What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-18 compared with 2021-02-25 · 375 added, 390 removed, 1442 unchanged (35% of the section changed)

2 unchanged sentences

Consolidated Financial Statements:

Reports of Independent Registered Public Accounting Firm

Reports of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Statements of Operations for the Years Ended December 31, 202 1 , 20 20 and 201 9

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We have also evaluated the adequacy of the Company’s income tax disclosures included in Note 7 in relation to these tax matters.

Estimates Impacted by Coronavirus (COVID-19)

Description of the Matter As discussed in Note 1 of the financial statements, the Company utilizes estimates in evaluating the recoverability of the carrying value of long-lived assets and goodwill, capitalized implementation costs, subscriber payments, accounts receivable and reserves for estimated air booking cancellations.

The COVID-19 pandemic has had a significant and adverse impact on the Company as well as its customers.

As the extent and duration of the impact is unknown, there is a high degree of uncertainty around transaction volumes in the global travel industry, which results in significant judgment in determining the underlying forecasted cash flows and other key assumptions utilized in these estimates to evaluate the recoverability of these assets and the amount of the cancellation reserve.

Auditing management’s judgments in estimating forecasted cash flows was complex and involved a high degree of judgment because of the high degree of uncertainty around future transaction volumes in the global travel industry, including forecasted airline booking cancellations.

Additionally, the assumptions are affected by future market and economic conditions, airline insolvency, suspension of travel services or actions taken by local governments that may reduce travel and hospitality activities.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls related to estimating the recoverability of the carrying value of long-lived assets and goodwill, capitalized implementation costs, subscriber payments and accounts receivable, as well as controls related to estimating future airline booking cancellations impacting the determination of the air booking cancellation reserve, including management’s review of the significant judgments in the cash flow forecasts.

We also tested controls over management’s review of the data used in their cash flow forecasts.

Our audit procedures included, among others, assessing methodologies and testing the significant assumptions in the cash flow forecasts and the underlying data used by the Company in its analyses, including the estimated period in which travel will return to pre pandemic volumes.

For example, we performed procedures to test significant assumptions related to future air booking cancellation activity and performed sensitivity analyses to evaluate how those assumptions affect the air booking cancellation reserve.

We also compared projected cash flows to the Company’s historical cash flows and other available industry and general economic information and performed sensitivity analyses of the significant assumptions in evaluating the recoverability of the related assets.

/s/ Ernst & Young LLP

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In our opinion, Sabre Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial statement schedule listed in the Index at Item 15, and our report dated February 25, 2021 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule listed in the Index at Item 15, and our report dated February 18, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

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(Loss) income from continuing operations before income taxes ( 938,387 ) ( 1,304,939 ) 199,638

Provision for income taxes ( 39,913 ) 35,326 57,492

(Benefit) Provision for income taxes ( 14,612 ) ( 21,012 ) 35,326

(Loss) income from continuing operations ( 923,775 ) ( 1,283,927 ) 164,312

Income (loss) from discontinued operations, net of tax 2,788 ( 1,766 ) 1,739

(Loss) Income from discontinued operations, net of tax ( 2,532 ) 2,788 ( 1,766 )

Net (loss) income ( 926,307 ) ( 1,281,139 ) 162,546

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(Loss) income from continuing operations $ ( 2.95 ) $ ( 4.46 ) $ 0.58

Income (loss) from discontinued operations 0.01 ( 0.01 ) 0.01

(Loss) income from discontinued operations ( 0.01 ) 0.01 ( 0.01 )

Net (loss) income per common share $ ( 2.96 ) $ ( 4.45 ) $ 0.57

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(Loss) income from continuing operations $ ( 2.95 ) $ ( 4.46 ) $ 0.58

Income (loss) from discontinued operations 0.01 ( 0.01 ) 0.01

(Loss) income from discontinued operations ( 0.01 ) 0.01 ( 0.01 )

Net (loss) income per common share $ ( 2.96 ) $ ( 4.45 ) $ 0.57

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Retirement-related benefit plans:

Net actuarial loss, net of taxes of $ 3,447 , $ 2,379 and $ 6,223

Net actuarial gain (loss), net of taxes of $( 517 ), $ 3,447 and $ 2,379

36,742 ( 11,778 ) ( 8,269 )

Pension settlement, net of taxes of $ — , $( 4,066 ), $ —

7,529 14,005 —

Amortization of prior service credits, net of taxes of $ — , $ 321 and $ 321

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Net change in retirement-related benefit plans, net of tax 50,824 7,793 ( 3,959 )

Unrealized (losses) gains, net of taxes of $ 5,571 , $ 4,497 and $ 1,474

Unrealized gains (losses), net of taxes of $ 26 , $ 5,571 and $ 4,497

( 134 ) ( 20,521 ) ( 15,217 )

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Net change in derivatives, net of tax 12,671 ( 2,631 ) ( 9,710 )

Share of other comprehensive income (loss) of equity method investments 489 ( 967 ) ( 635 )

Share of other comprehensive (loss) income of equity method investments ( 602 ) 489 ( 967 )

Other comprehensive income (loss) 55,670 13,349 ( 16,582 )

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Cash and cash equivalents $ 978,352 $ 1,499,665

Restricted cash 21,039 —

Accounts receivable, net 259,934 255,468

Prepaid expenses and other current assets 121,591 132,972

Current assets held for sale 21,358 —

Total current assets 1,402,274 1,888,105

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Other assets, net 475,424 629,768

Long-term assets held for sale 203,204 —

Total assets $ 5,291,330 $ 6,077,722

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Current portion of debt 29,290 26,068

Tax Receivable Agreement — 71,911

Current liabilities held for sale 21,092 —

Total current liabilities 716,505 621,943

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Long-term debt 4,723,685 4,717,808

Long-term liabilities held for sale 15,476 —

Commitments and contingencies (Note 17)

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Preferred stock;

$ 0.01 par value, 225,000 authorized, 3,340 and no shares issued and outstanding as of December 31, 2020 and 2019, respectively;

$ 0.01 par value, 225,000 authorized, 3,290 and 3,340 shares issued and outstanding as of December 31, 2021 and 2020, respectively;

aggregate liquidation value of $ 329,000 and $ 334,000 as of December 31, 2021 and 2020, respectively

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Noncontrolling interest 9,190 7,028

Total stockholders’ equity 362,632 947,669

Total liabilities and stockholders’ equity $ 6,077,722 $ 5,689,957

Total stockholders’ (deficit) equity ( 499,717 ) 285,154

Total liabilities and stockholders’ (deficit) equity $ 5,291,330 $ 6,077,722

See Notes to Consolidated Financial Statements.

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Net (loss) income $ ( 926,307 ) $ ( 1,281,139 ) $ 162,546

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

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

Depreciation and amortization 262,185 363,743 414,621

Amortization of upfront incentive consideration 74,677 82,935 77,622

Stock-based compensation expense 120,892 69,946 66,885

Provision for expected credit losses 65,710 20,563 7,749

Amortization of upfront incentive consideration 57,570 74,677 82,935

Deferred income taxes ( 27,515 ) ( 27,333 ) ( 22,925 )

Acquisition termination fee 24,811 — —

Gain on sale of investment ( 14,532 ) — —

Loss on extinguishment of debt 13,070 21,626 —

Amortization of debt discount and issuance costs 11,984 9,633 3,972

Provision for expected credit losses ( 7,788 ) 65,710 20,563

Pension settlement charge 7,529 18,071 —

Facilities-related charges 5,816 — —

Loss (income) from discontinued operations 2,532 ( 2,788 ) 1,766

Debt modification costs 2,435 — —

Acquisition termination fee — 24,811 —

Impairment and related charges — 8,684 —

(Income) loss from discontinued operations ( 2,788 ) 1,766 ( 1,739 )

Facilities-related charges — 5,816 —

Other 4,701 7,981 2,085

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Investing Activities

Proceeds from sale of property 68,504 — —

Additions to property and equipment ( 54,302 ) ( 65,420 ) ( 115,166 )

Proceeds from disposition of investments and assets 24,874 68,504 —

Acquisitions, net of cash acquired — — ( 107,462 )

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Payments on borrowings from lenders ( 1,061,050 ) ( 1,533,597 ) ( 106,560 )

Net payment on the settlement of equity-based awards ( 22,682 ) ( 5,996 ) ( 5,736 )

Dividends paid on preferred stock ( 21,629 ) ( 5,850 ) —

Debt prepayment fees and issuance costs ( 12,194 ) ( 77,878 ) —

Payment for settlement of exchangeable notes ( 2,540 ) — —

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

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

Debt prepayment fees and issuance costs ( 77,878 ) — ( 1,567 )

Payments on Tax Receivable Agreement — ( 71,958 ) ( 101,482 )

Cash dividends paid to common stockholders ( 38,544 ) ( 153,508 ) ( 154,080 )

Net (payments) receipts on the settlement of equity-based awards ( 5,996 ) ( 5,736 ) 2,040

Dividends paid on preferred stock ( 5,850 ) — —

Cash dividends paid to common shareholders — ( 38,544 ) ( 153,508 )

Repurchase of common stock — — ( 77,636 )

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Cash used in discontinued operations ( 3,498 ) ( 2,932 ) ( 2,383 )

Effect of exchange rate changes on cash and cash equivalents 216 781 6,747

Increase (decrease) in cash and cash equivalents 1,063,489 ( 73,089 ) 147,884

Cash and cash equivalents at beginning of period 436,176 509,265 361,381

Cash and cash equivalents at end of period $ 1,499,665 $ 436,176 $ 509,265

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 2,136 ) 216 781

(Decrease) increase in cash, cash equivalents and restricted cash ( 500,274 ) 1,063,489 ( 73,089 )

Cash, cash equivalents and restricted cash at beginning of period 1,499,665 436,176 509,265

Cash, cash equivalents and restricted cash at end of period $ 999,391 $ 1,499,665 $ 436,176

Cash payments for income taxes $ 14,659 $ 24,505 $ 55,137

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Stock-based compensation expense — — — — 66,885 — — — — — 66,885

Adoption of New Accounting Standard — — — — — — — 101,429 — — 101,429

Dividends paid to non-controlling interest on subsidiary common stock — — — — — — — — — ( 2,571 ) ( 2,571 )

Balance at December 31, 2019 — — 294,319,417 2,943 2,317,544 20,586,852 ( 468,618 ) ( 763,482 ) ( 149,306 ) 8,588 947,669

Comprehensive income — — — — — — — 158,592 ( 16,582 ) 3,954 145,964

Common stock dividends — — — — — — — ( 153,508 ) — — ( 153,508 )

Repurchase of common stock — — — — — 3,673,768 ( 77,636 ) — — — ( 77,636 )

Settlement of stock-based awards — — 2,655,463 26 7,240 601,546 ( 13,002 ) — — — ( 5,736 )

Stock-based compensation expense — — — — 66,885 — — — — — 66,885

Dividends paid to non-controlling interest on subsidiary common stock — — — — — — — — — ( 2,571 ) ( 2,571 )

Balance at December 31, 2019 — — 294,319,417 2,943 2,317,544 20,586,852 ( 468,618 ) ( 763,482 ) ( 149,306 ) 8,588 947,669

Comprehensive loss — — — — — — — ( 1,282,339 ) 13,349 1,200 ( 1,267,790 )

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— — — — — — — ( 7,659 ) — — ( 7,659 )

Equity component of the exchangeable notes, net — — — — 67,876 — — — — — 67,876

Settlement of stock-based awards — — 3,271,114 33 143 778,375 ( 6,172 ) — — — ( 5,996 )

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Balance at December 31, 2020 3,340,000 33 338,661,960 3,387 2,985,077 21,365,227 ( 474,790 ) ( 2,099,624 ) ( 135,957 ) 7,028 285,154

Comprehensive loss — — — — — — — ( 928,469 ) 55,670 2,162 ( 870,637 )

Preferred stock dividends (1)

— — — — — — — ( 21,602 ) — — ( 21,602 )

Conversion from preferred stock to common stock ( 50,000 ) — 595,240 6 — — — — — — 6

Settlement of stock-based awards — — 5,903,724 59 717 1,564,441 ( 23,351 ) — — — ( 22,575 )

Stock-based compensation expense — — — — 120,892 — — — — — 120,892

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

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

Balance at December 31, 2021 3,290,000 $ 33 346,430,421 $ 3,464 $ 3,115,719 22,929,668 $ ( 498,141 ) $ ( 3,049,695 ) $ ( 80,287 ) $ 9,190 $ ( 499,717 )

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

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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.

