What changed in this filing

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Item 1. Financial Statements

2021-11-02 compared with 2021-08-03 · 214 added, 182 removed, 708 unchanged (36% of the section changed)

3 unchanged sentences

(In thousands, except per share amounts)

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

6 unchanged sentences

Interest expense, net ( 65,461 ) ( 64,376 ) ( 193,834 ) ( 157,749 )

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

Loss on extinguishment of debt ( 13,070 ) ( 10,333 ) ( 13,070 ) ( 10,333 )

Equity method loss ( 114 ) ( 460 ) ( 395 ) ( 1,645 )

Other, net ( 5,993 ) ( 18,431 ) 2,439 ( 72,015 )

1 unchanged sentence

Loss from continuing operations before income taxes ( 241,326 ) ( 326,649 ) ( 744,471 ) ( 1,010,272 )

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

Benefit for income taxes ( 6,613 ) ( 19,874 ) ( 4,513 ) ( 51,757 )

Loss from continuing operations ( 234,713 ) ( 306,775 ) ( 739,958 ) ( 958,515 )

Loss from discontinued operations, net of tax ( 81 ) ( 672 ) ( 344 ) ( 2,798 )

Income (loss) from discontinued operations, net of tax 186 ( 533 ) ( 158 ) ( 3,331 )

Net loss ( 234,527 ) ( 307,308 ) ( 740,116 ) ( 961,846 )

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

Net income attributable to noncontrolling interests 714 125 1,657 837

Net loss attributable to Sabre Corporation ( 235,241 ) ( 307,433 ) ( 741,773 ) ( 962,683 )

16 unchanged sentences

(In thousands)

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

3 unchanged sentences

Retirement-related benefit plans:

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

Net actuarial gain (loss), net of taxes of $ 6,153 , $ 3,524 , $ — , $ 2,318

3,701 ( 12,101 ) 25,048 ( 7,960 )

6 unchanged sentences

Net change in retirement-related benefit plans, net of tax 9,516 ( 92 ) 37,044 6,699

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

Unrealized gains (losses), net of taxes of $ 2,715 , $( 544 ), $ 2,745 , $ 5,641

2,698 2,224 2,595 ( 20,582 )

2 unchanged sentences

Net change in derivatives, net of tax 5,935 6,724 12,148 ( 7,688 )

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 )

Share of other comprehensive (loss) income of equity method investments ( 250 ) 258 ( 474 ) ( 540 )

Other comprehensive income 13,566 11,329 43,352 3,203

Comprehensive loss ( 220,961 ) ( 295,979 ) ( 696,764 ) ( 958,643 )

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

Comprehensive income attributable to noncontrolling interests ( 714 ) ( 125 ) ( 1,657 ) ( 837 )

Comprehensive loss attributable to Sabre Corporation $ ( 221,675 ) $ ( 296,104 ) $ ( 698,421 ) $ ( 959,480 )

3 unchanged sentences

(In thousands)

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Current assets

Cash and cash equivalents $ 1,023,769 $ 1,499,665

Restricted cash 21,039 —

Accounts receivable, net of allowance for credit losses of $ 77,751 and $ 96,150

27 unchanged sentences

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

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

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

Common Stock:

1 unchanged sentence

1,000,000 authorized shares;

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

345,752 and 338,662 shares issued, 322,842 and 317,297 shares outstanding at September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital 3,080,949 2,985,077

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

Treasury Stock, at cost, 22,910 and 21,365 shares at September 30, 2021 and December 31, 2020, respectively

( 497,944 ) ( 474,790 )

8 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating Activities

6 unchanged sentences

Deferred income taxes ( 13,489 ) ( 65,551 )

Loss on extinguishment of debt 13,070 10,333

Amortization of debt discount and issuance costs 8,815 6,736

1 unchanged sentence

Provision for expected credit losses ( 3,728 ) 58,375

Other 3,141 7,392

Debt modification costs 2,435 —

Dividends received from equity method investments 698 1,691

Loss from discontinued operations 158 3,331

Other 238 2,408

Acquisition termination fee — 24,811

13 unchanged sentences

Other investing activities — ( 4,375 )

Cash provided by (used in) investing activities 7,634 ( 43,746 )

Cash used in investing activities ( 5,535 ) ( 52,634 )

Financing Activities

Net payment on the settlement of equity-based awards ( 22,016 ) ( 5,241 )

