What changed in this filing

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Item 1. Financial Statements

2021-08-03 compared with 2021-05-04 · 229 added, 158 removed, 661 unchanged (37% of the section changed)

3 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Revenue $ 419,668 $ 83,044 $ 747,152 $ 742,021

5 unchanged sentences

Interest expense, net ( 64,272 ) ( 55,931 ) ( 128,373 ) ( 93,373 )

Equity method loss ( 911 ) ( 686 )

Equity method income (loss) 630 ( 499 ) ( 281 ) ( 1,185 )

Other, net ( 3,199 ) ( 6,098 ) 8,432 ( 53,584 )

1 unchanged sentence

Loss from continuing operations before income taxes ( 247,211 ) ( 446,598 ) ( 503,145 ) ( 683,623 )

Provision for income taxes 3,997 ( 27,254 )

(Benefit) provision for income taxes ( 1,897 ) ( 4,629 ) 2,100 ( 31,883 )

Loss from continuing operations ( 245,314 ) ( 441,969 ) ( 505,245 ) ( 651,740 )

1 unchanged sentence

Net loss ( 245,395 ) ( 442,641 ) ( 505,589 ) ( 654,538 )

Net income attributable to noncontrolling interests 484 783

Net income (loss) attributable to noncontrolling interests 459 ( 71 ) 943 712

Net loss attributable to Sabre Corporation ( 245,854 ) ( 442,570 ) ( 506,532 ) ( 655,250 )

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(In thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Net loss $ ( 245,395 ) $ ( 442,641 ) $ ( 505,589 ) $ ( 654,538 )

3 unchanged sentences

Net actuarial gain, net of taxes of $( 6,153 ), $ — , $( 6,153 ), $( 1,206 )

Amortization of prior service credits, net of taxes of $ 80 , and $ 80

21,347 — 21,347 4,141

Amortization of actuarial losses, net of taxes of $( 481 ), and $( 365 )

Pension settlement, net of taxes of $( 973 ), $ — , $( 973 ), $ —

3,374 — 3,374 —

Amortization of prior service credits, net of taxes of $ 80 , $ 80 , $ 160 , $ 160

( 278 ) ( 278 ) ( 556 ) ( 556 )

Amortization of actuarial losses, net of taxes of $( 488 ), $( 561 ), $( 969 ), $( 926 )

1,688 1,942 3,363 3,206

Net change in retirement-related benefit plans, net of tax 26,131 1,664 27,528 6,791

Unrealized losses, net of taxes of $ 1 , and $ 6,447

Unrealized (losses) gains, net of taxes of $ 29 , $( 262 ), $ 30 , $ 6,185

( 101 ) 1,012 ( 104 ) ( 22,806 )

Reclassification adjustment for realized losses, net of taxes of $( 899 ), and $( 515 )

Reclassification adjustment for realized losses, net of taxes of $( 916 ), $( 1,787 ), $( 1,815 ), $( 2,302 )

3,189 6,559 6,316 8,394

Net change in derivatives, net of tax 3,088 7,571 6,212 ( 14,412 )

Share of other comprehensive income (loss) of equity method investments 534 ( 653 )

Share of other comprehensive loss of equity method investments ( 758 ) ( 145 ) ( 224 ) ( 798 )

Other comprehensive income (loss) 29,571 11,177 29,786 ( 8,126 )

Comprehensive loss ( 215,824 ) ( 431,464 ) ( 475,803 ) ( 662,664 )

Comprehensive income attributable to noncontrolling interests ( 484 ) ( 783 )

Comprehensive (income) loss attributable to noncontrolling interests ( 459 ) 71 ( 943 ) ( 712 )

Comprehensive loss attributable to Sabre Corporation $ ( 216,283 ) $ ( 431,393 ) $ ( 476,746 ) $ ( 663,376 )

3 unchanged sentences

(In thousands)

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Current assets

15 unchanged sentences

Total assets $ 5,608,449 $ 6,077,722

Liabilities and stockholders’ equity

Liabilities and stockholders’ (deficit) equity

Current liabilities

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Commitments and contingencies (Note 13)

Stockholders’ equity

Preferred stock, $ 0.01 par value, 225,000 authorized, 3,340 issued and outstanding as of March 31, 2021 and December 31, 2020;

aggregate liquidation value of $ 334,000 as of March 31, 2021 and December 31, 2020

Stockholders’ (deficit) equity

Preferred stock, $ 0.01 par value, 225,000 authorized, 3,340 issued and outstanding as of June 30, 2021 and December 31, 2020;

aggregate liquidation value of $ 334,000 as of June 30, 2021 and December 31, 2020

Common Stock:

1 unchanged sentence

1,000,000 authorized shares;

341,563 and 338,662 shares issued, 319,433 and 317,297 shares outstanding at March 31, 2021 and December 31, 2020, respectively

345,210 and 338,662 shares issued, 322,365 and 317,297 shares outstanding at June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital 3,049,156 2,985,077

Treasury Stock, at cost, 22,130 and 21,365 shares at March 31, 2021 and December 31, 2020, respectively

Treasury Stock, at cost, 22,845 and 21,365 shares at June 30, 2021 and December 31, 2020, respectively

( 497,221 ) ( 474,790 )

2 unchanged sentences

Non-controlling interest 7,971 7,028

Total stockholders’ equity 31,739 285,154

Total liabilities and stockholders’ equity $ 5,827,838 $ 6,077,722

Total stockholders’ (deficit) equity ( 159,792 ) 285,154

Total liabilities and stockholders’ (deficit) equity $ 5,608,449 $ 6,077,722

See Notes to Consolidated Financial Statements.

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(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating Activities

Net loss $ ( 505,589 ) $ ( 654,538 )

Adjustments to reconcile net loss to cash (used in) provided by operating activities:

Adjustments to reconcile net loss to cash used in operating activities:

Depreciation and amortization 140,653 189,815

2 unchanged sentences

Gain on sale of investment ( 14,532 ) —

Deferred income taxes ( 7,292 ) ( 44,704 )

Amortization of debt discount and issuance costs 6,060 3,795

Pension settlement charge 4,347 —

Provision for expected credit losses ( 3,914 ) 47,727

Deferred income taxes ( 2,004 ) ( 41,732 )

Dividends received from equity method investments 698 1,652

Loss from discontinued operations 344 2,798

Acquisition termination fee — 24,811

Other 238 2,408

Acquisition termination fee — 24,811

Changes in operating assets and liabilities:

7 unchanged sentences

Deferred revenue including upfront solution fees 1,175 21,029

Cash (used in) provided by operating activities ( 197,403 ) 40,431

Cash used in operating activities ( 338,460 ) ( 395,036 )

Investing Activities

Proceeds from sale of investment 14,840 —

Proceeds from disposition of investments and assets 24,874 —

Additions to property and equipment ( 17,240 ) ( 39,333 )

5 unchanged sentences

Dividends paid on preferred stock ( 10,856 ) —

Debt prepayment fees and issuance costs — ( 29,473 )

Proceeds of borrowings from lenders — 1,495,000

12 unchanged sentences

SABRE CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(In thousands, except share data)

6 unchanged sentences

Stockholders'

Equity (Deficit)

Shares Amount Shares Amount Shares Amount

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Balance at March 31, 2021 3,340,000 $ 33 341,562,653 $ 3,416 $ 3,009,651 22,130,174 $ ( 487,401 ) $ ( 2,365,730 ) $ ( 135,742 ) $ 7,512 $ 31,739

Comprehensive loss — — — — — — — ( 245,854 ) 29,571 459 ( 215,824 )

Preferred stock dividends (1)

— — — — — — — ( 5,428 ) ( 5,428 )

Settlement of stock-based awards — — 2,377,690 24 214 714,622 ( 9,820 ) — — ( 9,582 )

Stock-based compensation expense — — — — 29,478 — — — — — 29,478

Issuance of common stock upon conversion of exchangeable notes — — 1,269,497 12 9,813 — — — — — 9,825

Balance at June 30, 2021 3,340,000 $ 33 345,209,840 $ 3,452 $ 3,049,156 22,844,796 $ ( 497,221 ) $ ( 2,617,012 ) $ ( 106,171 ) $ 7,971 $ ( 159,792 )

(1) Our mandatory convertible preferred stock accumulates cumulative dividends at an annual rate of 6.50 %.

