References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to Austerlitz Acquisition Corporation II. References to our
"management" or our "management team" refer to our officers and directors,
references to the "Sponsor" refer to Austerlitz Acquisition Sponsor, LP II. The
following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the unaudited condensed
financial statements and the notes thereto contained elsewhere in this Quarterly
Report. Certain information contained in the discussion and analysis set forth
below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" that are not
historical facts and involve risks and uncertainties that could cause actual
results to differ materially from those expected and projected. All statements,
other than statements of historical fact included in this Quarterly Report
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"expect," "believe," "anticipate," "intend," "estimate," "seek" and variations
and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future
performance, but reflect management's current beliefs, based on information
currently available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and results
discussed in the forward-looking statements. For information identifying
important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements, please refer to the Risk
Factors section of the Company's final prospectus for its IPO filed with the SEC
and Part II, Item 1A "Risk Factors" below. The Company's securities filings can
be accessed on the EDGAR section of the SEC's website at www.sec.gov. Except as
expressly required by applicable securities law, the Company disclaims any
intention or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated on January 5, 2021 as a Cayman Islands
exempted company for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar Business Combination with
one or more businesses. We intend to effectuate a Business Combination using
cash from the proceeds of our IPO and the Private Placement, the proceeds of the
sale of our shares in connection with a Business Combination, shares issued to
the owners of the target, debt issued to bank or other lenders or the owners of
the target, or a combination of the foregoing.
The registration statement for our IPO was declared effective on February 25,
2021. On March 2, 2021, we completed our IPO of 138,000,000 Units sold to the
public, including the issuance of 18,000,000 Units as a result of the
underwriter's exercise in full of its over-allotment option, at the price of
$10.00 per Unit, generating gross proceeds of $1,380,000,000. Each Unit consists
of one Class A ordinary share of the Company and
one-fourth
of one redeemable warrant. Each whole Public Warrant entitles the holder to
purchase one Class A ordinary share at an exercise price of $11.50 per share,
subject to adjustment. Simultaneously with the closing of our IPO, we completed
the sale to Cannae Holdings, LLC of an aggregate of 19,733,333 Private Placement
Warrants at a price of $1.50 per Private Placement Warrant, generating gross
proceeds of approximately $29,600,000. Each Private Placement Warrant is
exercisable for one Class A ordinary share at a price of $11.50 per share,
subject to adjustment. The proceeds from the Private Placement were added to the
net proceeds from the IPO held in the Trust Account.
Following our IPO, the full exercise of the over-allotment option and the
Private Placement, a total of $1,380,000,000 was placed in the Trust Account. We
incurred $28,359,571 in transaction costs, including $27,600,000 of underwriting
fees and $759,571 of other offering costs.
The Company's management has broad discretion with respect to the specific
application of the net proceeds of the IPO and the sale of the Private Placement
Warrants, although substantially all of the net proceeds are intended to be
applied generally toward consummating a Business Combination. There is no
assurance that the Company will be able to complete a Business Combination
successfully. The Company must complete its initial Business Combination with
one or more target businesses that together have a fair market value equal to at
least 80% of the net assets held in the Trust Account (excluding any deferred
underwriting commissions held in the Trust Account) at the time the Company
signs a definitive agreement in connection with a Business Combination. The
Company will only complete a Business Combination if the post-Business
Combination company owns or acquires 50% or more of the issued and outstanding
voting securities of the target or otherwise acquires a controlling interest in
the target business sufficient for it not to be required to register as an
investment company under the Investment Company Act of 1940, as amended.
We expect to continue to incur significant costs in the pursuit of our initial
Business Combination. We cannot assure you that our plans to complete a Business
Combination will be successful.
In March 2020, the World Health Organization classified the
COVID-19
outbreak as a pandemic, based on the rapid increase in exposure globally. The
full impact of the
COVID-19
outbreak continues to evolve. The impact of the
COVID-19
outbreak on our results of operations, financial position and cash flows will
depend on future developments, including the duration and spread of the outbreak
and related advisories and restrictions. These developments and the impact of
the
COVID-19
outbreak on the financial markets and the overall economy are highly uncertain
and cannot be predicted. If the financial markets and/or the overall economy
continue to be impacted for an extended period, our ability to complete our
initial Business Combination may be materially adversely affected due to
significant governmental measures being implemented to contain the
COVID-19
outbreak or treat its impact, including travel restrictions, the shutdown of
businesses and quarantines, among others, which may limit our ability to have
meetings with potential investors or affect the ability of a potential target
company's personnel, vendors and service providers to negotiate and consummate
our initial Business Combination in a timely manner.