Proceeds of borrowings from lenders 1,070,380 2,345,000

Payments on borrowings from lenders ( 1,053,728 ) ( 894,613 )

Net payment on the settlement of equity-based awards ( 22,378 ) ( 5,298 )

Dividends paid on preferred stock ( 16,283 ) —

Debt prepayment fees and issuance costs ( 12,194 ) ( 54,158 )

Proceeds of borrowings from lenders — 1,495,000

Payment for settlement of exchangeable notes ( 2,541 ) —

Other financing activities ( 269 ) ( 4,513 )

Proceeds from issuance of preferred stock, net — 322,885

Proceeds from issuance of common stock, net — 275,003

Payments on Tax Receivable Agreement — ( 71,958 )

Cash dividends paid to common shareholders — ( 38,544 )

Other financing activities 842 ( 3,686 )

Cash (used in) provided by financing activities ( 37,013 ) 1,873,804

3 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 1,781 ) 1,814

(Decrease) increase in cash and cash equivalents ( 377,551 ) 870,112

Cash and cash equivalents at beginning of period 1,499,665 436,176

Cash and cash equivalents at end of period $ 1,122,114 $ 1,306,288

(Decrease) increase in cash, cash equivalents and restricted cash ( 454,857 ) 1,232,176

Cash, cash equivalents and restricted cash at beginning of period 1,499,665 436,176

Cash, cash equivalents and restricted cash at end of period $ 1,044,808 $ 1,668,352

See Notes to Consolidated Financial Statements.

25 unchanged sentences

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 )

Comprehensive loss — — — — — — — ( 235,241 ) 13,566 714 ( 220,961 )

Preferred stock dividends (1)

— — — — — — — ( 5,400 ) — — ( 5,400 )

Settlement of stock-based awards — — 542,451 6 355 65,518 ( 723 ) — — — ( 362 )

Stock-based compensation expense — — — — 32,218 — — — — — 32,218

Settlement of exchangeable notes — — — — ( 780 ) — — — — — ( 780 )

Balance at September 30, 2021 3,340,000 $ 33 345,752,291 $ 3,458 $ 3,080,949 22,910,314 $ ( 497,944 ) $ ( 2,857,653 ) $ ( 92,605 ) $ 8,685 $ ( 355,077 )

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

19 unchanged sentences

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

Comprehensive loss — — — — — — — ( 307,433 ) 11,329 125 ( 295,979 )

Accrued preferred stock dividend (2)

— — — — — — — ( 2,231 ) — — ( 2,231 )

Issuance of preferred stock, net 3,340,000 33 — — 322,852 — — — — — 322,885

Issuance of common stock, net — — 41,071,429 411 274,592 — — — — — 275,003

Settlement of stock-based awards — — 297,150 3 — 7,278 ( 60 ) — — — ( 57 )

Stock-based compensation expense — — — — 18,566 — — — — — 18,566

Balance at September 30, 2020 3,340,000 $ 33 338,499,281 $ 3,385 $ 2,960,111 21,265,859 $ ( 474,165 ) $ ( 1,774,531 ) $ ( 146,103 ) $ 9,425 $ 578,155

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

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

See Notes to Consolidated Financial Statements.

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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.

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 second quarter of 2021.

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

With the continued increase in volumes, our incentive consideration costs have also increased 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 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.

Our air booking cancellation reserve totaled $ 15 million and $ 18 million as of September 30, 2021 and December 31, 2020, respectively.

Additionally, our allowance for credit losses at September 30, 2021 was $ 78 million, a decrease of $ 19 million from December 31, 2020.

The provision for credit losses for the nine months ended September 30, 2021 decreased $ 62 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, 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.

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 and six months ended June 30, 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 not record any goodwill impairment charges for the three and nine months ended September 30, 2021.

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 $ 1.1 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;

We believe our cash position and the liquidity measures we have taken will provide additional flexibility as we manage through the global economic recovery from the COVID-19 pandemic.

As a result, 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 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

consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 25, 2021 .

Operating results for the three and nine months ended September 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 consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 25, 2021 .

We consolidate all majority-owned subsidiaries and companies over which we exercise control through majority voting rights.

10 unchanged sentences

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.

Accounting Policies —Restricted cash primarily includes $ 21 million of cash collateral for standby letters of credit associated with guarantees related to our bilateral letter of credit facility issued in conjunction with the 2021 Refinancing (as defined below).

Debt for additional information.

Adoption of New Accounting Standards

3 unchanged sentences

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 six months ended June 30, 2021 as a result of the adoption of these standards.