This pandemic had a material impact to our consolidated financial results for the year ended December 31, 2020, 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 resulted in a material decline in incentive consideration costs, as expected.

The reduction in revenues as the result of COVID-19 has significantly adversely affected our liquidity.

We have responded with measures to increase our cash position, including our previously disclosed suspension of common stock dividends and share repurchases under our multi-year share repurchase program (the "Share Repurchase Program"), borrowing under our existing revolving credit facility, and the completion of debt and equity offerings.

Debt and Note 13.

Stock and Stockholders’ Equity for further information.

We believe that we have resources to sufficiently fund our liquidity requirements over at least the next twelve months;

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

Despite the continued negative impacts of the COVID-19 pandemic on our business and global travel volumes, we have seen some gradual improvement in our key volume metrics during the year ended December 31, 2021 as compared to the prior year as COVID-19 vaccines have continued to be administered and some travel restrictions have been relaxed.

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

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

We believe the ongoing effects of COVID-19 on our operations and global bookings will continue to have a material negative impact on our financial results and liquidity, and this negative impact may continue well beyond the containment of the outbreak.

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.

As noted above, we substantially completed the strategic realignment of our airline and agency-focused businesses during the third quarter of 2020 to address the changing travel landscape and to respond to the impacts of the COVID-19 pandemic on our business and cost structure.

Restructuring Activities for further details on the costs incurred related to restructuring activities.

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

Cancellations of airline travel reservations prior to the day of departure are estimated based on the historical level of cancellation rates, adjusted to take into account any recent factors which could cause a change in those rates.

Revenue during 2020, particularly in the second quarter, was negatively impacted by increased cancellation activity.

Revenue from Contracts with Customers for further information regarding our cancellation reserve and the impact of cancellations on revenue during the year ended December 31, 2020.

Given the unprecedented amount of air booking cancellations during 2020, we expect variability in the amount of our cancellation reserve in future periods as estimates of cancellations may differ from historical and recent experience.

Additionally, our provision for expected credit losses for the year ended December 31, 2020 was $ 66 million, primarily related to fully reserving for aged balances related to certain customers, bankruptcy-related reserves, an increase in our forecasted credit losses due to the impact of the COVID-19 pandemic on the global economy and other general increases in bad debt from aging balances as applied under the newly adopted credit loss standard.

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

Additionally, our allowance for credit losses at December 31, 2021 was $ 60 million, a decrease of $ 38 million from December 31, 2020.

Our provision for expected credit losses for the year ended December 31, 2021 decreased $ 74 million from December 31, 2020, 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.

We updated our goodwill assessment on a qualitative basis and reviewed our other long-lived assets including intangible assets as of December 31, 2020, and did not identify any material impairments.

Goodwill and Intangible Assets for further information about our goodwill assessment.

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.

Strategic Realignment

The COVID-19 pandemic has caused major shifts in the travel ecosystem resulting in the changing needs of our airline, hotel and agency customers.

As a result in 2020, we accelerated the organizational changes we began in 2018 to address the changing travel landscape through a strategic realignment ("the Strategic Realignment") of our airline and agency-focused businesses and to respond to the impacts of the COVID-19 pandemic on our business and cost structure.

The organizational changes involve the creation of a functional-oriented structure to further enhance our long-term growth opportunities and help deliver new retailing, distribution and fulfillment solutions to the travel marketplace.

As a result of the Strategic Realignment, we now operate our business and present our results through two business segments, effective the third quarter of 2020:

(i) Travel Solutions, our global travel solutions for travel suppliers and travel buyers, including a broad portfolio of software technology

products and solutions for airlines, and (ii) Hospitality Solutions, an extensive suite of leading software solutions for hoteliers.

The historical results of the Hospitality Solutions reporting segment have not changed.

Additionally, we have reclassified expenses on our statement of operations to provide additional clarification on our costs by separating technology costs from cost of revenue and moving certain expenses previously classified as cost of revenue to selling, general and administrative to align with the current leadership and operational organizational structure.

Within our segments and results of operations, cost of revenue, excluding technology costs primarily consists of costs associated with the delivery and distribution of our products and services, including employee-related costs for our delivery, customer operations and call center teams, transactional-related costs, including travel agency incentive consideration for reservations made on our GDS for Travel Solutions and GDS transaction fees for Hospitality Solutions, and depreciation and amortization associated with capitalized implementation costs, certain intangible assets, and upfront incentive consideration.

Technology costs consist of expenses related to third-party providers and employee-related costs to operate technology operations including data processing and hosting, third-party software, other costs associated with the maintenance and minor enhancement of our technology, and depreciation and amortization associated with software developed for internal use that supports our products, assets supporting our technology platform, businesses and systems and intangible assets related to technology.

We completed a strategic realignment ("the 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.

Restructuring Activities for further details on the costs incurred related to restructuring activities.

As a result of the Strategic Realignment, we now operate our business and present our results through two business segments:

(i) Travel Solutions, our global travel solutions for travel suppliers and travel buyers, including a broad portfolio of software technology products and solutions for airlines, and (ii) Hospitality Solutions, an extensive suite of leading software solutions for hoteliers.

All revenue and expenses previously assigned to the Travel Network and Airline Solutions business segments were consolidated into a unified revenue and expense structure now reported as the Travel Solutions business segment.

There were no changes to the historical Hospitality Solutions reporting segment.

Additionally, we present expenses on our statement of operations to provide additional clarification on our costs by separating technology costs from cost of revenue and moving certain expenses previously classified as cost of revenue to selling, general and administrative to align with the current leadership and operational organizational structure.

Financial information for all periods presented reflects these classifications.

Within our segments and results of operations, cost of revenue, excluding technology costs, primarily consists of costs associated with the delivery and distribution of our products and services, including employee-related costs for our delivery, customer operations and call center teams, transactional-related costs, including travel agency incentive consideration for reservations made on our global distribution system ("GDS") for Travel Solutions and GDS transaction fees for Hospitality Solutions, amortization of upfront incentive consideration and depreciation and amortization associated with capitalized implementation costs, and certain intangible assets.

depreciation and amortization associated with software developed for internal use that supports our products, assets supporting our technology platform, businesses and systems and intangible assets related to technology.

Technology costs also include costs associated with our technology transformation efforts.

Selling, general and administrative expenses consist of professional service fees, certain settlement charges or reimbursements, costs to defend legal disputes, provision for expected credit losses, other overhead costs, personnel-related expenses, including stock-based compensation, for employees engaged in sales, sales support, account management and who administratively support the business in finance, legal, human resources, information technology and communications, and depreciation and amortization associated with property and equipment, acquired customer relationships, trademarks and brand names.

For the year ended December 31, 2019, we reclassified $ 1,179 million from cost of revenue and $ 106 million from selling, general and administrative to technology costs.

Additionally, for the year ended December 31, 2019, we reclassified $ 130 million from cost of revenue to selling, general and administrative.

For the year ended December 31, 2018, we reclassified $ 997 million from cost of revenue and $ 102 million from selling, general and administrative to technology costs.

Additionally, for the year ended December 31, 2018, we reclassified $ 140 million from cost of revenue to selling, general and administrative.

Basis of Presentation

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Actual results could differ from these estimates and assumptions.

Our accounting policies, which include significant estimates and assumptions, include, among other things, estimation of the collectability of accounts receivable, estimation of future cancellations of bookings processed through the Sabre GDS, revenue recognition for Software-as-a-Service ("SaaS") arrangements, determination of the fair value of assets and liabilities acquired in a business combination, determination of the fair value of derivatives, the evaluation of the recoverability of the carrying value of intangible assets and goodwill, assumptions utilized in the determination of pension and other postretirement benefit liabilities, the evaluation of the recoverability of capitalized implementation costs, assumptions utilized to evaluate the recoverability of deferred customer advance and discounts, estimation of loss contingencies, and evaluation of uncertainties surrounding the calculation of our tax assets and liabilities.

Our accounting policies, which utilize significant estimates and assumptions, include, among other things, estimation of the collectability of accounts receivable, estimation of future cancellations of bookings processed through the Sabre GDS, revenue recognition for Software-as-a-Service ("SaaS") arrangements, determination of the fair value of assets and liabilities acquired in a business combination, determination of the fair value of derivatives, the evaluation of the recoverability of the carrying value of intangible assets and goodwill, assumptions utilized in the determination of pension and other postretirement benefit liabilities, the evaluation of the recoverability of capitalized implementation costs, assumptions utilized to evaluate the recoverability of deferred customer advance and discounts, estimation of loss contingencies, and evaluation of uncertainties surrounding the calculation of our tax assets and liabilities.

Revenue Recognition

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Timing of revenue recognition is primarily based on the consistent provision of services in a stand-ready series SaaS environment and the amount of revenue recognized varies with the volume of transactions processed.

Revenue is recognized if it is not considered probable of reversal.

Performance Obligations

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The transaction price is allocated to each performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

Most of our contracts for GDS services and central reservation system (CRS) services for Hospitality Solutions have a single performance obligation.

Most of our contracts for GDS services and central reservation system (CRS) services for Hospitality Solutions have a single stand-ready series performance obligation.

For Travel Solutions' IT Solutions revenue, many of our contracts may have multiple performance obligations, which generally include software and product solutions through SaaS and hosted delivery, and other service fees.

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This can result in a requirement to forecast expected usage-based fees and volumes over the contract term in order to determine the rate for revenue recognition.

This variable consideration is constrained if there is an inability to reliably forecast this revenue.

This variable consideration is constrained if there is an inability to reliably forecast this revenue or if future reversal is considered probable.

Additionally, 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.

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GDS services link and engage transactions between travel agents and travel suppliers.

Revenue is generated from contracts with the travel suppliers as each booking is made or transaction occurs and represents a stand-ready performance obligation where our systems perform the same service each day for the customer, based on the customer’s level of usage.

Revenue is generated from contracts with the travel suppliers as each booking is made or transaction occurs and represents a stand-ready series performance obligation where our systems perform the same service each day for the customer, based on the customer’s level of usage.

Distribution revenue associated with car rental, hotel transactions and other travel providers is recognized at the time the reservation is used by the customer.

Distribution revenue associated with airline travel reservations is recognized at the time of booking of the reservation, net of estimated future cancellations.

Cancellations prior to the day of departure are estimated based on the historical level of cancellation rates, adjusted to take into account any recent factors which could cause a change in those rates.

Travel Solutions also generates IT solutions revenue from its product offerings including reservation systems for full-cost and low-cost carriers, commercial and operations products, agency solutions and booking data.

Cancellations prior to the day of departure are estimated based on historical and expected levels of cancellation rates, adjusted to take into account any recent factors which could cause a change in those rates.