Stockholders’ Equity (Deficit)

Preferred Stock Common Stock Additional

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Balance at March 31, 2020 — $ — 296,543,470 $ 2,965 $ 2,335,171 21,228,917 $ ( 473,890 ) $ ( 1,022,297 ) $ ( 168,609 ) $ 9,371 $ 682,711

Comprehensive loss — — — — — — — ( 442,570 ) 11,177 ( 71 ) ( 431,464 )

Settlement of stock-based awards — — 587,232 6 168 29,664 ( 215 ) — — — ( 41 )

Stock-based compensation expense — — — — 8,762 — — — — — 8,762

Balance at June 30, 2020 — $ — 297,130,702 $ 2,971 $ 2,344,101 21,258,581 $ ( 474,105 ) $ ( 1,464,867 ) $ ( 157,432 ) $ 9,300 $ 259,968

(1) A quarterly cash dividend of $ 0.14 per share on our common stock.

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In these consolidated financial statements, references to “Sabre,” the “Company,” “we,” “our,” “ours” and “us” refer to Sabre Corporation and its consolidated subsidiaries unless otherwise stated or the context otherwise requires.

Recent Events— The travel industry continues to be adversely affected by the global health crisis due to the outbreak of the coronavirus ("COVID-19") in January 2020, as well as by government directives that have been enacted to slow the spread of the virus.

As expected, this pandemic continued to have a material impact to our consolidated financial results in the first quarter of 2021, resulting in a material decrease in transaction-based revenue across both of our business units compared to the prior year.

Lower global distribution system ("GDS") volumes have continued to result in a material decline in incentive consideration costs, as expected.

Despite the continued negative impacts of the COVID-19 pandemic on our business and global travel volumes, as COVID-19 vaccines have continued to be administered, we have seen some continued improvement in our key volume metrics during the first quarter of 2021, led by our Hospitality Solutions business.

Domestic bookings continue to exceed international bookings, however, which has negatively impacted revenue.

Recent Events— The travel industry continues to be adversely affected by the global health crisis due to the outbreak of the coronavirus ("COVID-19"), as well as by government directives that have been enacted to slow the spread of the virus.

As expected, this pandemic has continued to have a material impact on our consolidated financial results in the second quarter of 2021.

Domestic bookings continue to exceed international bookings, however, negatively impacting revenue.

With the continued increase in volumes, our incentive consideration costs are also increasing significantly compared to the prior year.

The inputs into our judgments and estimates consider the economic implications of COVID-19 on our critical and significant accounting estimates.

Our air booking cancellation reserve totaled $ 18 million as of March 31, 2021, which is consistent with our reserve as of December 31, 2020.

Additionally, our allowance for credit losses at March 31, 2021 was $ 93 million, a decrease of $ 5 million from December 31, 2020.

The provision for credit losses for the three months ended March 31, 2021 decreased $ 39 million from the same period in the prior year, primarily related to fully reserving for aged balances of certain customers in the prior year and an overall improvement in our forecasted credit losses in the current year given the start of the global economic recovery from the COVID-19 pandemic.

Our air booking cancellation reserve totaled $ 18 million as of June 30, 2021, which is consistent with our reserve as of December 31, 2020.

Additionally, our allowance for credit losses at June 30, 2021 was $ 86 million, a decrease of $ 12 million from December 31, 2020.

The provision for credit losses for the six months ended June 30, 2021 decreased $ 52 million from the same period in the prior year, primarily related to fully reserving for aged balances of certain customers in the prior year and an overall improvement in our forecasted credit losses in the current year given the start of the global economic recovery from the COVID-19 pandemic.

Credit Losses.

Given the uncertainties surrounding the duration and effects of COVID-19 on transaction volumes in the global travel industry, particularly air travel transaction volumes and future cancellation activity, including from airlines’ insolvency or suspension of service or aircraft groundings, we cannot provide assurance that the assumptions used in these estimates will be accurate.

We have not identified any triggering events or changes in circumstances since the performance of our annual goodwill impairment test that would require us to perform another goodwill impairment test and we did not record any goodwill impairment charges for the three months ended March 31, 2021.

Given the uncertainties surrounding the duration and effects of COVID-19, including any variants, on transaction volumes in the global travel industry, particularly air travel transaction volumes and future cancellation activity, including from airlines’ insolvency or suspension of service or aircraft groundings, we cannot provide assurance that the assumptions used in these estimates will be accurate and the impacts could be material on our cancellation reserves, credit loss provisions and results of operations.

Fair Value Measurements for further information.

As we cannot predict the duration or scope of the COVID-19 pandemic, future impairments may occur and the negative financial impact to our consolidated financial statements and results of operations of potential future impairments cannot be reasonably estimated but could be material.

Given the liquidity measures we enacted during 2020 and our ending cash balance of $ 1.3 billion as of March 31, 2021, we believe that we have resources to sufficiently fund our liquidity requirements over at least the next twelve months;

Given the liquidity measures we enacted during 2020 and our ending cash balance of $ 1.1 billion as of June 30, 2021, we believe that we have resources to sufficiently fund our liquidity requirements over at least the next twelve months;

however, given the magnitude of travel decline and the unknown duration of the COVID-19 impact, we will continue to monitor our liquidity levels and take additional steps should we determine they are necessary.

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In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated.

Operating results for the three months ended March 31, 2021 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2021.

Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2021.

The accompanying interim financial statements should be read in conjunction with the

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Our use of estimates and the related accounting policies are discussed in the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 25, 2021.

Given the uncertainties surrounding the duration and effects of COVID-19, we cannot provide assurance that the assumptions used in our estimates will be accurate.

Given the uncertainties surrounding the duration and effects of COVID-19, including any variants, we cannot provide assurance that the assumptions used in our estimates will be accurate and the impacts could be material on our cancellation reserves, credit loss provisions and results of operations.

Adoption of New Accounting Standards

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The standards are effective for all entities upon issuance and we will apply the amendments prospectively through December 31, 2022.

There was no impact to our consolidated financial statements for the three months ended March 31, 2021 as a result of the adoption of these standards.

There was no impact to our consolidated financial statements for the six months ended June 30, 2021 as a result of the adoption of these standards.

Our current hedging contracts do not extend past December 31, 2021.

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As a result of adoption, the component of the Exchangeable Notes originally bifurcated as equity was derecognized and accounted for as a liability.

The net deferred tax liability originally established in connection with the debt discount and issuance costs within equity was also removed and the debt issuance costs which were allocated to equity were reclassified to debt and amortized using an effective interest rate of approximately 5 %.

As a result of removing the net deferred tax liability related to the debt discount, the valuation allowance increased by $ 17 million for the year ended December 31, 2020.

Because the Exchangeable Notes were entered into during the second quarter of 2020, there was no impact to our consolidated statements of operations or earnings per share for the three months ended March 31, 2020 as a result of the adoption of this standard.

The net deferred tax liability originally recognized within equity in connection with the debt discount and issuance costs was also derecognized.

The debt issuance costs that were originally allocated to equity were reclassified to debt and amortized using an effective interest rate of approximately 5 %.

As a result of derecognizing the net deferred tax liability of $ 18 million related to the debt discount, the valuation allowance associated with the deferred tax asset increased by $ 17 million for the year ended December 31, 2020.

The impact of the adoption of the guidance on our consolidated statements of operations for the three and six months ended June 30, 2020 was a decrease in interest expense, net of $ 3 million, and a decrease in benefit for income taxes of $ 1 million, which decreased our net loss attributable to common stockholders by $ 2 million.