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Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities since inception have been organizational activities, those
necessary to prepare for our IPO and, after completing our IPO, identifying a
target company for a Business Combination. We do not expect to generate any
operating revenues until after completion of a Business Combination. We may
generate
non-operating
income in the form of interest income on marketable securities held in the Trust
Account. We incur expenses as a result of being a public company (for legal,
financial reporting, accounting and auditing compliance), as well as expenses as
we conduct due diligence on prospective Business Combination candidates.
Additionally, we recognize
non-cash
gains and losses related to changes in recurring fair value measurements of our
Warrant liabilities at each reporting period.
For the period from January 5, 2021 (inception) through September 30, 2021, we
had net income of $27,271,303, which consists of
non-cash
gains of $31,030,334 related to changes in the fair value of the Warrants and
the FPA, less $3,181,372 in offering costs allocated to warrant liabilities,
less operating costs of $577,659.
For the quarter ending September 30, 2021, we had net income of $13,293,819
which consists of
non-cash
gains of $13,616,334 related to changes in the fair value of the Warrants and
FPA, less operating costs of $322,515.
Liquidity and Capital Resources
As of September 30, 2021, we had cash of $330,524 outside of the Trust Account.
We intend to use the funds held outside the Trust Account primarily to identify
and evaluate target businesses, perform business due diligence on prospective
target businesses, travel and structure, negotiate and complete a Business
Combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with our initial Business Combination, our Sponsor or an affiliate of
our Sponsor or certain of our officers and directors may, but are not obligated
to, loan us funds as may be required. If we complete our initial Business
Combination, we would repay such loaned amounts. In the event that our initial
Business Combination does not close, we may use a portion of the working capital
held outside the Trust Account to repay such loaned amounts but no proceeds from
our Trust Account would be used for such repayment. Up to $1,500,000 of such
loans may be convertible into warrants identical to the Private Placement
Warrants, at a price of $1.50 per warrant at the option of the lender.
We do not currently believe we will need to raise additional funds in order to
meet the expenditures required for operating our business. However, if our
estimate of the costs of identifying a target business, undertaking
in-depth
due diligence and negotiating our initial Business Combination are more than the
actual amount necessary to do so, we may have insufficient funds available to
operate our business prior to our initial Business Combination. Moreover, we may
need to obtain additional financing either to complete our initial Business
Combination or because we become obligated to redeem a significant number of our
Public Shares upon consummation of our initial Business Combination, in which
case we may issue additional securities or incur debt in connection with such
Business Combination. Subject to compliance with applicable securities laws, we
would only complete such financing simultaneously with the completion of our
initial Business Combination. If we are unable to complete our initial Business
Combination because we do not have sufficient funds available to us, we will be
forced to cease operations and liquidate the Trust Account. In addition,
following our initial Business Combination, if cash on hand is insufficient, we
may need to obtain additional financing in order to meet our obligations.
For the period from January 5, 2021 (inception) through September 30, 2021, cash
used in operating activities was $887,784. Net income of $27,271,303 was
affected by
non-cash
gains of $31,030,334 related to changes in the fair value of Warrants and FPA,
losses of $3,181,372 related to offering costs allocated to warrant liabilities
and changes in operating assets and liabilities, which used $310,125 of cash
from operating activities.
As of September 30, 2021, we had cash and marketable securities of
$1,380,000,000 held in the Trust Account. We intend to use substantially all of
the funds held in the Trust Account (less taxes paid and deferred underwriting
commissions) to complete a Business Combination. To the extent that our capital
stock or debt is used, in whole or in part, as consideration to complete a
Business Combination, the remaining proceeds held in the Trust Account will be
used as working capital to finance the operations of the target business or
businesses, make other acquisitions and pursue our growth strategies.
Off-Balance
Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance
sheet arrangements as of September 30, 2021. We do not participate in
transactions that create relationships with unconsolidated entities or financial
partnerships, often referred to as variable interest entities. We have not
entered into any
off-balance
sheet financing arrangements, established any special purpose entities,
guaranteed any debt or commitments of other entities, or purchased any
non-financial
assets.

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Contractual Obligations
We do not have any
long-term
debt, capital lease obligations, operating lease obligations or long-term
liabilities, other than an agreement to pay an affiliate of our sponsor a
monthly fee up to $5,000 for office space and administrative support services.
We began incurring these fees on March 2, 2021 and will continue to incur these
fees monthly until the earlier of the completion a Business Combination and our
liquidation.
Refer to Note 7 to the financial statements included in Item 1 of Part I of this
Quarterly Report for further discussion of our obligations under the
Registration Rights Agreement and FPA.
