Item 5. Market for Registrant’s Common Equity
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is listed on the NASDAQ Global Select Market under the symbol “SABR.” As of February 22, 2021, there were 104 stockholders of record of our common stock. We have suspended the payment of quarterly cash dividends on our common stock, effective with respect to the dividends occurring after the March 30, 2020 payment. The amount of future cash dividends on our common stock, if any, will depend upon, among other things, our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions, number of shares of common stock outstanding and other factors the board of directors may deem relevant. The timing and amount of future dividend payments will be at the discretion of our board of directors. See Item 7 , “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources —Dividends.” There were no shares repurchased during the fourth quarter of 2020. See Item 7 , " Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Recent Events Impacting Our Liquidity and Capital Resources —Share Repurchase Program."
Stock Performance Graph
The following graph shows a comparison from December 31, 2015 through December 31, 2020 of the cumulative total return for our common stock, the Nasdaq Composite Index ("NASDAQ Composite"), the Standard & Poor's 500 Stock Index ("S&P 500") and the Standard & Poor's Software and Services Index ("S&P 500/Software & Services") (collectively, the "Indices"). The graph assumes that $100 was invested at the market close on December 31, 2015 in the common stock of Sabre Corporation and the Indices as well as reinvestments of dividends. The stock price performance of the following graph is not necessarily indicative of future stock price performance.
The stock price performance depicted in the above graph is not necessarily indicative of future price performance. The stock performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing by us under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate the graph by reference in such filing.
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ITEM 6. SELECTED FINANCIAL DATA
The following selected financial data should be read in conjunction with Item 7 , “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ,” and our consolidated financial statements and notes thereto contained in Item 8 , “ Financial Statements and Supplementary Data ,” of this Annual Report on Form 10-K. Pursuant to the early adoption of the changes to Item 301 of Regulation S-K, we have elected to present three years of selected financial data, which we believe represents relevant historical periods and information for our readers in light of our Strategic Realignment.
The consolidated statements of operations data and consolidated statements of cash flows data for the years ended December 31, 2020, 2019 and 2018 and the consolidated balance sheet data as of December 31, 2020 and 2019 are derived from our audited consolidated financial statements contained in Item 8 , “ Financial Statements and Supplementary Data ,” of this Annual Report on Form 10-K. The consolidated balance sheet data as of December 31, 2018 is derived from audited consolidated financial statements not included in this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results to be expected in the future. All amounts presented below are in thousands, except per share amounts.
Year Ended December 31,
2020 2019 2018
Consolidated Statements of Operations Data:
Revenue $ 1,334,100 $ 3,974,988 $ 3,866,956
Operating (loss) income (988,039) 363,417 562,016
(Loss) income from continuing operations (1,274,332) 164,312 340,921
Income (loss) from discontinued operations, net of tax 2,788 (1,766) 1,739
Net (loss) income attributable to common stockholders (1,280,403) 158,592 337,531
Net (loss) income per share attributable to common stockholders:
Basic $ (4.42) $ 0.57 $ 1.23
Diluted $ (4.42) $ 0.57 $ 1.22
Weighted-average common shares outstanding:
Basic 289,855 274,168 275,235
Diluted 289,855 276,217 277,518
Consolidated Statements of Cash Flows Data:
Cash (used in) provided by operating activities $ (770,245) $ 581,260 $ 724,797
Cash (used in) provided by investing activities (1,291) (243,026) (275,259)
Cash provided by (used in) financing activities 1,837,741 (409,721) (306,506)
Additions to property and equipment 65,420 115,166 283,940
Cash payments for interest 186,235 157,648 156,041
Other Financial Data:
Adjusted Operating (Loss) Income $ (745,274) $ 513,408 $ 701,432
Adjusted Net (Loss) Income (922,321) 279,215 427,570
Adjusted EBITDA (372,852) 946,360 1,124,390
Free Cash Flow (835,665) 466,094 440,857
Key Metrics:
Travel Solutions
Direct Billable Bookings - Air 103,331 499,111 491,820
Direct Billable Bookings - Lodging, Ground and Sea
21,353 67,197 66,454
Distribution Total Direct Billable Bookings 124,684 566,308 558,274
IT Solutions Passengers Boarded 322,714 741,107 752,548
Hospitality Solutions
Central Reservations System Transactions 67,046 108,482 88,655
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As of December 31,
2020 2019 2018
Consolidated Balance Sheet Data:
Cash and cash equivalents $ 1,499,665 $ 436,176 $ 509,265
Total assets (1) (2)
6,077,722 5,689,957 5,806,381
Long-term debt 4,639,782 3,261,821 3,337,467
Working capital surplus (2)
1,266,162 96,377 169,235
Noncontrolling interest 7,028 8,588 7,205
Total stockholders’ equity (2)
362,632 947,669 974,271
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(1) In the first quarter of 2019, we adopted new lease accounting guidance on a modified retrospective basis in accordance with Accounting Standards Codification (" ASC") 842, Leases. See Note 12. Leases, to our consolidated financial statements.