There was a $ 0.01 increase in earnings per share for the three and six months ended June 30, 2020 as a result of the adoption.

The impacts to our consolidated balance sheets as of December 31, 2020 are shown below (in thousands):

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Total liabilities and stockholders’ equity 6,077,722 — 6,077,722

In December 2019, the FASB issued updated guidance which simplifies the accounting for income taxes, eliminates certain exceptions within existing income tax guidance, and clarifies certain aspects of the current guidance to promote consistency among reporting entities.

consistency among reporting entities.

We adopted this standard prospectively in the first quarter of 2021.

There was no material impact to our consolidated financial statements for the three months ended March 31, 2021 as a result of this guidance.

There was no material impact to our consolidated financial statements for the six months ended June 30, 2021 as a result of this guidance.

Revenue from Contracts with Customers

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Timing differences among revenue recognition, unconditional rights to bill, and receipt of contract consideration may result in contract assets or contract liabilities.

The following table presents our assets and liabilities with customers as of March 31, 2021 and December 31, 2020 (in thousands):

Account Consolidated Balance Sheet Location March 31, 2021 December 31, 2020

The following table presents our assets and liabilities with customers as of June 30, 2021 and December 31, 2020 (in thousands):

Account Consolidated Balance Sheet Location June 30, 2021 December 31, 2020

Contract assets and customer advances and discounts (1)

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________________________________

(1) Includes contract assets of $ 8 million for March 31, 2021 and December 31, 2020.

During the three months ended March 31, 2021, we recognized revenue of approximately $ 12 million from contract liabilities that existed as of January 1, 2021.

(1) Includes contract assets of $ 10 million and $ 8 million for June 30, 2021 and December 31, 2020, respectively.

During the six months ended June 30, 2021, we recognized revenue of approximately $ 28 million from contract liabilities that existed as of January 1, 2021.

Our long-term trade unbilled receivables, net relate to license fees billed ratably over the contractual period and recognized when the customer gains control of the software.

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The following table presents our revenues disaggregated by business (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Distribution $ 218,245 $ ( 47,949 ) $ 370,026 $ 346,589

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Total Sabre Revenue $ 419,668 $ 83,044 $ 747,152 $ 742,021

In the first and second quarters of 2020, the airline industry experienced an unprecedented number of airline travel reservation cancellations as a result of COVID-19.

Revenue for the second quarter of 2020 was negatively impacted by approximately $ 100 million resulting from increased cancellation activity beyond what was initially estimated.

Our cancellation reserve is highly sensitive to our estimate of bookings that we expect will eventually travel, as well as to the mix of those bookings between domestic and international, given the varying rates paid by airline suppliers.

To address this change in estimate, we further increased our reserve for future cancellations to $ 60 million as of June 30, 2020 to account for the significant effect that COVID-19 has had on the travel industry and the resulting volume of airline travel cancellations and the impacts on the booking fee rate for higher international cancellations and lower international new bookings than previously experienced.

Our air booking cancellation reserve totaled $ 18 million as of June 30, 2021, which is consistent with our reserve as of December 31, 2020.

We may occasionally recognize revenue in the current period for performance obligations partially or fully satisfied in the previous periods resulting from changes in estimates for the transaction price, including any changes to our assessment of whether an estimate of variable consideration is constrained.

For the three months ended March 31, 2021, the impact on revenue recognized in the current period, from performance obligations partially or fully satisfied in the previous period, is immaterial.

For the six months ended June 30, 2021, the impact on revenue recognized in the current period, from performance obligations partially or fully satisfied in the previous period, is immaterial.

Unearned performance obligations primarily consist of deferred revenue for fixed implementation fees and future product implementations, which are included in deferred revenue and other noncurrent liabilities in our consolidated balance sheet.

We have not disclosed the performance obligation related to contracts containing minimum transaction volume, as it represents a subset of our business, and therefore would not be meaningful in understanding the total future revenues expected to be earned from our long-term contracts.

We have not disclosed the performance obligation related to contracts containing minimum transaction volume, as it represents a

subset of our business, and therefore would not be meaningful in understanding the total future revenues expected to be earned from our long-term contracts.

Restructuring Activities

We completed a strategic realignment of our airline and agency-focused businesses in the third quarter of 2020 to address the changing travel landscape and respond to the impacts of the COVID-19 pandemic on our business and cost structure.

As a result of this strategic realignment, we incurred restructuring costs beginning in the first quarter of 2020.

As a result of this strategic realignment, we incurred restructuring costs beginning in the first quarter of 2020 associated with our workforce and leased office space.

The strategic realignment and related actions are substantially complete.

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Since the first quarter of 2020, we have incurred $ 80 million in connection with these restructuring activities, of which $ 18 million is recorded within cost of revenue, excluding technology costs, $ 30 million is recorded within technology costs and $ 32 million is recorded within selling, general and administrative costs in our consolidated statement of operations.

For the three months ended March 31, 2021, adjustments to restructuring charges were immaterial.

For the three and six months ended June 30, 2021, adjustments to restructuring charges were immaterial.

During the three months ended June 30, 2020, we incurred $ 48 million in connection with these restructuring activities, of which $ 17 million is recorded within cost of revenue, excluding technology costs, $ 20 million is recorded within technology costs and $ 11 million is recorded within selling, general and administrative costs within our consolidated statement of operations.

During the six months ended June 30, 2020, we incurred $ 73 million in connection with these restructuring activities, of which $ 22 million is recorded within cost of revenue, excluding technology costs, $ 31 million is recorded within technology costs and $ 20 million is recorded within selling, general and administrative costs within our consolidated statement of operations.

The following table summarizes the accrued liability related to severance and related benefits costs as recorded within accrued compensation and related benefits within our consolidated balance sheet (in thousands):

Three Months Ended

March 31, 2021

Six Months Ended

June 30, 2021

Balance as of December 31, 2020 $ 23,253

1 unchanged sentence

Non-cash adjustments ( 5,049 )

Balance as of March 31, 2021 $ 11,024

For the three months ended March 31, 2021, we recognized $ 4 million income tax expense, representing a negative effective tax rate of 2 %, compared to an income tax benefit of $ 27 million, representing an effective tax rate of 11 % for the three months ended March 31, 2020.

The decrease in the effective tax rate for the three months ended March 31, 2021 as compared to the same period in 2020 was primarily due to an increase in the valuation allowance generated in the current quarter related to the impact of COVID-19 on our results of operations and various discrete items recorded in each of the respective three month periods.

Balance as of June 30, 2021 $ 7,298

For the six months ended June 30, 2021, we recognized $ 2 million of income tax expense, representing a negative effective tax rate less than 1 %, compared to an income tax benefit of $ 32 million, representing an effective tax rate of 5 % for the six months ended June 30, 2020.

The decrease in the effective tax rate for the six months ended June 30, 2021 as compared to the same period in 2020 was primarily due to a higher percent of valuation allowance generated in the six month period on earnings related to the impact of COVID-19 on our results of operations and various discrete items recorded in each of the respective six month periods.

The difference between our effective tax rates and the U.S.

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We believe it is more likely than not that the results of future operations will not generate sufficient taxable income in the U.S.

and in certain foreign jurisdictions to realize the full benefits of its deferred tax assets.

On the basis of this evaluation, as of March 31, 2021, a valuation allowance of $ 311 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized.

and in certain foreign jurisdictions to realize the full benefit of its deferred tax assets.

On the basis of this evaluation, as of June 30, 2021, a cumulative valuation allowance of $ 356 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized.

The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased.

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When facts and circumstances change, we reassess these probabilities and record any changes in the consolidated financial statements as appropriate.

Our net unrecognized tax benefits, excluding interest and penalties, included in our consolidated balance sheets, were $ 74 million and $ 73 million as of March 31, 2021 and December 31, 2020, respectively.