Travel Solutions also generates IT solutions revenue from its product offerings including reservation systems for full-service and low-cost carriers, commercial and operations products, agency solutions and booking data.

Reservation system revenue is primarily generated based on the number of passengers boarded.

Normally, customers are charged a fixed, upfront solutions fee and a recurring usage-based fee for the use of the software as a stand-ready performance obligation.

Generally, customers are charged a fixed, upfront solutions fee and a recurring usage-based fee for the use of the software in a stand-ready series performance obligation.

In the context of both our reservation systems and our commercial and operations products, upfront solutions fees are recognized primarily on a straight-line basis over the relevant contract term, upon cut-over of the primary SaaS solution.

Hospitality Solutions —Hospitality Solutions provides technology solutions and other professional services, through SaaS and hosted delivery models, to hoteliers around the world.

The technology solutions are primarily provided in a SaaS or hosted environment.

Customers are normally charged an upfront solutions fee and a recurring usage-based fee for the use of the software, which represents a stand-ready performance obligation where our systems perform the same service each day for the customer, based on the customer’s level of usage.

Generally, customers are charged an upfront solutions fee and a recurring usage-based fee for the use of the software, which represents a stand-ready series performance obligation where our systems perform the same service each day for the customer, based on the customer’s level of usage.

Upfront solutions fees are recognized primarily on a straight-line basis over the relevant contract term, upon cut-over of the primary SaaS solution.

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Revenue from other services consisting of development services that represent minor configuration or professional consulting is generally recognized over the period the services are performed or upon completed delivery.

Travel Solutions also directly licenses certain software to its customers where the customer obtains control of the license.

Travel Solutions also directly licenses certain software to its customers where the customer obtains on-site control of the license.

Revenue from software license fees is recognized when the customer gains control of the software enabling them to directly use the software and obtain substantially all of the remaining benefits.

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As our market strategies evolve, we may modify pricing practices in the future which could result in changes to SSP.

Revenue recognition from our Travel Solutions business requires significant judgments such as identifying distinct performance obligations including material rights within an agreement, estimating the total contract consideration and allocating amounts to each distinct performance obligation, determining whether variable pricing within a contract meets the allocation objective, and forecasting future volumes.

For a small subset of our contracts, we are required to forecast volumes as a result of pricing variability within the contract in order to calculate the rate for revenue recognition.

Revenue recognition from our Travel Solutions business requires significant judgments such as identifying distinct performance obligations including estimating the total contract consideration and allocating amounts to each distinct performance obligation, determining whether variable pricing within a contract meets the allocation objective, assessing revenue for constraint particularly due to impacts of the COVID-19 pandemic on our customers and contracts and forecasting future volumes.

For a small number of our contracts, we are required to forecast volumes as a result of pricing variability within the contract in order to calculate the rate for revenue recognition.

Any changes in these judgments and estimates could have an impact on the revenue recognized in future periods.

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Advertising costs incurred by our continuing operations totaled $ 4 million, $ 8 million and $ 19 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Cash and Cash Equivalents and Restricted Cash

Cash and Cash Equivalents

We classify all highly liquid instruments, including money market funds and money market securities with original maturities of three months or less, as cash equivalents.

Restricted Cash

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.

Allowance for Credit Losses and Concentration of Credit Risk

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For those carriers from which we do not collect payments through the ACH or other similar clearing houses, our credit risk is higher.

We monitor our ongoing credit exposure for these carriers through active review of customer balances against contract terms and due dates with account management.

We monitor our ongoing credit exposure for these carriers through active review of customer

balances against contract terms and due dates with account management.

Our activities include established collection processes, account reconciliations, dispute resolution and payment confirmations.

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Receivables are written off against the allowance when it is probable that all remaining contractual payments will not be collected as evidenced by factors such as the extended age of the balance, the exhaustion of collection efforts, and the lack of ongoing contact or billing with the customer.

We maintained an allowance for credit losses of approximately $ 98 million and $ 58 million at December 31, 2020 and 2019, respectively.

See “—Recent Accounting Pronouncements" below for information on recently issued accounting guidance regarding the allowance for credit losses and Note 8.

We maintained an allowance for credit losses of approximately $ 60 million, $ 98 million and $ 58 million at December 31, 2021, 2020 and 2019, respectively.

Credit Losses for further considerations involved in the development of this estimate.

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We also evaluate the useful lives of these assets on an annual basis and test for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets used in combination to generate cash flows largely independent of other assets may not be recoverable.

We did not record any property and equipment impairment charges for the years ended December 31, 2021 and 2019.

During the year ended December 31, 2020, we recorded an impairment charge related to our Hospitality Solutions business of $ 5 million associated with software developed for internal use based on our analysis of the recoverability of such amounts.

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Additionally, we recorded a $ 4 million impairment charge associated with leasehold improvements and furniture and fixtures of abandoned leased office space during the year ended December 31, 2020 which is recorded within selling, general, and administrative expenses in our consolidated statement of operations.

Restructuring Activities for further information.

We did not record any property and equipment impairment charges for the years ended December 31, 2019 and 2018.

We lease certain facilities under long term operating leases.

We determine if an arrangement is a lease at inception.

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.

lease assets are included in property and equipment with associated liabilities included in current portion of debt and long-term debt in our consolidated balance sheets.

We evaluate lessee agreements with a minimum term greater than one year for recording on the balance sheet.

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 current liabilities and other noncurrent liabilities in our consolidated balance sheets.

Finance lease assets are included in property and equipment with associated liabilities included in current portion of debt and long-term debt in our consolidated balance sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

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We recognize measurement-period adjustments in the period in which we determine the amounts, including the effect on earnings of any amounts we would have recorded in previous periods if the accounting had been completed at the acquisition date.

Assets Held for Sale

We periodically divest assets that we do not consider core to our business strategy.

The carrying value of the net assets held for sale are compared to their fair value, less cost to sell, and any initial adjustments of the carrying value to fair value, less cost to sell are recorded when the held for sale criteria are met.

Gains or losses associated with the disposal of assets held for sale are recorded within other operating costs.

When the net assets constitute a business, we allocate a portion of the goodwill from the related reporting unit to the carrying value of the net assets held for sale.

The amount of goodwill allocated is based on the relative fair values of the business to be disposed of and the portion of the reporting unit that will be retained.

Goodwill and Intangible Assets

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zo.o, and a voting interest of 20 % in Asiana Sabre, Inc.

The carrying value of these equity method investments in joint ventures amounts to $ 24 million as of December 31, 2020 and 2019.

The carrying value of these equity method investments in joint ventures amounts to $ 23 million as of December 31, 2021 and $ 24 million as of December 31, 2020.

Contract Acquisition Costs and Capitalized Implementation Costs

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Recoverability is measured based on the future estimated revenue and direct costs of the contract compared to the capitalized implementation costs.

D uring the year ended December 31, 2020, we recorded impairments totaling $ 10 million associated with capitalized implementation costs based on our analysis of the recoverability of such amounts.

Balance Sheet Components and Note 2.

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We measure the grant date fair value of stock option awards as calculated by the Black-Scholes option-pricing model which requires certain subjective assumptions, including the expected term of the option, the expected volatility of our common stock, risk-free interest rates and expected dividend yield.

The expected term is estimated by using the “simplified method” which

is based on the midpoint between the vesting date and the expiration of the contractual term.

The expected term is estimated by using the “simplified method” which is based on the midpoint between the vesting date and the expiration of the contractual term.

We utilized the simplified method due to the lack of sufficient historical experience under our current grant terms.

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Adoption of New Accounting Standards

In March 2020, the Financial Accounting Standards Board ("FASB") issued updated guidance which provides optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued, if certain criteria are met.

The updated standard is 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 year ended December 31, 2020 as a result of adopting this standard.

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

In December 2021, the Financial Accounting Standards Board ("FASB") issued guidance that requires an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606:

Revenue from contracts with customers .

We adopted this standard in the fourth quarter of 2021, which did not have a material impact on our consolidated financial statements.

In August 2020, the FASB issued updated guidance limiting the accounting models for convertible instruments, which requires the senior exchangeable notes due 2025 (the "Exchangeable Notes") entered into April 2020 to be accounted for as a single liability measured at amortized cost.

We elected to early adopt this standard on January 1, 2021 using the full retrospective method, which requires us to restate each prior reporting period presented.

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 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 year end December 31, 2020 was a decrease in interest, net of $ 9 million, and a decrease in benefit for income taxes of $ 19 million.

This increased our net loss attributable to common stockholders by $ 10 million for the year ended December 31, 2020.

There was a $ 0.03 decrease in earnings per share for the year ended December 31, 2020 as a result of the adoption.

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

December 31, 2020

As Originally Reported Adjustments Recast

Deferred income taxes $ 72,744 $ ( 548 ) $ 72,196

Long-term debt 4,639,782 78,026 4,717,808

Additional paid-in capital 3,052,953 ( 67,876 ) 2,985,077

Accumulated deficit ( 2,090,022 ) ( 9,602 ) ( 2,099,624 )

Total stockholders’ equity 362,632 ( 77,478 ) 285,154

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, which did not have a material impact on our consolidated financial statements.

In October 2018, the FASB issued updated guidance that eliminates the requirement that entities consider indirect interests held through related parties under common control in their entirety when assessing whether a decision-making fee is a variable interest and instead requires entities to consider these indirect interests on a proportional basis.

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Recent Accounting Pronouncements

In August 2020, the FASB issued updated guidance limiting the accounting models for convertible instruments, which will result in fewer embedded conversion features being separately recognized from the host contract when compared to existing guidance.

Under the updated guidance, some convertible debt instruments will be accounted for as a single liability measured at amortized cost.

Additionally, the updated guidance both enhances disclosures around convertible instruments and requires the use of the if-converted method to calculate diluted earnings per share for convertible instruments.

The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020.

The standard provides for the option of full retrospective transition on January 1, 2021.

Although we are still evaluating the impact of the updated guidance and the effects on our financial statements, we anticipate using full retrospective transition on January 1, 2021 to account for the Exchangeable Notes on a whole-instrument basis.

As a result, we anticipate the amount previously bifurcated into equity will be reclassified as a component of long-term debt.

Additionally, we anticipate pre-tax interest expense will be retrospectively reduced and will align more closely with the contractual payments for the Exchangeable Notes.

The updated standard is effective for public companies for fiscal years, and interim periods

within those fiscal years, beginning after December 15, 2020, with early adoption permitted.

We do not expect the adoption of this standard will have a material impact to our consolidated financial statements.

In March 2020, the FASB issued updated guidance which provides optional expedients and exceptions for applying U.S.

This standard is effective for all entities upon issuance and is optional through December 31, 2022.

As of December 31, 2021 we have not modified any of the interest rates on our outstanding debt and therefore, the options under this standard are not applicable.

Revenue from Contracts with Customers

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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.

We evaluate collectability of our accounts receivable based on a combination of factors and record reserves as reflected in Note 8.

We evaluate collectability of our accounts receivable based on a combination of factors and record reserves as described further in Note 8.

Credit Losses.

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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 year ended December 31, 2020, the impact on revenue recognized in the current period, from performance obligations partially or fully satisfied in the previous period, is immaterial.

For the year ended December 31, 2021, the impact on revenue recognized in the current period, from performance obligations partially or fully satisfied in the previous period, is $ 13 million.

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.

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Summary of Business and Significant Accounting Policies regarding revenue recognition of our various revenue streams for more information.

Revenue during 2020, particularly in the second quarter, was negatively impacted by increased cancellation activity.