(2) In the first quarter of 2020, we adopted the comprehensive update for the measurement of credit losses, ASC 326, on a modified retrospective basis. See Note 8. Credit Losses, to our consolidated financial statements.
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Non-GAAP Financial Measures
The following table sets forth the reconciliation of Net (Loss) Income attributable to common stockholders to Adjusted Net (Loss) Income from continuing operations, Operating (Loss) Income to Adjusted Operating (Loss) Income, and (Loss) Income from continuing operations to Adjusted EBITDA (in thousands):
Year Ended December 31,
2020 2019 2018
Net (loss) income attributable to common stockholders $ (1,280,403) $ 158,592 $ 337,531
(Income) loss from discontinued operations, net of tax (2,788) 1,766 (1,739)
Net income attributable to non-controlling interests (1)
1,200 3,954 5,129
Preferred stock dividends
7,659 — —
(Loss) Income from continuing operations (1,274,332) 164,312 340,921
Adjustments:
Impairment and related charges (2)
8,684 — —
Acquisition-related amortization (3a)
65,998 64,604 68,008
Restructuring and other costs (6)
85,797 — —
Loss on extinguishment of debt
21,626 — 633
Other, net (5)
66,961 9,432 8,509
Acquisition-related costs (7)
16,787 41,037 3,266
Litigation costs, net (8)
(1,919) (24,579) 8,323
Stock-based compensation
69,946 66,885 57,263
Tax impact of adjustments (9)
18,131 (42,476) (59,353)
Adjusted Net (Loss) Income from continuing operations $ (922,321) $ 279,215 $ 427,570
Adjusted Net (Loss) Income from continuing operations per share $ (3.18) $ 1.01 $ 1.54
Diluted weighted-average common shares outstanding 289,855 276,217 277,518
Operating (loss) income $ (988,039) $ 363,417 $ 562,016
Add back:
Equity method (loss) income (2,528) 2,044 2,556
Impairment and related charges (2)
8,684 — —
Acquisition-related amortization (3a)
65,998 64,604 68,008
Restructuring and other costs (6)
85,797 — —
Acquisition-related costs (7)
16,787 41,037 3,266
Litigation costs, net (8)
(1,919) (24,579) 8,323
Stock-based compensation 69,946 66,885 57,263
Adjusted Operating (Loss) Income $ (745,274) $ 513,408 $ 701,432
(Loss) income from continuing operations $ (1,274,332) $ 164,312 $ 340,921
Adjustments:
Depreciation and amortization of property and equipment (3b)
260,651 310,573 303,612
Amortization of capitalized implementation costs (3c)
37,094 39,444 41,724
Acquisition-related amortization (3a)
65,998 64,604 68,008
Impairment and related charges (2)
8,684 — —
Restructuring and other costs (6)
85,797 — —
Amortization of upfront incentive consideration (4)
74,677 82,935 77,622
Interest expense, net 235,091 156,391 157,017
Other, net (5)
66,961 9,432 8,509
Loss on extinguishment of debt 21,626 — 633
Acquisition-related costs (7)
16,787 41,037 3,266
Litigation costs, net (8)
(1,919) (24,579) 8,323
Stock-based compensation 69,946 66,885 57,263
Provision for income taxes (39,913) 35,326 57,492
Adjusted EBITDA $ (372,852) $ 946,360 $ 1,124,390
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The following tables set forth the reconciliation of Adjusted Operating (Loss) Income to Operating (Loss) Income in our statement of operations and Adjusted EBITDA to (Loss) Income from Continuing Operations in our statement of operations by business segment (in thousands):
Year Ended December 31, 2020
Travel
Solutions
Hospitality
Solutions Corporate Total
Adjusted Operating Loss $ (523,122) $ (63,915) $ (158,237) $ (745,274)
Less:
Equity method loss (2,528) — — (2,528)
Impairment and related charges (2)
— — 8,684 8,684
Acquisition-related amortization (3a)
— — 65,998 65,998
Restructuring and other costs (6)
— — 85,797 85,797
Acquisition-related costs (7)
— — 16,787 16,787
Litigation costs, net (8)
— — (1,919) (1,919)
Stock-based compensation — — 69,946 69,946
Operating loss $ (520,594) $ (63,915) $ (403,530) $ (988,039)
Adjusted EBITDA $ (197,905) $ (21,126) $ (153,821) $ (372,852)
Less:
Depreciation and amortization of property and equipment (3b)
217,808 38,427 4,416 260,651
Amortization of capitalized implementation costs (3c)
32,732 4,362 — 37,094
Acquisition-related amortization (3a)
— — 65,998 65,998
Impairment and related charges (2)
— — 8,684 8,684
Restructuring and other costs (6)