Our net unrecognized tax benefits, excluding interest and penalties, included in our consolidated balance sheets, were $ 83 million and $ 73 million as of June 30, 2021 and December 31, 2020, respectively.

Credit Losses

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We develop and document our methodology used in determining the allowance for credit losses at the portfolio segment level.

Within the travel portfolio segment, we identify airlines, hoteliers and travel agencies as each presenting unique risk characteristics associated with historical credit loss patterns unique to each and we determine the adequacy of our allowance for credit loss by assessing the risks and losses inherent in our receivables related to each.

Within the travel portfolio segment, we identify airlines, hoteliers and travel agencies as each presenting unique risk characteristics associated with historical credit loss patterns

unique to each and we determine the adequacy of our allowance for credit loss by assessing the risks and losses inherent in our receivables related to each.

We evaluate the collectability of our receivables based on a combination of factors.

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Our allowance for credit losses relates to all financial assets, primarily trade receivables due in less than one year recorded in Accounts Receivable, net on our consolidated balance sheets.

Our allowance for credit losses for the three months ended March 31, 2021 for our portfolio segment is summarized as follows (in thousands):

Three Months Ended

March 31, 2021

Our allowance for credit losses for the six months ended June 30, 2021 for our portfolio segment is summarized as follows (in thousands):

Six Months Ended

June 30, 2021

Balance at December 31, 2020 $ 97,568

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Other ( 1,845 )

Balance at March 31, 2021 $ 92,665

Our provision for expected credit losses for the three months ended March 31, 2021 decreased $ 39 million from $ 36 million in the same period in the prior year, primarily related to fully reserving for aged balances of certain customers in the prior year and an overall improvement in our forecasted credit losses in the current year given the start of the global economic recovery from the COVID-19 pandemic.

For the three months ended March 31, 2020, we made a decision to fully reserve for certain aged balances related to particular customers due to heightened uncertainty regarding collectability, including uncertainty related to bankruptcy filings by several of our customers during the three months ended March 31, 2020.

Balance at June 30, 2021 $ 85,603

Our provision for expected credit losses was a reduction of $ 2 million and $ 4 million for the three and six months ended June 30, 2021, respectively.

Our provision for expected credit losses for the six months ended June 30, 2021 decreased $ 52 million from the same period in the prior year, primarily related to fully reserving for aged balances of certain customers in the prior year and an overall improvement in our forecasted credit losses in the current year given the start of the global economic recovery from the COVID-19 pandemic.

For the six months ended June 30, 2020, we made a decision to fully reserve for certain aged balances related to particular customers due to heightened uncertainty regarding collectability, including uncertainty related to bankruptcy filings by several of our customers during the six months ended June 30, 2020.

Additionally, the impact of the COVID-19 pandemic on the global economy and other general increases in aging balances affected our estimate of expected credit losses in the prior year.

Macro-economic factors, including the economic downturn, lack of liquidity in the capital markets resulting from the COVID-19 pandemic and lack of additional government funding, can have a significant effect on additions to the allowance as the pandemic may continue to result in restructuring or bankruptcy of additional customers.

Given the uncertainties surrounding the duration and effects of COVID-19, we cannot provide assurance that the assumptions used in our estimates will be accurate and actual write-offs may vary from our estimates.

As of March 31, 2021 and December 31, 2020, our outstanding debt included in our consolidated balance sheets totaled $ 4,741 million and $ 4,744 million, respectively, which are net of debt issuance costs of $ 51 million and $ 54 million, respectively, and unamortized discounts of $ 9 million and $ 10 million, respectively.

The following table sets forth the face values of our outstanding debt as of March 31, 2021 and December 31, 2020 (in thousands):

Rate Maturity March 31, 2021 December 31, 2020

As of June 30, 2021 and December 31, 2020, our outstanding debt included in our consolidated balance sheets totaled $ 4,728 million and $ 4,744 million, respectively, which are net of debt issuance costs of $ 48 million and $ 54 million, respectively, and unamortized discounts of $ 9 million and $ 10 million, respectively.

The following table sets forth the face values of our outstanding debt as of June 30, 2021 and December 31, 2020 (in thousands):

Rate Maturity June 30, 2021 December 31, 2020

Senior secured credit facilities:

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(1) Pursuant to the August 27, 2020 refinancing, subject to certain "springing" maturity conditions, the maturity may extend to February 2024 at the latest.

We had $ 375 million outstanding under the Revolver as of March 31, 2021 and December 31, 2020.

We had outstanding letters of credit totaling $ 10 million as of March 31, 2021 and December 31, 2020, which reduced our overall credit capacity under the Revolver.

We had $ 375 million outstanding under the Revolver as of June 30, 2021 and December 31, 2020.

We had outstanding letters of credit totaling $ 10 million as of June 30, 2021 and December 31, 2020, which reduced our overall credit capacity under

the Revolver.

On July 12, 2021, we entered into agreements to refinance the Revolver, and terminated the revolving commitments thereunder.

Subsequent Events for further detail.

Senior Secured Credit Facilities

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On August 23, 2017, Sabre GLBL entered into a Fourth Incremental Term Facility Amendment to our Amended and Restated Credit Agreement, Term Loan A Refinancing Amendment to our Amended and Restated Credit Agreement, and Second Revolving Facility Refinancing Amendment to our Amended and Restated Credit Agreement (the “2017 Refinancing”).

The 2017 Refinancing included a $ 400 million revolving credit facility ("Revolver") as well as the application of the proceeds of the

approximately $ 1,891 million incremental Term Loan B facility (“Term Loan B”) and $ 570 million Term Loan A facility (“Term Loan A”).

The 2017 Refinancing included a $ 400 million revolving credit facility ("Revolver") as well as the application of the proceeds of the approximately $ 1,891 million incremental Term Loan B facility (“Term Loan B”) and $ 570 million Term Loan A facility (“Term Loan A”).

On August 27, 2020, Sabre GLBL entered into a Third Revolving Facility Refinancing Amendment to the Amended and Restated Credit Agreement (the "Third Revolving Refinancing Amendment") and the First Term A Loan Extension Amendment to the Amended and Restated Credit Agreement (the "Term A Loan Extension Amendment" and, together with the Third Revolving Refinancing Amendment, the "2020 Refinancing"), which extended the maturity of the Revolver from July 1, 2022 to November 23, 2023 at the earliest and February 22, 2024 at the latest, depending on certain "springing" maturity conditions as described in the Third Revolving Refinancing Amendment.

In the event that, as of November 23, 2023, the maturity date of the Term Loan B has not been extended or refinanced to a date after August 20, 2024, the extension is subject to an earlier "springing" maturity date of November 23, 2023.

In addition to extending the maturity date of the Revolver, the 2020 Refinancing also provides that, during any covenant suspension resulting from a "Material Travel Event Disruption" (as defined in the Amended and Restated Credit Agreement and discussed further below), including during the current covenant suspension period, we must maintain liquidity of at least $ 300 million on a monthly basis, which was lowered in December 2020 from $ 450 million.

In addition, during this covenant suspension, the 2020 Refinancing limits certain payments to equity holders, certain investments, certain prepayments of unsecured debt and the ability of certain subsidiaries to incur additional debt.

The applicable margins for the Revolver are between 2.50 % and 1.75 % per annum for Eurocurrency rate loans and between 1.50 % and 0.75 % per annum for base rate loans, with the applicable margin for any quarter reduced by 25 basis points (up to 75 basis points total) if the Senior Secured First-Lien Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement) is less than 3.75 to 1.0, 3.00 to 1.0, or 2.25 to 1.0, respectively.

In addition to extending the maturity date of the Revolver, the 2020 Refinancing also provided that, during any covenant suspension resulting from a "Material Travel Event Disruption" (as defined in the Amended and Restated Credit Agreement), including during the current covenant suspension period, we were required to maintain liquidity of at least $ 300 million on a monthly basis, which was lowered in December 2020 from $ 450 million.

