutions provides us with growth options, scalability and capacity for investment in our platform that powers the GBT Flywheel and distinguishes us from our competitors.
We supplement our diverse portfolio of leading travel management software and services, which target attractive segments in B2B travel, with our GBT Partner Solutions proposition. We believe that the combination of our brands and partner solutions provides us with growth options, scalability and capacity for investment in our platform that powers the GBT Flywheel and distinguishes us from our competitors.
High-quality Client Base with Track Record of Attractive Retention Rates and New Business Growth Through our diverse portfolio of leading travel management services, we serve a broad range of business clients globally across a diverse range of industries including, among others, business and financial services, industrial, technology, healthcare, legal and other industries.
High-quality Client Base with Track Record of Attractive Retention Rates and New Business Growth Through our diverse portfolio of leading travel management software and services, we serve a broad range of business clients globally across a diverse range of industries including, among others, business and financial services, industrial, technology, healthcare, legal and other industries.
Within our global client solutions, our tools and infrastructure allow travel counselors to serve any client or traveler anywhere, to the high standard our clients expect of us. Where our clients require deep, personal knowledge of their business and travelers, we dedicate travel counselors to their account and offer on-site service.
Within our global client solutions, our tools and infrastructure allow 12 travel counselors to serve any client or traveler anywhere, to the high standard our clients expect of us. Where our clients require deep, personal knowledge of their business and travelers, we dedicate travel counselors to their account and offer on-site service.
Strengthen Position in Global and Multinational Segment We believe our value proposition to business clients was strengthened by the COVID-19 pandemic, which underscored our high-quality service and created a flight to service quality, where quality of service became highly prioritized as a critical buying factor.
Strengthen Position in Global and Multinational Segment We believe our value proposition to business clients was strengthened by the COVID-19 pandemic, which underscored our high-quality service and created a flight to service quality, where quality of service became highly 15 prioritized as a critical buying factor.
Effective as of December 16, 2021, the Senior Secured Credit Agreement was amended to, among other things, establish the Senior Secured New Tranche B-3 Term Loan Facilities, a portion of which was applied to refinance and repay in full the Senior Secured Prior Tranche B-1 Term Loans and the Senior Secured Prior Tranche B-2 Term Loan Facility.
Effective as of December 16, 2021, the Senior Secured Credit Agreement was amended to, among other things, establish the Senior Secured New Tranche B-3 Term Loan Facilities, a portion of which was 17 applied to refinance and repay in full the Senior Secured Prior Tranche B-1 Term Loans and the Senior Secured Prior Tranche B-2 Term Loan Facility.
We receive marketing funds from certain travel suppliers for use in promotion, product and brand development programs, including national and/or regional marketing, advertising, public relations, social media, research and sales promotion campaigns. Competition The travel industry, and the business travel services industry, are highly competitive.
We receive marketing funds from certain travel suppliers for use in promotion, product and brand development programs, including national and/or regional marketing, advertising, public relations, social media, research and sales promotion campaigns. 21 Competition The travel industry, and the business travel services industry, are highly competitive.
Our value to travel suppliers is built on efficient access to premium business travelers, combined with solutions that help them effectively market their content and service offerings, including: ● A technology platform distributing content to our business clients across a wide range of POS; ● Managing a highly complex retail environment on behalf of travel suppliers, including client-specific content, fares and POS integrations; ● Analytics and other solutions that help travel suppliers make better retail decisions; ● Acting as an extension of the supplier salesforce to our clients; and ● Superior capabilities that allow us to service those clients in challenging or unpredictable environments.
Our value to travel suppliers is built on efficient access to premium business travelers, combined with solutions that help them effectively market their content and service offerings, including: • A technology platform distributing content to our business clients across a wide range of points of sale ("POS"); • Managing a highly complex retail environment on behalf of travel suppliers, including client-specific content, fares and POS integrations; • Analytics and other solutions that help travel suppliers make better retail decisions; • Acting as an extension of the supplier salesforce to our clients; and • Superior capabilities that allow us to service those clients in challenging or unpredictable environments.
The graphic below reflects such acquisitions: ● KDS (now NEO), which we acquired in October 2016, strengthened our platform and digital capabilities in two key areas: (i) KDS’ flagship Neo Online Booking Tool and Expense platform (“Neo”) provides us with our own leading edge platform to engage with and delight travelers through digital channels; and (ii) KDS’ development group, relaunched as our Neo Technology Group (“NTG”), is part of our dedicated center of excellence for digital and ecommerce innovation supporting all our group offerings. ● SMT was our long-time service delivery partner (TPN) in Finland and became our proprietary operation in October 2016. ● Banks Sadler is a UK-based specialist in creative solutions for meetings and events.
The graphic below reflects such acquisitions and investments: • KDS, which we acquired in October 2016, strengthened our platform and digital capabilities in two key areas: (i) KDS’ flagship Neo Online Booking Tool and Expense platform (“Neo”) provides us with our own leading edge platform to engage with and delight travelers through digital channels; and (ii) KDS’ development group, relaunched as our Neo Technology Group (“NTG”), is part of our dedicated center of excellence for digital and ecommerce innovation supporting all our group offerings. • SMT was our long-time service delivery partner in Finland and became our proprietary operation in October 2016. • Banks Sadler is a UK-based specialist in creative solutions for meetings and events.
The Senior Secured Credit Agreement also requires that an aggregate amount of Liquidity, as defined in the Senior Secured Credit Agreement, equal to at least $200 million be maintained as of the end of each calendar month.
The Senior Secured Credit Agreement requires that an aggregate amount of Liquidity, as defined in the Senior Secured Credit Agreement, equal to at least $200 million be maintained as of the end of each calendar month.
We offer travel suppliers efficient access to this premium demand. For example, we estimate that the total distribution cost through us is comparable (as a percentage of booking value) to the reported selling costs for at least our top five airline clients and even more cost-effective when considering the technology investment and servicing cost savings our travel suppliers realize.
We offer travel suppliers efficient access to this premium demand. For example, we estimate that the total distribution cost through us is comparable (as a percentage of booking value) to the reported selling costs for at least our top five airline supplier and even more cost-effective when considering the technology investment and servicing cost savings our travel suppliers realize.
As a result of this paradigm shift, newly won client expected annual value and growth in client and traveler satisfaction performance has strengthened compared to our pre-pandemic trend. We provide one of the most complete business travel solutions for business clients, and we believe our differentiated value proposition will enable us to continue to grow in this segment.
As a result of this paradigm shift, newly won client expected annual value and growth in client and traveler satisfaction performance have strengthened compared to our pre-pandemic trend. We provide one of the most complete business travel solutions for business clients, and we believe our differentiated value proposition will enable us to continue to grow in this segment.
Through the last two economic cycles (2000-2019), global business travel spend grew by an estimated CAGR of 4.4% compared to 3.7% real global GDP growth rate over the same period (“GBTA BTI Outlook Annual Global Report & Forecast: Prospects for Global Business Travel 2020-2024,” January 2021, Global Business Travel Association).
Through the last two economic cycles (2000-2019), global business travel spend grew by an estimated compound annual growth rate of 4.4% compared to 3.7% real global GDP growth rate over the same period (“GBTA BTI Outlook Annual Global Report & Forecast: Prospects for Global Business Travel 2020-2024,” January 2021, Global Business Travel Association ) .
Our regulators are increasingly focused on ensuring that our privacy, data protection, data governance and information and cyber security-related policies and practices are adequate to inform customers of our data collection, use, sharing and/or security practices, to provide them with choices, if required, about how we use and share their information, and to appropriately safeguard their personal information and account access.
Our regulators are increasingly focused on ensuring that our privacy, data protection, data governance and information and cybersecurity-related policies and practices are adequate to inform customers of our data collection, use, sharing and/or security practices, to provide them with choices, if required, about how we use and share their information, and to appropriately safeguard their personal information and account access.
In addition, the GBT Supply MarketPlace aggregates and optimizes content delivery, which we believe will solve critical problems for business clients, travel suppliers and Network Partners. With increased capabilities and functionality, we can deliver more value for our clients and potentially capture a higher share of travel spend from our clients.
In addition, the Amex GBT Marketplace aggregates and optimizes content delivery, which we believe will solve critical problems for business clients, travel suppliers and Network Partners. With increased capabilities and functionality, we can deliver more value for our clients and potentially capture a higher share of travel spend from our clients.
For additional information, see “ Risk Factors — Risks Relating to Regulatory, Tax and Litigation Matters — Because we are deemed to be “controlled” by American Express under the BHC Act, we are and will be subject to supervision, examination and regulation by the Federal Reserve which could adversely affect our future growth and our business, results of operations and financial condition. ” Activities The BHC Act generally limits bank holding companies, including entities that are deemed “controlled” for BHC Act purposes, to activities that are considered to be banking activities and certain closely related activities.
Risk Factors — Risks Relating to Regulatory, Tax and Litigation Matters — Because we are deemed to be “controlled” by American Express under the BHC Act, we are and will be subject to supervision, examination and regulation by the Federal Reserve which could adversely affect our future growth and our business, results of operations and financial condition. ” Activities The BHC Act generally limits bank holding companies, including entities that are deemed “controlled” for BHC Act purposes, to activities that are considered to be banking activities and certain closely related activities.
Failure to satisfy any of the requirements to which our licensed entities are subject could result in a variety of regulatory actions ranging from a fine, a directive requiring remedial action, suspension of a license or, ultimately, revocation of a license. In the United States, our businesses are subject to regulation by the DOT under the U.S.
Failure to satisfy any of the requirements to which our licensed entities are subject could result in a variety of regulatory actions ranging from a fine, a directive requiring remedial action, suspension of a license or, ultimately, revocation of a license. In the United States, our businesses are subject to regulation by the U.S.
Through a TMC, business clients benefit from savings from demand aggregation, access to supplier content, effective fulfilment of business clients’ obligations to ensure the safety and well-being of their employees when traveling for business, and enhanced control over travel spending, among many other benefits.
Through a TMC, business clients benefit from savings from demand aggregation, access to supplier content, effective fulfillment of business clients’ obligations to ensure the safety and well-being of their employees when traveling for business, and enhanced control over travel spending, among many other benefits.
We have also designed processes to streamline travel advisor sales and support workflow to integrate acquired companies efficiently. Employees and Human Capital Resources As of December 31, 2022, we had approximately 19,000 employees worldwide with a proprietary presence or operations in 31 countries.
We have also designed processes to streamline travel advisor sales and support workflow to integrate acquired companies efficiently. Employees and Human Capital Resources As of December 31, 2023, we had approximately 19,000 employees worldwide with a proprietary presence or operations in 31 countries.
Until December 16, 2023, the Borrower will have the option to pay accrued interest on loans under the Senior Secured New Tranche B-3 Term Loan Facilities and the Senior Secured New Tranche B-4 Term Loan Facility at a rate equal to (i) adjusted SOFR (with a 1.00% SOFR floor) plus 4.00% per annum with respect to the portion required to be paid in cash plus (ii) 4.00% per annum with respect to the portion paid in kind by adding such interest to the principal amount of the loans.
Until December 16, 2023, the Borrower had the option to pay accrued interest on loans under the Senior Secured New Tranche B-3 Term Loan Facilities and the Senior Secured New Tranche B-4 Term Loan Facility at a rate equal to (i) adjusted SOFR (with a 1.00% SOFR floor) plus 4.00% per annum with respect to the portion required to be paid in cash plus (ii) 4.00% per annum with respect to the portion paid in kind by adding such interest to the principal amount of the loans.
We, through Neo and Egencia, are differentiated in this capability at global scale. Most new technology-based TMCs are focused on building this capability. We believe that our proven digital offer, further strengthened by the Egencia Acquisition, differentiates us to these clients.
We, through Neo and Egencia, are differentiated in this capability at global scale. Most new technology-based TMCs are focused on building this capability. We believe that our proven digital offer, further strengthened by our acquisition of Egencia, differentiates us to these clients.
We depend on the use of sophisticated information technologies and systems, including, but not limited to the following: ● third-party reservation systems from all the major GDS providers; ● third-party and company-owned online booking portals for air, hotel, car, cruise, activities, insurance etc.; ● third-party and company-owned technology that facilitates the marketing of supplier sponsored advertisements and promotions; ● marketing platforms to attract and acquire quality leads from the internet; ● third-party and proprietary systems for providing customer service, accepting and processing payments, detecting fraud, etc.; ● business intelligence tools to deliver insights and reporting for our business travelers; ● mobile applications to assist our travel advisors in providing just in time services for travelers such as trip or flight recovery tools and destination-related emergency monitoring and alerts; ● third-party and proprietary systems for various business processes such as ticketing, policy validation, document delivery, invoicing, commission management, operational reporting and finance; and ● enterprise communication and productivity software, systems and computing devices for our travel advisors.
We depend on the use of sophisticated information technologies and systems, including, but not limited to, the following: • third-party reservation systems from all the major GDS providers; • third-party and company-owned online booking portals for air, hotel, car, cruise, activities, insurance etc.; • third-party and company-owned technology that facilitates the marketing of supplier sponsored advertisements and promotions; • marketing platforms to attract and acquire quality leads from the internet; • third-party and proprietary systems for providing customer service, accepting and processing payments, detecting fraud, etc.; • business intelligence tools to deliver insights and reporting for our business travelers; • mobile applications to assist our travel advisors in providing just in time services for travelers such as trip or flight recovery tools and destination-related emergency monitoring and alerts; • third-party and proprietary systems for various business processes such as ticketing, policy validation, document delivery, invoicing, commission management, operational reporting and finance; and • enterprise communication and productivity software, systems and computing devices for our travel advisors. 22 We continuously improve and upgrade our systems, infrastructure and information security.
The GDPR includes, among other things, a requirement for prompt notice of data breaches, in certain circumstances, to affected individuals and supervisory authorities. The UK GDPR, which became effective in January 2021, mirrors the compliance requirements and fine structure of the GDPR.
The GDPR includes, among other things, a requirement for prompt notice of data breaches, in certain circumstances, to affected individuals and supervisory authorities. The UK-only adaptation of GDPR, which became effective in January 2021 ("UK GDPR"), mirrors the compliance requirements and fine structure of the GDPR.
In 2016, we released the first phase of our omnichannel core platform, which today consists of our global profile solution, global trip record repository, and GBT Supply MarketPlace with content and an expansive data repository that houses most of our trip and traveler data.
In 2016, we released the first phase of our omnichannel core platform, which today consists of our global profile solution, global trip record repository, and Amex GBT Marketplace with content and an expansive data repository that houses most of our trip and traveler data.
As the world’s leading B2B travel platform by 2021 TTV, we offer travel suppliers access to one of the largest aggregations of this premium demand in the travel industry. Moreover, we believe the composition of our bookings is uniquely valuable compared to typical B2B bookings.
As the world’s leading B2B travel platform by 2022 TTV, we offer travel suppliers access to one of the largest aggregations of this premium demand in the travel industry. Moreover, we believe the composition of our bookings is uniquely valuable compared to typical B2B bookings.
For example, more than 90 airlines and more than 60,000 hotel properties participated in the Preferred Extras program, with clients benefiting from an average saving of approximately 7% compared to public fares when they used Preferred Extras content, in addition to benefiting from extra amenities and perks such as free Wi- Fi, breakfast, last-room availability and loyalty benefits.
For example, in 2023, more than 90 airlines and more than 60,000 hotel properties participated in the Preferred Extras program, with clients benefiting from an average saving of approximately 5% compared to public fares when they used Preferred Extras content, in addition to benefiting from extra amenities and perks such as free Wi-Fi, breakfast, last-room availability and loyalty benefits.
These high value relationships and economics are powered by the GBT Supply MarketPlace, our unified platform encompassing the GDS and non-GDS content aggregation that connects all of our travel suppliers and content to the POS our clients and travelers use.
These high value relationships and economics are powered by the Amex GBT Marketplace, our unified platform encompassing the GDS and non-GDS content aggregation that connects all of our travel suppliers and content to the POS our clients and travelers use.
Egencia is focused on integrated software solutions for SMEs. The Egencia platform is simple and easy to use, provides the “look and feel” of a consumer platform for travelers, and features intuitive integrated travel management solutions. Egencia was designed and built as a software solution for SMEs.
The Egencia platform is simple and easy to use, provides the “look and feel” of a consumer platform for travelers, and features intuitive integrated travel management solutions. Egencia was designed and built as a software solution for SMEs.
Defaults include, but are not limited to, the following: ● non-payment of principal, interest or other amounts when due under the Senior Secured Credit Agreement; 34 Table of Contents ● materially incorrect representations or warranties; ● breaches of covenants; ● cross-default to other material indebtedness of any of the Loan Parties or their subsidiaries; ● one or more material monetary judgments against any of the Loan Parties or their subsidiaries remaining undischarged, unpaid or unstayed; ● certain bankruptcy or insolvency events affecting any of the Loan Parties or any of their material subsidiaries; ● invalidity of any loan document; ● certain events with respect to U.S. and/or non-U.S. employee benefit plans and pension plans; and ● the occurrence of one or more change in control events, which are limited to the following events from and after the Closing (as further described in the Senior Secured Credit Agreement): ● any person or group (other than any combination of the Sponsor, Amex HoldCo, Juweel, QIA, BlackRock, Inc, Certares, certain of their respective affiliates and/or certain other permitted holders) shall have acquired direct or indirect beneficial ownership of more than 50% of the aggregate ordinary voting power represented by the issued and outstanding equity interests of the Loan Party that is the direct or indirect party of all the other Loan Parties; ● a majority of the seats (other than vacant seats) on the Board shall be occupied by persons who were not nominated, appointed or approved for election by the Board; and/or ● 100% of the equity interests in the Borrower shall cease to be owned and controlled, directly or indirectly, by the Loan Party that is the direct or indirect parent of all the other Loan Parties.