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

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

5 unchanged sentences

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 impact of the adoption of the guidance on our consolidated statements of operations was a decrease in interest, net of $ 3 million and $ 6 million for the three and nine months ended September 30, 2020, respectively, an immaterial decrease in benefit for income taxes for the three months ended September 30, 2020 and a decrease of $ 2 million in benefit for income taxes for the nine months ended September 30, 2020.

This decreased our net loss attributable to common stockholders by $ 3 million and $ 4 million for the three and nine months ended September 30, 2020, respectively.

There was a $ 0.01 increase in earnings per share for the three and nine months ended September 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):

7 unchanged sentences

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.

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

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

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

Revenue from Contracts with Customers

2 unchanged sentences

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 June 30, 2021 and December 31, 2020 (in thousands):

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

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

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

Contract assets and customer advances and discounts (1)

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________________________________

(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.

(1) Includes contract assets of $ 11 million and $ 8 million for September 30, 2021 and December 31, 2020, respectively.

During the nine months ended September 30, 2021, we recognized revenue of approximately $ 34 million from contract liabilities that existed as of January 1, 2021.

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

We evaluate collectability of our accounts receivable based on a combination of factors and record reserves as described further in Note 5.

1 unchanged sentence

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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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.

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 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.

Actual cancellations during the third quarter of 2020 were fewer than expected as of the end of the second quarter of 2020 and new bookings remained down significantly during the third quarter of 2020.

This combination of actual cancellation activity and fewer bookings resulted in a reduction in the cancellation reserve to $ 33 million as of September 30, 2020.

Approximately $ 18 million of revenue was recognized in the third quarter of 2020 resulting from less cancellation activity on bookings scheduled to depart during the third quarter of 2020 than estimated as of June 30, 2020.

Our air booking cancellation reserve totaled $ 15 million and $ 18 million as of September 30, 2021 and December 31, 2020, respectively.

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, we cannot provide assurance that the assumptions used in these estimates will be accurate and the impacts could be material on our cancellation reserves and results of operations.

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 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.

For the nine months ended September 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

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We do not expect additional restructuring charges associated with these activities to be significant.

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 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.

Since the first quarter of 2020, we have incurred $ 80 million in connection with these restructuring activities.

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

During the three months ended September 30, 2020, we incurred $ 1 million in connection with these restructuring activities, which is recorded within technology costs.

During the nine months ended September 30, 2020, we incurred $ 74 million in connection with these restructuring activities, of which $ 22 million is recorded within cost of revenue, excluding technology costs, $ 32 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):

Six Months Ended

June 30, 2021

Nine Months Ended

September 30, 2021

Balance as of December 31, 2020 $ 23,253

1 unchanged sentence

Non-cash adjustments ( 4,881 )

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.

Balance as of September 30, 2021 $ 6,168

For the nine months ended September 30, 2021, we recognized $ 5 million of income tax benefit, representing an effective tax rate of less than 1 %, compared to an income tax benefit of $ 52 million, representing an effective tax rate of 5 % for the nine months ended September 30, 2020.

The decrease in the effective tax rate for the nine months ended September 30, 2021 as compared to the same period in 2020 was primarily due to a higher percent of valuation allowance generated in the nine 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 nine month periods.

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

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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.

On the basis of this evaluation, as of September 30, 2021, a cumulative valuation allowance of $ 395 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 $ 83 million and $ 73 million as of June 30, 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 September 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, 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 six months ended June 30, 2021 for our portfolio segment is summarized as follows (in thousands):

Six Months Ended

June 30, 2021

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

Nine Months Ended

September 30, 2021

Balance at December 31, 2020 $ 97,568

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Other ( 2,168 )

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.

Balance at September 30, 2021 $ 78,474

Our provision for expected credit losses was immaterial for the three months ended September 30, 2021, and a $ 4 million reduction for the nine months ended September 30, 2021.

Our provision for expected credit losses for the nine months ended September 30, 2021 decreased $ 62 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 nine months ended September 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 nine months ended September 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.

1 unchanged sentence

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

As of September 30, 2021 and December 31, 2020, our outstanding debt included in our consolidated balance sheets totaled $ 4,758 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 September 30, 2021 and December 31, 2020 (in thousands):

Rate Maturity September 30, 2021 December 31, 2020

Senior secured credit facilities:

1 unchanged sentence

February 2024 $ 1,810,508 $ 1,824,616

Other Term Loan B L + 4.00 %

Other Term Loan B (1)

December 2027 — 637,000

Term Loan B-1 (1)

December 2027 402,990 —

Term Loan B-2 (1)

December 2027 642,390 —

Revolver, $ 400 million (1)

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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 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.