In addition, during this covenant suspension, the 2020 Refinancing limited certain payments to equity holders, certain investments, certain prepayments of unsecured debt and the ability of certain subsidiaries to incur additional debt.

The applicable margins for the Revolver were between 2.50 % and 1.75 % per annum for Eurocurrency rate loans and between 1.50 % and 0.75 % per annum for base rate loans, with the applicable margin for any quarter reduced by 25 basis points (up to 75 basis points total) if the Senior Secured First-Lien Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement) was less than 3.75 to 1.0, 3.00 to 1.0, or 2.25 to 1.0, respectively.

These interest rate spreads for the Revolver were increased by 0.25 %, during covenant suspension, in connection with the 2020 Refinancing.

On July 12, 2021, Sabre GLBL entered into agreements to refinance the Other Term Loan B facility and the Revolver, and terminated the revolving commitments thereunder.

Among other things, the refinancing amended the financial performance covenant to remove the $ 300 million minimum liquidity requirement, and certain other limitations, including the items listed above.

Subsequent Events for further detail.

On December 17, 2020, Sabre GLBL entered into a Sixth Term A Loan Refinancing and Incremental Amendment to our Amended and Restated Credit Agreement, resulting in additional Term Loan B borrowings of $ 637 million ("Other Term B Loans") due December 17, 2027.

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The net proceeds of $ 623 million from the issuance, net of underwriting fees and commissions, were used to fully redeem both the $ 500 million outstanding 5.25 % senior secured notes due November 2023 and the $ 134 million outstanding Term Loan A.

Additionally, on December 17, 2020, Sabre GLBL entered into a Pro Rata Amendment and the Refinancing Amendment which reduced the minimum liquidity requirement to $ 300 million.

We incurred no material additional indebtedness as a result of these transactions, other than amounts for certain interest, fees and expenses.

We recognized a loss on extinguishment of debt of $ 11 million during the year ended December 31, 2020 in connection with these transactions, which consisted of a redemption premium of $ 6 million and the write-off of unamortized debt issuance costs of $ 5 million.

Under the Amended and Restated Credit Agreement, the loan parties are subject to certain customary non-financial covenants, including certain restrictions on incurring certain types of indebtedness, creation of liens on certain assets, making of certain investments, and payment of dividends, as well as a maximum leverage ratio.

Pursuant to Credit Agreement Amendments, effective July 18, 2016, the maximum leverage ratio has been adjusted to be based on the Total Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement) and we are required, at all times (no longer solely when a threshold amount of revolving loans or letters of credit were outstanding), to maintain a Total Net Leverage Ratio of less than 4.5 to 1.0.

However, under the terms of the Amended and Restated Credit Agreement, our Total Net Leverage Ratio requirement may be suspended for a limited time if a “Material Travel Event Disruption” has occurred.

“Material Travel Event Disruption,” as defined in the Amended and Restated Credit Agreement, means a decrease of 10 % or more has occurred in any given calendar month in the number of “domestic revenue passenger enplanements” as a result of, or in connection with, a Travel Event (as defined in the Amended and Restated Credit Agreement) when compared to the number of “domestic revenue passenger enplanements” occurring in the corresponding month during the prior year, or if a Material Travel Event Disruption existed during such month, the most recent corresponding month in which no Material Travel Event Disruption occurred/existed.

The number of “domestic revenue passenger enplanements” is determined by reference to the monthly “Air Traffic Statistics,” which terms are published by the Bureau of Transportation Statistics.

The capacity reductions by domestic airlines in response to the COVID-19 outbreak and related decreases in domestic passenger enplanements, and a recent sharp decline in GDS bookings, has led to a finding that a Material Travel Event Disruption occurred in the first quarter of 2021.

As such, the leverage ratio covenant has been suspended for the first and second quarters of 2021.

As of March 31, 2021, we are in compliance with all covenants not suspended under the terms of the Amended and Restated Credit Agreement and with the additional covenants of the 2020 Refinancing.

On July 12, 2021, Sabre GLBL entered into agreements to refinance the Other Term Loan B facility and the Revolver, and terminated the revolving commitments thereunder.

Subsequent Events for further detail.

As of June 30, 2021, we are in compliance with all covenants not suspended under the terms of the Amended and Restated Credit Agreement and with the additional covenants of the 2020 Refinancing.

In addition, the Amended and Restated Credit Agreement provided for a maximum leverage ratio for the loan parties, based on the Total Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement).

We were required, at all times (no longer solely when a threshold amount of revolving loans or letters of credit were outstanding), to maintain a Total Net Leverage Ratio of less than 4.5 to 1.0.

The capacity reductions by domestic airlines in response to the COVID-19 outbreak and related decreases in domestic passenger enplanements, and a recent sharp decline in GDS bookings, led to a finding that a Material Travel Event Disruption occurred in the first quarter of 2021.

As such, the leverage ratio covenant was suspended through at least the second quarter of 2021.

As noted above, on July 12, 2021, we entered into agreements to refinance the Other Term Loan B facility and the Revolver, and terminated the revolving commitments thereunder.

Among other things, the refinancing amended the financial performance covenant to remove the Total Net Leverage Ratio maintenance requirement.

Subsequent Events for further detail.

Exchangeable Notes

On April 17, 2020, Sabre GLBL entered into a new debt agreement consisting of $ 345 million aggregate principal amount of 4.000 % senior exchangeable notes due 2025 (the “Exchangeable Notes”).

The Exchangeable Notes are senior, unsecured obligations of Sabre GLBL, accrue interest payable semi-annually in arrears and mature on April 15, 2025, unless earlier repurchased or exchanged in accordance with specified circumstances and terms of the indenture governing the Exchangeable Notes.

The Exchangeable Notes are senior, unsecured

obligations of Sabre GLBL, accrue interest payable semi-annually in arrears and mature on April 15, 2025, unless earlier repurchased or exchanged in accordance with specified circumstances and terms of the indenture governing the Exchangeable Notes.

Under the terms of indenture, the notes are exchangeable into common stock of Sabre Corporation (referred to as "our common stock" herein) at the following times or circumstances:

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With certain exceptions, upon a Change of Control or other Fundamental Change (both as defined in the indenture governing the Exchangeable Notes), the holders of the Exchangeable Notes may require us to repurchase all or part of the principal amount of the Exchangeable Notes at a repurchase price equal to 100 % of the principal amount of the Exchangeable Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date.

Due to the price of our common stock during the 30 trading days preceding March 31, 2021, the first condition above has been met as of March 31, 2021 and the Exchangeable Notes are exchangeable by the holders at any time during the second quarter of 2021.

As of March 31, 2021, the if-converted value of the Exchangeable Notes exceeds the outstanding principal amount by $ 304 million.

Due to the price of our common stock during the 30 trading days preceding June 30, 2021, the first condition above has been met as of June 30, 2021 and the Exchangeable Notes are exchangeable by the holders at any time during the third quarter of 2021.

As of June 30, 2021, the if-converted value of the Exchangeable Notes exceeds the outstanding principal amount by $ 196 million.

The Exchangeable Notes are convertible at their holder’s election into shares of our common stock based on an initial conversion rate of 126.9499 shares of common stock per $1,000 principal amount of the Exchangeable Notes, which is equivalent to an initial conversion price of approximately $ 7.88 per share.

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The net proceeds received from the sale of the Exchangeable Notes of $ 336 million, net of underwriting fees and commissions, are being used for general corporate purposes.

As the result of the adoption of a new accounting standard on January 1, 2021, using the full retrospective method, the Exchangeable Notes are presented as a single liability measured at amortized cost.

As presented in Note 1.

General Information, the component of the Exchangeable Notes originally bifurcated as equity was derecognized and accounted for as a liability.