— — 85,797 85,797
Amortization of upfront incentive consideration (4)
74,677 — — 74,677
Acquisition-related costs (7)
— — 16,787 16,787
Litigation costs, net (8)
— — (1,919) (1,919)
Stock-based compensation — — 69,946 69,946
Equity method loss (2,528) — — (2,528)
Operating loss $ (520,594) $ (63,915) $ (403,530) $ (988,039)
Interest expense, net (235,091)
Other, net (5)
(66,961)
Loss on extinguishment of debt (21,626)
Equity method loss (2,528)
Provision for income taxes 39,913
Loss from continuing operations $ (1,274,332)
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Year Ended December 31, 2019
Travel
Solutions Hospitality
Solutions Corporate Total
Adjusted Operating Income (Loss) $ 729,266 $ (21,632) $ (194,226) $ 513,408
Less:
Equity method income 2,044 — — 2,044
Acquisition-related amortization (3a)
— — 64,604 64,604
Acquisition-related costs (7)
— — 41,037 41,037
Litigation costs, net (8)
— — (24,579) (24,579)
Stock-based compensation — — 66,885 66,885
Operating income (loss) $ 727,222 $ (21,632) $ (342,173) $ 363,417
Adjusted EBITDA $ 1,104,298 $ 31,466 $ (189,404) $ 946,360
Less:
Depreciation and amortization of property and equipment (3b)
257,390 48,361 4,822 310,573
Amortization of capitalized implementation costs (3c)
34,707 4,737 — 39,444
Acquisition-related amortization (3a)
— — 64,604 64,604
Amortization of upfront incentive consideration (4)
82,935 — — 82,935
Acquisition-related costs (7)
— — 41,037 41,037
Litigation costs, net (8)
— — (24,579) (24,579)
Stock-based compensation — — 66,885 66,885
Equity method income 2,044 — — 2,044
Operating income (loss) $ 727,222 $ (21,632) $ (342,173) $ 363,417
Interest expense, net (156,391)
Other, net (5)
(9,432)
Equity method income 2,044
Provision for income taxes (35,326)
Income from continuing operations $ 164,312
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Year Ended December 31, 2018
Travel
Solutions Hospitality
Solutions Corporate Total
Adjusted Operating Income (Loss) $ 866,957 $ 12,881 $ (178,406) $ 701,432
Less:
Equity method income 2,556 — — 2,556
Acquisition-related amortization (3a)
— — 68,008 68,008
Acquisition-related costs (7)
— — 3,266 3,266
Litigation costs, net (8)
— — 8,323 8,323
Stock-based compensation — — 57,263 57,263
Operating income (loss) $ 864,401 $ 12,881 $ (315,266) $ 562,016
Adjusted EBITDA $ 1,245,286 $ 52,824 $ (173,720) $ 1,124,390
Less:
Depreciation and amortization of property and equipment (3b)
262,745 36,181 4,686 303,612
Amortization of capitalized implementation costs (3c)
37,962 3,762 — 41,724
Acquisition-related amortization (3a)
— — 68,008 68,008
Amortization of upfront incentive consideration (4)
77,622 — — 77,622
Acquisition-related costs (7)
— — 3,266 3,266
Litigation costs, net (8)
— — 8,323 8,323
Stock-based compensation — — 57,263 57,263
Equity method income 2,556 — — 2,556
Operating income (loss) $ 864,401 $ 12,881 $ (315,266) $ 562,016
Interest expense, net (157,017)
Other, net (5)
(8,509)
Loss on extinguishment of debt (633)
Equity method income 2,556
Provision for income taxes (57,492)
Income from continuing operations $ 340,921
The following tables present information from our statements of cash flows and set forth the reconciliation of Free Cash Flow to cash provided by operating activities, the most directly comparable GAAP measure (in thousands):
Year Ended December 31,
2020 2019 2018
Cash (used in) provided by operating activities $ (770,245) $ 581,260 $ 724,797
Cash used in investing activities (1,291) (243,026) (275,259)
Cash provided by (used in) financing activities 1,837,741 (409,721) (306,506)
Year Ended December 31,
2020 2019 2018
Cash provided by operating activities $ (770,245) $ 581,260 $ 724,797
Additions to property and equipment (65,420) (115,166) (283,940)
Free Cash Flow $ (835,665) $ 466,094 $ 440,857
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(1) Net income attributable to non-controlling interests represents an adjustment to include earnings allocated to non-controlling interests held in (i) Sabre Travel Network Middle East of 40% and Sabre Seyahat Dagitim Sistemleri A.S. of 40% for all periods presented, (ii) Sabre Travel Network Lanka (Pte) Ltd of 40% beginning in July 2015, and (iii) Sabre Bulgaria of 40% beginning in November 2017.