(1) The balances under the Other Term Loan B facility and the Revolver were refinanced pursuant to the 2021 Refinancing (as defined below), with the proceeds of the Term Loan B-1 and Term Loan B-2.

On July 12, 2021, pursuant to the 2021 Refinancing (as defined below), we drew $ 25 million under the Revolver, entered into agreements to refinance the $ 400 million outstanding balance and terminated the revolving commitments thereunder.

See the discussion of the 2021 Refinancing below.

We had outstanding letters of credit totaling $ 10 million as of September 30, 2021, which were secured by a $ 20 million cash collateral deposit account.

We had $ 375 million outstanding under the Revolver on December 31, 2020, and had outstanding letters of credit totaling $ 10 million as of December 31, 2020, which reduced our overall credit capacity under the Revolver.

Senior Secured Credit Facilities

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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.

The applicable interest rate margins for the Other Term B Loans are 4.00 % per annum for Eurocurrency rate loans and 3.00 % per annum for base rate loans, with a floor of 0.75 % for the Eurocurrency rate, and 1.75 % for the base rate, respectively.

rate, respectively.

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.

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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.

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.

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 (the "2021 Refinancing").

We incurred no additional indebtedness as a result of the 2021 Refinancing, other than amounts covering certain interest, fees and expenses.

Among other things, the 2021 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 2021 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 and the outstanding $ 400 million Revolver balance, and to terminate the revolving commitments thereunder.

The remaining proceeds, net of a $ 3 million discount, were used to pay a $ 6 million redemption premium and $ 6 million in other fees associated with the refinancing.

We recognized a loss on extinguishment of debt in connection with these transactions during the three months ended September 30, 2021 of $ 13 million and debt modification costs for financing fees of $ 2 million recorded to Other, net.

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 bilateral letter of credit facility, which is secured by a cash collateral deposit account and included as Restricted cash on our consolidated balance sheets as of September 30, 2021.

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 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.

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” (as defined in the Amended and Restated Credit Agreement) has occurred.

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.

As of September 30, 2021, we are in compliance with all covenants under the terms of the Amended and Restated Credit Agreement.

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.

On April 17, 2020, Sabre GLBL entered into a new debt agreement consisting of $ 345 million aggregate principal amount of 4.000 % 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 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.

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

As of September 30, 2021, the if-converted value of the Exchangeable Notes exceeds the outstanding principal amount by $ 168 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.

The exchange rate is subject to anti-dilution and other adjustments.

The exchange rate is subject to anti-dilution and other

Upon conversion, Sabre GLBL will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of common stock, at our election.

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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.

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

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

During the three months ended September 30, 2021 , certain holders elected to exchange $ 2 million of the Exchangeable Notes for $ 3 million in cash, which we elected to settle in cash.

As of September 30, 2021, we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

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

September 30, 2021 December 31, 2020

Principal $ 333,220 $ 345,000

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Net Carrying Value $ 324,751 $ 334,557

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,

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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These agreements involve the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreements without an exchange of the underlying principal amount.

For derivative instruments that are designated and qualify as cash flow hedges, the effective portions and ineffective portions of the gain or loss on the derivative instruments, and the hedge components excluded from the assessment of effectiveness, are reported as a component of other comprehensive income (“OCI”) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings.

affects earnings.

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.

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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:

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

For the nine months ended September 30, 2021, we had no unsettled forward contracts.

Interest Rate Swap Contracts — Interest rate swaps outstanding during the nine months ended September 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 June 30, 2021 and December 31, 2020 are as follows (in thousands):

The estimated fair values of our derivatives designated as hedging instruments as of September 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 June 30, 2021 December 31, 2020

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

Interest rate swaps Other accrued liabilities $ ( 4,148 ) $ ( 16,038 )

Total $ ( 4,148 ) $ ( 16,038 )

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):

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

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

Effective Portion

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

Three Months Ended September 30, Nine Months Ended September 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 June 30, Six Months Ended June 30,

Derivatives in Cash Flow Hedging Relationships Income Statement Location Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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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 June 30, 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 September 30, 2021 and December 31, 2020 (in thousands):

Fair Value at Reporting Date Using

June 30, 2021 Level 1 Level 2 Level 3

September 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 and six months ended June 30, 2021.