The following table sets forth the carrying value of the Exchangeable Notes as of March 31, 2021 and December 31, 2020, as recast (in thousands):

March 31, 2021 December 31, 2020

During the three months ended June 30, 2021, a certain holder elected to convert $ 10 million of the Exchangeable Notes for 1,269,497 shares of common stock.

We elected to settle this conversion in shares of our common stock.

As of June 30, 2021, we have $ 335 million aggregate principal amount of Exchangeable Notes outstanding.

The following table sets forth the carrying value of the Exchangeable Notes as of June 30, 2021 and December 31, 2020, as recast (in thousands):

June 30, 2021 December 31, 2020

Principal $ 335,000 $ 345,000

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Net Carrying Value $ 325,937 $ 334,557

The following table sets forth interest expense recognized related to the Exchangeable Notes for the three months ended March 31, 2021 and 2020 (in thousands):

Three Months Ended March 31,

The following table sets forth interest expense recognized related to the Exchangeable Notes for the three and six months ended June 30, 2021 and 2020 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Contractual interest expense $ 3,450 $ 2,798 $ 6,900 $ 2,798

Amortization of debt discount and issuance costs $ 551 $ —

Amortization of issuance costs $ 829 $ 444 $ 1,380 $ 444

Hedging Objectives —We are exposed to certain risks relating to ongoing business operations.

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Derivatives not designated as hedging instruments are carried at fair value with changes in fair value reflected in Other, net in the consolidated statement of operations.

Forward Contracts —In order to hedge our operational expenditures' exposure to foreign currency movements, we are a party to certain foreign currency forward contracts that extend until December 2020.

We have designated these instruments as cash flow hedges.

No hedging ineffectiveness was recorded in earnings relating to the forward contracts during the three months ended March 31, 2021 and 2020.

As of March 31, 2021, we had no unsettled forward contracts and no material losses are expected to be reclassified from other comprehensive (loss) income to earnings over the next 12 months.

Interest Rate Swap Contracts — Interest rate swaps outstanding during the three months ended March 31, 2021 and 2020 are as follows:

Forward Contracts —In order to hedge our operational expenditures' exposure to foreign currency movements, we were a party to certain foreign currency forward contracts that extended until December 2020.

We designated these instruments as cash flow hedges.

No hedging ineffectiveness was recorded in earnings relating to the forward contracts during the three and six months ended June 30, 2020.

For the six months ended June 30, 2021, we had no unsettled forward contracts.

Interest Rate Swap Contracts — Interest rate swaps outstanding during the six months ended June 30, 2021 and 2020 are as follows:

Notional Amount Interest Rate

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We have designated these swaps as cash flow hedges.

The estimated fair values of our derivatives designated as hedging instruments as of March 31, 2021 and December 31, 2020 are as follows (in thousands):

The estimated fair values of our derivatives designated as hedging instruments as of June 30, 2021 and December 31, 2020 are as follows (in thousands):

Derivative Assets (Liabilities)

Fair Value as of

Derivatives Designated as Hedging Instruments Consolidated Balance Sheet Location March 31, 2021 December 31, 2020

Derivatives Designated as Hedging Instruments Consolidated Balance Sheet Location June 30, 2021 December 31, 2020

Interest rate swaps Other accrued liabilities $ ( 8,250 ) $ ( 16,038 )

Total $ ( 8,250 ) $ ( 16,038 )

The effects of derivative instruments, net of taxes, on OCI for the three months ended March 31, 2021 and 2020 are as follows (in thousands):

Amount of Gain (Loss) Recognized in OCI on Derivative,

The effects of derivative instruments, net of taxes, on OCI for the three and six months ended June 30, 2021 and 2020 are as follows (in thousands):

Amount of (Loss) Gain Recognized in OCI on Derivative,

Effective Portion

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Derivatives in Cash Flow Hedging Relationships 2021 2020 2021 2020

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Amount of Loss (Gain) Reclassified from Accumulated OCI into Income, Effective Portion

Derivatives in Cash Flow Hedging Relationships Income Statement Location Three Months Ended March 31,

Derivatives in Cash Flow Hedging Relationships Income Statement Location Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Foreign exchange contracts Cost of revenue, excluding technology costs $ — $ 2,602 $ — $ 3,223

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Interest Rate Swaps— The fair value of our interest rate swaps is estimated using a combined income and market-based valuation methodology based upon Level 2 inputs, including credit ratings and forward interest rate yield curves obtained from independent pricing services.

The following tables present our (liabilities) assets that are required to be measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 (in thousands):

The following tables present our (liabilities) assets that are required to be measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020 (in thousands):

Fair Value at Reporting Date Using

March 31, 2021 Level 1 Level 2 Level 3

June 30, 2021 Level 1 Level 2 Level 3

Derivatives (1)

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Derivatives for further detail.

There were no transfers between Levels 1 and 2 within the fair value hierarchy for the three months ended March 31, 2021.

There were no transfers between Levels 1 and 2 within the fair value hierarchy for the three and six months ended June 30, 2021.

Other Financial Instruments

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The fair values of our senior exchangeable notes due 2025, senior secured notes due 2025 and term loans under our Amended and Restated Credit Agreement are determined based on quoted market prices for a similar liability when traded as an asset in an active market, a Level 2 input.

The following table presents the fair value and carrying value of our senior notes and borrowings under our senior secured credit facilities as of March 31, 2021 and December 31, 2020 (in thousands):

The following table presents the fair value and carrying value of our senior notes and borrowings under our senior secured credit facilities as of June 30, 2021 and December 31, 2020 (in thousands):

Fair Value at Carrying Value at (1)

Financial Instrument March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020

Financial Instrument June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020

Term Loan B $ 1,790,252 $ 1,785,843 $ 1,812,159 $ 1,821,016

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We continually monitor events and changes in circumstances such as changes in market conditions, near and long-term demand and other relevant factors, that could indicate that the fair value of any one of our reporting units may more likely than not have fallen below its respective carrying amount.

We have not identified any triggering events or changes in circumstances since the performance of our annual goodwill impairment test that would require us to perform another goodwill impairment test and we did no t record any goodwill impairment charges for the three months ended March 31, 2021.

We have not identified any triggering events or changes in circumstances since the performance of our annual goodwill impairment test that would require us to perform another goodwill impairment test and we did no t record any goodwill impairment charges for the three and six months ended June 30, 2021.

Accumulated Other Comprehensive Loss

As of March 31, 2021 and December 31, 2020, the components of accumulated other comprehensive loss, net of related deferred income taxes, are as follows (in thousands):

March 31, 2021 December 31, 2020

As of June 30, 2021 and December 31, 2020, the components of accumulated other comprehensive loss, net of related deferred income taxes, are as follows (in thousands):

June 30, 2021 December 31, 2020

Defined benefit pension and other post-retirement benefit plans $ ( 108,069 ) $ ( 135,596 )

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The amortization of actuarial losses and periodic service credits associated with our retirement-related benefit plans is primarily included in Other, net in the consolidated statements of operations.

During the three months ended June 30, 2021, a settlement accounting event was triggered within our defined benefit pension plan which resulted in a charge of $ 4 million recorded to Other, net in the consolidated statements of operations.

The decline in Defined benefit pension and other post-retirement benefit plans is also due to a $ 21 million pension remeasurement, as a result of pension settlement accounting.

On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which modified funding requirements for single-employer defined benefit pension plans by restarting and extending the amortization of funding shortfalls and extending and enhancing interest rate stabilization percentages.

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In the event of our voluntary or involuntary liquidation, dissolution or winding-up, no distribution of our assets may be made to holders of our common stock until we have paid to holders of our Preferred Stock a liquidation preference equal to $ 100 per share plus accumulated and unpaid dividends.

We recorded $ 5 million of accrued preferred stock dividends in our consolidated results of operations for the three months ended March 31, 2021.

During the three months ended March 31, 2021, we paid cash dividends on our preferred stock of $ 5 million.