(2) Impairment and related charges consists of $5 million associated with s oftware developed for internal use and $4 million associated with capitalized implementation costs related to a specific customer based on our analysis of the recoverability of such amounts.
(3) Depreciation and amortization expenses:
a. Acquisition-related amortization represents amortization of intangible assets from the take-private transaction in 2007 as well as intangibles associated with acquisitions since that date.
b. Depreciation and amortization of property and equipment includes software developed for internal use as well as amortization of contract acquisition costs.
c. Amortization of capitalized implementation costs represents amortization of upfront costs to implement new customer contracts under our SaaS and hosted revenue model.
(4) Our Travel Solutions business at times provides upfront incentive consideration to travel agency subscribers at the inception or modification of a service contract, which are capitalized and amortized to cost of revenue, excluding technology costs over an average expected life of
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the service contract, generally over three to ten years. This consideration is made with the objective of increasing the number of clients or to ensure or improve customer loyalty. These service contract terms are established such that the supplier and other fees generated over the life of the contract will exceed the cost of the incentive consideration provided up front. These service contracts with travel agency subscribers require that the customer commit to achieving certain economic objectives and generally have terms requiring repayment of the upfront incentive consideration if those objectives are not met.
(5) Other, net includes a $46 million charge related to termination payments incurred in 2020 in connection with the now-terminated acquisition of Farelogix Inc. ("Farelogix") and a $18 million pension settlement charge recorded in 2020, partially offset by a $10 million gain on sale of our headquarters building in the fourth quarter of 2020. In 2018, we recorded an expense of $5 million related to our liability under the Tax Receivable Agreement ("TRA") and an offsetting gain of $8 million on the sale of an investment. In addition, all periods presented include foreign exchange gains and losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into the relevant functional currency. See Note 3. Acquisitions to our consolidated financial statements regarding the Farelogix termination and Note 16. Pension and Other Postretirement Benefit Plans to our consolidated financial statements regarding the pension settlements.
(6) Restructuring and other costs represents charges associated with business restructuring and associated changes, including the Strategic Realignment, as well as other measures to support the new organizational structure and to respond to the impacts of the COVID-19 pandemic on our business, facilities and cost structure. See Note 4. Restructuring Activities to our consolidated financial statements for further details.
(7) Acquisition-related costs represent fees and expenses incurred associated with the now-terminated agreement to acquire Farelogix, as well as costs related to the acquisition of Radixx in 2019. See Note 3. Acquisitions to our consolidated financial statements.
(8) Litigation costs, net represent charges associated with antitrust litigation and other foreign non-income tax contingency matters. In 2020, we reversed the previously accrued non-income tax expense of $4 million due to success in our claims. In 2019, we recorded the reversal of our previously accrued loss related to the US Airways legal matter for $32 million. In 2018, we recorded non-income tax expense of $5 million for tax, penalties and interest associated with certain non-income tax claims for historical periods regarding permanent establishment in a foreign jurisdiction. See Note 17. Commitments and Contingencies to our consolidated financial statements.