Defaults include, but are not limited to, the following: • non-payment of principal, interest or other amounts when due under the Senior Secured Credit Agreement; • materially incorrect representations or warranties; • breaches of covenants; • cross-default to other material indebtedness of any of the Loan Parties or their subsidiaries; • one or more material monetary judgments against any of the Loan Parties or their subsidiaries remaining undischarged, unpaid or unstayed; • certain bankruptcy or insolvency events affecting any of the Loan Parties or any of their material subsidiaries; • invalidity of any loan document; • certain events with respect to U.S. and/or non-U.S. employee benefit plans and pension plans; and • the occurrence of one or more change in control events, which are limited to the following events from and after the Closing (as further described in the Senior Secured Credit Agreement): • any person or group (other than any combination of the Sponsor, American Express, Juweel, QIA, BlackRock, Inc, Certares, certain of their respective affiliates and/or certain other permitted holders) shall have acquired direct or indirect beneficial ownership of more than 50% of the aggregate ordinary voting power represented by the issued and outstanding equity interests of the Loan Party that is the direct or indirect party of all the other Loan Parties; • a majority of the seats (other than vacant seats) on the board of directors of GBTG ("Board") shall be occupied by persons who were not nominated, appointed or approved for election by the Board; and/or • 100% of the equity interests in the Borrower shall cease to be owned and controlled, directly or indirectly, by the Loan Party that is the direct or indirect parent of all the other Loan Parties.
We are subject to certain privacy, data protection, data governance and information and cyber security laws in the United States and other countries in which we operate (including countries in the European Union (the “EU”), Australia, Canada, China, Japan, Hong Kong, India, Mexico, and the United Kingdom), some of which are more stringent and/or expansive than the applicable laws in the United States and some of which may conflict with each other.
We are subject to certain privacy, data protection, data governance and information and cybersecurity laws in the United States and other countries in which we operate (including countries in the European Union (the “EU”), Australia, Canada, China, Japan, Hong Kong, India, Mexico, and the United Kingdom), some of which are more stringent and/or expansive than the applicable laws in the United States and some of which may conflict with each other.
This broad geographic reach allows us to offer streamlined access to a consistent portfolio of services across the globe and a differentiated local service where such service is needed and valued by the traveler and client. 22 Table of Contents Our traveler interactions are captured within and powered by our core platform, which is fully integrated into all service channels.
This broad geographic reach allows us to offer streamlined access to a consistent portfolio of services across the globe and a differentiated local service where such service is needed and valued by the traveler and client. Our traveler interactions are captured within and powered by our core platform, which is fully integrated into all service channels.
The core platform demonstrates how the GBT Flywheel enables enhanced investment in our technology to drive better outcomes for our clients and travel suppliers. By increasingly owning both the traveler experience (whether through Neo, GBT Mobile or Chat) and the distribution technology (through the GBT Supply MarketPlace), we deliver content to travelers the way they want it.
The core platform demonstrates how the GBT Flywheel enables enhanced investment in our technology to drive better outcomes for our clients and travel suppliers. By increasingly owning both the traveler experience (whether through Egencia, Neo, GBT Mobile or Chat) and the distribution technology (through the Amex GBT MarketPlace), we deliver content to travelers the way they want it.
Our clients and suppliers benefit from the 18 Table of Contents incremental value created by these investments through more services and solutions, better client and traveler experiences and a more efficient platform. ● Our end-to-end ownership of our technology platform, from connectivity to sources that supply to our POS, allows us to deploy investments efficiently and generate extensive benefits for our clients and travel suppliers.
Our clients and suppliers benefit from the incremental value created by these investments through more services and solutions, better client and traveler experiences and a more efficient platform. • Our end-to-end ownership of our technology platform, from connectivity to sources that supply to our POS, allows us to deploy investments efficiently and generate extensive benefits for our clients and travel suppliers.
These savings and benefits make our value proposition even more compelling for our clients. Moreover, we benefit from premium economics and capacity to invest in our platform and in inorganic expansion of platform scale and capability.
These savings and benefits make our value proposition even more compelling for our clients. Moreover, we benefit from premium economics and capacity to invest in our platform and in the inorganic expansion of platform and capability.
Where it is valued by our clients, our platform also integrates seamlessly with all major third-party OBTs as well as Neo, further enhancing our flexibility. Our travel counselors are experienced specialists in B2B travel and provide 24/7 global support capabilities. Our service constructs are flexible to match client needs.
Where it is valued by our clients, our platform also integrates seamlessly with all major third-party OBTs, further enhancing our flexibility. Our travel counselors are experienced specialists in B2B travel and provide 24/7 global support capabilities. Our service constructs are flexible to match client needs.
Our products and third-party integrations continue to grow as travel programs and needs evolve, and our core platform is central to our ability to quickly and efficiently develop, deploy and improve solutions across our client base globally.
Our products and integrations continue to grow as travel programs and needs evolve, and our core platform is central to our ability to quickly and efficiently develop, deploy and improve solutions across our client base globally.
Often this includes travel management at a global and local level, a mix of insourced and outsourced processes and an ecosystem of tools and technology that varies for each client. Additionally, travel programs interface with processes and systems of other corporate functions (such as finance, HR, sustainability, risk and compliance for example).
Often this includes travel management at a global and local level, a mix of insourced and outsourced processes and an ecosystem of tools and technology that varies for each client. Additionally, travel programs interface with processes and systems of other corporate functions (such as finance, human resources, sustainability, risk and compliance for example).
The Borrower is also obligated to pay other customary fees described in the Senior Secured Credit Agreement. 33 Table of Contents Covenants The Senior Secured Credit Agreement contains various affirmative and negative covenants, including certain financial covenants (see below) and limitations (subject to exceptions) on the ability of the Loan Parties and their subsidiaries to: (i) incur indebtedness or issue preferred stock; (ii) incur liens on their assets; (iii) consummate certain fundamental changes (such as acquisitions, mergers, liquidations or changes in the nature of the business); (iv) dispose of all or any part of their assets; (v) pay dividends or other distributions with respect to, or repurchase, any equity interests of any Loan Party or any equity interests of any direct or indirect parent company or subsidiary of any Loan Party; (vi) make investments, loans or advances; (vii) enter into transactions with affiliates and certain other permitted holders; (viii) modify the terms of, or prepay, any of their subordinated or junior lien indebtedness; (ix) make certain changes to a Loan Party’s entity classification for U.S. federal income tax purposes or certain intercompany transfers of a Loan Party’s assets if, as a result thereof, an entity would cease to be a Loan Party due to adverse tax consequences; (x) enter into swap contracts; and (xi) enter into certain burdensome agreements.
Covenants The Senior Secured Credit Agreement contains various affirmative and negative covenants, including certain financial covenants (see below) and limitations (subject to exceptions) on the ability of the Loan Parties and their subsidiaries to: (i) incur indebtedness or issue preferred stock; (ii) incur liens on their assets; (iii) consummate certain fundamental changes (such as acquisitions, mergers, liquidations or changes in the nature of the business); (iv) dispose of all or any part of their assets; (v) pay dividends or other distributions with respect to, or repurchase, any equity interests of any Loan Party or any equity interests of any direct or indirect parent company or subsidiary of any Loan Party; (vi) make investments, loans or advances; (vii) enter into transactions with affiliates and certain other permitted holders; (viii) modify the terms of, or prepay, any of their subordinated or junior lien indebtedness; (ix) make certain changes to a Loan Party’s entity classification for U.S. federal income tax purposes or certain intercompany transfers of a Loan Party’s assets if, as a result thereof, an entity would cease to be a Loan Party due to adverse tax consequences; (x) enter into swap contracts; and (xi) enter into certain burdensome agreements.
Transportation Code and state agencies under state seller of travel laws and must comply with various rules and regulations governing the holding out, offering, sale and arrangement of travel products and services as a travel agency and, in the case of the DOT, air transportation as a ticket agent.
Department of Transportation ("DOT") under the U.S. Transportation Code and state agencies under state seller of travel laws and must comply with various rules and regulations governing the holding out, offering, sale and arrangement of travel products and services as a travel agency and, in the case of the DOT, air transportation as a ticket agent.
The combination of solving the distinct needs of clients and travelers through tailored propositions and delivering the value of the GBT Supply MarketPlace across our entire client base underpins our differentiation. 13 Table of Contents ● Unrivaled Experience ● Leading Human (24/7 global customer service) and Digital traveler and customer experience powered by cutting edge Proprietary Platform : Ownership of the digital experience is a critical success factor, as a simple, easy to use, intuitive traveler and client digital experience often drives the buying decision.
The combination of solving the distinct needs of clients and travelers through tailored propositions and delivering the value of the Amex GBT Marketplace across our entire client base underpins our differentiation. • Unrivaled Experience ◦ Leading Human (24/7 global customer service) and Digital Traveler and Customer Experience Powered by Cutting Edge Proprietary Platform : Ownership of the digital experience is a critical success factor, as a simple, easy to use, intuitive traveler and client digital experience often drives the buying decision.
Neither the Senior Secured New Tranche B-3 Term Loan Facilities nor the Senior Secured New Tranche B-4 Term Loan Facility do not have any scheduled amortization payments prior to maturity.
Neither the Senior Secured New Tranche B-3 Term Loan Facilities nor the Senior Secured New Tranche B-4 Term Loan Facility have any scheduled amortization payments prior to maturity.
Our dedicated Global Supplier Partnerships team works closely with our travel suppliers to promote our solutions to travel suppliers and negotiate proprietary content that delivers value and benefits to our clients.
Our dedicated Global Business Partnerships team works closely with our travel suppliers to promote our solutions to travel suppliers and negotiate proprietary content that delivers value and benefits to our clients.
In 2020, we established a global Diversity, Equity and Inclusion Center of Excellence to improve colleague awareness, reduce unconscious bias in the workplace and help drive diversity, equity and inclusion across GBT. We now have seven active inclusion groups which are open to all employees. We remain committed to ensuring that all employees can continuously grow and develop with us.
Our global Diversity, Equity and Inclusion Center of Excellence was established to improve colleague awareness, reduce unconscious bias in the workplace and help drive diversity, equity and inclusion across GBT. We now have seven active inclusion groups which are open to all employees. We remain committed to ensuring that all employees can continuously grow and develop with us.
In addition, our strategic acquisitions help us build scale and add capabilities. We believe that our continued innovation and development of our platform makes us more competitive.
In addition, our strategic acquisitions help us add capabilities. We believe that our continued innovation and development of our platform makes us more competitive.
We offer solutions for demand and supply fragmentation, designed to provide travel suppliers with a cost-efficient channel to reach business clients and business travelers, and we own parts of the distribution value chain, including technology, that enable us to differentiate our service and deliver excellence in client and traveler experiences.
We offer software and services in travel and expense designed to provide solutions to demand and supply fragmentation. We provide travel suppliers with a cost-efficient channel to reach business clients and business travelers. We own parts of the distribution value chain, including technology, that enable us to differentiate our service and deliver excellence in client and traveler experiences.
After the consummation of this acquisition, GBT Spain became our wholly-owned business. 10 Table of Contents ● In July 2018, we completed the acquisition of Hogg Robinson Group Limited (“HRG”), a global B2B services company specializing in travel management.
After the consummation of this acquisition, GBT Spain became our wholly-owned business. • In July 2018, we completed the acquisition of Hogg Robinson Group Limited (“HRG”), a global B2B services company specializing in travel management.
Where business travel is unmanaged, travelers procure travel from, and are serviced by, B2C channels largely outside of business clients’ immediate oversight and control. Where business travel is managed, business clients choose a TMC through which its travelers procure travel and travel services.
Where business travel is unmanaged, travelers procure travel from, and are serviced by, B2C (as defined herein) channels largely outside of business clients’ immediate oversight and control. Where business travel is managed, business clients choose a TMC through which its travelers procure travel and travel services.
We believe that our headquarters space is adequate for our needs and we believe that we should be able to renew our lease or secure a similar property without an adverse impact on our operations. 37 Table of Contents We also routinely make purchases of property and equipment to strengthen our information technology infrastructure and enabling technologies.
We believe that our headquarters space is adequate for our needs and that we should be able to renew our lease or secure a similar property without an adverse impact on our operations. 23 We also routinely make purchases of property and equipment to strengthen our information technology infrastructure and enabling technologies.
We have established and continue to maintain policies and a governance framework to comply with applicable privacy, data protection, data governance and information and cyber security laws and requirements, meet evolving customer and industry expectations and support and enable business innovation and growth.
We have established and continue to maintain policies and a governance framework to comply with applicable privacy, data protection, data governance and information and cybersecurity laws and requirements, meet evolving customer and industry expectations and support and enable business innovation and growth.
Blocked assets (e.g., property or bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license from OFAC. We maintain a global 39 Table of Contents sanctions program designed to ensure compliance with OFAC requirements. Failure to comply with such requirements could subject us to serious legal and reputational consequences, including criminal penalties.
Blocked assets (e.g., property or bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license from OFAC. We maintain a global sanctions program designed to ensure 25 compliance with OFAC requirements. Failure to comply with such requirements could subject us to serious legal and reputational consequences, including criminal penalties.
Failure of the Company, our subsidiaries, employees, contractors or agents to comply with the FCPA, the UK Bribery Act and other similar laws can expose us and/or individual colleagues to investigation, prosecution and potentially severe criminal and civil penalties. Other We maintain operations and employees in the U.S. and worldwide.
Failure of the Company, our subsidiaries, employees, contractors or agents to comply with the FCPA, the UK Bribery Act and other similar laws can expose us and/or individual colleagues to investigation, prosecution and potentially severe criminal and civil penalties. Other We maintain operations and employees in the United States and worldwide.
For any period for which accrued interest is paid in cash, the applicable margin for loans under the Senior Secured New Tranche B-3 Term Loan Facilities and the Senior Secured New Tranche B-4 Term Loan Facility is initially 6.75% per annum for SOFR loans and 5.75% per annum for base rate loans and, commencing with the test period ending September 30, 2023, will vary with the total leverage ratio (calculated in a manner set forth in the Senior Secured Credit Agreement), ranging from 5.25% to 6.75% per annum for SOFR loans and 4.25% to 5.75% per annum for base rate loans.
For any period for which accrued interest is paid in cash, the applicable margin for loans under the Senior Secured New Tranche B-3 Term Loan Facilities and the Senior Secured New Tranche B-4 Term Loan Facility is initially 6.75% per annum for SOFR loans and 5.75% per annum for base rate loans 19 and, commencing with the test period ended September 30, 2023, varies with the total leverage ratio (calculated in a manner set forth in the Senior Secured Credit Agreement), ranging from 5.25% to 6.75% per annum for SOFR loans and 4.25% to 5.75% per annum for base rate loans.
Our value propositions are tailored to meet the sophisticated needs of business travel clients, which in turn are valuable to our travel suppliers. We believe the strength of our value proposition is demonstrated by our track record of attracting and retaining premium demand business clients. Our client retention rate was 95% in 2022.
Our value propositions are tailored to meet the sophisticated needs of business travel clients, which in turn are valuable to our travel suppliers. We believe the strength of our value proposition is demonstrated by our track record of attracting and retaining premium demand business clients. Our client retention rate was 96% in 2023.
The core platform sits at the heart of our business and is custom-built to integrate with our solutions and the technology ecosystems of business clients, travel suppliers and technology 23 Table of Contents partners, providing seamless experiences and technology- enabled solutions.
The core platform sits at the heart of our business and is custom-built to integrate with our solutions and the technology ecosystems of business clients, travel suppliers and technology partners, providing seamless experiences and technology- enabled solutions.
At the option of the Borrower (upon prior written notice), amounts borrowed under one or more of the Senior Secured Term Loan Facilities (as selected by the Borrower) may be voluntarily prepaid, in whole or in part, at any time without premium or penalty (other than (x) any applicable prepayment premium required to be paid with respect to the Senior Secured New Tranche B-3 Term Loan Facilities and the Senior Secured New Tranche B-4 Term Loan Facility, as described below, and (y) customary breakage costs in connection with certain prepayments of loans bearing interest at a rate based on LIBOR).
At the option of the Borrower (upon prior written notice), amounts borrowed under one or more of the Senior Secured Term Loan Facilities (as selected by the Borrower) may be voluntarily prepaid, in whole or in part, at any time without premium or penalty (other than (x) any applicable prepayment premium required to be paid with respect to the Senior Secured New Tranche B-3 Term Loan Facilities and the Senior Secured New Tranche B-4 Term Loan Facility, as described below, and (y) customary breakage costs in connection with certain prepayments of loans ).
As part of the Egencia Acquisition, on November 1, 2021, GBT UK entered into a Transition Services Agreement with Expedia, Inc. (the “Egencia TSA”), pursuant to which Expedia, Inc. (an affiliate of Expedia) and its affiliates provide certain transition services to facilitate an orderly transfer of Egencia from Expedia, Inc. to GBT.
As part of the acquisition of Egencia, on November 1, 2021, GBT Travel Services UK Limited ("GBT UK") entered into a Transition Services Agreement with Expedia (the “Egencia TSA”), pursuant to which Expedia and its affiliates provide certain transition services to facilitate an orderly transfer of Egencia from Expedia to GBT.
We are in the early stages of such discussions and have not entered into any 25 Table of Contents agreement with respect to any possible acquisitions not expressly described in this Annual Report. The purchase price for possible acquisitions may be paid in cash, through the issuance of equity, the incurrence of additional indebtedness, or a combination thereof.
We are in various stages of such discussions and have not entered into any agreement with respect to any possible acquisitions not expressly described in this Annual Report. The purchase price for possible acquisitions may be paid in cash, through the issuance of equity, the incurrence of additional indebtedness, or a combination thereof.
According to GBTA, global business travel was an estimated $1.4 trillion industry in 2019 with decades of historical secular growth through economic cycles.
According to the GBTA, global business travel was an estimated $1.4 trillion industry in 2023 with decades of historical secular growth through economic cycles.
On January 25, 2023, an additional $135 million of term loans were borrowed under the Senior Secured New Tranche B-4 Term Loan 31 Table of Contents Facility.