We estimate future cancellations using the expected value approach at the end of each reporting period based on the number of undeparted bookings, expected cancellations and an estimated rate.

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 increased our reserve for future cancellations during the year 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.

The combination of actual cancellation activity and significantly fewer bookings resulted in a cancellation reserve of $ 18 million as of December 31, 2020.

The cancellation reserve as of December 31, 2019 was $ 34 million on a larger base of undeparted bookings.

Given the continued uncertainty caused by the COVID-19 pandemic, we expect variability in the amount of our cancellation reserve in future periods as estimates of cancellations may differ from historical and recent experience.

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.

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

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.

Contract Acquisition Costs and Capitalized Implementation Costs

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We incur contract implementation costs to implement new customer contracts under our SaaS revenue model .

We periodically assess contract costs for recoverability, and our assessment resulted in impairments of approximately $ 10 million and $ 2 million for the year ended December 31, 2020 and 2019, respectively.

We periodically assess contract costs for recoverability, and our assessment resulted in impairments of approximately $ 1 million and $ 10 million for the years

ended December 31, 2021 and 2020, respectively.

Summary of Business and Significant Accounting Policies for an overview of our policy for capitalization of acquisition and implementation costs.

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( 1,315 ) ( 9,562 )

Assets classified as held for sale, net ( 19,169 ) —

Other 257 ( 901 )

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(1) Includes an impairment charge related to a specific customer of $ 4 million and $ 6 million in other impairments for the year ended December 31, 2020.

Acquisitions and Dispositions

AirCentre Disposition

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.

AirCentre met the requirements for presentation as held for sale as of December 31, 2021.

There were no losses recorded on held for sale assets for the year ended December 31, 2021.

We determined that the impending exit from these businesses does not represent a strategic shift that had or will have a major effect on our consolidated results of operations, and therefore were not classified as a discontinued operation.

The results of operations for these businesses are included within the Travel Solutions reportable segment for all periods presented.

The assets and liabilities held for sale, measured at the lower of carrying value or fair value, less cost to sell, were as follows as of December 31, 2021 (in thousands):

As of December 31, 2021

Accounts receivable, net $ 21,151

Prepaid expenses and other current assets 207

Current assets held for sale 21,358

Property and equipment, net of accumulated depreciation 9,496

Goodwill 152,742

Acquired customer relationships, net of accumulated amortization 2,785

Other assets, net 38,181

Long-term assets held for sale 203,204

Total assets held for sale $ 224,562

Accounts payable $ 73

Accrued compensation and related benefits 715

Deferred revenues 19,753

Other accrued liabilities 551

Current liabilities held for sale 21,092

Other noncurrent liabilities 15,476

Long-term liabilities held for sale 15,476

Total liabilities held for sale $ 36,568

Terminated Farelogix Acquisition

On August 20, 2019, the U.S.

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Sabre and Farelogix agreed to terminate the acquisition agreement on May 1, 2020, and we paid Farelogix aggregate termination fees of $ 21 million pursuant to the acquisition agreement.

Radixx Acquisition

In October 2019, we completed the acquisition of Radixx, a provider of retailing and customer service solutions to airlines in the low-cost carrier ("LCC") market, for $ 107 million, net of cash acquired and funded by cash on hand.

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Restructuring Activities

Given the market conditions as a result of COVID-19, we have responded with cost savings measures, including a reduction in our workforce through involuntary and voluntary severance and voluntary early retirement programs, and the early abandonment of leased office space.

The COVID-19 pandemic has caused major shifts in the travel ecosystem resulting in the changing needs of our airline, hotel and agency customers.

As a result, in 2020 we accelerated the organizational changes we began in 2018 to address the changing travel landscape through the Strategic Realignment to respond to the impacts of the COVID-19 pandemic on our business and cost structure.

This Strategic Realignment and related actions are substantially complete.

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 associated with our workforce and leased office space.

The strategic realignment and related actions are substantially complete.

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

During the year ended December 31, 2020, we incurred $ 86 million in connection with these restructuring activities, of which $ 19 million is recorded within cost of revenue, excluding technology costs, $ 32 million is recorded within technology costs and $ 35 million is recorded within selling, general and administrative costs within our consolidated statement of operations.

These restructuring costs are comprised of $ 72 million that has been or will be paid in cash related to severance and related benefits costs and $ 2 million paid in cash related to early termination lease payments.

Additionally, we recorded a $ 12 million abandonment charge during the year ended December 31, 2020 related to the abandonment of certain leased office space.

During the year ended December 31, 2021, we reduced restructuring charges by $ 7 million, for a total of $ 79 million incurred in connection with these restructuring activities, since the first quarter of 2020.

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):

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Balance as of January 1, 2021 $ 23,253

Charges 71,590

Cash payments ( 13,803 )

Non-cash adjustments ( 7,137 )

Balance as of December 31, 2021 $ 2,313

Goodwill and Intangible Assets

Due to triggering events related to the COVID-19 pandemic, we performed a quantitative assessment, as of March 31, 2020.

This assessment was based on our current projections and was subject to various risks, uncertainties and estimates including:

(1) forecasted revenues, expenses and cash flows, including future travel supplier capacity and load factors, (2) the duration and extent of the impact of the COVID-19 pandemic on our business and our customers, (3) current discount and long-term growth rates, (4) the reduction in our market capitalization, (5) current market transaction trends and (6) changes to the regulatory environment impacting our industry.

In estimating fair value, a key assumption was the estimate of when travel would return to pre-COVID-19 levels.

Should a significant change in the estimated recovery period elongate further than our expectations, it could have a material impact on our estimates of fair value.

Our interim quantitative impairment assessment as of March 31, 2020 determined that our goodwill was not impaired.

We updated our goodwill assessment quarterly on a qualitative basis during 2020 and determined that our goodwill was not impaired at any reporting date in 2020.

Our qualitative assessments considered the latest information available regarding the items noted above including the most recent information available regarding the duration of the recovery period to 2019 levels.

As a result of the Strategic Realignment, our historical Travel Network and Airline Solutions business segments have been combined into a new business segment, Travel Solutions.

As a result of the 2020 strategic realignment discussed above, our historical Travel Network and Airline Solutions business segments have been combined into a new business segment, Travel Solutions.

In connection with this reorganization, the historical Travel Network and Airline Solutions reporting units and their related goodwill were combined into a single Travel Solutions reporting unit, thereby requiring no reallocation of goodwill based on fair values.

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Balance as of December 31, 2019 $ 2,478,440 $ 154,811 $ 2,633,251

82,402 — 82,402

Adjustments (1)

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Balance as of December 31, 2020 $ 2,476,201 $ 160,345 $ 2,636,546

Reclassified to assets held for sale

( 152,742 ) — ( 152,742 )

Adjustments (1)

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________________________

(1) Includes net foreign currency effects during the year.

(1) Includes allocated goodwill on divestitures as well as net foreign currency effects during the year.

The following table presents our intangible assets as of December 31, 2021 and 2020 (in thousands):

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Unrealized foreign currency translation gain 6,282 13,671

Share of other comprehensive loss of equity method investment ( 1,796 ) ( 1,195 )

Unrealized loss on foreign currency forward contracts, interest rate swaps and available-for-sale securities — ( 12,837 )

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taxing jurisdictions, net 26,029 38,994 9,458

Impact of U.S.

— — ( 26,730 )

Employee stock based compensation 9,836 13,985 8,380

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Tax receivable agreement (TRA) (1)

— ( 536 ) 1,019

Valuation Allowance 176,921 218,687 957

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___________________________

(1) In 2018, amount includes adjustments for deferred taxes and foreign tax effects.

(1) Amount includes adjustments to the TRA, which are not taxable.

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During 2019, we decreased the TRA liability by $ 3 million as a result of certain audit and transfer pricing adjustments recorded during the period, which is reflected in our 2019 income from continuing operations before taxes.

Additionally, during the year ended December 31, 2018, we reduced the provisional net discrete tax cost associated with the TCJA by $ 27 million to $ 20 million upon further analysis of certain aspects of the TCJA and subsequently published administrative guidance, and refinement of our calculations.

The components of our deferred tax assets and liabilities are as follows:

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Suspended loss 14,592 14,528

Software developed for internal use 16,208 —

Accrued expenses 12,946 1,209

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Deferred tax liabilities:

Exchangeable notes ( 19,114 ) —

Bond discounts ( 1,731 ) ( 1,158 )

Right of use assets ( 22,276 ) ( 21,376 )

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As a result of the enactment of the TCJA, we recorded a one-time transition tax on the undistributed earnings of our foreign subsidiaries.

We do not consider undistributed foreign earnings to be indefinitely reinvested as of December 31, 2020, with certain limited exceptions and have recorded corresponding deferred taxes.

We consider the undistributed capital investments in our foreign subsidiaries to be indefinitely reinvested as of December 31, 2020, and have not provided deferred taxes on any outside basis differences.

Determination of the amount of unrecognized deferred tax liability, if any, related to indefinitely reinvested capital investments is not practicable.

We do not consider undistributed foreign earnings to be indefinitely reinvested as of December 31, 2021,

with certain limited exceptions and have, in those cases, recorded corresponding deferred taxes.

We consider the undistributed capital investments in most of our foreign subsidiaries to be indefinitely reinvested as of December 31, 2021 and have not provided deferred taxes on any outside basis differences, with the exception of balances associated with the AirCentre disposition.

With respect to the held for sale nature of our AirCentre portfolio of products, we have established deferred taxes, where applicable, for the outside basis of the capital investment of subsidiaries to be sold.

As of December 31, 2021, we have U.S.

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Significant losses related to COVID-19 resulted in a three-year cumulative loss in certain jurisdictions, which represents significant negative evidence regarding the ability to realize deferred tax assets.

As a result, we established a valuation allowance on a portion of our U.S.

deferred tax assets of $ 165 million as of December 31, 2020.

We also established and maintained a U.S.

state valuation allowance on current year losses and other deferred tax assets of $ 15 million and $ 5 million as of December 31, 2020 and 2019, respectively.

deferred tax assets of certain subsidiaries, we established and maintained a valuation allowance on current year losses and other deferred tax assets of $ 71 million and $ 33 million as of December 31, 2020 and 2019, respectively.

We reassess these assumptions regularly which could cause an increase or decrease to the valuation allowance.

This assessment could result in an increase or decrease in the effective tax rate which could materially impact our results of operations.

As a result, we maintain a cumulative valuation allowance on our U.S.

federal and state deferred tax assets of $ 322 million and $ 22 million, respectively as of December 31, 2021.

deferred tax assets of certain subsidiaries, we maintained a cumulative valuation allowance on current year losses and other deferred tax assets of $ 86 million as of December 31, 2021.

We reassess these assumptions regularly, which could cause an increase or decrease to the valuation allowance resulting in an increase or decrease in the effective tax rate and could materially impact our results of operations.

It is our policy to recognize penalties and interest accrued related to income taxes as a component of the provision for income taxes from continuing operations.

During the years ended December 31, 2020, 2019 and 2018, we recognized an

expense of $ 6 million, benefit of $ 7 million and expense of $ 1 million, respectively, related to interest and penalties.

During the years ended December 31, 2021, 2020, and 2019, we recognized a benefit of $ 3 million, an expense of $ 6 million, and benefit of $ 7 million, respectively, related to interest and penalties.

As of December 31, 2021 and 2020, we had a liability, including interest and penalties, of $ 110 million and $ 96 million, respectively, for unrecognized tax benefits, including cumulative accrued interest and penalties of approximately $ 25 million and $ 23 million, respectively.