(9) The tax impact of adjustments includes the tax effect of each separate adjustment based on the statutory tax rate for the jurisdiction(s) in which the adjustment was taxable or deductible, the impact of the adjustments on valuation allowance assessments, and the tax effect of items that relate to tax specific financial transactions, tax law changes, uncertain tax positions, and other items. In 2018, the provision for income taxes includes a benefit of $27 million related to the enactment of the TCJA for deferred taxes and foreign tax effects.
Definitions of Non-GAAP Financial Measures
We have included both financial measures compiled in accordance with GAAP and certain non-GAAP financial measures in this Annual Report on Form 10-K, including Adjusted Operating (Loss) Income, Adjusted Net (Loss) Income from continuing operations ("Adjusted Net (Loss) Income"), Adjusted EBITDA, Free Cash Flow and ratios based on these financial measures. As a result of the Strategic Realignment, we have separated our technology costs from cost of revenue and moved certain expenses previously classified as cost of revenue to selling, general and administrative to provide increased visibility to our technology costs for analytical and decision-making purposes and to align costs with the current leadership and operational organizational structure.
We define Adjusted Operating (Loss) Income as operating (loss) income adjusted for equity method (loss) income, impairment and related charges, acquisition-related amortization, restructuring and other costs, acquisition-related costs, litigation costs, net, and stock-based compensation.
We define Adjusted Net (Loss) Income as net (loss) income attributable to common stockholders adjusted for loss (income) from discontinued operations, net of tax, net income attributable to noncontrolling interests, impairment and related charges, acquisition-related amortization, loss on extinguishment of debt, other, net, restructuring and other costs, acquisition-related costs, litigation costs, net, stock-based compensation, and the tax impact of net income adjustments.
We define Adjusted EBITDA as (Loss) Income from continuing operations adjusted for depreciation and amortization of property and equipment, amortization of capitalized implementation costs, acquisition-related amortization, impairment and related charges, restructuring and other costs, amortization of upfront incentive consideration, interest expense, net, other, net, loss on extinguishment of debt, acquisition-related costs, litigation costs, net, stock-based compensation and the remaining provision for income taxes.
We define Free Cash Flow as cash (used in) provided by operating activities less cash used in additions to property and equipment.
We define Adjusted Net (Loss) Income from continuing operations per share as Adjusted Net (Loss) Income divided by diluted weighted-average common shares outstanding.
These non-GAAP financial measures are key metrics used by management and our board of directors to monitor our ongoing core operations because historical results have been significantly impacted by events that are unrelated to our core operations as a result of changes to our business and the regulatory environment. We believe that these non-GAAP financial measures are used by investors, analysts and other interested parties as measures of financial performance and to evaluate our ability to service debt obligations, fund capital expenditures and meet working capital requirements. We also believe that Adjusted Operating (Loss) Income, Adjusted Net (Loss) Income and Adjusted EBITDA assist investors in company-to-company and period-to-period comparisons by excluding differences caused by variations in capital structures (affecting interest expense), tax positions and the impact of depreciation and amortization expense. In addition, amounts derived from Adjusted EBITDA are a primary component of certain covenants under our senior secured credit facilities.
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Adjusted Operating (Loss) Income, Adjusted Net (Loss) Income, Adjusted EBITDA, Free Cash Flow and ratios based on these financial measures are not recognized terms under GAAP. These non-GAAP financial measures and ratios based on them are unaudited and have important limitations as analytical tools, and should not be viewed in isolation and do not purport to be alternatives to net income as indicators of operating performance or cash flows from operating activities as measures of liquidity. These non-GAAP financial measures and ratios based on them exclude some, but not all, items that affect net income or cash flows from operating activities and these measures may vary among companies. Our use of these measures has limitations as an analytical tool, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are:
• these non-GAAP financial measures exclude certain recurring, non-cash charges such as stock-based compensation expense and amortization of acquired intangible assets;
• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash requirements for such replacements;
• Adjusted EBITDA does not reflect amortization of upfront incentive consideration or capitalized implementation costs associated with our revenue contracts, which may require future working capital or cash needs in the future;
• Adjusted Operating (Loss) Income, Adjusted Net (Loss) Income and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
• Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness;
• Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;
• Free Cash Flow removes the impact of accrual-basis accounting on asset accounts and non-debt liability accounts, and does not reflect the cash requirements necessary to service the principal payments on our indebtedness; and
• other companies, including companies in our industry, may calculate Adjusted Operating (Loss) Income, Adjusted Net (Loss) Income, Adjusted EBITDA or Free Cash Flow differently, which reduces their usefulness as comparative measures.
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