On January 25, 2023, an additional $135 million of term loans were borrowed under the Senior Secured New Tranche B-4 Term Loan Facility.
They have also deftly managed the challenges of the COVID-19 pandemic together, taking roles as industry leaders in supporting the emerging resurgence of travel, and have the expertise and leadership required to execute on our growth strategy. Our Growth Strategy We believe GBT has significant runway for growth and margin expansion opportunity, enabled by our differentiated industry position.
They have also deftly managed the challenges of the COVID-19 pandemic together, taking roles as industry leaders in supporting the emerging resurgence of travel, and have the expertise and leadership required to execute on our growth strategy. Our Growth Strategy We believe we have significant runway for growth, margin expansion and accelerated cash generation, enabled by our differentiated industry position.
Our total compensation package includes competitive base pay (with variable pay programs to reward outstanding performance), bonus programs, long-term incentive programs, benefits programs, retirement savings options and matching contributions, paid time off for sick and vacation, and protected leave time for medical and family care, of which both medical and bonding leaves are paid.
Our total compensation package includes competitive base pay (with variable pay programs to reward outstanding performance), bonus programs, long-term incentive programs, benefits programs, retirement savings options and matching contributions, paid time off for sick and vacation, a global employee stock purchase plan and protected leave time for medical and family care, of which both medical and bonding leaves are paid.
We estimate that the top 10 TMCs in aggregate accounted for approximately $120 billion in business travel TTV in 2019, or less than 10% of total business travel spend worldwide . Many TMCs serve a mix of business clients.
We estimate that the top 10 TMCs in aggregate accounted for approximately $70 billion in business travel TTV in 2002, or less than 10% of total business travel spend worldwide . Many TMCs serve a mix of business clients.
The Borrower was required to pay a fee of 3.00% per annum on the actual daily unused delayed draw commitments under the Senior Secured New Tranche B-3 Term Loan Facilities. The Borrower paid approximately $3.78 million of upfront fees for the commitments of the lenders under the Senior Secured New Tranche B-4 Term Loan Facility.
The Borrower paid $15 million of upfront fees for the commitments of the lenders under the Senior Secured New Tranche B-3 Term Loan Facilities. The Borrower was required to pay a fee of 3.00% per annum on the actual daily unused delayed draw commitments under the Senior Secured New Tranche B-3 Term Loan Facilities.
The GBT Supply MarketPlace delivers on this need with comprehensive content and superior value.
The Amex GBT Marketplace delivers on this need with comprehensive content and superior value.
The Senior Secured Credit Agreement also contains an additional financial covenant applicable solely to the Senior Secured 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 (a) the suspension period is not in effect and (b) the aggregate principal amount of outstanding loans and letters of credit under the Senior Secured Revolving Credit Facility exceeds 35% of the aggregate principal amount of the Senior Secured Revolving Credit Facility.
The Senior Secured Credit Agreement also contains an additional financial covenant applicable solely to the Senior Secured 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 Senior Secured Revolving Credit Facility exceeds 35% of the aggregate principal amount of the Senior Secured Revolving Credit Facility.
See “ Risk Factors — Risks Relating to Employee Matters, Managing Our Growth and Other Risks Relating to Our Business — We may be unable to identify and consummate new acquisition opportunities, which would significantly impact our growth strategy. ” Capitalize on our Differentiated Value Proposition and Technology Platform Since the formation of the JV, we have invested approximately $1.4 billion in product and platform, to deliver the leading B2B travel platform, including exceptional traveler experience and leading travel program management tools and capabilities.
Risk Factors — Risks Relating to Employee Matters, Managing Our Growth and Other Risks Relating to Our Business — We may be unable to identify and consummate new acquisition opportunities, which would significantly impact our growth strategy. ” Capitalize on our Differentiated Value Proposition and Technology Platform Since our formation in 2014, we have invested approximately $1.6 billion in product and platform, to deliver the leading B2B travel and expense software and services, including exceptional traveler experience and leading travel program management tools and capabilities.
We believe that our ability to offer the seamless combination of digital experience with the expertise of our travel counselors and customer relationship managers is a compelling differentiator and provides us with leading value propositions for our customers. ● The Powerful Backing of American Express GBT ● We believe that operating to a higher standard in relation to the Environment, Social Responsibility and Corporate Governance is integral to our success with customers and suppliers and to attracting and retaining the best talent in the industry and is the cornerstone of our brand promise.
We believe that our ability to offer the 5 seamless combination of digital experience with the expertise of our travel counselors and customer relationship managers is a compelling differentiator and provides us with leading value propositions for our customers. • The American Express GBT Brand Promise ◦ In addition to offering Unrivaled Choice, Unrivaled Value and Unrivaled Experience, we believe that operating to a higher standard in relation to the environment, social responsibility and corporate governance is integral to our success with business clients and suppliers and to attracting and retaining the best talent in the industry and is the cornerstone of our brand promise.
We believe this differentiation is further enhanced by our brand promise — the Powerful Backing of American Express GBT: ● Unrivaled Choice ● Global Servicing with Sophisticated Capabilities: Many clients have global operations, and this is often combined with organizational size and complexity to drive a wide range of sophisticated travel program needs.
We believe this differentiation is further enhanced by our brand promise. • Unrivaled Choice ◦ Global Servicing with Sophisticated Capabilities: Many clients have global operations, and this is often combined with organizational size and complexity to drive a wide range of sophisticated travel program needs.
We regularly consider acquisition opportunities as well as other forms of business combinations. Historically, we have been involved in numerous transactions of various magnitudes, for consideration which included cash, securities or combinations thereof. We are continuing to evaluate and to pursue appropriate acquisition and combination opportunities as they arise in the expansion of our operations.
Historically, we have been involved in numerous transactions of various magnitudes, for consideration which included cash, securities or combinations thereof. We are continuing to evaluate and to pursue appropriate acquisition and combination opportunities as they arise in the expansion of our operations.
During 2022, less than 40% of customer driven revenue, including supplier revenue, was generated by our top 50 clients and no single client accounted for more than 2% of such revenue.
During 2023, less than 40% of customer driven revenue was generated by our top 50 clients and no single client accounted for more than 2% of such revenue.
Furthermore, our ability to consummate and finance acquisitions may be limited by the terms of our existing or future debt arrangements. We cannot predict if any such acquisition will be consummated or, if consummated, will result in a financial or other benefit to us.
Furthermore, our ability to consummate and finance acquisitions may be limited by the terms of our existing or future debt arrangements. We cannot predict if any such acquisition will be consummated or, if consummated, will result in a financial or other benefit to us. See “ Part I, Item 1A .
Accelerate Penetration in SME Segment We are focused on growth in the SME segment, which we believe represents a large and profitable opportunity for our business. In 2019, estimated global SME total travel spend was approximately $945 billion, including both significant managed and unmanaged spend.
Accelerate Penetration in SME Segment We are focused on growth in the SME segment, which we believe represents a large and profitable opportunity for our business. In 2023, we estimate global SME total travel spend was approximately $950 billion, including both significant managed and unmanaged spend.
Privacy, Data Protection, Data Governance, Information and Cyber Security Regulatory and legislative activity in the areas of privacy, data protection, data governance and information and cyber security continues to increase worldwide.
Privacy, Data Protection, Data Governance, Information and Cybersecurity Regulatory and legislative activity in the areas of privacy, data protection, data governance and information and cybersecurity continues to increase worldwide.
The average tenure of our top 100 clients by TTV is approximately 14 years with more than 76% of our client relationships having a tenure of more than five years.
The average tenure of our top 100 clients by TTV is approximately 15 years with more than 81% of our client relationships having a tenure of more than five years.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factor Summary The principal risks and uncertainties affecting our business include the following: Risks Relating to Our Business and Industry ● The COVID-19 pandemic has had, and may continue to have, an adverse impact on our business, including our financial results and prospects, and the travel suppliers on which our business relies. ● The ongoing impact of the COVID-19 pandemic on our business and the impact on our results of operations is uncertain. ● Our revenue is derived from the global travel industry, and a prolonged or substantial decrease in global travel, particularly air travel, could adversely affect us. ● The widespread adoption of teleconference and virtual meeting technologies could reduce the number of in-person business meetings and demand for travel and our services, which could adversely affect our business, financial condition and results of operations. ● The travel industry is highly competitive. ● Consolidation in the travel industry may result in lost bookings and reduced revenue. ● Our business and results of operations may be adversely affected by macroeconomic conditions. 40 Table of Contents ● Downturns in domestic or global economic conditions, or other macroeconomic factors more generally, could have adverse effects on our results of operations. ● Our international business exposes us to geopolitical and economic risks associated with doing business in foreign countries.
Biggest changeRisk Factor Summary The principal risks and uncertainties affecting our business include the following: Risks Relating to Our Business and Industry • Our revenue is derived from the global travel industry, and a prolonged or substantial decrease in global travel, particularly air travel, could adversely affect us. • The widespread adoption of teleconference and virtual meeting technologies could reduce the number of in-person business meetings and demand for travel and our services, which could adversely affect our business, financial condition and results of operations. • The travel industry is highly competitive. • Our business and results of operations may be adversely affected by macroeconomic conditions. • Our international business exposes us to geopolitical and economic risks associated with doing business in foreign countries. • We could be negatively impacted by climate change, ESG and sustainability-related matters.
Increasing competition from current and emerging competitors, consolidation of our competitors, the introduction of new technologies and the continued expansion of existing technologies may force us to make changes to our business models, which could materially and adversely affect our business, prospects, financial condition and results of operations.
Increasing competition from current and emerging competitors, consolidation of our competitors, the introduction of new technologies and the continued expansion of existing technologies may force us to make changes to our business models, which could materially and adversely affect our business, financial condition, results of operations and prospects.
Risks Relating to Employee Matters, Managing Our Growth and Other Risks Relating to Our Business Our ability to identify, hire and retain senior management and other qualified personnel is critical to our results of operations and future growth.
Risks Relating to Employee Matters, Managing Our Growth and Other Risks Relating to Our Business Our ability to identify, hire and retain senior management and other qualified personnel is critical to our results of operations and future growth.
We are in the early stages of such discussions and have not entered into any agreement in principle with respect to any possible acquisitions not expressly described in this Annual Report. The purchase price for possible acquisitions may be paid in cash, through the issuance of equity, the incurrence of additional indebtedness or a combination thereof.
We are in the early stages of such discussions and have not entered into any agreement in principle with respect to any possible acquisitions not expressly described in this Annual Report. The purchase price for acquisitions may be paid in cash, through the issuance of equity, the incurrence of additional indebtedness or a combination thereof.
Preferred stock (including the Class A-1 Preferred Stock and the Class B-1 Preferred Stock, none of which is issued and outstanding as of the date of this Annual Report), if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of the Class A Common Stock.
Preferred stock (including the Class A-1 Preferred Stock and the Class B-1 Preferred Stock, none of which is issued and outstanding as of the date of this Annual Report), if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our Common Stock.
If our TPN were to provide diminished quality of service to clients, engage in fraud, including fraud related to our commission structure, misconduct or negligence or otherwise violate the law, our image and reputation may suffer materially, and we may become subject to liability claims based upon their actions. Any such incidents could adversely affect our results of operations.
If our TPN partners were to provide diminished quality of service to clients, engage in fraud, including fraud related to our commission structure, misconduct or negligence or otherwise violate the law, our image and reputation may suffer materially, and we may become subject to liability claims based upon their actions. Any such incidents could adversely affect our results of operations.
Our Network Partners are an integral part of our business, and we may be unable to successfully implement our growth strategy if our Network Partners refuse to participate in such strategies. For example, the refusal by our Network Partners to actively make our travel product and service offerings available to travelers would have a negative impact on our success.
Our Network Partners are an integral part of our business, and we may be unable to successfully implement our growth strategy if our Network Partners refuse to participate in such strategies. For example, the refusal by our Network Partners to actively make our travel product and service offerings available to travelers would have a negative impact on 35 our success.
While we have taken steps to comply with privacy, cyber security, data protection, data governance, account access and information and cyber security laws and PCI-DSS, any failure or perceived failure by us, our third-party service providers, our independent travel advisors or our partners or affiliates to comply with the privacy policies, privacy- or cyber security-related obligations to travelers or other third parties, or privacy- or cybersecurity-related legal obligations could result in potentially significant regulatory and/or governmental investigations and/or actions, litigation, fines, sanctions, monetary penalties and damages, ongoing regulatory monitoring and increased regulatory scrutiny, client attrition, diversion of management’s time and attention, decreases in the use or acceptance of our cards and damage to our reputation and our brand, all of which could have a material adverse effect on our business and financial performance.
While we have taken steps to comply with privacy, cybersecurity, data protection, data governance, account access and information and cybersecurity laws and PCI-DSS, any failure or perceived failure by us, our third-party service providers, our independent travel advisors or our partners or affiliates to comply with the privacy policies, privacy- or cybersecurity-related obligations to travelers or other third parties, or privacy- or cybersecurity-related legal obligations could result in potentially significant regulatory and/or governmental investigations and/or actions, litigation, fines, sanctions, monetary penalties and damages, ongoing regulatory monitoring and increased regulatory scrutiny, client attrition, diversion of management’s time and attention, decreases in the use or acceptance of our cards and damage to our reputation and our brand, all of which could have a material adverse effect on our business and financial performance.
If the actual trends in these factors are less favorable than our assumptions, we may need to contribute cash to fund our obligations under these plans, thereby reducing cash available to fund our operations or service our debt, which could have an adverse effect on our business, financial condition and results of operations.
If the actual trends in these factors are less favorable than our assumptions, we may need to contribute additional cash to fund our obligations under these plans, thereby reducing cash available to fund our operations or service our debt, which could have an adverse effect on our business, financial condition and results of operations.
Should businesses choose to continue to substitute these technologies for part or all of their in-person meetings and conferences and the preferences of our clients shift away from in-person meetings and conferences, it would adversely affect our business, financial condition, results of operations and prospects. The travel industry is highly competitive.
Should businesses choose to continue to substitute these technologies for part or all of their in-person meetings and conferences and the preferences of our clients shift away from in-person meetings and conferences, it would adversely affect our business, financial condition, results of operations and prospects. 28 The travel industry is highly competitive.
If we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operational flexibility and would also require us to incur interest expense.
If we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operational flexibility and would also require us to incur incremental interest expense.
The CCPA also creates an expanded definition of personal information, imposes special rules on the collection of consumer data from minors, and provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase the likelihood and cost of data breach litigation.
The CCPA also creates an expanded definition of personal information, imposes special rules on the collection of consumer data from minors, and provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase 43 the likelihood and cost of data breach litigation.
Additionally, holders of the Class A Common Stock are subject to the prior liquidation rights of holders of Class A-1 Preferred Stock and Class B-1 Preferred Stock, none of which is issued and outstanding as of the date of this Annual Report, and may become subject to the prior dividend and liquidation rights of holders of any series of preferred stock that the Board may designate and issue without any action on the part of the holders of the Class A Common Stock.
Additionally, holders of our Common Stock are subject to the prior liquidation rights of holders of Class A-1 Preferred Stock and Class B-1 Preferred Stock, none of which is issued and outstanding as of the date of this Annual Report, and may become subject to the prior dividend and liquidation rights of holders of any series of preferred stock that the Board may designate and issue without any action on the part of the holders of our Common Stock.
We may not be able to maintain compliance with these covenants in the future, and in the event that we are not able to maintain compliance, we cannot assure you that we will be able to obtain waivers from the lenders or amend the covenants. Our credit ratings are periodically reviewed by rating agencies, including Standard & Poor’s.
We may not be able to maintain compliance with these covenants in the future, and in the event that we are not able to maintain compliance, we cannot assure you that we will be able to obtain waivers from the lenders or amend the covenants. 33 Our credit ratings are periodically reviewed by rating agencies, including Standard & Poor’s.
Our TPN are independent businesses and are not our employees. As such, we do not exercise control over their day-to-day operations. Our TPN may choose not to operate their travel services businesses in a manner consistent with industry standards, our requirements or standards, or the requirements or standards of applicable laws or governmental authorities.
Our TPN partners are independent businesses and are not our employees. As such, we do not exercise control over their day-to-day operations. Our TPN partners may choose not to operate their travel services businesses in a manner consistent with industry standards, our requirements or standards, or the requirements or standards of applicable laws or governmental authorities.
No assurance can be given with respect to the timing, likelihood or financial or business effect of any possible transaction. As part of our regular ongoing evaluation of acquisition opportunities, we are currently engaged in a number of unrelated preliminary discussions concerning possible acquisitions.
No assurance can be given with respect to the timing, likelihood or financial or business effect of any potential transaction. As part of our regular ongoing evaluation of acquisition opportunities, we are currently engaged in a number of unrelated preliminary discussions concerning possible acquisitions.
Any of the foregoing could prevent us from competing effectively and could have an adverse effect on our business, operating results and financial condition. Our failure to adequately protect our intellectual property may negatively impact our ability to compete effectively against competitors in our industry.
Any of the foregoing could prevent us from competing effectively and could have an adverse effect on our business, operating results and financial condition. 45 Our failure to adequately protect our intellectual property may negatively impact our ability to compete effectively against competitors in our industry.
We currently rely on a variety of third-party systems, service providers and software companies, including GDSs and other electronic central reservation systems used by airlines, various channel managing systems and reservation systems used by other travel suppliers, as well as other technologies used by payment gateway providers.
We currently rely on a variety of third-party systems, service providers and software companies, including GDSs and other electronic central reservation systems used by airlines, various channel managing 41 systems and reservation systems used by other travel suppliers, as well as other technologies used by payment gateway providers.
We are, and in the future, may be, subject to material legal proceedings in the course of our business, including, but not limited to, actions relating to contract disputes, business practices, intellectual property and other commercial and tax matters.
We are, and in the future, may be, subject to legal proceedings in the course of our business, including, but not limited to, actions relating to contract disputes, business practices, intellectual property and other commercial and tax matters.