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

Other Financial Instruments

The carrying value of our financial instruments including cash and cash equivalents, and accounts receivable, approximates their fair values due to the short term nature of these instruments.

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 June 30, 2021 and December 31, 2020 (in thousands):

The carrying value of our financial instruments including cash and cash equivalents, restricted cash and accounts receivable, approximates their fair values due to the short term nature of these instruments.

The fair values of our Exchangeable Notes, 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 September 30, 2021 and December 31, 2020 (in thousands):

Fair Value at Carrying Value at (1)

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

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

Term Loan B $ 1,791,272 $ 1,785,843 $ 1,807,737 $ 1,821,016

Other Term Loan B — 639,389 — 630,663

Term Loan B-1 401,227 — 402,010 —

Term Loan B-2 639,981 — 636,823 —

Revolver, $ 400 million

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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 and six months ended June 30, 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 nine months ended September 30, 2021.

Accumulated Other Comprehensive Loss

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

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

September 30, 2021 December 31, 2020

Defined benefit pension and other post-retirement benefit plans $ ( 98,553 ) $ ( 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.

During the second and third quarters of 2021, a settlement accounting event was triggered within our defined benefit pension plan which resulted in a charge of $ 4 million and $ 2 million, respectively, 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 $ 25 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.

We are examining the short-term impact of these measures on our 2021 pension plan contributions, including the reduction, or potential elimination of, minimum funding requirements, as well as the possible long-term effects of fully funding the plan over a longer period of time if we were to take advantage of the extended amortization relief.

On March 11, 2021, the American Rescue Plan Act ("ARPA") 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.

As of September 30, 2021, we have elected to use excess contributions resulting from a reduction to past contribution requirements allowed by ARPA to offset remaining required contributions for calendar year 2021 and most of 2022.

As of September 30, 2021, we have contributed $ 3 million to our defined benefit pension plan in 2021 and do no t expect to make any additional contributions for the year.

Derivatives, for information on the income statement line items affected as the result of reclassification adjustments associated with derivatives.

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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 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.

We recorded $ 5 million and $ 16 million of accrued preferred stock dividends in our consolidated results of operations for the three and nine months ended September 30, 2021, respectively.

During the three and nine months ended September 30, 2021, we paid cash dividends on our preferred stock of $ 5 million and $ 16 million, respectively.

On October 19, 2021, the Board of Directors declared a dividend of $ 1.625 per share on Preferred Stock payable on December 1, 2021 to holders of record of the Preferred Stock on November 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 .

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.

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

During the nine months ended September 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 June 30, 2021.

Approximately $ 287 million remains authorized for repurchases under the Share Repurchase Program as of September 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.

On April 17, 2020, we issued $ 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.

During the three months ended June 30, 2021, a certain holder elected to exchange $ 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.

As of September 30, 2021, we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

Debt for further details.

At-the-Market (ATM) Program

On August 19, 2021, we established an at-the-market equity distribution program (the “ATM Program”) by entering into a sales agreement (the “Sales Agreement”) with BofA Securities, Inc., Citigroup Global Markets Inc., and Mizuho Securities USA LLC, each acting as a sales agent for Sabre (each, a “Sales Agent” and, collectively, the “Sales Agents”), pursuant to which we may issue and sell, from time to time, shares of our common stock, par value $ 0.01 per share, in “at-the-market” offerings having an aggregate gross sales price of up to $ 300 million .

We are not obligated to sell any shares under the Sales Agreement, and may at any time suspend offers under the Sales Agreement or terminate the Sales Agreement.

Sales of the shares, if any, may be made by means that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, including block trades and sales made in ordinary brokers’ transactions on the Nasdaq Global Select Market or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices.

Under the terms of the Sales Agreement, we may also sell shares to any Sales Agent as principal for our own account.

If we sell shares to any Sales Agent as principal, we will enter into a separate terms agreement setting forth the terms of such transaction with the applicable Sales Agent.

As of September 30, 2021 , we have no t sold any shares pursuant to the ATM Program.

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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

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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 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.

The diluted weighted-average common shares outstanding calculation excludes 4 million and 2 million of dilutive stock options and restricted stock awards for the nine months ended September 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 3 million of dilutive stock options and restricted stock awards for the three months ended September 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 September 30, 2020 are less than one million.