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Singapore 2016 - forward

India 1996 - 2015

India 1996 - forward

Uruguay 2015 - forward

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Immediately prior to the closing of our initial public offering in April 2014, we entered into the TRA, which provides the right to receive future payments from us to stockholders and equity award holders that were our stockholders and equity award holders, respectively, immediately prior to the closing of our initial public offering (collectively, the "Pre-IPO Existing Stockholders").

In connection with the TRA, we made payments, including interest, of $ 72 million in January 2020, $ 105 million in 2019, and $ 60 million in 2018, respectively.

In connection with the TRA, we made payments, including interest, of $ 72 million in January 2020, and $ 105 million in 2019.

In December 2019, we exercised our right under the terms of the TRA to accelerate our remaining payments under the TRA and make an early termination payment of $ 1 million, to the Pre-IPO Existing Shareholders, which was included in the January 2020 payment of $ 72 million described above.

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Balance at December 31, 2020 $ 97,569

Cumulative-effect adjustment upon adoption 9,868

Provision for expected credit losses ( 7,788 )

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Balance at December 31, 2021 $ 59,646

Our provision for expected credit losses totaled $ 66 million and $ 21 million for the year ended December 31, 2020 and 2019, respectively.

Our provision for expected credit losses was a reduction of $ 8 million for the year ended December 31, 2021.

Our provision for expected credit losses totaled $ 66 million for the year ended December 31, 2020.

For the year ended December 31, 2020, we fully reserved 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 year ended December 31, 2020.

Additionally, the impact of the COVID-19 pandemic on the global economy and other general increases in aging balances has affected our current estimate of expected credit losses since implementation of the new credit impairment standard.

Macro-economic factors, including the economic downtown, 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 result in the 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.

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 the restructuring or bankruptcy of additional customers.

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 actual write-offs may vary from our estimates.

We regularly monitor the financial condition of the air transportation industry.

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For these carriers, we believe the use of ACH mitigates our credit risk with respect to airline bankruptcies.

For those carriers from which we do not collect payments through the ACH or other similar clearing houses, our credit risk is higher.

For those carriers from which we do not collect payments through the ACH or other similar

clearing houses, our credit risk is higher.

We monitor these carriers and account for the related credit risk through our normal reserve policies.

As of December 31, 2021 and 2020, our outstanding debt included in our consolidated balance sheets totaled $ 4,753 million and $ 4,744 million, respectively, which are net of debt issuance costs of $ 45 million and $ 54 million, respectively, and unamortized discounts of $ 9 million and $ 10 million, respectively.

See "—Senior Secured Notes due 2025" and "—Exchangeable Notes" below regarding the increase in unamortized discounts as of December 31, 2020.

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

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Senior secured credit facilities:

Term Loan A (1)

August 2023 $ — $ 484,500

Term Loan B L+ 2.00 %

February 2024 $ 1,805,806 $ 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 401,980 —

Term Loan B-2 (1)

December 2027 640,780 —

Revolver, $ 400 million (1)

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7.375 % senior secured notes due 2025

5.25 % November 2023 — 500,000

9.25 % senior secured notes due 2025

9.25 % April 2025 775,000 —

7.375 % senior secured notes due 2025

7.375 % September 2025 850,000 850,000

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_____________________________

(1) Extinguished on December 17, 2020 using proceeds from the Other Term Loan B.

(2) Pursuant to the August 27, 2020 refinancing, the interest rate on the Revolver was increased from L+ 2.50 % to L+ 2.75 % and the maturity was extended from July 2022 to November 2023.

Subject to certain "springing" maturity conditions, the maturity may extend to February 2024 at the latest.

(3) Extinguished on August 27, 2020 using proceeds from the 7.375 % senior secured notes due 2025.

We had $ 375 million outstanding under the Revolver as of December 31, 2020 and no balance outstanding as of December 31, 2019.

We had outstanding letters of credit totaling $ 10 million and $ 12 million as of December 31, 2020 and 2019, which reduced our overall credit capacity under the Revolver.

(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 December 31, 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

Refinancing Transactions

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”).

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 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 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 bate, 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.

Additionally, on December 17, 2020, Sabre GLBL entered into a Pro Rata Amendment and the Refinancing Amendment which reduced the minimum liquidity requirement described outlined below from $ 450 million 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.

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 $ 450 million on a monthly basis (reduced to $ 300 million pursuant to the refinancing in December 2020 as discussed above).

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.

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, 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 year ended December 31, 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.

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 December 31, 2021.

Principal Payments

The Other Term B Loans mature on December 17, 2027 and require principal payments in equal quarterly installments of 0.25 % through to the maturity date on which the remaining balance is due.

Term Loan B matures on February 22, 2024 and requires principal payments in equal quarterly installments of 0.25 % through to the maturity date on which the remaining balance is due.

Term Loan B-1 and Term Loan B-2 mature on December 17, 2027 and require principal payments in equal quarterly installments of 0.25 % through to the maturity date on which the remaining balance is due.

For the year ended December 31, 2021, we made $ 24 million of scheduled principal payments.

We are also required to pay down the Term Loan B by an amount equal to 50 % of annual excess cash flow, as defined in the Amended and Restated Credit Agreement.

We are also required to pay down the term loans by an amount equal to 50 % of annual excess cash flow, as defined in the Amended and Restated Credit Agreement.

This percentage requirement may decrease or be eliminated if certain leverage ratios are achieved.

Based on our results for the year ended December 31, 2019, we were not required to make an excess cash flow payment in 2020, and no excess cash flow payment is required in 2021 with respect to our results for the year ended December 31, 2020.

Based on our results for the year ended December 31, 2020, we were not required to make an excess cash flow payment in 2021, and no excess cash flow payment is expected to be required in 2022 with respect to our results for the year ended December 31, 2021.

We are further required to pay down the term loan with proceeds from certain asset sales or borrowings as defined in the Amended and Restated Credit Agreement.

Financial Covenants

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.

Under the terms of the Amended and Restated Credit Agreement, the financial covenant related to our leverage ratio is suspended for a limited time if a “Material Travel Event Disruption” has occurred.

As defined in the Amended and Restated Credit Agreement, a “Material Travel Event Disruption” means, in any given calendar month, a decrease of 10 % or more in the number of “domestic revenue passenger enplanements” (determined by reference to the monthly “Air Traffic Statistics” published by the Bureau of Transportation Statistics) has occurred as a result of or in connection with a Travel Event (as defined in the Amended and Restated Credit Agreement) as compared to the number of “domestic revenue passenger enplanements” (determined by reference to the monthly “Air Traffic Statistics” published by the Bureau of Transportation Statistics) 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.

As of December 31, 2020, 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 has occurred.

As such, the leverage ratio covenant has been suspended for at least the fourth quarter of 2020 and first quarter of 2021.

As of December 31, 2020, 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.

We are further required to pay down the term loans with proceeds from certain asset sales, if not reinvested into the business within 15 months, as defined in the Amended and Restated Credit Agreement.

As of December 31, 2021, we are in compliance with all covenants under the terms of the Amended and Restated Credit Agreement.

Borrowings under the Amended and Restated Credit Agreement bear interest at a rate equal to either, at our option:

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Interest payments are due on the last day of each month as a result of electing one-month LIBOR.

Interest on a portion of the outstanding loan is hedged with interest rate swaps (see Note 10.

Interest on a portion of the outstanding loan was hedged with interest rate swaps (see Note 10.

Derivatives).

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Term Loan B 2.00 % 1.00 %

Other Term Loan B 4.00 % 3.00 %

Revolver, $ 400 million

2.75 % 1.75 %

Term Loan B-1 3.50 % 2.50 %

Term Loan B-2 3.50 % 2.50 %

_____________________________

(1) Applicable margins do not reflect potential step ups and downs of Other Term Loan B and Revolver, $ 400 million, which are determined by the Senior Secured Leverage Ratio.

See below for additional information.

(2) Term Loan B, and the Revolver, $ 400 million, are subject to a 0 % floor, while the Other Term Loan B is subject to a 0.75 % floor.

Applicable margins for the Term Loan B are 2.00 % per annum for Eurocurrency rate loans and 1.00 % per annum for base rate loans over the life of the loan and are not dependent on the Senior Secured Leverage Ratio.

Applicable margins for the Other Term Loan B and the Revolver step up by 25 basis points for any quarter if the Senior Secured Leverage Ratio is greater than or equal to 3.00 to 1.0.

Applicable margins for the Other Term Loan B and the Revolver under the Amended and Restated Credit Agreement step down 25 basis points for any quarter if the Senior Secured Leverage Ratio is less than 2.25 to 1.0.

In addition, we are required to pay a quarterly commitment fee of 0.250 % per annum for unused Revolver commitments.

The commitment fee may increase to 0.375 % per annum if the Senior Secured Leverage Ratio is greater than or equal to 3.00 to 1.0.

(1) Term Loan B is subject to a 0.00 % floor, while Term Loan B-1 and Term Loan B-2 are subject to a 0.50 % floor.

Applicable margins for the Term Loan B are 2.00 % per annum for Eurocurrency rate loans and 1.00 % per annum for base rate loans over the life of the loan, with a floor of 0.00 %.

Applicable margins for the Term Loan B-1 and Term Loan B-2 are 3.50 % per annum for Eurocurrency rate loans and 2.50 % per annum for base rate loans over the life of the loan, with a floor of 0.50 % for the Eurocurrency rate, and 1.50 % for the base rate, respectively.

The Eurocurrency rate is based on LIBOR.

In July 2017, the Financial Conduct Authority announced its intention to phase out LIBOR by the end of 2021, and subsequently extended the phase-out date to June 30, 2023.

If a published U.S.

dollar LIBOR rate is unavailable, the interest rates on our debt indexed to LIBOR will be determined using various alternative methods set forth in our Amended and Restated Credit Agreement, any of which could result in interest obligations that are more than or that do not otherwise correlate over time with the payments that would have been made on this debt if U.S.

dollar LIBOR were available in its current form.

We anticipate amending our Amended and Restated Credit Agreement prior to the phaseout of LIBOR to provide for a Eurocurrency rate alternative to LIBOR.

In July 2021, we entered into the 2021 Refinancing which, among other things, allows for the LIBOR rate to be phased out and replaced with the Secured Overnight Financing Rate plus a credit spread adjustment factor for Term Loan B-1 and Term Loan B-2.

Term Loan B allows for a transition to the Prime rate plus a margin from the LIBOR rate.

Our effective interest rates on borrowings under the Amended and Restated Credit Agreement for the years ended December 31, 2021, 2020 and 2019, inclusive of amounts charged to interest expense, are as follows:

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Excluding the impact of interest rate swaps 3.33 % 3.26 % 4.63 %

Effective December 31, 2021 all outstanding interest rate swaps have matured.

Senior Secured Notes due 2025

On April 17, 2020, Sabre GLBL entered into a new debt agreement consisting of $ 775 million aggregate principal amount of 9.250 % senior secured notes due 2025 (the “April 2025 Notes”).

The April 2025 Notes are jointly and severally, irrevocably and unconditionally guaranteed by Sabre Holdings and all of Sabre GLBL’s restricted subsidiaries that guarantee Sabre GLBL’s credit facility.

The April 2025 Notes bear interest at a rate of 9.250 % per annum and interest payments are due semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2020.

The April 2025 Notes mature on April 15, 2025.

The net proceeds received from the sale of the April 2025 Notes of $ 763 million, net of underwriting fees and commissions, are being used for general corporate purposes.

On August 27, 2020, Sabre GLBL entered into a new debt agreement consisting of $ 850 million aggregate principal amount of 7.375 % senior secured notes due 2025 (the “September 2025 Notes”).