On April 28, 2021, the Board of Directors declared a dividend of $ 1.625 per share on Preferred Stock payable on June 1, 2021 to holders of record of the Preferred Stock on May 15, 2021.

We recorded $ 5 million and $ 11 million of accrued preferred stock dividends in our consolidated results of operations for the three and six months ended June 30, 2021, respectively.

During the three and six months ended June 30, 2021, we paid cash dividends on our preferred stock of $ 5 million and $ 11 million, respectively.

On July 28, 2021, the Board of Directors declared a dividend of $ 1.625 per share on Preferred Stock payable on September 1, 2021 to holders of record of the Preferred Stock on August 15, 2021.

Unless earlier converted, each outstanding share of Preferred Stock will automatically convert, on the mandatory conversion date, which is expected to be September 1, 2023 into shares of our common stock at a rate between 11.9048 and 14.2857 , subject to customary anti-dilution adjustments.

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Holders of the Preferred Stock have the right to convert all or any portion of their shares at any time until the close of business on the mandatory conversion date.

Early conversions that are not in connection with a “Make-Whole Fundamental Change” (as defined in the Certificate of Designations governing the Preferred Stock) will be settled at the minimum conversion rate of 11.9048 .

rate of 11.9048 .

If a Make-Whole Fundamental Change occurs, holders of the Preferred Stock will, in certain circumstances, be entitled to convert their shares at an increased conversion rate for a specified period of time and receive an amount to compensate them for certain unpaid accumulated dividends and any remaining future scheduled dividend payments.

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Repurchases under the Share Repurchase Program may take place in the open market or privately negotiated transactions.

For the three months ended March 31, 2021, we did no t repurchase any shares pursuant to the Share Repurchase Program.

During the six months ended June 30, 2021, we did no t repurchase any shares pursuant to the Share Repurchase Program.

On March 16, 2020, we announced the suspension of share repurchases under the Share Repurchase Program in conjunction with certain cash management measures we are undertaking as a result of the market conditions caused by COVID-19.

Approximately $ 287 million remains authorized for repurchases under the Share Repurchase Program as of March 31, 2021.

Approximately $ 287 million remains authorized for repurchases under the Share Repurchase Program as of June 30, 2021.

Exchangeable Notes

On April 17, 2020, we entered into a new debt agreement consisting of $ 345 million aggregate principal amount of Exchangeable Notes.

Under the terms of indenture, the Exchangeable Notes are exchangeable into our common stock under specified circumstances.

During the three months ended June 30, 2021, a certain holder elected to convert $ 10 million of the Exchangeable Notes for 1,269,497 shares of common stock.

We elected to settle this conversion in shares of our common stock.

As of June 30, 2021, we have $ 335 million aggregate principal amount of Exchangeable Notes outstanding.

Debt for further details.

Earnings Per Share

The following table reconciles the numerators and denominators used in the computations of basic and diluted earnings per share from continuing operations (in thousands, except per share data):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Loss from continuing operations $ ( 245,314 ) $ ( 441,969 ) $ ( 505,245 ) $ ( 651,740 )

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Diluted earnings per share is computed by dividing net income from continuing operations available to common stockholders by the weighted-average number of common shares outstanding plus the effect of all dilutive common stock equivalents during each period.

The diluted weighted-average common shares outstanding calculation excludes 6 million and 2 million of dilutive stock options and restricted stock awards for the three months ended March 31, 2021 and 2020, respectively, as their effect would be anti-dilutive given the net loss incurred in the periods.

The calculation of diluted weighted-average shares excludes the impact of 1 million of anti-dilutive common stock equivalents for the three months ended March 31, 2021.

The diluted weighted-average common shares outstanding calculation excludes 5 million and 2 million of dilutive stock options and restricted stock awards for the six months ended June 30, 2021 and 2020, respectively, as their effect would be anti-dilutive given the net loss incurred in the periods.

The diluted weighted-average common shares outstanding calculation excludes 5 million of dilutive stock options and restricted stock awards for the three months ended June 30, 2021 as their effect would be anti-dilutive given the net loss incurred in the period.

The dilutive stock options and restricted stock awards for the three months ended June 30, 2020 are immaterial.

The calculation of diluted weighted-average shares excludes the impact of 1 million of anti-dilutive common stock equivalents for the three and six months ended June 30, 2021, respectively, and 8 million and 2 million of anti-dilutive common stock equivalents for each of the three and six months ended June 30, 2020, respectively.

We have used the if-converted method for calculating any potential dilutive effect of the Exchangeable Notes on our diluted net income per share.

Under the if-converted method, the Exchangeable Notes are assumed to be converted at the beginning of the period and the resulting common shares are included in the denominator of the diluted earnings per share calculation for the entire period being presented and interest expense, net of tax, recorded in connection with the Exchangeable Notes is added back to the numerator, only in the periods in which such effect is dilutive.

The approximately 44 million resulting common shares related to the Exchangeable Notes are not included in the dilutive weighted-average common shares outstanding calculation for the three months ended March 31, 2021 as their effect would be anti-dilutive given the net loss incurred in the period.

There was no impact to our earnings per share for the three months ended March 31, 2020 as a result of the full retrospective adoption on January 1, 2021 of updated guidance affecting the accounting for the Exchangeable Notes.

The approximately 43 million resulting common shares related to the Exchangeable Notes are not included in the dilutive weighted-average common shares outstanding calculation for the three and six months ended June 30, 2021 and 2020 as their effect would be anti-dilutive given the net loss incurred in those periods.

There was a $ 0.01 increase to our earnings per share for the three and six months ended June 30, 2020 as a result of the full retrospective adoption on January 1, 2021 of updated guidance affecting the accounting for the Exchangeable Notes.

General Information for further information.

Likewise, the potential dilutive effect of our Preferred Stock outstanding during the period was calculated using the if-converted method assuming the conversion as of the earliest period reported or at the date of issuance, if later.

The approximately 40 million resulting common shares related to the Preferred Stock are not included in the dilutive weighted-average common shares outstanding calculation for the three months ended March 31, 2021 as their effect would be anti-dilutive given the net loss incurred in the period.

The approximately 40 million resulting common shares related to the Preferred Stock are not included in the dilutive weighted-average common shares outstanding calculation for the three and six months ended June 30, 2021 as their effect would be anti-dilutive given the net loss incurred in the period.

We lease certain facilities under long-term operating leases.

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The following table presents supplemental cash flow information related to operating leases (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Supplemental Cash Flow Information

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The following table presents supplemental balance sheet information related to operating leases (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Operating Leases

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others include options to terminate the agreement within two years .

Future minimum lease payments under non-cancellable operating leases as of March 31, 2021 are as follows (in thousands):

Future minimum lease payments under non-cancellable operating leases as of June 30, 2021 are as follows (in thousands):

Year Ending December 31, Operating Leases

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As a result of the jury's verdict, US Airways was also entitled to receive reasonable attorneys’ fees and costs under the Sherman Act.

As such, it filed a motion

seeking approximately $ 125 million in attorneys’ fees and costs, the amount of which we strongly dispute.

As such, it filed a motion seeking approximately $ 125 million in attorneys’ fees and costs, the amount of which we strongly dispute.

In January 2018, the court denied US Airways' motion seeking attorneys' fees and costs, without prejudice.

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As a result of the Second Circuit’s opinion, we believe that the claims associated with this case are not probable;

therefore, in the third quarter of 2019, we reversed our previously accrued loss of $ 32 million and do no t have any losses accrued for this matter as of March 31, 2021.

therefore, in the third quarter of 2019, we reversed our previously accrued loss of $ 32 million and do no t have any losses accrued for this matter as of June 30, 2021.

We have and will incur significant fees, costs and expenses for as long as the litigation is ongoing.

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Depending on the outcome of the litigation, any of these consequences could have a material adverse effect on our business, financial condition and results of operations.