The calculation of diluted weighted-average shares excludes the impact of 2 million and 1 million of anti-dilutive common stock equivalents for each of the three and nine months ended September 30, 2021, respectively, and 6 million and 3 million of anti-dilutive common stock equivalents for each of the three and nine months ended September 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 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.

The approximately 42 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 nine months ended September 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 nine months ended September 30, 2020, respectively 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 and six months ended June 30, 2021 as their effect would be anti-dilutive given the net loss incurred in the period.

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 nine months ended September 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.

Operating lease assets are included in operating lease right-of-use (“ROU”) assets within other noncurrent assets and operating lease liabilities are included in other current liabilities and other noncurrent liabilities in our consolidated balance sheets.

Operating lease assets are included in operating lease right-of-use (“ROU”) assets within other assets, net and operating lease liabilities are included in other accrued liabilities and other noncurrent liabilities in our consolidated balance sheets.

Our finance leases are not material to our consolidated financial statements and have been omitted from the information below.

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

Six Months Ended June 30,

Nine Months Ended September 30,

Supplemental Cash Flow Information

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

June 30, 2021 December 31, 2020

September 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 June 30, 2021 are as follows (in thousands):

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

Year Ending December 31, Operating Leases

2021 $ 14,802

Thereafter 60,719

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In April 2011, US Airways filed suit against us in federal court in the Southern District of New York, alleging violations of the Sherman Act Section 1 (anticompetitive agreements) and Section 2 (monopolization).

The complaint was filed fewer than two months after we entered into a new distribution agreement with US Airways.

The complaint was filed fewer than two

months after we entered into a new distribution agreement with US Airways.

In September 2011, the court dismissed all claims relating to Section 2.

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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 June 30, 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 September 30, 2021.

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

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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.

In October 2021, the court heard arguments to determine whether to grant a temporary injunction preventing the alleged breach of contract, and on October 27, 2021, the court issued a ruling denying the temporary injunction.

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

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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.

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

Department of Justice Investigation

On May 19, 2011, we received a civil investigative demand ("CID") from the DOJ investigating alleged anticompetitive acts related to the airline distribution component of our business.

We are fully cooperating with the DOJ investigation and are unable to make any prediction regarding its outcome.

We are fully cooperating with the DOJ investigation and are unable

to make any prediction regarding its outcome.

The DOJ is also investigating other companies that own GDSs and has sent CIDs to other companies in the travel industry.

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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 June 30, 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 September 30, 2021.

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

22 unchanged sentences

The unauthorized party was also able, in some cases, to access certain information such as guest name(s), email, phone number, address, and other information if provided to the HS Central Reservation System.

Information such as Social Security, passport, or driver’s license number was not accessed.

Information such as Social Security, passport, or driver’s license number was

not accessed.

The investigation did not uncover forensic evidence that the unauthorized party removed any information from the system, but it is a possibility.

19 unchanged sentences

Our most significant VAT receivable is in Greece.

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

As of September 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.

2 unchanged sentences

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 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 of September 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.

12 unchanged sentences

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.

increased visibility to our technology costs for analytical and decision-making purposes and to align costs with the current leadership and operational organizational structure.

Our CODM does not review total assets by segment as operating evaluations and resource allocation decisions are not made on the basis of total assets by segment.

4 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 and six months ended June 30, 2021 and 2020 is as follows (in thousands):

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

22 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Operating loss $ ( 156,688 ) $ ( 233,049 ) $ ( 539,611 ) $ ( 768,530 )

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

Equity method loss ( 114 ) ( 460 ) ( 395 ) ( 1,645 )

Acquisition-related amortization (1)

11 unchanged sentences

Restructuring Activities for further details.

(3) Acquisition-related costs represent fees and expenses incurred associated with the now-terminated agreement to acquire Farelogix.

(3) Acquisition-related costs represent fees and expenses incurred associated with the now-terminated agreement to acquire Farelogix and other acquisition and disposition related activities.

(4) Litigation costs, net represent charges associated with antitrust and other foreign non-income tax contingency matters.

1 unchanged sentence

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.

On October 28, 2021, we announced that we have entered into an agreement with a third party to sell our suite of flight and crew management and optimization solutions, which represents our AirCentre airline operations portfolio within Travel Solution’s IT Solutions.

At closing, we will sell the AirCentre product portfolio, related technology and intellectual property for $ 392.5 million.

The sale is subject to customary closing conditions and regulatory approvals and is expected to close in the first quarter of 2022.

We cannot provide assurance that the sale will occur on these terms or at all.

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