The September 2025 Notes are jointly and severally, irrevocably and unconditionally guaranteed by Sabre Holdings and all of Sabre GLBL’s restricted subsidiaries that guarantee Sabre GLBL’s credit facility.

The September 2025 Notes bear interest at a rate of 7.375 % per annum and interest

payments are due semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2021.

The September 2025 Notes bear interest at a rate of 7.375 % per annum and interest payments are due semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2021.

The September 2025 Notes mature on September 1, 2025.

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We recognized a loss on extinguishment of debt of $ 10 million during the year ended December 31, 2020 in connection with these transactions which consisted of a redemption premium of $ 7 million and the write-off of unamortized debt issuance costs of $ 3 million.

On April 17, 2020, Sabre GLBL entered into a new debt agreement consisting of $ 775 million aggregate principal amount of 9.250 % senior secured notes due 2025 (the “April 2025 Notes”).

The April 2025 Notes bear interest at a rate of 9.250 % per annum and interest payments are due semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2020.

The April 2025 Notes mature on April 15, 2025.

The net proceeds received from the sale of the April 2025 Notes of $ 763 million, net of underwriting fees and commissions, are being used for general corporate purposes.

Exchangeable Notes

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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 days preceding December 31, 2020, the first condition above has been met as of December 31, 2020 and the Exchangeable Notes are exchangeable by the holders at any time during the first quarter of 2021.

Due to the price of our common stock during the 30 days preceding December 31, 2021, the first condition above has not been met as of December 31, 2021 and the Exchangeable Notes are not exchangeable by the holders during the first quarter of 2022.

As of December 31, 2021 , the if-converted value of the Exchangeable Notes exceeds the outstanding principal amount by $ 30 million.

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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.

We allocated the proceeds of the Exchangeable Notes between long-term debt and equity.

The allocation to the long-term debt component was based on an estimated fair value of a similar debt instrument that does not contain features permitting exchange into common stock (a Level 2 input, as defined in Note 11.

Value Measurements).

We determined the fair value of the long-term debt component as the present value of contractual future cash flows.

The carrying amount of the equity component was calculated by deducting the fair value of the long-term debt component from the initial proceeds of the Exchangeable Notes.

Accordingly, at issuance, we allocated $ 255 million to long-term debt and $ 90 million to additional paid-in capital.

We recorded a net deferred tax liability of $ 20 million in connection with the debt discount and issuance costs associated with the Exchangeable Notes that is recorded in deferred income taxes on the consolidated balance sheets.

The difference between the face value of the Exchangeable Notes and the long-term debt component is accounted for as a debt discount, which is amortized, along with debt issuance costs, to interest expense over the term of the Exchangeable Notes ending April 15, 2025 using an effective interest rate of approximately 12 %.

During the year ended December 31, 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.

Additionally, 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 December 31, 2021, we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

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.

Summary of Business and Significant Accounting Policies, 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 %.

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

December 31, 2020

Liability Component:

Year Ended December 31, 2021 Year Ended December 31, 2020

Principal $ 333,220 $ 345,000

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Net carrying value (1)

Equity component:

Conversion feature $ 90,500

Equity portion of debt issuance costs 3,167

Deferred tax liability 19,457

Net carrying value $ 67,876

$ 325,303 $ 334,557

(1) Excludes net unamortized debt issuance costs of $ 8 million as of December 31, 2020.

The following table sets forth interest expense recognized related to the Exchangeable Notes for year ended December 31, 2021 (in thousands):

December 31, 2021 Year Ended

December 31, 2020

Contractual interest expense $ 13,576 $ 9,698

Amortization of debt discount and issuance costs 10,834

Amortization of issuance costs 2,209 1,527

Aggregate Maturities

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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 have been a party to certain foreign currency forward contracts that extended until December 31, 2020.

We have designated these instruments as cash flow hedges.

No hedging ineffectiveness was recorded in earnings relating to the forward contracts in the years ended December 31, 2020 and 2019.

As of December 31, 2020, we have 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 at December 31, 2020 and matured during the years ended December 31, 2020, 2019 and 2018 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 31, 2020.

We designated these instruments as cash flow hedges.

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

As of December 31, 2021, we had no unsettled forward contracts.

Interest Rate Swap Contracts —We had no interest rate swaps outstanding as of December 31, 2021.

Interest swaps matured during the years ended December 31, 2021, 2020 and 2019 as follows:

Notional Amount Interest Rate

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2.81 % December 31, 2020 December 31, 2021

$ 600 million 1 month LIBOR (1)

2.81 % December 31, 2020 December 31, 2021

____________________

(1) Subject to a 1 % floor.

In connection with the 2017 Term Facility Amendment, we entered into forward starting interest rate swaps effective March 31, 2017 to hedge the interest payments associated with $ 750 million of the floating-rate 2017 Term Loan B.

The total notional amount outstanding of $ 750 million became effective December 31, 2018 and extended through the full year 2019.

In September 2017, we entered into forward starting interest rate swaps to hedge the interest payments associated with $ 750 million of the floating-rate Term Loan B.

The total notional outstanding of $ 750 million became effective December 31, 2019 and extends through the full year 2020.

The total notional outstanding of $ 750 million became effective December 31, 2019 and extended through the full year 2020.

In April 2018, we entered into forward starting interest rate swaps to hedge the interest payments associated with $ 600 million, $ 300 million and $ 450 million of the floating-rate Term Loan B related to years 2019, 2020 and 2021, respectively.

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

Derivative Assets (Liabilities)

Derivative Liabilities

Fair Value as of December 31,

Derivatives Designated as Hedging Instruments Consolidated Balance Sheet Location 2021 2020

Foreign exchange contracts Prepaid expenses and other current assets $ — $ 1,953

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

Interest rate swaps Other noncurrent liabilities — ( 7,918 )

Total $ — $ ( 16,038 )

The effects of derivative instruments, net of taxes, on OCI for the years ended December 31, 2021, 2020 and 2019 are as follows (in thousands):

Amount of (Loss) Gain

Amount of Loss

Recognized in OCI on Derivative, Effective Portion

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Total $ ( 134 ) $ ( 20,521 ) $ ( 15,217 )

Amount of Loss (Gain) Reclassified from Accumulated

Amount of Loss Reclassified from Accumulated

OCI into Income, Effective Portion

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Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

Foreign Currency Forward Contracts —The fair value of the foreign currency forward contracts was estimated based upon pricing models that utilize Level 2 inputs derived from or corroborated by observable market data such as currency spot and forward rates.

Interest Rate Swaps— The fair value of our interest rate swaps are 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 reflecting broker market quotes.

Pension Plan Assets —See Note 16.

Pension and Other Postretirement Benefit Plans, for fair value information on our pension plan assets.

The following tables present the fair value of our assets (liabilities) that are required to be measured at fair value on a recurring basis as of December 31, 2020 and 2019 (in thousands):

Fair Value at Reporting Date Using

December 31, 2020 Level 1 Level 2 Level 3

Derivatives (1) :

Interest rate swap contracts $ ( 16,038 ) $ — $ ( 16,038 ) $ —

Total $ ( 16,038 ) $ — $ ( 16,038 ) $ —

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

Fair Value at Reporting Date Using

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Derivatives (1) :

Foreign currency forward contracts $ 1,953 $ — $ 1,953 $ —

Interest rate swap contracts $ ( 16,038 ) $ — $ ( 16,038 ) $ —

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(1) See Note 10.

Derivatives for further detail.

Derivatives for further details.

There were no transfers between Levels 1 and 2 within the fair value hierarchy for the years ended December 31, 2021 and 2020.

Assets that are Measured at Fair Value on a Nonrecurring Basis

As described in Note 1.

Summary of Business and Significant Accounting Policies, our impairment review of goodwill is performed annually, as of October 1 of each year.

In addition, goodwill, property and equipment and intangible assets are reviewed for impairment if events and circumstances indicate that their carrying amounts may not be recoverable.

Due to the impacts of the COVID-19 pandemic on our current and projected future results of operations, we identified a triggering event requiring an interim quantitative assessment on our goodwill in the first quarter of 2020.

We utilized Level 3 inputs based on management's best estimates and assumptions in performing our quantitative assessment as of March 31, 2020.

Our interim impairment assessment as of March 31, 2020 determined that our goodwill was not impaired.

We updated our goodwill assessment quarterly on a qualitative basis during 2020 and determined that our goodwill was not impaired at any reporting date in 2020.

Goodwill and Intangible Assets for additional information

Other Financial Instruments

The carrying value of our financial instruments including cash and cash equivalents, and accounts receivable approximates their fair values.

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 all our senior notes and borrowings under our senior secured credit facilities as of December 31, 2020 and 2019 (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 December 31, 2021 and 2020 (in thousands):

Fair Value at December 31, Carrying Value (1) at December 31,

Financial Instrument 2021 2020 2021 2020

Term Loan A $ — $ 485,106 $ — $ 483,317

Term Loan B $ 1,767,432 $ 1,785,843 $ 1,803,318 $ 1,821,016

Term Loan B-1 397,458 — 401,036 —

Term Loan B-2 633,171 — 635,416 —

Other Term Loan B (1)

Revolver, $ 400 million

— 639,389 — 630,663

5.375 % senior secured notes due 2023

— 543,536 — 530,000

5.25 % senior secured notes due 2023

Revolver, $ 400 million

— 375,000 — 375,000

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(1) Excludes net unamortized debt issuance costs.

In the first quarter of 2019, we adopted ASC 842, Leases, which replaced the previous accounting standard on leases.

The new lease standard is a right-of-use model, requiring most lessee agreements to be recorded on the balance sheet.

The intent of the standard is to provide greater transparency about lessee obligations and activities.

The primary impact to our financial statements is that most operating leases are recorded on our consolidated balance sheet and enhanced disclosures are required for both operating and finance leases.

As permitted by ASC 842, our accounting policy is to evaluate lessee agreements with a minimum term greater than one year for recording on the balance sheet.

We adopted the standard using the modified retrospective approach, as of January 1, 2019.

Prior year's financial results were not restated.

On the adoption date, we recorded a right-of-use asset for $ 72 million in other assets, net, with a corresponding offset to other accrued liabilities and other noncurrent liabilities for $ 25 million and $ 47 million, respectively.

There was no impact to retained deficit from adoption of the new standard.

For the year ended December 31, 2018, we recognized rent expense of $ 30 million.

Assets that are Measured at Fair Value on a Nonrecurring Basis

As described in Note 1.

Summary of Business and Significant Accounting Policies, we assess goodwill and other intangible assets with indefinite lives for impairment annually or more frequently if indicators arise.

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 that would require us to perform a goodwill impairment test and we did not record any goodwill impairment charges for the year ended December 31, 2021.

Goodwill and Intangible Assets for additional information.

The following table presents the components of lease expense for the years ended December 31, 2021 and 2020 (in thousands):

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Operating leases $ 296 $ 89,328

Finance leases $ — $ 397

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

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Other accrued liabilities — 889

Other noncurrent liabilities — 78

Total finance lease liabilities $ — $ 889

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

Year Ending December 31, Operating Leases Finance Leases

2021 $ 38,029 $ 923

2022 21,620 —

2023 17,062 —

2024 15,615 —

Year Ending December 31, Operating Leases

2022 $ 21,684

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provided, however, that any undeclared and unpaid dividends will continue to accumulate.

Dividends are payable when, as and if declared by our Board of Directors, out of funds legally available for their payment to the extent paid in cash, quarterly in arrears on March 1, June 1,

September 1 and December 1 of each year, beginning on December 1, 2020 and ending on, and including, September 1, 2023.

Dividends are payable when, as and if declared by our Board of Directors, out of funds legally available for their payment to the extent paid in cash, quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, beginning on December 1, 2020 and ending on, and including, September 1, 2023.

Declared dividends on the Preferred Stock will be payable, at our election, in cash, shares of our common stock or a combination of cash and shares of our common stock.

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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 $ 8 million of preferred stock dividends in our consolidated results of operations for the year ended December 31, 2020.

We recorded $ 22 million of accrued preferred stock dividends in our consolidated results of operations for the year ended December 31, 2021.

During the year ended December 31, 2021, we paid cash dividends on our preferred stock of $ 22 million.

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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.

The Preferred Stock is not be redeemable at our election before the mandatory conversion date.

In the fourth quarter of 2021, a certain holder elected to convert 50,000 shares of preferred stock to 595,240 shares of common stock.

The Preferred Stock is not redeemable at our election before the mandatory conversion date.

The holders of the Preferred Stock do not have any voting rights, with limited exceptions.

1 unchanged sentence

On August 24, 2020, we completed an offering of 41,071,429 shares of our common stock which generated net proceeds of approximately $ 275 million for use as general corporate purposes.

We paid a quarterly cash dividend on our common stock of $ 0.14 per share, totaling $ 39 million, $ 0.14 per share, totaling $ 154 million, and $ 0.14 per share, totaling $ 154 million, during the years ended December 31, 2020, 2019 and 2018, respectively.

During the year ended December 31, 2021, we did not pay cash dividends on our common stock.

We paid a cash dividend on our common stock of $ 0.14 per share, totaling $ 39 million, on March 30, 2020, and we paid a quarterly cash dividend on our common stock of $ 0.14 per share, totaling $ 154 million, during the year ended December 31, 2019.

Given the impacts of COVID-19, we suspended the payment of quarterly cash dividends on our common stock, effective with respect to the dividends occurring after the March 30, 2020 payment.

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

For the year ended December 31, 2020, we did no t repurchase any shares pursuant to the Share Repurchase Program.

For the years ended December 31, 2019 and 2018, we repurchased 3,673,768 shares totaling $ 78 million and 1,075,255 shares totaling $ 26 million pursuant to the Share Repurchase Program, respectively.

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.

For the years ended December 31, 2021 and 2020 we did not repurchase any shares pursuant to the Share Repurchase Program.

For the year ended December 31, 2019 we repurchased 3,673,768 shares totaling $ 78 million 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 undertook 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 December 31, 2021.

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 year ended December 31, 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 December 31, 2021, we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

Debt for further details.

We expect to settle the principal amount of the outstanding Exchangeable Notes in shares of our common stock.

Equity-Based Awards

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Management Equity Incentive Plan (“Sovereign MEIP”), the Sovereign Holdings, Inc.

2012 Management Equity Incentive Plan (“Sovereign 2012 MEIP”), the Sabre Corporation 2014 Omnibus Incentive Compensation Plan (the “2014 Omnibus Plan”), the Sabre Corporation 2016 Omnibus Incentive Compensation Plan (the “2016 Omnibus Plan”), the Sabre Corporation 2019 Omnibus Incentive Compensation Plan (the "2019 Omnibus Plan"), and the 2019 Director Equity Compensation Plan ("2019 Director Plan").

Our 2019 Omnibus Plan serves as a successor to the 2016 Omnibus Plan, the 2014 Omnibus Plan, the Sovereign MEIP and Sovereign 2012 MEIP and provides for the issuance of stock options, restricted shares, restricted stock units (“RSUs”), performance-based RSU awards (“PSUs”), cash incentive compensation and other stock-based awards.

Our 2019 Director Plan provides for the issuance of RSUs, Deferred Stock Units ("DSUs"), and stock options to non-

employee Directors.

2012 Management Equity Incentive Plan (“Sovereign 2012 MEIP”), the Sabre Corporation 2014 Omnibus Incentive Compensation Plan (the “2014 Omnibus Plan”), the Sabre Corporation 2016 Omnibus Incentive Compensation Plan (the “2016 Omnibus Plan”), the Sabre Corporation 2019 Omnibus Incentive Compensation Plan (the "2019 Omnibus Plan"), the 2019 Director Equity Compensation Plan ("2019 Director Plan"), and the Sabre Corporation 2021 Omnibus Incentive Compensation Plan (the "2021 Omnibus Plan") .

Our 2021 Omnibus Plan serves as a successor to the 2019 Omnibus Plan, the 2016 Omnibus Plan, the 2014 Omnibus Plan, the Sovereign MEIP and Sovereign 2012 MEIP and provides for the issuance of stock options, restricted shares, restricted stock units (“RSUs”), performance-based RSU awards (“PSUs”), cash incentive compensation and other stock-based awards.

Our 2019 Director Plan provides for the issuance of RSUs, Deferred Stock Units ("DSUs"), and stock options to non-employee Directors.

Outstanding awards under the 2016 Omnibus Plan, the 2014 Omnibus Plan, the Sovereign MEIP and Sovereign 2012 MEIP continue to be subject to the terms and conditions of their respective plan.

We initially reserved 12,500,000 shares of our common stock for issuance under our 2019 Omnibus Plan and 500,000 shares of our common stock for issuance under our 2019 Director Plan.

We added 10,687,275 shares that were reserved but not issued under the Sovereign MEIP, Sovereign 2012 MEIP, 2014 Omnibus, and 2016 Omnibus Plans to the 2019 Omnibus Plan reserves, for a total of 23,187,275 authorized shares of common stock for issuance under the 2019 Omnibus Plan.

We initially reserved 12,000,000 shares of our common stock for issuance under our 2021 Omnibus Plan.

We added 6,438,450 shares that were reserved but not issued under the Sovereign MEIP, Sovereign 2012 MEIP, 2014 Omnibus, 2016 Omnibus Plans, and 2019 Omnibus Plan to the 2021 Omnibus Plan reserves, for a total of 18,438,450 authorized shares of common stock for issuance under the 2021 Omnibus Plan.

Additionally, we have reserved 500,000 shares of our common stock for issuance under our 2019 Director Plan.

Time-based options granted under the 2019, 2016, and 2014 Omnibus Plans prior to 2020 generally vest over a four year period with 25 % vesting at the end of year one and the remaining vesting quarterly thereafter.

Time-based options granted under the 2019 Omnibus Plan in 2020 vest over a three-year period, vesting in equal annual installments.

Time-based options granted under the 2021 Omnibus plan and the 2019 Omnibus Plan in 2020 and 2021 vest over a three-year period, vesting in equal annual installments.

Options granted prior to fiscal year 2020 vested over a four-year period.

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PSUs granted prior to 2020 generally vest over a four year period with 25 % vesting annually.

During 2020, we granted PSUs that vest over a three year period in equal annual installments, as well as PSUs that cliff vest at the end of one , two, or three years , depending on the terms of the grant.

During 2020 and 2021, we granted PSUs that vest over a three year period in equal annual installments, as well as PSUs that cliff vest at the end of one , two, or three years , depending on the terms of the grant.

Vesting of PSUs is dependent upon the achievement of certain company-based performance measures.

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Exercised ( 84,341 ) 8.81

Cancelled ( 1,857,337 ) 22.86

Forfeited ( 61,383 ) 15.39

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______________________

(1) Aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options awards and the closing price of our common stock of $ 12.02 on December 31, 2020.

The total intrinsic value of stock options exercised was immaterial for the year ended December 31, 2020.

For the years ended December 31, 2019 and 2018, the total intrinsic value of stock options exercised was $ 4 million and $ 6 million, respectively.

The weighted-average fair values of options granted were $ 1.71 , $ 4.55 , and $ 4.58 during the years ended December 31, 2020, 2019 and 2018, respectively.

(1) Aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options awards and the closing price of our common stock of $ 8.59 and $ 12.02 on December 31, 2021 and 2020, respectively.

If the aggregate intrinsic value is negative, it is assigned a nil value.

The total intrinsic value of stock options exercised was immaterial for the years ended December 31, 2021 and 2020.

For the year ended December 31, 2019, the total intrinsic value of stock options exercised was $ 4 million.

The weighted-average fair values of options granted were $ 6.01 , $ 1.71 , and $ 4.55 during the years ended December 31, 2021, 2020 and 2019,

respectively.

As of December 31, 2021, $ 2 million in unrecognized compensation expense associated with stock options will be recognized over a weighted-average period of 1.5 years.

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Vested ( 4,899,238 ) 12.43

Cancelled ( 295,024 ) 8.47

Forfeited ( 871,986 ) 13.52

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The recognition of compensation expense associated with PSUs is contingent upon the achievement of annual company-based performance measures.

During the year ended December 31, 2020, we amended the 2020 performance metrics associated with PSUs that vest in March 2021 due to the impact of COVID-19 on our performance and these awards became subject to variable accounting based on the fair value at the end of each period with the cumulative effect of changes in fair value recorded each reporting period.

During the year ended December 31, 2021, we amended the performance criteria for all other outstanding PSUs as of March 2021.

During the years ended December 31, 2021, 2020 and 2019, we assessed the probability of achieving the performance measures associated with PSU awards each reporting period and, if there was an adjustment, recorded the cumulative effect of the adjustment in that respective reporting period.

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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, expect per share data):

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):

Year Ended December 31,

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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 2 million of dilutive stock options and restricted stock awards for the year ended December 31, 2020 as their effect would be anti-dilutive given the net loss incurred in the period.

The calculation of diluted weighted-average shares excludes the impact of 3 million of anti-dilutive common stock equivalents for the years ended December 31, 2020, 2019 and 2018, respectively.

As we expect to settle the principal amount of the outstanding Exchangeable Notes in shares of our common stock, we have used the if-converted method for calculating any potential dilutive effect of these notes on our diluted net income per share.

The diluted weighted-average common shares outstanding calculation excludes 4 million and 2 million of dilutive stock options and restricted stock awards for the years ended December 31, 2021 and 2020, respectively, as their effect would be anti-dilutive given the net loss incurred in those periods.

The calculation of diluted weighted-average shares excludes the impact of 2 million for the year ended December 31, 2021 and 3 million for the years ended December 31, 2020 and 2019 of anti-dilutive common stock equivalents.

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 year ended December 31, 2020, respectively, as their effect would be anti-dilutive given the net loss incurred in the period.

The approximately 42 million and 44 million resulting common shares related to the Exchangeable Notes are not included in the dilutive weighted-average common shares outstanding calculation for the years ended December 31, 2021 and 2020, respectively, as their effect would be anti-dilutive given the net loss incurred in those periods.

There was a $ 0.03 decrease to our earnings per share for the year ended December 31, 2020, as a result of the full retrospective adoption on January 1, 2021 of updated guidance affecting the accounting for the Exchangeable Notes.

Summary of Business and Significant Accounting Policies 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 year ended December 31, 2020, respectively, as their effect would be anti-dilutive given the net loss incurred in the period.

The approximately 39 million and 40 million resulting common shares related to the Preferred Stock are not included in the dilutive weighted-average common shares outstanding calculation for the years ended December 31, 2021 and 2020, respectively, as their effect would be anti-dilutive given the net loss incurred in those periods.

Pension and Other Postretirement Benefit Plans

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( 11,822 ) ( 14,675 )

Actuarial loss, net ( 53,831 ) ( 47,632 )

Actuarial gain (loss), net 22,387 ( 53,831 )

Benefits paid

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Unfunded status at December 31 $ ( 84,168 ) $ ( 123,763 )

The actuarial gain, net of $ 22 million for the year ended December 31, 2021 is attributable to an increase in the discount rate.

The actuarial loss, net of $ 54 million for the year ended December 31, 2020 is attributable to a decrease in the discount rate.

The actuarial loss, net of $ 48 million for the year ended December 31, 2019, is attributable to a decrease in the discount rate, form of payment assumptions, and updates to certain plan participant assumptions.

During the year ended December 31, 2020, lump sum settlements occurred within our defined benefit pension plan which resulted in a loss of $ 18 million recorded to Other, net.

During the year ended December 31, 2021 and 2020 lump sum settlements occurred within our defined benefit pension plan which resulted in a loss of $ 8 million and $ 18 million, respectively, recorded to Other, net.

The net benefit obligation of $ 84 million and $ 124 million as of December 31, 2021 and 2020, respectively, is included in other noncurrent liabilities in our consolidated balance sheets.

The amounts recognized in accumulated other comprehensive income (loss) associated with the LPP, net of deferred taxes of $ 40 million and $ 42 million as of December 31, 2020 and 2019, respectively, are as follows (in thousands):

The amounts recognized in accumulated other comprehensive income (loss) associated with the LPP, net of deferred taxes of $ 40 million as of December 31, 2021 and 2020, are as follows (in thousands):

Net actuarial loss $ ( 115,772 ) $ ( 159,709 )

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Interest cost (1)

$ 11,822 $ 14,675 $ 18,324

Expected return on plan assets (1)

( 14,334 ) ( 15,420 ) ( 18,510 )

Amortization of prior service credit (1)

( 1,432 ) ( 1,432 ) ( 1,432 )

Amortization of actuarial loss (1)

7,985 8,622 6,516

Net periodic benefit $ 4,041 $ 6,445 $ 4,898

Settlement charge (1)

7,529 18,071 —

Net cost $ 11,570 $ 24,516 $ 4,898

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________________________________

(1) As of August 31, 2020, 2.76 % discount rate due to the settlement charge.

(1) Included in Other, net on our consolidated statement of operations.

(2) Discount rates are as of January 1 of the respective years.

Due to settlements during the year additional discount rates assumed are as follows:

August 31, 2020:

2.76 %, June 30, 2021:

2.89 %, September 30, 2021:

The following table provides the pre-tax amounts recognized in other comprehensive income (loss), including the amortization of the actuarial loss and prior service credit, associated with the LPP for the years ended December 31, 2021, 2020 and 2019 (in thousands):

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Other Comprehensive Income (Loss) 2021 2020 2019

Net actuarial loss $ 15,225 $ 11,196 $ 25,595

Net actuarial loss (gain) $ ( 37,258 ) $ 15,225 $ 11,196

Pension settlement ( 7,529 ) ( 18,071 ) —

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It is recognized that the investment management of the LPP assets has a direct effect on the achievement of its goal.

As defined in Note 11.

defined in Note 11.

Fair Value Measurements, the following tables present the fair value of the LPP assets as of December 31, 2021 and 2020:

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Identical Assets

(Level 1) Significant

(Level 2) Significant

(Level 3) Total

Common collective trusts:

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Net investment income

Unrealized gain

Net realized gain

Unrealized loss

Net realized loss

Ending balance at December 31, 2020 $ 8,735

Contributions

Net distributions

Net investment income

Unrealized loss

Net realized loss

Unrealized gain

Net realized gain

Ending balance at December 31, 2021 $ 7,883

3 unchanged sentences

Thus, past contributions are not always indicative of future contributions.

Based on current assumptions, we expect to make $ 13 million in contributions to our defined benefit pension plans in 2021.

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.

We have elected to use excess contributions resulting from a reduction to past contribution requirements allowed

by ARPA to offset contributions for calendar year 2021 and 2022.

As such, we do no t expect to make contributions to our defined benefit pension plans in 2022.

The expected long term rate of return on plan assets for each measurement date was selected after giving consideration to historical returns on plan assets, assessments of expected long term inflation and market returns for each asset class and the target asset allocation strategy.

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The jury rejected US Airways' claim alleging a conspiracy with the other GDSs.

We continue to believe that our business practices and contract terms are lawful.

Based on the jury’s verdict, in March 2017 the court entered final judgment in favor of US Airways in the amount of $ 15 million, which is three times the jury’s award of $ 5 million as required by the Sherman Act.

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The trial court has scheduled the trial to begin on April 25, 2022.

We continue to believe that our business practices and contract terms are lawful.

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

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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.

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.

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.

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

Based on its findings in the investigation, the DOJ may (i) close the file, (ii) seek a consent decree to remedy issues it believes violate the antitrust laws, or (iii) file suit against us for violating the antitrust laws, seeking injunctive relief.

If injunctive relief were granted, depending on its scope, it could affect the manner in which our airline distribution business is operated and potentially force changes to the existing airline distribution business model.

Any of these consequences would have a material adverse effect on our business, financial condition and results of operations.

We have not received any communications from the DOJ regarding this matter for several years;

however, we have not been notified that this matter is closed.

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.

The Court also denied American Airlines’ subsequent motion seeking reconsideration of the Court’s denial of the temporary injunction.

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.

Indian Income Tax Litigation

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The DIT appealed those decisions to the Bombay High Court and our case is pending before that court.

The DIT also assessed taxes on a similar basis plus some additional issues for

assessment years ending March 2006 through March 2016 and appeals for assessment years ending March 2006 through 2016 are pending before the ITAT or the High Court depending on the year.

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 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 $ 46 million as of December 31, 2021.

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

Although we do not believe that the outcome of the proceedings will result in a material impact on our business or financial condition, litigation is by its nature uncertain.

Although we do not believe that the outcome of the proceedings will result in a material impact on our

business or financial condition, litigation is by its nature uncertain.

We do not believe this outcome is more likely than not and therefore have not made any provisions or recorded any liability for the potential resolution of any of these claims.

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In December 2020, we entered into settlement agreements with certain state Attorneys General to resolve their investigation into this incident.

As part of the settlement with these states, we paid $ 2 million to the states represented by the Attorneys General in the first quarter of 2021 and agreed to implement certain security controls and processes.

As part of these settlement agreements, we paid $ 2 million to the states represented by the Attorneys General in the first quarter of 2021 and agreed to implement certain security controls and processes.

Separately, in November 2017, Sabre Hospitality Solutions observed a pattern of activity that, after further investigation, led it to believe that an unauthorized party improperly obtained access to certain hotel user credentials for purposes of accessing the HS Central Reservation System.

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We also notified the payment card brands, and at their request, we have engaged a PCI forensic investigator to investigate this incident.

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

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 above.

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For example, in most countries we pay and collect Value Added Tax (“VAT”) when procuring goods and services, or providing services, within the normal course of business.

VAT receivables are established in jurisdictions where VAT paid exceeds VAT collected and are recoverable through the filing of

refund claims.

VAT receivables are established in jurisdictions where VAT paid exceeds VAT collected and are recoverable through the filing of refund claims.

These receivables have inherent audit and collection risks unique to the specific jurisdictions that evaluate our refund claims.

Our most significant VAT receivable is in Greece.

As of December 31, 2020, we have approximately $ 22 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.

In the second quarter of 2020, we received notice that the tax court has accepted our arguments to dismiss certain claims by the Greek tax authorities;

however, this ruling has been appealed.

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 December 31, 2020, we do not believe that an adverse outcome is probable with respect to the claims of the Greek tax authorities or any other jurisdiction;

We intend to vigorously defend our positions against any claims that are not insignificant, including through litigation when necessary.

As of December 31, 2021, we do not believe that an adverse outcome is probable with respect to current outstanding claims;

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

Nevertheless, we may incur expenses in future periods related to such matters, including litigation costs and possible pre-payment of a portion of any assessed tax amount to defend our position, and if our positions are ultimately rejected, it could have a material impact to our results of operations.

Nevertheless, we may incur expenses in future periods related to such matters, including litigation costs and

possible pre-payment of a portion of any assessed tax amount to defend our position, and if our positions are ultimately rejected, it could have a material impact to our results of operations.

Segment Information

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We now operate our business and present our results through two business segments effective the third quarter of 2020 (i) Travel Solutions, our global travel solutions for travel suppliers and travel buyers, including a broad portfolio of software technology products and solutions for airlines, and (ii) Hospitality Solutions, an extensive suite of software solutions for hoteliers.

All revenue and expenses previously assigned to the Travel Network and Airline Solutions business segments have been consolidated into a unified revenue and expense structure which aligns with information that our Chief Operating Decision Maker utilizes beginning in the third quarter of 2020 to evaluate segment performance and allocate resources.

All revenue and expenses previously assigned to the Travel Network and Airline Solutions business segments have been consolidated into a unified revenue and expense structure which aligns with information that our CODM utilizes beginning in the third quarter of 2020 to evaluate segment performance and allocate resources.

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

Our CODM utilizes Adjusted Operating (Loss) Income as the measures 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) Income , 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) Income 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) Income as operating (loss) income adjusted for equity method (loss) income, impairment and related charges, acquisition-related amortization, restructuring and other costs, acquisition-related costs, litigation costs, net, and stock-based compensation.

As a result of the Strategic Realignment, we have separated our technology costs from cost of revenue and moved certain expenses previously classified as cost of revenue to selling, general and administrative to provide increased visibility to our technology costs for analytical and decision-making purposes and to align costs with the current leadership and operational organizational structure.

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

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.

Certain of our costs associated with our technology organization are allocated to the segments based on the segments' usage of resources.

Benefit expenses, facility costs and depreciation expense on the corporate headquarters building are allocated to the segments based on headcount.

Benefit expenses, facility and lease costs and associated depreciation expense are allocated to the segments based on headcount.

Unallocated corporate costs include certain shared expenses such as accounting, finance, human resources, legal, corporate systems, amortization of acquired intangible assets, impairment and related charges, stock-based compensation, restructuring charges, legal reserves and other items not identifiable with one of our segments.

34 unchanged sentences

Restructuring and other costs (3)

( 7,608 ) 85,797 —

Acquisition-related costs (4)

7 unchanged sentences

(2) Acquisition-related amortization represents amortization of intangible assets from the take-private transaction in 2007 as well as intangibles associated with acquisitions since that date.

(3) Restructuring and other costs represents charges associated with business restructuring and associated changes, including the Strategic Realignment, as well as other measures to support the new organizational structure and to respond to the impacts of the COVID-19 pandemic on our business, facilities and cost structure.

(3) Restructuring and other costs represent charges, and adjustments to those charges, associated with business restructuring and associated changes, including the Strategic Realignment, as well as other measures to support the new organizational structure and to respond to the impacts of the COVID-19 pandemic on our business, facilities and cost structure.

Restructuring Activities for further details.

(4) Acquisition-related costs represent fees and expenses incurred associated with the now-terminated agreement to acquire Farelogix, as well as costs related to the acquisition of Radixx in 2019.

Acquisitions for further information.

(4) Acquisition-related costs represent fees and expenses incurred associated with the now-terminated agreement to acquire Farelogix, as well as costs related to the acquisition of Radixx in 2019 and other acquisition and disposition related activities.

Acquisitions and Dispositions for further information.

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

1 unchanged sentence

In 2019, we recorded the reversal of our previously accrued loss related to the US Airways legal matter for $ 32 million.

In 2018, we recorded non-income tax expense of $ 5 million for tax, penalties and interest associated with certain non-income tax claims for historical periods regarding permanent establishment in a foreign jurisdiction.

Commitments and Contingencies for further information.

26 unchanged sentences

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-K

Item 8. Financial Statements and Supplementary Data