The Company will provide its shareholders with the opportunity to redeem all or
a portion of their Public Shares upon the completion of a Business Combination
either (i) in connection with a general meeting called to approve the Business
Combination or (ii) by means of a tender offer. The decision as to whether the
Company will seek shareholder approval of a Business Combination or conduct a
tender offer will be made by the Company. The shareholders will be entitled to
redeem their shares for a pro rata portion of the amount held in the Trust
Account (initially $10.00 per share), calculated as of two business days prior
to the completion of a Business Combination, including any pro rata interest
earned on the funds held in the Trust Account and not previously released to the
Company to pay its tax obligations. There will be no redemption rights upon the
completion of a Business Combination with respect to the Company's warrants. The
Class A ordinary shares are recorded at redemption value and classified as
temporary equity, in accordance with ASC 480.
Critical Accounting Estimates
The preparation of unaudited condensed financial statements and related
disclosures in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements, and
income and expenses during the period reported. Actual results could materially
differ from those estimates. We have identified the following critical
accounting estimates effecting our financial statements:
Warrant Liabilities and Forward Purchase Assets
The Company accounts for the Warrants and FPA as either equity-classified or
liability-classified instruments based on an assessment of the specific terms of
the Warrants and FPA and the applicable authoritative guidance in ASC 480 and
ASC 815. The assessment considers whether the Warrants and FPA are freestanding
financial instruments pursuant to ASC 480, meet the definition of a liability
pursuant to ASC 480, and meet all of the requirements for equity classification
under ASC 815, including whether the Warrants and FPA are indexed to the
Company's own ordinary shares and whether the warrant holders could potentially
require "net cash settlement" in a circumstance outside of the Company's
control, among other conditions for equity classification. This assessment,
which requires the use of professional judgment, is conducted at the time of
issuance of the Warrants and execution of the FPA and as of each subsequent
quarterly period end date while the Warrants and FPA are outstanding. For issued
or modified instruments such as warrants and forward purchases of equity that
meet all of the criteria for equity classification, such instruments are
required to be recorded as a component of additional
paid-in
capital at the time of issuance. For issued or modified instruments that do not
meet all the criteria for equity classification, such instruments are required
to be recorded as liabilities at their initial fair value on the date of
issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of
liability-classified
instruments are recognized as a non-cash gain or loss on the unaudited condensed
statements of operations.
The Company accounts for the Warrants and FPA in accordance with ASC
815-40
under which the Warrants and FPA do not meet the criteria for equity
classification and must be recorded as assets or liabilities. The assets and
liabilities for the Warrants and FPA are included in Warrant liability and
Forward purchase agreement asset, respectively, on the condensed balance sheet
as of September 30, 2021. See Note 9 to our unaudited condensed financial
statements included in Item 1 of Part I of this Quarterly Report for further
discussion of the pertinent items of the Warrants and Note 10 for further
discussion of the methodology used to determine the fair value of the Company's
liabilities for the Warrants and FPA.
Class A Ordinary Shares Subject to Possible Redemption
We account for our Class A ordinary shares subject to possible redemption in
accordance with the guidance in ASC 480. Class A ordinary shares subject to
mandatory redemption are classified as a liability instrument and is measured at
fair value. Conditionally redeemable ordinary shares (including ordinary shares
that feature redemption rights that are either within the control of the holder
or subject to redemption upon the occurrence of uncertain events not solely
within our control) are classified as temporary equity. At all other times,
ordinary shares are classified as shareholders' equity. Our Class A ordinary
shares feature certain redemption rights that are considered to be outside of
our control and subject to occurrence of uncertain future events. Accordingly,
the Class A ordinary shares subject to possible redemption are presented as
temporary equity, outside of the shareholders' equity section of our unaudited
condensed balance sheet.

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Net Income (Loss) per Ordinary Share
The Company has three classes of shares, one for each of its Class A, Class B,
and Class C ordinary shares. Income and losses are shared pro rata between the
three classes of shares. Net income per ordinary share is computed by dividing
net income by the weighted average number of ordinary shares outstanding during
the period. We apply the
two-class
method in calculating earnings per share. Refer to Note 3 to our condensed
consolidated financial statements included in Item 1 of Part 1 of this Quarterly
Report for further discussion of the calculation of our net loss per share.
Recently Issued Accounting Pronouncements
Refer to Note 3 to our condensed consolidated financial statements included in
Item 1 of Part 1 of this Quarterly Report for discussion of management's
consideration of recently issued accounting pronouncements.
Restatement of Previously Issued Financial Statements
Refer to Note 2 to our condensed consolidated financial statements included in
Item 1 of Part 1 of this Quarterly Report for discussion of restatements to the
Company's previously issued financial statements related to our accounting for
the value of our redeemable Class A ordinary shares presented in temporary
equity and our calculation of net income (loss) per ordinary share.

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