Through our Travel Partner Network, we expand our global reach through a set of partners that operate locally (most in non-proprietary regions) under the American Express Global Business Travel and Egencia brands.
Through our Travel Partner Network ("TPN"), we expand our global reach through a set of partners that operate locally (most in non-proprietary regions) under the American Express Global Business Travel and Egencia brands.
Unless we maintain good relationships with our TPN and renew existing, or enter into new, TPN agreements, we may be unable to expand our business, and our financial condition and results of operations may suffer.
Unless we maintain good relationships with our TPN partners and renew existing, or enter into new, TPN agreements, we may be unable to expand our business, and our financial condition and results of operations may suffer.
For example, in July 2020, the Court of Justice of the European Union invalidated the “EU-US Privacy Shield,” a framework for transfers of personal data from the European Economic Area to the United States.
For example, in July 2020, the Court of Justice of the European Union ("CJEU") invalidated the “EU-US Privacy Shield,” a framework for transfers of personal data from the European Economic Area to the United States.
Unauthorized use and misuse of our intellectual property or intellectual property we otherwise have the rights to use could reduce or eliminate any competitive advantage we have developed, potentially causing us to lose sales or actual or potential clients, or otherwise harm our business, resulting in a material adverse effect on our business, financial condition or results of operations, and we cannot assure you that legal remedies would adequately compensate us for the damage caused by unauthorized use.
Unauthorized use and misuse of our intellectual property or intellectual property we otherwise have the right to use could reduce or eliminate any competitive advantage we have developed, potentially causing us to lose sales or actual or potential clients, or otherwise harm our business, resulting in a material adverse effect on our business, financial condition or results of operations, and we cannot assure you that legal remedies would adequately compensate us for the damage caused by unauthorized use.
In addition, if Amex HoldCo becomes subject to regulatory or supervisory restrictions that limit its ability to engage in activities generally permitted for financial holding companies under the BHC Act and, in response, we elect to require Amex HoldCo to divest or otherwise restructure its investment in us such that American Express no longer “controls” us under the BHC Act (which is an Amex Exit Condition), American Express may, at its option, terminate the A&R Trademark License Agreement, subject to the two-year transition period set forth therein (including termination of the “Payment Provider Obligations” referred to in the A&R Trademark License Agreement and the American Express exclusivity obligations to us and our affiliates and our and our affiliates’ other exclusivity obligations to American Express under the operating agreements between GBT UK (and its affiliates, where applicable) and American Express; provided, however, that our co-brand obligations with 72 Table of Contents respect to the existing co-brands will continue on their current terms until the existing termination dates of such agreements; provided, further, that we and our affiliates will have no obligation to renew such co-brands or support any future co-brands once the A&R Trademark License Agreement is terminated).
In addition, if American Express becomes subject to regulatory or supervisory restrictions that limit its ability to engage in activities generally permitted for financial holding companies under the BHC Act and, in response, we elect to require American Express to divest or otherwise restructure its investment in us such that American Express no longer “controls” us under the BHC Act (which is an Amex Exit Condition), American Express may, at its option, terminate the A&R Trademark License Agreement, subject to the two-year transition period set forth therein (including termination of the “Payment Provider Obligations” referred to in the A&R Trademark License Agreement and the American Express exclusivity obligations to us and our affiliates and our and our affiliates’ other exclusivity obligations to American Express under the operating agreements between GBT UK (and its affiliates, where applicable) and American Express; provided, however, that our co-brand obligations with respect to the existing co-brands will continue on their current terms until the existing termination dates of such agreements; provided, further, that we and our affiliates will have no obligation to renew such co-brands or support any future co-brands once the A&R Trademark License Agreement is terminated).
Our international operations can pose complex management, compliance, foreign currency, legal, tax, labor, data privacy and economic risks that we may not adequately address, including changes in the priorities and budgets of international travelers and geo-political uncertainties, which may be driven by changes in threat environments and potentially volatile worldwide economic conditions, various regional and local economic and political factors, risks and uncertainties, as well as U.S. foreign policy.
Our international operations can pose complex management, compliance, foreign currency, legal, tax, labor, data privacy and economic risks that we may not adequately address, including changes in the priorities and budgets of international travelers and geopolitical uncertainties, which may be driven by changes in threat environments and potentially volatile worldwide economic conditions, various regional and local economic and political factors, risks and uncertainties, as well as U.S. foreign policy.
In the event of a default, the holders of our indebtedness could elect to declare such indebtedness be due and payable and/or elect to exercise other rights, such as the lenders under the Senior Secured Credit Agreement terminating their commitments thereunder or instituting foreclosure proceedings against their collateral, any of which could have a material adverse effect on our liquidity and our business, financial conditions and results of operations.
In the event of a default, the holders of our indebtedness could elect to declare such indebtedness be due and payable and/or elect to exercise other rights, such as the lenders under the Senior Secured Credit Agreement terminating their commitments thereunder or instituting foreclosure proceedings against their collateral, any of which could have a material adverse effect on our liquidity and our business, financial condition and results of operations.
If we are not able to obtain such necessary financing, it could have an impact on our ability to consummate a substantial acquisition and execute our growth strategy. Also, consideration paid for any future acquisitions could include the Class A Common Stock or other equity securities, which could cause dilution to existing stockholders and to earnings per share.
If we are not able to obtain such necessary financing, it could have an impact on our ability to consummate a substantial acquisition and execute our growth strategy. Also, consideration paid for any future acquisitions could include our Common Stock or other equity securities, which could cause dilution to existing stockholders and to earnings per share.
For completeness, the UK government has stated that transfers of data from the UK to the EEA in most cases are permitted to continue without change. It says it will keep this under review. Further, we are subject to evolving laws and regulations that dictate whether, how, and under what circumstances we can transfer, process and/or receive personal data.
For completeness, the UK government has stated that transfers of data from the United King to the EEA in most cases are permitted to continue without change. It says it will keep this under review. Further, we are subject to evolving laws and regulations that dictate whether, how, and under what circumstances we can transfer, process and/or receive personal data.
Moreover, American Express’s transfer or exercise of demand registration rights with respect to all or a substantial portion of its shares to terminate its deemed “control” of us under the BHC Act following an Amex Exit Condition could result in the sale of a large number of shares of the Class A Common Stock at once or within a relatively short period of time.
Moreover, American Express’s transfer or exercise of demand registration rights with respect to all or a substantial portion of its shares to terminate its deemed “control” of us under the BHC Act following an Amex Exit Condition could result in the sale of a large number of shares of our Common Stock at once or within a relatively short period of time.
If a new transatlantic data transfer framework is not adopted and we are unable to continue to rely on SCCs or validly rely upon other alternative means of data transfers from the European Economic Area or the United Kingdom to the U.S. and other countries where safeguards for transfers of personal data are required under the GDPR (and UK GDPR), we may be unable to operate material portions of our business in the European Economic Area or the United Kingdom as a result of the CJEU’s ruling and related guidance of competent European and national agencies, which would materially and adversely affect our business, financial condition, and results of operations.
If a new transatlantic data transfer framework is not adopted and we are unable to continue to rely on SCCs or validly rely upon other alternative means of data transfers from the European Economic Area or the United Kingdom to the United States and other countries where safeguards for transfers of personal data are required under the GDPR (and UK GDPR), we may be unable to operate material portions of our business in the European Economic Area or the United Kingdom as a result of the CJEU’s ruling and related guidance of competent European and national agencies, which would materially and adversely affect our business, financial condition, and results of operations.
Congress, U.S. state legislatures and many states and countries outside the U.S. are considering new privacy and security requirements that would apply to our business.
Congress, U.S. state legislatures and many states and countries outside the United States are considering new privacy and security requirements that would apply to our business.
The Senior Secured Credit Agreement contains a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long term best interests, including restrictions on our ability to: ● incur or guarantee additional indebtedness or issue disqualified stock or preferred stock; ● incur liens; ● consummate certain fundamental changes (such as acquisitions, mergers or liquidations); ● sell, transfer or otherwise dispose of assets, including capital stock of subsidiaries; 49 Table of Contents ● pay dividends and make other distributions on, or redeem, repurchase or retire capital stock; ● make investments, acquisitions, loans, or advances; ● engage in certain transactions with affiliates; ● enter into agreements that restrict the ability of restricted subsidiaries to make dividends or other payments to the borrower or the guarantors of the debt under the Senior Secured Credit Agreement; ● change of the nature of our business; ● prepay, redeem or repurchase certain indebtedness; and ● designate restricted subsidiaries as unrestricted subsidiaries.
The Senior Secured Credit Agreement contains a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long term best interests, including restrictions on our ability to: • incur or guarantee additional indebtedness or issue disqualified stock or preferred stock; • incur liens; • consummate certain fundamental changes (such as acquisitions, mergers or liquidations); • sell, transfer or otherwise dispose of assets, including capital stock of subsidiaries; • pay dividends and make other distributions on, or redeem, repurchase or retire capital stock; 32 • make investments, acquisitions, loans, or advances; • engage in certain transactions with affiliates; • enter into agreements that restrict the ability of restricted subsidiaries to make dividends or other payments to the borrower or the guarantors of the debt under the Senior Secured Credit Agreement; • change of the nature of our business; • prepay, redeem or repurchase certain indebtedness; and • designate restricted subsidiaries as unrestricted subsidiaries.
Among other things, our Certificate of Incorporation and Bylaws include provisions regarding: ● the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; ● the limitation of the liability of, and the indemnification of, our directors and officers; 71 Table of Contents ● the right of the Board to elect a director to fill a vacancy created by the expansion of or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on the Board (unless a shareholder meeting is called by the Board for this purpose); ● the inability of holders of Class A Common Stock to act by written consent in lieu of a meeting; ● the requirement that a special meeting of stockholders may be called only by the Board, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; ● the procedures for the conduct and scheduling of the Board and stockholder meetings; ● the ability of the Board to amend our Bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our Bylaws to facilitate an unsolicited takeover attempt; ● the establishment of a supermajority stockholder vote requirement of 662∕3% of outstanding shares entitled to vote generally to remove directors, amend our Certificate of Incorporation or amend our Bylaws; and ● advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the composition of the Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Among other things, our Certificate of Incorporation and Bylaws include provisions regarding: • the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the limitation of the liability of, and the indemnification of, our directors and officers; • the right of the Board to elect a director to fill a vacancy created by the expansion of or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on the Board (unless a shareholder meeting is called by the Board for this purpose); • the inability of holders of Common Stock to act by written consent in lieu of a meeting; • the requirement that a special meeting of stockholders may be called only by the Board, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • the procedures for the conduct and scheduling of the Board and stockholder meetings; • the ability of the Board to amend our Bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our Bylaws to facilitate an unsolicited takeover attempt; • the establishment of a supermajority stockholder vote requirement of 66 2∕3% of outstanding shares entitled to vote generally to remove directors, amend our Certificate of Incorporation or amend our Bylaws; and • advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the composition of the Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
In particular, we rely on third parties for: ● the hosting of our websites; 59 Table of Contents ● the hosting of websites of our travel suppliers, which we may rely on; ● certain software underlying our technology platform; ● transportation ticketing agencies to issue transportation tickets and travel assistance products, confirmations and deliveries; ● assistance in conducting searches for airfares and to process air ticket bookings; ● processing hotel reservations for hotels not connected to our management systems; ● processing credit card, debit card and net banking payments; ● providing computer infrastructure critical to our business; ● providing after hours travel management services; and ● providing client relationship management services.
In particular, we rely on third parties for: • the hosting of our websites; • the hosting of websites of our travel suppliers, which we may rely on; • certain software underlying our technology platform; • transportation ticketing agencies to issue transportation tickets and travel assistance products, confirmations and deliveries; • assistance in conducting searches for airfares and to process air ticket bookings; • processing hotel reservations for hotels not connected to our management systems; • processing credit card, debit card and net banking payments; • providing computer infrastructure critical to our business; • providing after hours travel management services; and • providing client relationship management services.
Compliance with current or future privacy, cyber security, data protection, data governance, account access and information and cyber security laws requires ongoing investment in systems, policies and personnel and will continue to impact our business in the future by increasing our legal, operational and compliance costs and could significantly curtail our collection, use, analysis, sharing, retention and safeguarding of personal information and restrict our ability to fully maximize our closed-loop capability, deploy data analytics or AI technology or provide certain products and services, which could materially and adversely affect our profitability.
Compliance with current or future privacy, cybersecurity, data protection, data governance, account access and information and cybersecurity laws requires ongoing investment in systems, policies and personnel and will continue to impact our business in the future by increasing our legal, operational and compliance costs and could significantly curtail our collection, use, analysis, sharing, retention and safeguarding of personal information and restrict our ability to fully maximize our closed-loop capability, deploy data analytics or AI technology or provide certain products and services, which could materially and adversely affect our profitability.
Even if American Express has not exercised such rights, the possibility that it could do so in the future could itself depress the market price of the Class A Common Stock and might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
Even if American Express has not exercised such rights, the possibility that it could do so in the future could itself depress the market price of our Common Stock and might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
Additionally, a disruption to a TPN relationship may impact customer retention and our financial conditions and results of operations may suffer. We may have disputes with our Network Partners, and they may refuse to implement our strategies or seek to terminate their agreements with us if the brands’ performance is worse than they expected.
Additionally, a disruption to a TPN relationship may impact customer retention and our financial condition and results of operations may suffer. We may have disputes with our Network Partners, and they may refuse to implement our strategies or seek to terminate their agreements with us if the brands’ performance is worse than they expected.
Our Certificate of Incorporation and the applicable provisions of the DGCL authorize us to issue these shares of Class A Common Stock and options, rights, warrants and appreciation rights relating to Class A Common Stock for the consideration and on the terms and conditions established by the Board in its sole discretion, whether in connection with acquisitions, or otherwise.
Our Certificate of Incorporation and the applicable provisions of the DGCL authorize us to issue these shares of Common Stock and options, rights, warrants and appreciation rights relating to Common Stock for the consideration and on the terms and conditions established by the Board in its sole discretion, whether in connection with acquisitions, or otherwise.
As a merchant that processes and accepts cards for payment, we have adopted and implemented internal controls over the use, storage and security of card data pursuant to the Payment Card Industry Data Security Standards. We assess our compliance with the Payment Card Industry Data Security Standards rules on a periodic basis and make necessary improvements to our internal controls.
As a merchant that processes and accepts cards for payment, we have adopted and implemented internal controls over the use, storage and security of card data pursuant to the Payment Card Industry Data Security Standards ("PCI-DSS"). We assess our compliance with the PCI-DSS rules on a periodic basis and make necessary improvements to our internal controls.
Our functional and presentational currency is U.S. dollars and as a result, our consolidated financial statements are reported in U.S. dollars. We have acquired, and may in the future acquire, businesses that denominate their financial information in a currency other than the U.S. dollar and/or conduct operations or make sales in currencies other than U.S. dollars.
Our functional and reporting currency is U.S. dollars and as a result, our consolidated financial statements are reported in U.S. dollars. We have acquired, and may in the future acquire, businesses that denominate their financial information in a currency other than the U.S. dollar and/or conduct operations or make sales in currencies other than U.S. dollars.
In addition, because acquisitions have been and are expected to continue to be a critical part of our growth strategy, any such limitations on our ability to engage in acquisition activity could inhibit our future growth and have a materially adverse effect on our business, financial condition or results of operations.
In addition, because acquisitions have been and are expected to continue to be a critical part of our growth strategy, any such limitations on our ability to engage in acquisition activity could inhibit our future growth and have a material adverse effect on our business, financial condition or results of operations.
Any requirement to disclose our proprietary source code, license it for free or license it for purposes of making derivative works, and any requirement to pay damages for breach of contract and/or intellectual property infringement may have a material adverse effect on our business, results of operations or financial condition, and could help our competitors develop services that are similar to or better than ours. 60 Table of Contents Our processing, storage, use and disclosure of personal data, including of travelers and our employees, exposes us to risks stemming from possible failure to comply with governmental law and regulation and other legal obligations.
Any requirement to disclose our proprietary source code, license it for free or license it for purposes of making derivative works, and any requirement to pay damages for breach of contract and/or intellectual property infringement may have a material adverse effect on our business, results of operations or financial condition, and could help our competitors develop services that are similar to or better than ours. 42 Our processing, storage, use and disclosure of personal data, including of travelers and our employees, exposes us to risks stemming from possible failure to comply with governmental law and regulation and other legal obligations.
The trading price of the Class A Common Stock is likely to be volatile and could be subject to fluctuations in response to various factors, some of which are beyond our control. These fluctuations could cause you to lose all or part of your investment in the Class A Common Stock.
The trading price of our Common Stock is likely to be volatile and could be subject to fluctuations in response to various factors, some of which are beyond our control. These fluctuations could cause you to lose all or part of your investment in our Common Stock.
The consequences of these developments and the phase-out of LIBOR cannot be entirely predicted but could include an increase in the cost of borrowings under the Senior Secured Credit Agreement. We may hedge against certain interest rate risks by using hedging instruments such as swaps, caps, options, forwards, futures or other similar products.
The consequences of these developments and the phase-out of LIBOR and synthetic USD LIBOR cannot be entirely predicted but could include an increase in the cost of borrowings under the Senior Secured Credit Agreement. We may hedge against certain variable interest rate risks by using hedging instruments such as swaps, caps, options, forwards, futures or other similar products.
In addition, cyber-attacks or security breaches could result in negative publicity, damage our reputation, divert management’s time and attention, increase our expenditure on cybersecurity measures, expose us to risk of loss or litigation and possible liability, subject us to regulatory penalties and sanctions (and lead to further enhanced regulatory oversight), or cause travelers and potential travel suppliers to lose confidence in our security and choose to use the services of our competitors, any of which would have a material adverse effect on our brands, market share, results of operations and financial condition.
In addition, cyber-attacks or security breaches could result in negative publicity, damage our reputation, divert management’s time and attention, increase our expenditure on cybersecurity measures, expose us to risk of loss or litigation and possible liability, subject us to regulatory penalties and sanctions (and lead to further enhanced regulatory oversight), or cause travelers and potential travel suppliers to lose confidence in our security and choose to use the services of our competitors, any of which would have a material adverse effect on our business, results of operations and financial condition.
Our Certificate of Incorporation further provides that (i) such exclusive forum provision shall not apply to claims or causes of action brought to enforce a duty or liability created by the Securities Act or the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction and (ii) unless we consent in writing to the section of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States shall be the sole and exclusive forum for the resolution of any complaint asserting a right under the Securities Act.
Our Certificate of Incorporation further provides that (i) such exclusive forum provision shall not apply to claims or causes of action brought to enforce a duty or liability created by the Securities Act of 1933, as amended ("Securities Act") or the Securities Exchange Act of 1934, as amended ("Exchange Act"), or any other claim for which the federal courts have exclusive jurisdiction and (ii) unless we consent in writing to the section of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States shall be the sole and exclusive forum for the resolution of any complaint asserting a right under the Securities Act.
Any decrease in demand for consumer or business travel could materially and adversely affect our business, financial condition and results of operations. The widespread adoption of teleconference and virtual meeting technologies could reduce the number of in-person business meetings and demand for travel and our services, which could adversely affect our business, financial condition and results of operations.
Any decrease in demand for business travel could materially and adversely affect our business, financial condition and results of operations. The widespread adoption of teleconference and virtual meeting technologies could reduce the number of in-person business meetings and demand for travel and our services, which could adversely affect our business, financial condition and results of operations.
Travel expenditures are sensitive to personal and business-related discretionary spending levels and tend to decline or grow more slowly during economic downturns, including during periods of slow, slowing or negative economic growth, higher unemployment or inflation rates, weakening currencies and concerns over government responses such as higher taxes or tariffs, increased interest rates and reduced government 45 Table of Contents spending.
Travel expenditures are sensitive to personal and business-related discretionary spending levels and tend to decline or grow more slowly during economic downturns, including during periods of slow, slowing or negative economic growth, higher unemployment or inflation rates, weakening currencies and concerns over government responses such as higher taxes or tariffs, increased interest rates and reduced government spending.
There are numerous laws with a significant impact on our operations regarding privacy, cyber security and the storage, sharing, use, analysis, processing, transfer, disclosure and protection of personal information and consumer data, the scope of which are changing, subject to differing interpretations, and may be inconsistent between states within a country or between countries.
There are numerous laws with a significant impact on our operations regarding privacy, cybersecurity and the storage, sharing, use, analysis, processing, transfer, disclosure and protection of personal information and consumer data, the scope of which are changing, subject to differing interpretations, and may be inconsistent between states within a country or between countries.
Although GAAP expense and pension funding contributions are impacted by different regulations and requirements, the key economic factors that affect GAAP expense would also likely affect the amount of cash or securities we would contribute to the pension plans.
Although GAAP expense and pension funding contributions are impacted by different regulations and requirements, the key economic factors that affect GAAP expense would also likely affect the amount of cash we would contribute to the pension plans.
Companies with close relationships with end clients, like Facebook, as well as new entrants introducing new paradigms into the travel industry, such as metasearch engines like Google, may promote alternative distribution channels by diverting client traffic away from intermediaries and travel agents, which may adversely affect our business and financial results.
Companies with close relationships with end clients, like Facebook, as well as new entrants introducing new paradigms into the travel industry, such as metasearch engines like Google, may promote alternative distribution channels by diverting client traffic away from intermediaries and travel agents, which may adversely affect our business, financial condition and results of operations.
If we need to 65 Table of Contents repay debt during periods of rising interest rates, we could be required to refinance our then-existing debt on unfavorable terms or liquidate one or more of our assets to repay such debt at times which may not permit realization of the maximum return on such assets and could result in a loss.
If we need to repay debt during periods of rising interest rates, we could be required to refinance our then-existing debt on unfavorable terms or liquidate one or more of our assets to repay such debt at times which may not permit realization of the maximum return on such assets and could result in a loss.
A change in these principles or interpretations could have a significant effect on our reported results of operations, and may even affect the reporting of transactions completed before the announcement or effectiveness of a change.
A change in these principles or interpretations could have a significant effect on our reported results of operations, and may even affect the reporting of transactions completed before the announcement or effectiveness of an accounting change.
In addition, if travel suppliers do not include some or all of our Network Partners in our preferred supplier agreements our revenues could be adversely impacted and Network Partners may choose to exit the program, which would further reduce our potential revenues. 52 Table of Contents Our TPN could take actions that may harm our business.
In addition, if travel suppliers do not include some or all of our Network Partners in our preferred supplier agreements our revenues could be adversely impacted and Network Partners may choose to exit the program, which would further reduce our potential revenues. Our TPN partners could take actions that may harm our business.
This competitive market for a small number of business opportunities may make it more challenging to identify and successfully capitalize on acquisition opportunities that meet our objectives. The identification of suitable acquisition candidates can be difficult, time-consuming and costly, and we may not complete acquisitions successfully that we target in the future.
This competition for a small number of business opportunities may make it more challenging to identify and successfully capitalize on acquisition opportunities that meet our objectives. The identification of suitable acquisition candidates can be difficult, time-consuming and costly, and we may not successfully complete acquisitions that we target in the future.
On June 28, 2021, the EU approved adequacy decisions for the EU GDPR and the Law Enforcement Directive (LED). This means that in the majority of circumstances, data can continue to flow from the EU and the EEA to the UK without the need for additional safeguards. Both decisions are expected to last until June 27, 2025.
On June 28, 2021, the EU approved adequacy decisions for the EU GDPR and the Law Enforcement Directive (LED). This means that in the majority of circumstances, data can continue to flow from the EU and the EEA to the United Kingdom without the need for additional safeguards. Both decisions are expected to last until June 27, 2025.
Issuing additional shares of our capital stock, other equity securities, or securities convertible into equity may dilute the economic and voting rights of our existing stockholders, reduce the market price of the Class A Common Stock, or both.
Issuing additional shares of our capital stock, other equity securities, or securities convertible into equity may dilute the economic and voting rights of our existing stockholders, reduce the market price of our Common Stock, or both.
Risks Relating to Our Dependence on Third Parties If we are unable to maintain existing, and establish new, arrangements with travel suppliers, or if our travel suppliers and partners reduce or eliminate the commission and other compensation they pay us, our business and results of operations would be negatively impacted.
Risks Relating to Our Dependence on Third Parties If we are unable to maintain existing, and establish new, arrangements with travel suppliers, or if our travel suppliers and partners reduce or eliminate the commission and other compensation they pay us or affect surcharges on TMCs, our business and results of operations would be negatively impacted.
We, and our travel suppliers and third-party service providers on our behalf, collect, use and transmit a large volume of personal information, which pose a tempting target for malicious actors who may seek to carry out cyber-attacks against us or our 62 Table of Contents suppliers or service providers.
We, and our travel suppliers and third-party service providers on our behalf, collect, use and transmit a large volume of personal information, which pose a tempting target for malicious actors who may seek to carry out cyber-attacks against us or our suppliers or service providers.
Our business and growth strategies rely in part upon our clients’ continued need for in-person meetings and conferences. Due to the COVID-19 pandemic, teleconference and virtual meeting technologies have become significantly more popular and many businesses have substituted these technologies for part or all of their in-person meetings and conferences.
Our business and growth strategies rely in part upon our clients’ continued need for in-person meetings and conferences. Since the COVID-19 pandemic, teleconference and virtual meeting technologies have become significantly more popular and many businesses have substituted these technologies for part or all of their in-person meetings and conferences.
Our ability to successfully implement our acquisition strategy will depend on our ability to identify, negotiate, complete and integrate acquisitions, including the Egencia Acquisition, and, if necessary, to obtain satisfactory debt or equity financing to fund those acquisitions. Mergers and acquisitions are inherently risky, and any mergers and acquisitions that we complete may not be successful.
Our ability to successfully implement our acquisition strategy will depend on our ability to identify, negotiate, complete and integrate acquisitions, and, if necessary, to obtain satisfactory debt or equity financing to fund those acquisitions. Mergers and acquisitions are inherently risky, and any mergers and acquisitions that we complete may not be successful.
Any due diligence conducted by us in connection with potential future acquisitions may not reveal all relevant considerations or liabilities of the target business, which could have a material adverse effect on our financial condition or results of operations.
Any due diligence conducted by us in connection with a potential acquisition may not reveal all relevant considerations or liabilities of the target business, which could have a material adverse effect on our financial condition or results of operations.
We cannot guarantee we have not, do not or will not infringe, 63 Table of Contents misappropriate or otherwise violate the intellectual property rights of others. If we were to discover that our products or services infringe, misappropriate or otherwise violate the intellectual property rights of others, we may need to obtain licenses or implement workarounds that could be costly.
We cannot guarantee we have not, do not or will not infringe, misappropriate or otherwise violate the intellectual property rights of others. If we were to discover that our products or services infringe, misappropriate or otherwise violate the intellectual property rights of others, we may need to obtain licenses or implement workarounds that could be costly.
Other states have signed into law or are considering legislation governing the handling of personal data, indicating a trend toward more stringent privacy legislation in the U.S. In addition to the existing framework of data privacy laws and regulations, the U.S.
A number of other U.S. states have recently signed into law or are considering legislation governing the handling of personal data, indicating a trend toward more stringent privacy legislation in the United States. In addition to the existing framework of data privacy laws and regulations, the U.S.
Brand value can be severely damaged even by isolated incidents, particularly if the incidents receive considerable negative publicity or result in litigation. Some of these incidents may occur in the ordinary course of our business or the business of our 57 Table of Contents partners or affiliates.
Brand value can be severely damaged even by isolated incidents, particularly if the incidents receive considerable negative publicity or result in litigation. Some of these incidents may occur in the ordinary course of our business or the business of our partners or affiliates.
In addition, the GDPR imposes strict rules on the transfer of personal data out of the EU to a “third country,” including the U.S. These obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other requirements or our practices.
In addition, the GDPR imposes strict rules on the transfer of personal data out of the EU to a “third country,” including the United States. These obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other requirements or our practices.
When consolidating a business that has functional currency other than U.S. dollars, we will be required to translate the balance sheet and operational results of such business into U.S. dollars. Due to the foregoing, changes in exchange rates between U.S. dollars and other currencies could lead to significant changes in our reported financial results from period to period.
When consolidating a business that has functional currency other than U.S. dollars, we will be required to translate the balance sheet and operational results of such business into U.S. dollars. As a result, changes in exchange rates between U.S. dollars and other currencies could lead to significant changes in our reported financial results from period to period.
Further, the fact that we are subject to supervision, examination and regulation by the Board of Governors of the Federal Reserve System (“Federal Reserve”) under the BHC Act could limit our ability to engage in acquisition activity (See “— Risks Relating to Regulatory, Tax and Litigation Matters — Because we are deemed to be “controlled” by American Express under the BHC Act, we are and will be subject to supervision, examination and regulation by the Federal Reserve which could adversely affect our future growth and our business, results of operations and financial condition ”).
Further, the fact that we are subject to supervision, examination and regulation by the Federal Reserve under the BHC Act could limit our ability to engage in acquisition activity (See “— Risks Relating to Regulatory, Tax and Litigation Matters — Because we are deemed to be “controlled” by American Express under the BHC Act, we are and will be subject to supervision, examination and regulation by the Federal Reserve which could adversely affect our future growth and our business, results of operations and financial condition ”).
Our success and ability to compete depend, in part, upon our intellectual property, including our brands, technology and database. In the U.S. and other jurisdictions, we rely on a combination of copyright, trademark, patent, and trade secret laws, as well as license and confidentiality agreements and internal policies and procedures to protect our intellectual property.
Our success and ability to compete depend, in part, upon our intellectual property, including our brands, technology and database. In the United States and other jurisdictions, we rely on a combination of copyright, trademark, patent, and trade secret laws, as well as license and confidentiality agreements and internal policies and procedures to protect our intellectual property.
In the future, we expect to obtain financing or to further increase our capital resources by issuing additional shares of our capital stock or offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity, or shares of preferred stock.
In the future, we may obtain financing or further increase our capital resources by issuing additional shares of our capital stock or offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity, or shares of preferred stock.
We may fail to effectively scale and grow our systems and infrastructure to accommodate these increased demands. Further, our systems and infrastructure may not be 58 Table of Contents adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could be harmful to our business, or could contain errors, bugs or vulnerabilities.
We may fail to effectively scale and grow our systems and infrastructure to accommodate these increased demands. Further, our systems and infrastructure may not be adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could be harmful to our business, or could contain errors, bugs or vulnerabilities.
Such sales could cause the market price of the Class A Common Stock to fall significantly, particularly because, following an Amex Exit Condition, the sale price for such shares may not reflect the intrinsic value of the Class A Common Stock.
Such sales could cause the market price of our Common Stock to fall significantly, particularly because, following an Amex Exit Condition, the sale price for such shares may not reflect the intrinsic value of our Common Stock.
These valuations reflect assumptions about financial market and other economic conditions, which may change based on changes in key economic indicators. The most significant year-end assumptions used to estimate pension or other post-retirement benefit income or expense for the following year are the discount rate applied to plan liabilities and the expected long-term rate of return on plan assets.
These valuations reflect assumptions about financial market and other economic conditions, which may change based on changes in key economic indicators. The most significant year-end assumptions used to estimate pension cost or benefit for the following year are the discount rate applied to plan liabilities and the expected long-term rate of return on plan assets.
In addition, the Cybersecurity and Infrastructure Security Agency, has warned all organizations in the U.S. to be on guard against possible cyber-attacks coming from Russia which have the potential to disrupt business operations, limit access to essential services, and threaten public safety.
In addition, the Cybersecurity and Infrastructure Security Agency, has warned all organizations in the United States to be on guard against possible cyber-attacks coming from Russia which have the potential to disrupt business operations, limit access to essential services, and threaten public safety.
The Federal Reserve has broad examination and enforcement power, including the power to impose substantial fines, limit dividends and other capital 67 Table of Contents distributions, restrict our operations and acquisitions and require divestitures. As noted above, American Express is a bank holding company.
The Federal Reserve has broad examination and enforcement power, including the power to impose substantial fines, limit dividends and other capital distributions, restrict our operations and acquisitions and require divestitures. As noted above, American Express is a bank holding company.
We cannot assure you that we will be able to compete successfully against any current, emerging and future competitors or provide sufficiently differentiated products and services to our client and traveler base.
We cannot guarantee that we will be able to compete successfully against any current, emerging and future competitors or provide sufficiently differentiated products and services to our client and traveler base.
In addition, under the Shareholders Agreement, American Express could prevent us from engaging in acquisitions of companies that provide products and services other than certain pre-approved products and services, if, after cooperating with us for a period of time to reach a mutually agreeable solution, American Express reasonably concludes that such acquisitions would have an adverse effect on American Express’s regulatory status under applicable banking laws.
In addition, under the Shareholders Agreement, American Express could prevent us from engaging in an acquisition of a company that provides products and services other than certain pre-approved products and services, if, after cooperating with us for a period of time to reach a mutually agreeable solution, American Express reasonably concludes that such acquisition would have an adverse effect on American Express’s regulatory status under applicable banking laws.
In addition to the impact of the COVID-19 pandemic described above, other macroeconomic uncertainties beyond our control, such as oil prices, geopolitical tensions, consumer confidence, large-scale business failures, tightened credit markets and stock market volatility, terrorist attacks, changing, unusual or extreme weather or natural disasters such as earthquakes, hurricanes, tsunamis, floods, fires, droughts and volcanic eruptions (whether due to climate change or otherwise), travel-related health concerns including pandemics and epidemics such as COVID-19 and any existing or new variants, Ebola and Zika, political instability, changes in economic conditions, wars and regional and international hostilities, such as Russia’s invasion of Ukraine, the imposition of taxes, tariffs or surcharges by regulatory authorities, changes in trade policies or trade disputes, changes in immigration policies or other travel restrictions or travel-related accidents have previously and may in the future create volatility in the travel market and negatively impact client travel behavior.
Other macroeconomic uncertainties beyond our control, such as oil prices, geopolitical tensions, consumer confidence, large-scale business failures, tightened credit markets and stock market volatility, terrorist attacks, changing, unusual or extreme weather or natural disasters such as earthquakes, hurricanes, tsunamis, floods, fires, droughts and volcanic eruptions (whether due to climate change or otherwise), travel-related health concerns including pandemics and epidemics such as COVID-19 and any existing or new variants, Ebola and Zika, political instability, changes in economic conditions, wars and regional and international hostilities, such as Russia’s invasion of Ukraine and the ongoing conflicts in the Middle-East, emerging tensions between China and Taiwan, the imposition of taxes, tariffs or surcharges by regulatory authorities, changes in trade policies or trade disputes, changes in immigration policies or other travel restrictions or travel-related accidents have previously and may in the future create volatility in the travel market and negatively impact client travel behavior.
Our future success also depends on our ability to understand, adapt and respond to rapidly changing technologies in the travel industry that will allow us to address evolving industry standards and to improve the breadth, diversity and reliability of our services.
Our future success also depends on our ability to understand, adapt and respond to rapidly changing technologies in the travel industry that will allow us to address evolving industry standards and to improve the breadth, diversity and reliability of our services in a cost effective manner.
Global factors over which we have no control but which could impact our clients’ willingness to travel and, depending on the scope and duration, cause a significant decline in travel volumes include, among other things: ● widespread health concerns, epidemics or pandemics, such as the COVID-19 pandemic, the Zika virus, H1N1 influenza, the Ebola virus, avian flu, SARS or any other serious contagious diseases; ● global security concerns caused by terrorist attacks, the threat of terrorist attacks, or the precautions taken in anticipation of such attacks, including elevated threat warnings or selective cancellation or redirection of travel; ● cyber-terrorism, political unrest, the outbreak of hostilities or escalation or worsening of existing hostilities or war, such as Russia’s invasion of Ukraine, resulting sanctions imposed by the U.S. and other countries and retaliatory actions taken by sanctioned countries in response to such sanctions; ● natural disasters or severe weather conditions, such as hurricanes, flooding and earthquakes; ● climate change-related impact to travel destinations, such as extreme weather, natural disasters and disruptions, and actions taken by governments, businesses and supplier partners to combat climate change; ● the occurrence of travel-related accidents or the grounding of aircraft due to safety concerns; ● the impact of macroeconomic conditions and labor shortages on the cost and availability of airline travel; and ● adverse changes in visa and immigration policies or the imposition of travel restrictions or more restrictive security procedures.
Global factors over which we have no control but which could impact our clients’ willingness to travel and, depending on the scope and duration, cause a significant decline in travel volumes include, among other things: • widespread health concerns, epidemics or pandemics, such as the COVID-19 pandemic, the Zika virus, H1N1 influenza, the Ebola virus, avian flu, SARS or any other serious contagious diseases; • global security concerns caused by terrorist attacks, the threat of terrorist attacks, or the precautions taken in anticipation of such attacks, including elevated threat warnings or selective cancellation or redirection of travel; • cyber-terrorism, political unrest, the outbreak of hostilities or escalation or worsening of existing hostilities or war, such as the conflict in the Middle-East, Russia’s invasion of Ukraine, and emerging tensions between China and Taiwan, resulting sanctions imposed by the United States and other countries and retaliatory actions taken by sanctioned countries in response to such sanctions; • natural disasters or severe weather conditions, such as hurricanes, flooding, volcanos and earthquakes; • climate change-related impact to travel destinations, such as extreme weather, natural disasters and disruptions, and actions taken by governments, businesses and supplier partners to combat climate change; • the occurrence of travel-related accidents or the grounding of aircraft due to safety concerns; • the impact of macroeconomic conditions and labor shortages on the cost and availability of airline travel; • sustainability regulations curtailing or restricting the availability of airline travel; and • adverse changes in visa and immigration policies or the imposition of travel restrictions or more restrictive security procedures.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLegal Proceedings We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us or any of our officers or directors in their corporate capacity. ​
Biggest changeLegal Proceedings We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us or any of our officers or directors in their corporate capacity. Item 4. Mine Safety Disclosures None. 57 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe performance graph shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under the Securities Act or the Exchange Act. 79 Table of Contents Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings Since inception in 2022, the registrant has not made any sales of unregistered equity securities that were not previously reported in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K. ​ Item 6. [Reserved] ​ 80 Table of Contents
Biggest changeThe performance graph shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report into any filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under the Securities Act or the Exchange Act. 58 Item 6. [Reserved] 59
The results are based on an investment of $100 in our Class A Common Stock and each of the Indices. The graph assumes the reinvestment of dividends and adjusts all closing prices and dividends for stock splits. The performance shown in the graph represents past performance and is not intended to be indicative of future performance.
The results are based on an investment of $100 in our Common Stock and each of the Indices. The graph assumes the reinvestment of dividends and adjusts all closing prices and dividends for stock splits. The performance shown in the graph represents past performance and is not intended to be indicative of future performance.
Performance Graph The performance graph below shows the cumulative total stockholder return on our Class A Common Stock, compared with the NYSE Composite Index (“NYSE Composite”), the Standard & Poor’s 500 Stock Index (“S&P 500”) and the Standard & Poor’s Software & Services Select Industry Index (“S&P Software & Services Select Industry Index”) (collectively, the “Indices”) from the closing price on May 31, 2022 (the date our Class A Common Stock began trading on NYSE) through December 30, 2022.
Performance Graph The performance graph below shows the cumulative total stockholder return on our Common Stock, compared with the NYSE Composite Index (“NYSE Composite”), the Standard & Poor’s 500 Stock Index (“S&P 500”) and the Standard & Poor’s Software & Services Select Industry Index (“S&P Software & Services Select Industry Index”) (collectively, the “Indices”) from the closing price on May 31, 2022 (the date our Common Stock began trading on NYSE) through December 29, 2023.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A Common Stock is listed and traded on the New York Stock Exchange under the stock symbol “GBTG.” Holders As of March 20, 2023, there were approximately 17 holders of record of our Class A Common Stock and 3 holders of record of our Class B Common Stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock is listed and traded on the New York Stock Exchange under the stock symbol “GBTG.” Holders As of March 12, 2024, there were approximately 33 holders of record of our Common Stock.
The payment of any cash dividends will be within the discretion of our board of directors. Our ability to declare dividends may be limited by the terms of financing or other agreements entered into by us or our subsidiaries from time to time.
Our ability to declare dividends may be limited by the terms of financing or other agreements entered into by us or our subsidiaries from time to time.
Dividends We have never declared or paid any cash dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition.
The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends will be within the discretion of our board of directors.
This does not include the number of shareholders that hold shares in “street name” through banks or broker-dealers. Our Class B Common Stock is not listed or quoted on any exchange and is not transferable by the holders, subject to certain limited exceptions.
This does not include the number of shareholders that hold shares in “street name” through banks or broker-dealers. Dividends We have never declared or paid any cash dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSet forth below is a reconciliation of net loss to EBITDA and Adjusted EBITDA. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ($ in millions except percentages) ​ 2022 2021 2020 Net loss ​ $ (229) ​ $ (475) ​ $ (619) ​ Interest income ​ — ​ (1) ​ (1) ​ Interest expense ​ 98 ​ 53 ​ 27 ​ Loss on early extinguishment of debt ​ — ​ 49 ​ — ​ Benefit from income taxes ​ (61) ​ (186) ​ (145) ​ Depreciation and amortization ​ 182 ​ 154 ​ 148 ​ EBITDA ​ (10) ​ (406) ​ (590) ​ Restructuring charges (a) ​ (3) ​ 14 ​ 206 ​ Integration costs (b) ​ 34 ​ 22 ​ 14 ​ Mergers and acquisitions (c) ​ 18 ​ 14 ​ 10 ​ Equity-based compensation (d) ​ 39 ​ 3 ​ 3 ​ Fair value movements on earnouts and warrants derivative liabilities (e) ​ (8) ​ — ​ — ​ Other adjustments, net (f) ​ 33 ​ 13 ​ (6) ​ Adjusted EBITDA ​ $ 103 ​ $ (340) ​ $ (363) ​ Net loss margin (1) ​ (12) % (62) % (78) % Adjusted EBITDA Margin ​ 6 % (45) % (46) % (1) Net loss margin is calculated as net loss divided by revenue.
Biggest changeYear Ended December 31, Change increase/(decrease) (in $ millions except percentages) 2023 2022 $ % Net loss $ (136) $ (229) $ 93 41 % Interest income (1) — (1) n/m Interest expense 141 98 43 43 % Benefit from income taxes (9) (61) 52 n/m Depreciation and amortization 194 182 12 6 % EBITDA 189 (10) 199 n/m Restructuring, exit and related charges (a) 49 (3) 52 n/m Integration costs (b) 35 34 1 3 % Mergers and acquisitions (c) 2 18 (16) n/m Equity-based compensation (d) 75 39 36 90 % Fair value movements on earnout and warrant derivative liabilities (e) (13) (8) (5) (54) % Other adjustments, net (f) 43 33 10 35 % Adjusted EBITDA $ 380 $ 103 $ 277 269 % Net loss margin (1) (6) % (12) % 6ppt n/m Adjusted EBITDA Margin 17 % 6 % 11ppt 199 % __________________________________________________ n/m — not meaningful (1) Net loss margin is calculated as net loss divided by revenue.
Lease Obligations The operating lease liability amounts are primarily related to corporate office facility leases, as well as other offices for our local operations. Our operating leases expire on various dates through December 31, 2035. In addition to minimum lease payments, we are responsible for taxes and other operating costs for leased premises.
Lease Obligations The operating lease liability amounts are primarily related to corporate office facility leases, as well as other offices for our local operations. Our operating leases expire on various dates through December 31, 2035. In addition to minimum lease payments, we are responsible for taxes and other non-lease operating costs for leased premises.
It is inherently difficult and subjective to estimate such amounts, as we have to determine the probability of various possible outcomes. We account for uncertain tax positions based on a two-step process of evaluating recognition and measurement criteria.
It is inherently difficult and subjective to estimate such amounts, as we have to 73 determine the probability of various possible outcomes. We account for uncertain tax positions based on a two-step process of evaluating recognition and measurement criteria.
Further, we believe that certain debt rating agencies, creditors and credit analysts monitor our Net Debt as part of their assessment of our business.
Further, we 69 believe that certain debt rating agencies, creditors and credit analysts monitor our Net Debt as part of their assessment of our business.
Purchase Obligations We have certain purchase obligations related to information technology (“IT”) agreements and certain other services. Agreements with IT providers include cloud-based services, hosting and licensing contracts. Other purchase commitments represent contractual obligations in the ordinary course of business for which we have not received the goods or services as of December 31, 2022.
Purchase Obligations We have certain purchase obligations related to information technology (“IT”) agreements and certain other services. Agreements with IT providers include cloud-based services, hosting and licensing contracts. Other purchase commitments represent contractual obligations in the ordinary course of business for which we have not received the goods or services as of December 31, 2023.
The sensitivity to a 100 basis point increase or decrease in the expected rate of return on plan assets assumption related to our pre-tax employee benefit expense for 2022 would be to decrease or increase the 2022 pre-tax expense by $4 million in each case.
The sensitivity to a 100 basis point increase or decrease in the expected rate of return on plan assets assumption related to our pre-tax employee benefit expense for 2023 would be to decrease or increase the 2023 pre-tax expense by $4 million in each case.
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.
EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses should not be considered as measures of liquidity or as measures 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 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.
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, exit 62 and related charges, integration costs, costs related to mergers and acquisitions, non-cash equity-based compensation, long-term incentive plan costs and certain corporate costs.
Financing Activities During the year ended December 31, 2022, net cash from financing activities of $292 million was primarily due to: (i) $269 million of proceeds from the Business Combination and (ii) $200 million of proceeds received from delayed draw term loans borrowed under the senior secured tranche B-3 term loan facilities, partially offset by (iii) $168 million redemption of preferred share capital, including dividends accrued thereon, and (iv) $4 million repayment of principal amount of senior secured term loans and finance leases.
During the year ended December 31, 2022, net cash from financing activities of $292 million primarily consisted of $269 million of proceeds from the Business Combination and (ii) $200 million of proceeds received from delayed draw term loans borrowed under the senior secured tranche B-3 term loan facilities, partially offset by (iii) $168 million redemption of preferred share capital, including dividends accrued thereon, and (iv) $4 million repayment of principal amount of senior secured term loans and finance leases.
Treasury zero-coupon yield curve for a maturity similar to the expected remaining life of the private warrants and earnout shares. The expected life of the private warrants and earnout shares was assumed to be equivalent to their remaining contractual term. We anticipated the dividend rate will remain at zero.
Treasury zero-coupon yield curve for a maturity similar to the expected remaining life of the earnout shares. The expected life of the earnout shares was assumed to be equivalent to their remaining contractual term. We anticipated the dividend rate will remain at zero.
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 and warrants 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 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, exit and related charges, integration costs, costs related to mergers and acquisitions, non-cash equity-based compensation, fair value movements on earnout and warrant derivative liabilities, long-term incentive plan costs, certain corporate costs, foreign currency gains (losses), non-service components of net periodic pension benefit (cost) and gains (losses) on disposal of businesses.
These metrics are used by our management to (1) manage the financial planning and performance of our business, (2) evaluate the effectiveness of our business strategies, (3) make budgeting 83 Table of Contents decisions, and (4) compare our performance to the performance of our peer companies.
These metrics are used by our management to (1) manage the financial planning and performance of our business, (2) evaluate the effectiveness of our business strategies, (3) make budgeting decisions, and (4) compare our performance to the performance of our peer companies.
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.
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.
The discount rate assumption is developed by determining a constant effective yield that produces the same result as discounting projected plan cash flows using high-quality (AA) bond yields of corresponding maturities as of the measurement date. We used weighted average discount rates of 4.5% for defined benefit pension plans as of December 31, 2022.
The discount rate assumption is developed by determining a constant effective yield that produces the same result as discounting projected plan cash flows 72 using high-quality (AA) bond yields of corresponding maturities as of the measurement date. We used weighted average discount rates of 4.2% for defined benefit pension plans as of December 31, 2023.
In determining the pension expense for 2022 we used a weighted average expected long-term rate of return on plan assets of 4.5%. Actual returns on plan assets for 2022, 2021 and 2020 were (28.9%), 7.5% and 11.5%, respectively, compared to the expected rate of return assumptions of 4.5%, 4.4% and 4.4%, respectively.
In determining the pension expense for 2023 we used a weighted average expected long-term rate of return on plan assets of 4.9%. Actual returns on plan assets for 2023, 2022 and 2021 were (0.4%), (28.9)% and 7.5%, respectively, compared to the expected rate of return assumptions of 4.9%, 4.5% and 4.4%, respectively.
The results of impairment testing performed in 2022 and 2021 indicated that the fair value of each of the reporting unit exceed their respective carrying values. As a result, we did not record any impairment of goodwill in our consolidated statement of operations during the years ended December 31, 2022 and 2021.
The results of impairment testing performed for each of the years ended December 31, 2023, 2022 and 2021 indicated that the fair value of each of the reporting unit exceed their respective carrying values and as a result, we did not record any impairment of goodwill in our consolidated statements of operations during any of these years.
Goodwill Goodwill and indefinite-lived intangible assets are not subject to amortization and are reviewed for impairment on December 31 each year, or when an event occurs or circumstances change and there is an indication of impairment. The performance of the goodwill impairment test is the comparison of the fair value of the reporting unit to its carrying value.
Goodwill Goodwill is not subject to amortization and is reviewed for impairment on December 31 each year, or when an event occurs or circumstances change and there is an indication of impairment. The performance of the goodwill impairment test is the comparison of the fair value of the reporting unit to its carrying value.
Based on our current operating plan, existing cash and cash equivalents, resurgence of business travel indicated by recent volume trends, our mitigation measures taken or planned to strengthen our liquidity and financial position, along with our available funding capacity and cash flows from operations, we believe we have adequate liquidity to meet the future operating, investing and financing needs of the business for a minimum period of twelve months.
Based on our current operating plan, existing cash and cash equivalents, increase in business volume trends, our mitigation measures taken or planned to strengthen our liquidity and financial position, along with our available funding capacity and cash flows from operations, we believe we have adequate liquidity to meet the future operating, investing and financing needs of the business for a minimum period of twelve months.
Under certain circumstances, each year, a portion of the senior secured term loans outstanding under the Senior Secured Credit Agreement are required to be prepaid with a percentage of annual excess cash flow, if any, calculated in a manner set forth in the Senior Secured 99 Table of Contents Credit Agreement.
Under certain circumstances, each year, a portion of the senior secured term loans outstanding under the senior secured credit agreement is required to be prepaid with a percentage of annual excess cash flow, if any, calculated in a manner set forth in the senior secured credit agreement.
Other Our obligations related to defined benefit and post-retirement plans are actuarially determined on an annual basis at our financial year end. As of December 31, 2022, plan contributions of $27 million were expected to be made in 2023. Funding projections beyond 2023 are not practical to estimate based on currently available information.
Other Our obligations related to defined benefit plans are actuarially determined on an annual basis at our financial year end. As of December 31, 2023, plan contributions of $29 million were expected to be made in 2024. Funding projections beyond 2024 are not practical to estimate based on currently available information.
Recent Accounting Pronouncements For information on recently issued accounting pronouncements, adopted and not yet adopted by us, see note 2 – Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this Form 10-K.
Recent Accounting Pronouncements For information on recently issued accounting pronouncements, adopted and not yet adopted by us, see note 2 – Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report.
Warrants and Earnouts We account for substantially all of the earnout shares in accordance with the guidance contained in ASC 815, “Derivatives and Hedging,” (“ASC 815”) whereby under those provisions the earnout shares do not meet the criteria for equity treatment and are recorded as liabilities.
Earnout Derivative Liability We account for substantially all of the earnout shares in accordance with the guidance contained in ASC 815, “ Derivatives and Hedging ,” (“ASC 815”) whereby under those provisions the earnout shares do not meet the criteria for equity treatment and are recorded as liabilities.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements, and the related notes, included elsewhere in this Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements, and the related notes, included elsewhere in this Annual Report.
Certain of the more important assumptions are described in note 17 - Employee Benefit Plans to our consolidated financial statements included elsewhere in this Form 10-K and include the discount rate, expected long-term rate of return on plan assets, mortality rates and other factors.
Certain of the more important assumptions are described in note 16 — Employee Benefit Plans to our consolidated financial statements included elsewhere in this Annual Report and include the discount rate, expected long-term rate of return on plan assets, mortality rates and other factors.
Liquidity and Capital Resources Our principal sources of liquidity are typically cash flows generated from operations, cash available under the credit facilities under the Senior Secured Credit Agreement as well as cash and cash equivalents balances on hand. As of December 31, 2022 and December 31, 2021, our cash and cash equivalent balances were $303 million and $516 million, respectively.
Our principal sources of liquidity are typically cash flows generated from operations, cash available under the credit facilities under the Senior Secured Credit Agreement as well as cash and cash equivalent balances on hand. As of December 31, 2023 and December 31, 2022, our cash and cash equivalent balances were $476 million and $303 million, respectively.
See note 19 - Commitments and Contingencies to our consolidated financial statements for the year ended December 31, 2022 included elsewhere in this document for further information related to our purchase obligations as well as amounts outstanding as of December 31, 2022 related to letters of credit and guarantees.
See note 18 — Commitments and Contingencies to our consolidated financial statements for the year ended December 31, 2023 included elsewhere in this Annual Report for further information related to our purchase obligations as well as amounts outstanding as of December 31, 2023 related to letters of credit and guarantees.
The impact of a 100 basis point increase or decrease in the discount rate for defined benefit pension plans would be to decrease pension liabilities by $90 million or increase pension liabilities by $72 million, respectively, as of December 31, 2022.
The impact of a 100 basis point increase or decrease in the discount rate for defined benefit pension plans would be to decrease pension liabilities by $77 million or increase pension liabilities by $97 million, respectively, as of December 31, 2023.
Expected long-term rate of return on plan assets : The expected long-term rate of return is used in the calculation of net periodic benefit cost. The use of the expected long-term rate of return on plan assets may result in recognized returns that are greater or less than the actual returns on those plan assets in any given year.
The use of the expected long-term rate of return on plan assets may result in recognized returns that are greater or less than the actual returns on those plan assets in any given year.
We estimated the volatility of the private warrants and earnout shares based on implied volatility from historical volatility of select peer companies’ common stock that matched the expected remaining life of the private warrants and earnout shares. The risk-free interest rate was based on the U.S.
We estimated the volatility of the earnout shares based on weighted average of our own share price volatility and implied volatility from historical volatility of select peer companies’ common stock that matched the expected remaining life of the earnout shares. The risk-free interest rate was based on the U.S.
A change in these assumptions could cause an increase or decrease to the valuation allowance resulting in an increase or decrease in the effective tax rate, which could materially impact our results of operations. During 2022, a valuation allowance for deferred tax assets of $14 million was recorded in our consolidated statement of operations.
A change in these assumptions could cause an increase or decrease to the valuation allowance resulting in an increase or decrease in the effective tax rate, which could materially impact our results of operations. During 2023, an increase to our valuation allowance of $18 million was recorded to tax expense in our consolidated statements of operations.
As of December 31, 2022, we had a total purchase obligation of $224 million, with $89 million due within the next 12 months.
As of December 31, 2023, we had a total purchase obligation of $239 million, with $101 million due within the next 12 months.
Key Factors Affecting Our Results of Operations As a result of a number of factors, our historical results of operations are not comparable from period to period and may not be comparable to our financial results of operations in future periods. Set forth below is a brief discussion of the key factors impacting the comparability of our results of operations.
Key Factors Affecting Our Results of Operations As a result of a number of factors, our historical results of operations are not comparable from period to period and may not be comparable to our financial results of operations in future periods.
Through GBT Partner Solutions, we aggregate business travel demand serviced by our Network Partners at low incremental cost, which we believe enhances the economics of our platform, generates increased return on investment and expands our geographic and segment footprint. ● GBT Supply MarketPlace provides travel suppliers with efficient access to business travel clients serviced by our diverse portfolio of leading travel management solutions and Network Partners.
Through GBT Partner Solutions, we aggregate business travel demand serviced by our Network Partners at low incremental cost, which we believe enhances the economics of our platform, generates increased return on investment and expands our geographic and segment footprint.
We believe the weighted use of the discounted cash flows and market approach is the best method for determining the fair value of our reporting unit as the blended use of both models compensates for the inherent risks associated with either model if used on a stand-alone basis. 103 Table of Contents We adopted qualitative approach to test our Goodwill for impairment during the year ended December 31, 2022.
We believe the weighted use of the discounted cash flows and market approach is the best method for determining the fair value of our reporting unit as the blended use of both models compensates for the inherent risks associated with either model if used on a stand-alone basis.
During the years ended December 31, 2022, 2021 and 2020, our Free Cash Flow was $(488) million, $(556) million and $(297) 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).
During the years ended December 31, 2023 and 2022, our cash flows from (used in) operating activities were $162 million and $(394) million, respectively, and our Free Cash Flow was $49 million and $(488) 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).
For information on the impact of the COVID-19 pandemic on business travel, see “ — Impact of the COVID-19 Pandemic ” and “ Business — Recent Performance and COVID-19 Update .” Transaction Growth (Decline) Transaction Growth (Decline) represents year-over-year change as a percentage of the total transactions, including air, hotel, car rental, rail or other travel-related transactions, recorded at the time of booking, and is calculated on a gross basis to include cancellations, refunds and exchanges.
Transaction Growth (Decline) Transaction Growth (Decline) represents year-over-year increase or decrease as a percentage of the total transactions, including air, hotel, car rental, rail or other travel-related transactions, recorded at the time of booking, and is calculated on a gross basis to include cancellations, refunds and exchanges.
The following discussion summarizes changes to our cash from operating, investing and financing activities for the year ended December 31, 2022 compared to the year ended December 31, 2021. Operating Activities For the year ended December 31, 2022, net cash used in operating activities was $394 million compared to $512 million for the year ended December 31, 2021.
The following discussion summarizes changes to our cash from operating, investing and financing activities for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Since March 2020, we have taken several measures to preserve our liquidity, including initiating a business response plan to the COVID-19 pandemic (voluntary and involuntary redundancies, flexible workings, mandatory pay reductions, consolidating facilities, etc.), and entering into several financial transactions, including debt financing / refinancing transactions and the consummation of the Business Combination.
In the past, we have taken several measures to preserve our liquidity (voluntary and involuntary redundancies, flexible workings, mandatory pay reductions, consolidating facilities, etc.), and entered into several financial transactions, including debt 67 financing / refinancing transactions and the consummation of the Business Combination.
Industry Trends The travel industry can generally be divided into two sectors: (i) the leisure travel sector, which serves individuals who make reservations for vacation and personal travel, and (ii) the business travel sector, which serves business clients that require travel by employees and other travelers for business needs and meetings.
Set forth below is a brief discussion of the key factors impacting the comparability of our results of operations. 60 Industry Trends The travel industry can generally be divided into two sectors: (i) the leisure travel sector, which serves individuals who make reservations for vacation and personal travel, and (ii) the business travel sector, which serves business clients that require travel by employees and other travelers for business needs and meetings.
To calculate year- over-year growth or decline, we compare the total number of transactions in the comparative previous period/year to the total number of transactions in the current period in percentage terms.
To calculate year-over-year growth or decline, we compare the total number of transactions in the comparative previous period/year to the total number of transactions in the current period in percentage terms. For the year ended December 31, 2023, Transaction Growth was 19% compared to the year ended December 31, 2022.
As of December 31, 2022, our operating leases had fixed lease payment obligations, including imputed interest, of $103 million, with $22 million payable within 12 months. We had immaterial amount of finance lease obligations as of December 31, 2022. See note 12 – Leases to our consolidated financial statements included elsewhere in this document.
As of December 31, 2023, our operating leases had fixed lease payment obligations, including imputed interest, of $95 million, with $23 million payable within 12 months. Our finance lease obligations as of December 31, 2023 were not material. See note 11 – Leases to our consolidated financial statements included elsewhere in this Annual Report.
Adjusted EBITDA additionally excludes (i) unrealized foreign exchange losses (gains) of $8 million, $0 and $(12) million for the years ended December 31, 2022, 2021 and 2020, respectively, (ii) non-service component of our net periodic pension benefit related to our defined benefit pension 86 Table of Contents plans of $9 million, $9 million and $2 million for the years ended December 31, 2022, 2021 and 2020, respectively, and (iii) loss on disposal of business of $0 million, $1 million and $0 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Adjusted EBITDA additionally excludes (i) unrealized foreign exchange losses of $5 million and $8 million for the years ended December 31, 2023 and 2022, respectively, and (ii) non-service component of our net periodic pension cost (benefit) related to our defined benefit pension plans of $5 million and $(9) million for the years ended December 31, 2023 and 2022, respectively.
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.
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.
Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For further information, see note 2 to our consolidated financial statements included elsewhere in this Form 10-K.
Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations.
Fair Value Movements on Earnouts and Warrants Derivative Liabilities For the year ended December 31, 2022, the fair value of our derivative liabilities related to our non-employee earnout shares and warrants decreased by $8 million resulting in a credit to our consolidated statement of operations.
Fair Value Movements on Earnout and Warrant Derivative Liabilities For the year ended December 31, 2023, the fair value of our derivative liabilities related to our earnout shares resulted in a credit of $13 million to our consolidated statement of operations compared to a credit of $8 million (which also included fair value movement related to warrant derivative liabilities) during the year ended December 31, 2022.
We receive incentives from air travel suppliers for flown incremental bookings above minimum targeted thresholds established under relevant agreements. We estimate such incentive revenues using internal and external data detailing completed and estimated completed airline travel and the price thresholds applicable to the volume for the period, as the consideration is variable and determined by meeting volume targets.
Therefore, we estimate such incentive revenues using internal and external data detailing completed and estimated completed airline travel and the price thresholds applicable to the volume for the period, as the consideration is variable and determined by meeting volume targets, requiring significant management judgement.
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.
Free Cash Flow We define Free Cash Flow as net cash from (used in) operating activities, less cash used for additions to property and equipment. We believe Free Cash Flow is an important measure of our liquidity. This measure is a useful indicator of our ability to generate cash to meet our liquidity demands.
The increase in salaries and benefits expenses of $4 million was more than offset by a decline in other technology and content costs of $17 million.
The increase in salaries and benefits expenses was more than offset by a decrease in other general and administrative costs.
While we believe these assumptions are appropriate, significant differences in actual experience or significant changes in these assumptions may materially affect our defined benefit pension and post-retirement employee benefit obligations and our future expense.
While we believe these assumptions are appropriate, significant differences in actual experience or significant changes in these assumptions may materially affect our defined benefit pension obligations and our future expense. See note 16 — Employee Benefit Plans to our consolidated financial statements included elsewhere in this Annual Report for more information regarding our retirement benefit plans.
During the year ended December 31, 2020, net cash used in investing activities of $47 million was due to purchase of property and equipment.
Investing Activities During the year ended December 31, 2023 cash used in investing activities increased by $24 million primarily due to increased investments in property and equipment.
We also believe that EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses are helpful supplemental measures to assist potential investors and analysts in evaluating our operating results across reporting periods on a consistent basis.
We further believe that these measures assist investors, potential investors and analysts in evaluating our operating results across reporting periods on a consistent basis. 63 Set forth below is a reconciliation of net loss to EBITDA and Adjusted EBITDA.
We believe that the adjustments applied in presenting EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses are appropriate to provide additional information to investors about certain material non-cash and other items that management believes are non-core to our underlying business. 85 Table of Contents We use these measures as performance measures as they are important metrics used by management to evaluate and understand the underlying operations and business trends, forecast future results and determine future capital investment allocations.
We believe that the adjustments applied in presenting EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses are appropriate to provide additional information to investors about certain material non-cash and other items that management believes are non-core to our underlying business.
The following key operating and financial metrics, which we believe are useful in evaluating our business, are used by management to monitor and analyze the operational and financial performance of our business: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ($ in millions except percentages) ​ 2022 2021 2020 Key Operating Metrics ​ TTV 22,968 6,392 5,907 ​ Transaction Growth (Decline) 200 % 6 % (71) % Key Financial Metrics ​ Revenue 1,851 763 793 ​ Total operating expense 2,049 1,323 1,540 ​ Net loss (229) (475) (619) ​ Net cash used in operating activities (394) (512) (250) ​ EBITDA (10) (406) (590) ​ Adjusted EBITDA 103 (340) (363) ​ Adjusted Operating Expenses 1,745 1,095 1,151 ​ Free Cash Flow (488) (556) (297) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2022 2021 Net Debt ​ $ 919 ​ $ 507 ​ Key Operating Metrics We consider TTV, followed by Transaction Growth (Decline), to be two significant non-financial metrics that are broadly used in the travel industry to help understand revenue and expense trends.
The following key operating and financial metrics, which we believe are useful in evaluating our business, are used by management to monitor and analyze the operational and financial performance of our business: Year Ended December 31, Change increase/(decrease) (in $ millions except percentages) 2023 2022 $ % Key Operating Metrics TTV $ 28,192 $ 22,968 $ 5,224 23 % Transaction Growth 19 % 200 % n/m n/m Key Financial Metrics Revenue 2,290 1,851 439 24 % Total operating expense 2,298 2,049 249 12 % Net loss (136) (229) 93 41 % Net loss margin (6) % (12) % 6ppt 52 % Net cash from (used in) operating activities 162 (394) 556 n/m EBITDA 189 (10) 199 n/m Adjusted EBITDA 380 103 277 269 % Adjusted EBITDA margin 17 % 6 % 11ppt 199 % Adjusted Operating Expenses 1,910 1,745 165 9 % Free Cash Flow 49 (488) 537 n/m __________________________________________________ n/m — not meaningful As of December 31, 2023 2022 Net Debt $ 886 $ 919 Key Operating Metrics We consider TTV, followed by Transaction Growth (Decline), to be two significant non-financial metrics that are broadly used in the travel industry to help understand revenue and expense trends.
Cash Flows The following table summarizes our cash flows for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ($ in millions) 2022 2021 2020 Net cash used in operating activities ​ $ (394) ​ $ (512) ​ $ (250) Net cash used in investing activities ​ (95) ​ (27) ​ (47) Net cash from financing activities ​ 292 ​ 478 ​ 384 Effect of exchange rate changes on cash, cash equivalents and restricted cash ​ (12) ​ (7) ​ 7 Net (decrease) increase in cash, cash equivalents and restricted cash ​ $ (209) ​ $ (68) ​ $ 94 ​ Cash Flows for the Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 As of December 31, 2022, we had $316 million of cash, cash equivalents and restricted cash, a decrease of $209 million compared to December 31, 2021.
Cash Flows The following table summarizes our cash flows for the years indicated: Year Ended December 31, Change increase/(decrease) (in $ millions) 2023 2022 $ % Net cash from (used in) operating activities $ 162 $ (394) $ 556 141 % Net cash used in investing activities (119) (95) (24) (25) % Net cash from financing activities 120 292 (172) (59)% Effect of exchange rate changes on cash, cash equivalents and restricted cash 10 (12) 22 174 % Net increase (decrease) in cash, cash equivalents and restricted cash $ 173 $ (209) $ 382 183 % Cash Flows for the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 As of December 31, 2023, we had $489 million of cash, cash equivalents and restricted cash, an increase of $173 million compared to December 31, 2022.
Overview We operate American Express Global Business Travel, the world’s leading B2B travel platform. We provide a full suite of differentiated, technology-enabled solutions to business travelers and clients, suppliers of travel content (such as airlines, hotels, ground transportation and aggregators) and third-party travel agencies.
We provide a full suite of differentiated, technology-enabled solutions to business travelers and clients, suppliers of travel content (such as airlines, hotels, ground transportation and aggregators) and third-party travel agencies. We differentiate our value proposition through our commitment to deliver unrivaled choice, value and experience, and our brand promise.
For the year ended December 31, 2022, our income tax benefit was $61 million, with an effective tax rate of 21.26% compared to a statutory tax rate of 21.00%. The nature of our business is such that the operational results should be taxed at a weighted average of the income tax rates in the jurisdictions in which it operates.
The nature of our business is such that the operational results should be taxed at a weighted average of the income tax rates in the jurisdictions in which it operates.
Set forth below is a reconciliation of net cash used in operating activities to Free Cash Flow. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ($in millions) 2022 2021 2020 Net cash used in operating activities ​ $ (394) ​ $ (512) ​ $ (250) Less: Purchase of property and equipment ​ (94) ​ (44) ​ (47) Free Cash Flow ​ $ (488) ​ $ (556) ​ $ (297) ​ Free Cash Flow of $(488) million for the year ended December 31, 2022, improved by $68 million compared to Free Cash Flow of $(556) million for the year ended December 31, 2021, due to a $118 million decrease in net cash used in operating activities as discussed above offset by, an increase of $50 million of cash outflows related to purchases of property and equipment.
Year Ended December 31, Change increase/(decrease) (in $ millions) 2023 2022 $ % Net cash from (used in) operating activities $ 162 $ (394) $ 556 141 % Less: Purchase of property and equipment (113) (94) (19) (19) % Free Cash Flow $ 49 $ (488) $ 537 110 % During the year ended December 31, 2023, our Free Cash Flow improvement of $537 million was due to a $556 million increase in net cash from operating activities as discussed above, offset by an increase of $19 million of cash outflows related to purchases of property and equipment.
After giving effect to the Senior Secured Credit Agreement Amendment, a s of December 31, 2022, we were in compliance with all applicable covenants under the Senior Secured Credit Agreement. Contractual Obligations and Commitments As of December 31, 2022, our material cash requirements include the following contractual obligations and commercial commitments arising in the normal course of business.
Contractual Obligations and Commitments As of December 31, 2023, our material cash requirements include the following contractual obligations and commercial commitments arising in the normal course of business. Debt Our debt obligation primarily includes all interest and principal of borrowings under our senior secured credit agreement.
The increase was primarily due to a higher amount of outstanding term loan debt and higher interest rates during the year ended December 31, 2022 compared to the year ended December 31, 2021.
Interest Expense For the year ended December 31, 2023, interest expense increased by $43 million, or 43%, primarily due to a higher amount of outstanding term loan debt and higher interest rates during the year ended December 31, 2023 compared to the year ended December 31, 2022, partially offset by the benefit resulting from interest rate swaps.
(f) Adjusted Operating Expenses excludes (i) long-term incentive plan expense of $25 million, $15 million and $2 million for the years ended December 31, 2022, 2021 and 2020, respectively, and (ii) litigation and professional services costs of $9 million, $6 million and $6 million for the years ended December 31, 2022, 2021 and 2020 respectively.
(e) Represents fair value movements on earnout and warrant derivative liabilities during the periods. 64 (f) Adjusted Operating Expenses excludes (i) long-term incentive plan expense of $19 million and $25 million for the years ended December 31, 2023 and 2022, respectively, and (ii) legal and professional services costs of $14 million and $9 million for the years ended December 31, 2023 and 2022, respectively.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. There are certain critical 100 Table of Contents estimates that we believe require significant judgment in the preparation of our consolidated financial statements.
There are certain critical estimates that we believe require significant judgment in the preparation of our consolidated financial statements.
Salaries and benefits expenses related to general and administrative increased by $48 million, or 38%, due to (i) incremental salaries and benefits of $27 million resulting from Egencia consolidation, (ii) $9 million primarily driven by higher integration costs and (iii) $12 million driven by an increase in employee incentives and a decrease in funds received from governments in connection with programs designed to minimize employment losses related to the COVID-19 pandemic, which were recorded as a reduction of salaries and benefits in 2021.
Salaries and benefits expenses related to general and administrative increased by $4 million, or 2%, due to (i) a $12 million increase on account of hiring of additional personnel to manage integration, transformation and head office functions, and (ii) a decrease in government funds of $2 million received in connection with programs designed to minimize employment losses related to the COVID-19 pandemic, which were recorded as a reduction of salaries and benefits expenses during the year ended December 31, 2022, offset by (iii) a $10 million net decrease in employee incentives.
Technology and Content ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended Change ​ ​ December 31, ​ favorable/(unfavorable) ​ ($ in millions except percentages) ​ 2022 2021 $ % Technology and Content ​ $ 388 ​ $ 264 ​ $ (124) (47) % ​ For the year ended December 31, 2022, technology and content increased by $124 million, or 47%, due to additional technology and content costs resulting from Egencia consolidation and increases in both, salaries and benefits expenses and other technology and content costs.
Technology and Content Year Ended December 31, Change increase/(decrease) (in $ millions except percentages) 2023 2022 $ % Technology and Content $ 405 $ 388 $ 17 4 % For the year ended December 31, 2023, technology and content increased by $17 million, or 4%, primarily due to an increase in salaries and benefits expenses with other technology and content costs remaining stable.
In addition, utilization of the Senior Secured Revolving Credit Facility may be effectively limited to the extent we are unable to comply with the additional borrowing conditions that apply during the suspension period or with the leverage-and liquidity-based financial covenant requirements for such facility contained in the Senior Secured Credit Agreement when required.
There is no assurance that such funding would be available to us on acceptable terms or at all. Our utilization of the Senior Secured Revolving Credit Facility may be effectively limited with the leverage-and liquidity-based financial covenant requirements for such facility contained in the Senior Secured Credit Agreement when required.
Net Debt is a non-GAAP measure and may not be comparable to similarly named measures used by other companies.
Net Debt We define Net Debt as total debt outstanding consisting of current and non-current portion of long-term debt, 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.
(d) Represents non-cash equity-based compensation expense related to equity incentive awards to certain employees. (e) Represents fair value movements on earnouts and warrants derivative liabilities during the periods.
(d) Represents non-cash equity-based compensation expense related to equity incentive awards to certain employees.
We also believe that TTV, followed by Transaction Growth (Decline), may assist potential investors and financial analysts in understanding the drivers of growth in our revenues and changes in our operating expenses across reporting periods.
We also believe that TTV, followed by Transaction Growth (Decline), may assist potential investors and financial analysts in understanding the drivers of growth in our revenues and changes in our operating expenses across reporting periods. 61 TTV TTV refers to the sum of the total price paid by travelers for air, hotel, rail, car rental and cruise bookings, including taxes and other charges applied by suppliers at point of sale, less cancellations and refunds.
The fair value of warrants was determined using a market price for the Public Warrants and, when relevant, Black- Scholes model for the Private Placement Warrants. Inherent in the such pricing models are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield.
These liabilities will be remeasured until the earnout shares are no longer contingent. The fair value of earnout shares was determined using Monte Carlo valuation method. Inherent in such pricing models are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield.
The following discussion summarizes changes to our cash flows from operating, investing and financing activities for the year ended December 31, 2021 compared to the year ended December 31, 2020. Operating Activities For the year ended December 31, 2021, net cash used in operating activities was $512 million compared to $250 million for the year ended December 31, 2020.
Operating Activities For the year ended December 31, 2023, net cash from operating activities was $162 million compared to $394 million of cash used in operating activities for the year ended December 31, 2022.
Critical Accounting Policies and Estimates Our consolidated financial statements and the related notes included elsewhere in this Form 10-K are prepared in accordance with GAAP. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures.
The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.
Periodically, we may choose to perform a qualitative assessment, prior to performing the quantitative analysis, to determine whether the fair value of the goodwill is more likely than not impaired. Our significant estimates in the discounted cash flows model include: our weighted average cost of capital; long-term rate of growth and profitability of our business; and working capital effects.
Our significant estimates in the discounted cash flows model include: our cash flow forecasts, weighted average cost of capital; long-term rate of growth and profitability of our business; and working capital effects.
Pension and Other Post-Retirement Defined Benefits We provide post-employment defined benefits to our current and former employees in certain non-U.S. jurisdictions, with the most material defined benefit pension plan being in the U.K. The determination of the obligation and expense for our pension and other post-retirement employee benefits is dependent on certain assumptions used by actuaries in calculating such amounts.
Pensions The determination of the obligation and expense for our pension benefits is dependent on certain assumptions used by actuaries in calculating such amounts.
Cost of Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended Change ​ ​ December 31, ​ favorable/(unfavorable) ​ ($ in millions except percentages) ​ 2022 2021 $ % Cost of revenue (excluding depreciation and amortization) ​ $ 832 ​ $ 477 ​ $ (355) ​ (75) % ​ For the year ended December 31, 2022, cost of revenue increased by $355 million, or 75%, due to additional cost of revenue resulting from Egencia consolidation and increase in both salaries and benefits expenses and other cost of revenue.
Cost of Revenue Year Ended December 31, Change increase/(decrease) (in $ millions except percentages) 2023 2022 $ % Cost of revenue (excluding depreciation and amortization) $ 958 $ 832 $ 126 15 % For the year ended December 31, 2023, cost of revenue increased by $126 million, or 15%, aligned with 19% Transaction Growth.
The sensitivity to a 100 basis point increase or decrease in the discount rate assumption related to our pre-tax employee benefit expense for 2022 would be to decrease or increase the 2022 pre-tax expense by $1 million in each case.
The sensitivity to a 100 basis point increase or decrease in the discount rate assumption related to our pre-tax net periodic pension cost (benefit) for 2024 would be immaterial. Expected long-term rate of return on plan assets : The expected long-term rate of return is used in the calculation of net periodic pension cost (benefit).
These non-GAAP financial measures supplement comparable GAAP measures in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and/or to compare our performance and liquidity against that of other peer companies using similar measures. 84 Table of Contents EBITDA , Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses We define EBITDA as net income (loss) before interest income, interest expense, gain (loss) on early extinguishment of debt, benefit from (provision for) income taxes and depreciation and amortization.
EBITDA , Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Expenses We define EBITDA as net income (loss) before interest income, interest expense, gain (loss) on early extinguishment of debt, benefit from (provision for) income taxes and depreciation and amortization.
In our opinion, our liquidity position provides sufficient capital resources to meet our foreseeable cash needs. There can be no assurance, however, that the cost or availability of future borrowings, including refinancings, if any, will be available on terms acceptable to us.
There can be no assurance, however, that the cost or availability of future borrowings, including refinancings, if any, will be available on terms acceptable to us. Critical Accounting Policies and Estimates Our consolidated financial statements and the related notes included elsewhere in this Annual Report are prepared in accordance with GAAP.
General and Administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended Change ​ ​ December 31, ​ favorable/(unfavorable) ($in millions except percentages) ​ 2022 2021 $ % General and administrative ​ $ 313 ​ $ 213 ​ $ (100) (46) % ​ For the year ended December 31, 2022, general and administrative expenses increased by $100 million, or 46%, due to additional general and administrative costs resulting from Egencia consolidation and increase in both, salaries and benefits expenses and other general and administrative costs.
General and Administrative Year Ended December 31, Change increase/(decrease) (in $ millions except percentages) 2023 2022 $ % General and administrative $ 306 $ 313 $ (7) (2) % For the year ended December 31, 2023, general and administrative expenses decreased by $7 million, or 2%.
Salaries and benefits expenses related to cost of revenue increased by $231 million, or 59%, due to (i) increase in the number of travel care employees employed to meet the increased travel demand as the recovery in business travel from the COVID-19 pandemic continues resulting in additional $132 million of salaries and benefits, (ii) $66 million incremental salaries and benefits resulting from Egencia consolidation and (iii) a decrease in funds of $33 million received from governments in connection with programs designed to minimize employment losses related to the COVID-19 pandemic, which were recorded as a reduction of salaries and benefits expenses in 2021.
Salaries and benefits expenses related to cost of revenue increased by $82 million, or 13%, due to (i) an increase in the number of traveler care employees as a result of increased volume (partially offset by cost savings driven by improved operational efficiencies) resulting in an additional $54 million of expense, and (ii) an increase of $18 million related to hiring of additional personnel to manage and support increased meeting and events demand, (iii) a $6 million decrease in government funds in connection with programs designed to minimize employment losses related to the COVID-19 pandemic and (iv) a $4 million increase in other employee incentives.
Set forth below is a reconciliation of total operating expenses to Adjusted Operating Expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ($ in millions) ​ 2022 ​ 2021 ​ 2020 Total operating expenses ​ $ 2,049 ​ $ 1,323 ​ $ 1,540 Adjustments: ​ ​ ​ Depreciation and amortization ​ (182) ​ (154) ​ (148) Restructuring charges (a) ​ 3 ​ (14) ​ (206) Integration costs (b) ​ (34) ​ (22) ​ (14) Mergers and acquisition (c) ​ (18) ​ (14) ​ (10) Equity-based compensation (d) ​ (39) ​ (3) ​ (3) Other adjustments, net (f) ​ (34) ​ (21) ​ (8) Adjusted Operating Expenses ​ $ 1,745 ​ $ 1,095 ​ $ 1,151 (a) Represents severance and related expenses due to restructuring activities.
Set forth below is a reconciliation of total operating expenses to Adjusted Operating Expenses: Year Ended December 31, Change increase/(decrease) (in $ millions) 2023 2022 $ % Total operating expenses $ 2,298 $ 2,049 $ 249 12% Adjustments: Depreciation and amortization (194) (182) (12) (6) % Restructuring, exit and related charges (a) (49) 3 (52) n/m Integration costs (b) (35) (34) (1) (3) % Mergers and acquisition (c) (2) (18) 16 n/m Equity-based compensation (d) (75) (39) (36) (90) % Other adjustments, net (f) (33) (34) 1 n/m Adjusted Operating Expenses $ 1,910 $ 1,745 $ 165 9% __________________________________________________ n/m — not meaningful (a) Includes (i) employee severance costs/(reversals) of $39 million, and $(1) million for the years ended December 31, 2023 and 2022, respectively, (ii) accelerated amortization of operating lease ROU assets of $7 million and $0 for the years ended December 31, 2023 and 2022, respectively, and (iii) contract costs related to leased facilities abandonment of $3 million and $(2) million for the years ended December 31, 2023 and 2022, respectively.
Depreciation and Amortization For the year ended December 31, 2021, depreciation and amortization increased by $6 million, or 4%, primarily due to additional depreciation and amortization resulting from the Egencia Acquisition. Interest Expense For the year ended December 31, 2021, interest expense increased by $26 million, or 95%.
Depreciation and Amortization For the year ended December 31, 2023, depreciation and amortization increased by $12 million, or 6%, primarily due to (i) increased capitalization of property and equipment and (ii) accelerated amortization of certain leasehold improvements resulting from abandonment of certain leased office facilities.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+3 added−4 removed6 unchanged
Biggest changeWe, simultaneously, entered into another swap contract, with substantially the same terms and conditions as the February 2022 swap, except the fixed interest rate component was changed. The interest rate swap is considered as an accounting hedge under ASC 815. As of December 31, 2022, we had recognized $10 million of derivative asset in our consolidated financial statements.
Biggest changeWe simultaneously entered into another swap contract with substantially the same terms and conditions as the February 2022 swap, except the fixed interest rate component was changed.
Our expenses are generally denominated in the currency of the country in which our operations are located, which are primarily the U.S., Europe and Asia. Our functional currency is denominated in U.S. dollars.
Our expenses are generally denominated in the currency of the country in which our operations are located, which are primarily in the U.S., Europe and Asia. Our functional currency is denominated in U.S. dollars.
We have interest rate risk primarily related to borrowings under the Senior Secured Credit Agreement, which bear interest at a variable rate tied to LIBOR or the applicable base rate plus a margin (subject to certain benchmark replacement provisions and certain interest rate floors, as applicable), and, during certain periods, the margin applicable to certain term loan facilities thereunder will be based on a pricing grid that varies with the total leverage ratio (calculated in a manner set forth in the Senior Secured Credit Agreement).
We have interest rate risk primarily related to borrowings under the senior secured credit agreement, which bear interest at a variable rate tied to LIBOR, SOFR or the applicable base rate plus a margin (subject to certain benchmark replacement provisions and certain interest rate floors, as applicable), and, during certain periods, the margin applicable to certain term loan facilities thereunder will be based on a pricing grid that varies with the total leverage ratio (calculated in a manner set forth in the senior secured credit agreement).
In February 2022, we entered into an interest rate swap for a notional amount of $600 million of debt for a period covering from March 2022 to March 2025 to hedge against future increases in the benchmark rate for the Senior Secured New Tranche B-3 Term Loan Facilities.
In February 2022, we entered into an interest rate swap for a notional amount of $600 million of debt for a period covering from March 2022 to March 2025 to hedge against future increases in the benchmark rate for the senior secured tranche B-3 term loan facilities.
We are exposed to market risk from changes in interest rates on debt, which bears interest at variable rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. Our debt has floating interest rates.
Interest Rate Risk We are exposed to market risk from changes in interest rates on debt, which bears interest at variable rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control.
The objective of our policies is to mitigate potential income statement, cash flow, and fair value 107 Table of Contents exposures resulting from possible future adverse fluctuations in rates. We do not engage in trading, market making or other speculative activities in the derivatives markets to manage these risks.
The objective of our policies is to mitigate potential income statement, cash flow, and fair value exposures resulting from possible future adverse fluctuations in rates. We do not engage in trading, market making or other speculative activities in the derivatives markets to manage these risks.
Based on the outstanding debt under the Senior Secured Credit Agreement as of December 31, 2022, and assuming that our mix of debt instruments and other variables remain unchanged, and excluding any impact of expected receipts or payments of cash flows resulting from any interest rate swap contract, a hypothetical 100 basis points increase or decrease in LIBOR would have increased or decreased our interest expense by $12 million on an annualized basis.
Based on the outstanding debt under the senior secured credit agreement as of December 31, 2023, and assuming that our mix of debt instruments and other variables remain unchanged, but including the impact of expected receipts or payments of cash flows resulting from interest rate swap contracts, a hypothetical 100 basis points increase or decrease in LIBOR or SOFR, as applicable, would have increased or decreased our interest expense by $5 million on an annualized basis.
As of December 31, 2022, $1,222 million of senior secured term loans were outstanding under the Senior Secured Credit Agreement, net of unamortized debt discount and unamortized debt issuance costs, and no borrowings or letters of credit were outstanding under the Senior Secured Revolving Credit Facility as of such date.
As of December 31, 2023, $1,356 million of senior secured term loans were outstanding under the senior secured credit agreement, net of unamortized debt discount and unamortized debt issuance costs, and $7 million of letters of credit were outstanding under the senior secured revolving credit facility as of such date.
In order to further hedge against future increases in the benchmark rate for the Senior Secured New Tranche B-3 Term Loan Facilities, in February 2023, we entered into another interest rate swap agreement for a notional amount of $300 million of debt for a period covering from March 2023 to March 2027.
The interest rate swap continues to be designated as a cash flow hedge that is highly effective at offsetting the increases in cash outflows when three-month SOFR exceeds 3.6800%. 74 In order to further hedge against future increases in the benchmark rate for the senior secured tranche B-3 term loan facilities, in February 2023, we entered into another interest rate swap agreement for a notional amount of $300 million of debt for a period covering from March 2023 to March 2027.
We are exposed to changes in the level of interest rates and to changes in the relationship or spread between interest rates for our floating rate debt.
Our debt has floating interest rates and we are exposed to changes in such floating interest rates.
We do not engage in any foreign currency related hedging activities. We will continue to reassess our approach to managing risks relating to fluctuations in currency rates. 108 Table of Contents Inflation Risk We are exposed to market risk due to inflationary pressures, including higher labor-related costs and vendor prices generally.
We do not engage in any foreign currency related hedging activities. We will continue to reassess our approach to managing risks relating to fluctuations in currency rates. 75 Item 8.
The terms of the agreement require us to receive a variable rate of 3 months U.S SOFR, with a floor of 0.9%, and pay fixed rate of 4.295%.
The terms of the agreement require us to receive a variable rate of three months U.S. SOFR, with a floor of 0.90%, and pay fixed rate of 4.295%. See note 15 — Long-term Debt to our consolidated financial statements included elsewhere in this Annual Report for further discussion about our debt and interest rates.
Removed
Interest Rate Risk Interest rates are highly sensitive to many factors, including fiscal and monetary policies and domestic and international economic and political considerations, as well as other factors beyond our control. Interest rate risk is the exposure to loss resulting from changes in the level of interest rates and the spread between different interest rates.
Added
In March 2023, we amended the terms to change the reference rate for the variable leg from LIBOR to SOFR to match the reference rate on the underlying debt that was amended in January 2023, and that is being hedged. Further, the interest rate on the fixed leg of the interest rate swap changed from 3.6858% to 3.6800%.
Removed
See note 16 – Long-term Debt and note 29 – Subsequent Events to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further discussion about our debt and interest rates.
Added
The interest rate swap contracts are considered as an accounting hedge under ASC 815. As of December 31, 2023, we had recognized $7 million of interest rate swap derivative asset and $5 million of interest rate swap derivative liability on our consolidated balance sheets.
Removed
In 2022, we started to see inflationary pressures on our labor-related cost base. We believe we can partially offset this impact through pricing actions and cost optimization initiatives.
Added
Financial Statements and Supplementary Data The financial statements required by this Item are included in Item 15 of this Annual Report, are presented beginning on page F-1 and are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
Removed
If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs and this could adversely affect our earnings. ​ 109 Table of Contents

Other GBTG 10-K year-over-year comparisons