American Airlines Commercial Litigation

On June 29, 2021, American Airlines filed suit against us in state district court in Tarrant County, Texas, alleging that our New Airline Storefront, a modern retailing experience designed to enhance comparison shopping of airline offers in the GDS, and

a new value-based incentive model with agencies breach our contract with American Airlines.

American Airlines is seeking a temporary and permanent injunction preventing the alleged breach of contract.

We strongly deny the allegations and have filed our response denying American Airlines’ allegations and seeking a declaratory judgment that, among other things, New Airline Storefront does not violate the contract and that the contract does not prohibit Sabre’s value-based fee arrangements.

We could incur significant fees, costs and expenses for as long as the litigation is ongoing.

If we cannot resolve this matter favorably, we could be limited in our ability to utilize New Airline Storefront and make the value-based incentive payments until our contract with American Airlines terminates.

Furthermore, if this dispute were to result in the termination of our distribution contract with American Airlines, we may be unable to negotiate a new contract with American Airlines on as favorable terms or at all, which could have a material adverse effect on our business, financial condition and results of operations.

European Commission’s Directorate-General for Competition ("EC") Investigation

On November 23, 2018, the EC announced that it has opened an investigation of us and another GDS to assess whether our respective agreements with airlines and travel agents may restrict competition in breach of European Union antitrust rules.

We are fully cooperating with the EC’s investigation and are unable to make any prediction regarding its outcome at this time.

There is no legal deadline for the EC to bring an antitrust investigation to an end, and the duration of the investigation is uncertain.

Depending on the findings of the EC, the outcome of the investigation could have a material adverse effect on our business, financial condition and results of operations.

We may incur significant fees, costs and expenses for as long as this investigation is ongoing.

We intend to vigorously defend against any allegations of anticompetitive activity by the EC.

On July 19, 2021, the EC announced that it has closed this investigation.

Department of Justice Investigation

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The DIT appealed those decisions to the Delhi High Court, which found in our favor on July 19, 2010.

The DIT has appealed the decision to the Supreme Court of India and our case

is currently pending before that court.

The DIT has appealed the decision to the Supreme Court of India and our case is currently pending before that court.

We have appealed the tax assessments for the assessment years ended March 2013 to March 2018 with the ITAT and no trial date has been set for these subsequent years.

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The DIT also assessed taxes on a similar basis plus some additional issues for assessment years ending March 2006 through March 2018 and appeals for assessment years ending March 2006 through 2016 and March 2018 are pending before the ITAT or the High Court depending on the year.

If the DIT were to fully prevail on every claim against us, including SAPPL, we could be subject to taxes, interest and penalties of approximately $ 45 million as of March 31, 2021.

If the DIT were to fully prevail on every claim against us, including SAPPL, we could be subject to taxes, interest and penalties of approximately $ 45 million as of June 30, 2021.

We intend to continue to aggressively defend against each of the foregoing claims.

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We did not find any evidence of a breach of the network security of the HS Central Reservation System, and we believe that the number of affected reservations represented only a fraction of 1 % of the bookings in the HS Central Reservation System.

Although the costs related to these incidents, including any associated penalties assessed by any other governmental authority or payment card brand or indemnification obligations to our customers, as well as any other impacts or remediation related to this incident, may be material, it is not possible at this time to determine whether we will incur, or to reasonably estimate the amount of, any liabilities in connection with them, with the exception of the payment related to the settlement agreements as described

We maintain insurance that covers certain aspects of cyber risks, including the payment related to the settlement agreements, and we continue to work with our insurance carriers in these matters.

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Our most significant VAT receivable is in Greece.

As of March 31, 2021, we have approximately $ 9 million in VAT receivables for which refund claims have been filed with the Greek government.

As of June 30, 2021, we have approximately $ 9 million in VAT receivables for which refund claims have been filed with the Greek government.

Although we have paid these amounts and believe we are entitled to a refund, the Greek tax authorities have challenged our position.

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In Greece, as in other jurisdictions, we intend to vigorously defend our positions against any claims that are not insignificant, including through litigation when necessary.

As of March 31, 2021, we do not believe that an adverse outcome is probable with respect to the claims of the Greek tax authorities or any other jurisdiction;

As of June 30, 2021, we do not believe that an adverse outcome is probable with respect to the claims of the Greek tax authorities or any other jurisdiction;

as a result, we have not accrued any material amounts for exposure related to such contingencies or adverse decisions.

9 unchanged sentences

These changes did not impact the historical Hospitality Solutions reporting segment's revenue and expenses.

Our CODM utilizes Adjusted Operating Loss as the measure of profitability to evaluate performance of our segments and allocate resources which is not a recognized term under GAAP.

Our CODM utilizes Adjusted Operating Loss, which is not a recognized term under GAAP, as the measure of profitability to evaluate performance of our segments and allocate resources.

Our uses of Adjusted Operating Loss has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.

We define Adjusted Operating Loss as operating loss adjusted for equity method loss, acquisition-related amortization, restructuring and other costs, acquisition-related costs, litigation costs, net, and stock-based compensation.

We define Adjusted Operating Loss as operating loss adjusted for equity method income (loss), acquisition-related amortization, restructuring and other costs, acquisition-related costs, litigation costs, net, and stock-based compensation.

As a result of the strategic realignment in the third quarter of 2020, 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.

5 unchanged sentences

The majority of the intersegment revenues and cost of revenues are fees charged by Travel Solutions to Hospitality Solutions for hotel stays booked through our GDS .

Segment information for the three months ended March 31, 2021 and 2020 is as follows (in thousands):

Three Months Ended March 31,

Segment information for the three and six months ended June 30, 2021 and 2020 is as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Travel Solutions $ 373,385 $ 56,262 $ 662,260 $ 663,850

21 unchanged sentences

(a) The following table sets forth the reconciliation of operating loss in our statement of operations to Adjusted Operating Loss (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Operating loss $ ( 180,370 ) $ ( 384,070 ) $ ( 382,923 ) $ ( 535,481 )

Equity method loss ( 911 ) ( 686 )

Equity method income (loss) 630 ( 499 ) ( 281 ) ( 1,185 )

Acquisition-related amortization (1)

3 unchanged sentences

Acquisition-related costs (3)

1,709 4,373 2,429 22,200

Litigation costs, net (4)

11,521 115 12,251 1,856

Stock-based compensation 29,478 8,762 53,904 26,339

6 unchanged sentences

Contingencies.

Subsequent Events

On July 12, 2021, we entered into agreements to refinance the Other Term Loan B facility and the Revolver, and terminated the revolving commitments thereunder.

We incurred no additional indebtedness as a result of the refinancing above the refinanced amount, other than amounts covering certain interest, fees and expenses.

Among other things, the refinancing amended the financial performance covenant to remove the minimum liquidity requirement of $ 300 million, the Total Net Leverage Ratio maintenance requirement, and certain other limitations.

The refinancing included the application of the proceeds of (i) a new $ 404 million term loan “B-1” facility (the “New Term B-1 Facility”) and (ii) a new $ 644 million term loan “B-2” facility (the "New Term B-2 Facility" and together with the New Term B-1 Facility, the “New Facilities”), borrowed by Sabre GLBL under our Amended and Restated Credit Agreement, to pay down in full approximately $ 634 million of Other Term B Loans incurred December 17, 2020 under the Amended and Restated Credit Agreement and $ 400 million of the Revolver, the outstanding revolver balance under the Amended and Restated Credit Agreement as of July 12, 2021, and to terminate the revolving commitments thereunder.

The New Facilities mature on December 17, 2027, and we have the ability to prepay the New Facilities after December 17, 2021 without a premium or to prepay at a 101 premium before that date.

In addition, on July 2, 2021, in anticipation of the Revolver repayment and termination of the revolving commitments (and related letter of credit subfacility), Sabre GLBL entered into a new $ 20 million letter of credit facility which is secured by a cash collateral deposit account.

We are currently in process of estimating the impact of the refinancing transaction on our results of operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements