What changed in this filing

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Item 1. Financial Statements

2022-05-03 compared with 2021-11-02 · 228 added, 378 removed, 544 unchanged (53% of the section changed)

3 unchanged sentences

(In thousands, except per share amounts)

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

2021 2020 2021 2020

Three Months Ended March 31,

Revenue $ 584,910 $ 327,484

8 unchanged sentences

Other, net 191,241 11,631

Total other expense, net ( 84,638 ) ( 93,600 ) ( 204,860 ) ( 241,742 )

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

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

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

Total other income (expense), net 126,480 ( 53,381 )

Income (loss) from continuing operations before income taxes 46,948 ( 255,934 )

(Benefit) provision for income taxes ( 596 ) 3,997

Income (loss) from continuing operations 47,544 ( 259,931 )

Income (loss) from discontinued operations, net of tax 134 ( 263 )

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

Net income (loss) 47,678 ( 260,194 )

Net income attributable to noncontrolling interests 272 484

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

Net income (loss) attributable to Sabre Corporation 47,406 ( 260,678 )

Preferred stock dividends 5,346 5,428

Net loss attributable to common stockholders $ ( 240,641 ) $ ( 309,664 ) $ ( 758,029 ) $ ( 964,914 )

Basic net loss per share attributable to common stockholders:

Loss from continuing operations $ ( 0.75 ) $ ( 1.06 ) $ ( 2.37 ) $ ( 3.43 )

Loss from discontinued operations — — — ( 0.01 )

Net loss per common share $ ( 0.75 ) $ ( 1.06 ) $ ( 2.37 ) $ ( 3.44 )

Diluted net loss per share attributable to common stockholders:

Loss from continuing operations $ ( 0.75 ) $ ( 1.06 ) $ ( 2.37 ) $ ( 3.43 )

Loss from discontinued operations — — — ( 0.01 )

Net loss per common share $ ( 0.75 ) $ ( 1.06 ) $ ( 2.37 ) $ ( 3.44 )

Net income (loss) attributable to common stockholders $ 42,060 $ ( 266,106 )

Basic net income (loss) per share attributable to common stockholders:

Income (loss) from continuing operations $ 0.13 $ ( 0.84 )

Net income (loss) per common share $ 0.13 $ ( 0.84 )

Diluted net income (loss) per share attributable to common stockholders:

Income (loss) from continuing operations $ 0.12 $ ( 0.84 )

Net income (loss) per common share $ 0.12 $ ( 0.84 )

Weighted-average common shares outstanding:

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SABRE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

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

2021 2020 2021 2020

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

Three Months Ended March 31,

Net income (loss) $ 47,678 $ ( 260,194 )

Other comprehensive income (loss), net of tax:

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Retirement-related benefit plans:

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

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

Pension settlement, net of taxes of $ 973 , $( 3,055 ), $ — , $( 3,055 )

3,170 10,488 6,544 10,488

Amortization of prior service credits, net of taxes of $( 122 ), $ 80 , $ 38 , $ 241

( 392 ) ( 278 ) ( 948 ) ( 834 )

Amortization of actuarial losses, net of taxes of $ 931 , $( 525 ), $( 38 ), $( 1,451 )

Net actuarial gain, net of taxes of $ — , $ —

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

( 358 ) ( 278 )

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

Net change in retirement-related benefit plans, net of tax 3,096 1,396

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

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

Reclassification adjustment for realized losses, net of taxes of $( 930 ), $( 1,283 ), $( 2,745 ), $( 3,585 )

3,237 4,500 9,553 12,894

Unrealized losses, net of taxes of $ — , and $ 1

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

Net change in derivatives, net of tax — 3,125

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

Share of other comprehensive income of equity method investments 655 534

Other comprehensive income 2,464 215

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

Comprehensive income (loss) 50,142 ( 259,979 )

Comprehensive income attributable to noncontrolling interests ( 272 ) ( 484 )

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

Comprehensive income (loss) attributable to Sabre Corporation $ 49,870 $ ( 260,463 )

See Notes to Consolidated Financial Statements.

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(In thousands)

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Current assets

4 unchanged sentences

Prepaid expenses and other current assets 137,393 121,591

Current assets held for sale — 21,358

Total current assets 1,678,425 1,402,274

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Other assets, net 447,392 475,424

Long-term assets held for sale — 203,204

Total assets $ 5,314,479 $ 5,291,330

Liabilities and stockholders’ (deficit) equity

Liabilities and stockholders’ deficit

Current liabilities

5 unchanged sentences

Current portion of debt 16,730 29,290

Current liabilities held for sale — 21,092

Total current liabilities 694,529 716,505

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Long-term debt 4,732,711 4,723,685

Long-term liabilities held for sale — 15,476

Commitments and contingencies (Note 13)

Stockholders’ (deficit) equity

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

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

Stockholders’ deficit

Preferred stock, $ 0.01 par value, 225,000 authorized, 3,290 issued and outstanding as of March 31, 2022 and December 31, 2021;

aggregate liquidation value of $ 329,000 as of March 31, 2022 and December 31, 2021

Common Stock:

1 unchanged sentence

1,000,000 authorized shares;

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

350,314 and 346,430 shares issued, 326,307 and 323,501 shares outstanding at March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital 3,143,315 3,115,719

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

Treasury Stock, at cost, 24,007 and 22,930 shares at March 31, 2022 and December 31, 2021, respectively

( 508,441 ) ( 498,141 )

1 unchanged sentence

Accumulated other comprehensive loss ( 77,823 ) ( 80,287 )

Non-controlling interest 8,685 7,028

Total stockholders’ (deficit) equity ( 355,077 ) 285,154

Total liabilities and stockholders’ (deficit) equity $ 5,442,908 $ 6,077,722

Noncontrolling interest 9,343 9,190

Total stockholders’ deficit ( 437,705 ) ( 499,717 )

Total liabilities and stockholders’ deficit $ 5,314,479 $ 5,291,330

See Notes to Consolidated Financial Statements.

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(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating Activities

Net loss $ ( 740,116 ) $ ( 961,846 )

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

Net income (loss) $ 47,678 $ ( 260,194 )

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

Gain on sale of assets and investments ( 192,151 ) ( 14,532 )

Depreciation and amortization 50,108 73,223

1 unchanged sentence

Amortization of upfront incentive consideration 11,325 15,825

Gain on sale of investment ( 14,532 ) —

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

Loss on extinguishment of debt 3,533 —

Amortization of debt discount and issuance costs 3,438 2,853

Pension settlement charge 6,544 13,543

Deferred income taxes ( 2,570 ) ( 2,004 )

Provision for expected credit losses 1,997 ( 2,226 )

(Income) loss from discontinued operations ( 134 ) 263

Other ( 485 ) 1,396

Debt modification costs 2,435 —

Dividends received from equity method investments 698 1,691

Loss from discontinued operations 158 3,331

Acquisition termination fee — 24,811

Changes in operating assets and liabilities:

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Investing Activities

Proceeds from disposition of investments and assets 24,874 —

Net proceeds from dispositions 392,268 14,840

Additions to property and equipment ( 17,403 ) ( 6,435 )

Other investing activities — ( 4,375 )

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

Cash provided by investing activities 374,865 8,405

Financing Activities

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

Payments on borrowings from lenders ( 625,296 ) ( 6,295 )

Proceeds of borrowings from lenders 625,000 —

Net payment on the settlement of equity-based awards ( 10,309 ) ( 12,434 )

Dividends paid on preferred stock ( 16,283 ) —

Debt prepayment fees and issuance costs ( 10,185 ) —

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

Dividends paid on preferred stock ( 5,346 ) ( 5,428 )

Other financing activities 301 ( 64 )

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

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

Payments on Tax Receivable Agreement — ( 71,958 )

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

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

Cash used in financing activities ( 25,835 ) ( 24,221 )

Cash Flows from Discontinued Operations

1 unchanged sentence

Cash used in discontinued operations ( 1,680 ) ( 281 )

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

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

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 205 ) ( 1,247 )

Increase (decrease) in cash, cash equivalents and restricted cash 208,062 ( 214,747 )

Cash, cash equivalents and restricted cash at beginning of period 999,391 1,499,665

4 unchanged sentences

(In thousands, except share data)

Stockholders’ Equity (Deficit)

Stockholders’ Deficit

Preferred Stock Common Stock Additional

Capital Treasury Stock Retained

(Deficit) Accumulated

Capital Treasury Stock Retained Deficit Accumulated

Comprehensive Loss Noncontrolling

1 unchanged sentence

Stockholders'

Equity (Deficit)

Shares Amount Shares Amount Shares Amount

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 )

Comprehensive loss — — — — — — — ( 260,678 ) 215 484 ( 259,979 )

Comprehensive income — — — — — — — 47,406 2,464 272 50,142

Preferred stock dividends (1)

2 unchanged sentences

Stock-based compensation expense — — — — 27,605 — — — — — 27,605

Other — — — — — — — — — ( 119 ) ( 119 )

Balance at March 31, 2022 3,290,000 $ 33 350,314,109 $ 3,503 $ 3,143,315 24,006,846 $ ( 508,441 ) $ ( 3,007,635 ) $ ( 77,823 ) $ 9,343 $ ( 437,705 )

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

Preferred stock dividends (1)

— — — — — — — ( 5,428 ) ( 5,428 )

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

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

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

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

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

Preferred stock dividends (1)

— — — — — — — ( 5,400 ) — — ( 5,400 )

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

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

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

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

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

Stockholders’ Equity

Preferred Stock Common Stock Additional

Capital Treasury Stock Retained

(Deficit) Accumulated

Capital Treasury Stock Retained Deficit Accumulated

Comprehensive

5 unchanged sentences

Comprehensive loss — — — — — — — ( 260,678 ) 215 484 ( 259,979 )

Common stock dividends (1)

Preferred stock dividends (1)

— — — — — — — ( 5,428 ) — — ( 5,428 )

1 unchanged sentence

Stock-based compensation expense — — — — 24,426 — — — — — 24,426

Adoption of New Accounting Standards — — — — — — — ( 7,591 ) — — ( 7,591 )

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

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

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

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

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

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

Accrued preferred stock dividend (2)

— — — — — — — ( 2,231 ) — — ( 2,231 )

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

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

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

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

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

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

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

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On March 30, 2007, Sabre Corporation acquired Sabre Holdings Corporation (“Sabre Holdings”).

Sabre Holdings is the sole subsidiary of Sabre Corporation.

Sabre Holdings is the sole direct subsidiary of Sabre Corporation.

Sabre GLBL Inc.

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

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

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

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

As expected, this pandemic has continued to have a material impact on our consolidated financial results in the first quarter of 2022.

Despite the continued negative impacts of the COVID-19 pandemic on our business and global travel volumes, we have seen some continued improvement in our key volume metrics during the first quarter of 2022 as compared to the prior year as COVID-19 vaccines have continued to be administered and some travel restrictions have been relaxed.

While domestic bookings continue to exceed international bookings, international bookings also continue to improve, resulting in year-over-year revenue improvement.

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

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

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

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

The provision for credit losses for the nine months ended September 30, 2021 decreased $ 62 million from the same period in the prior year, primarily related to fully reserving for aged balances of certain customers in the prior year and an overall improvement in our forecasted credit losses in the current year given the start of the global economic recovery from the COVID-19 pandemic.

Our air booking cancellation reserve totaled $ 15 million and $ 18 million as of March 31, 2022, and December 31, 2021, respectively.

Additionally, our allowance for credit losses at March 31, 2022 was $ 58 million, a decrease of $ 2 million from December 31, 2021.

The provision for credit losses for the three months ended March 31, 2022 was $ 2 million, and for the three months ended March 31, 2021 was a reversal of $ 2 million due to the recovery experienced in 2021.

Credit Losses.

We have not identified any triggering events or changes in circumstances since the performance of our annual goodwill impairment test that would require us to perform another goodwill impairment test, and we did not record any goodwill impairment charges for the three and nine months ended September 30, 2021.

Fair Value Measurements for further information.

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

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.

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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.

Strategic Realignment— 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 our 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 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.

Financial information for all periods presented has been updated to reflect these reclassifications.

Subsequent to the initiation of the current military conflict in Ukraine, we terminated our distribution agreement with Public Joint Stock Company Aeroflot Russian Airlines ("Aeroflot").

In addition, air travel in and to Russia, Ukraine, and Belarus has substantially declined, including as a result of sanctions imposed on those countries.

While none of Russia, Ukraine, and Belarus constituted a significant portion of our financial results in 2021, we have experienced significantly reduced GDS bookings and passengers boarded in Russia, Belarus and Ukraine beginning in the middle of the first quarter of 2022, and these reductions are ongoing.

For reference, our Travel Solutions revenue generated in Russia represented a low-single digit percentage of our total 2019 Travel Solutions revenue.

An expansion in the scope of the current conflict or any economic disruption, or any expansion of sanctions or export controls, could have a material adverse effect on our results of operations.

Basis of Presentation— The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information.

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

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

Operating results for the three months ended March 31, 2022 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2022.

The accompanying interim financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 18, 2022 .

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Our accounting policies that utilize significant estimates and assumptions include:

(i) estimation for revenue recognition and multiple performance obligation arrangements, (ii) determination of the fair value of assets and liabilities acquired in a business combination, (iii) the evaluation of the recoverability of the carrying value of long-lived assets and goodwill, (iv) assumptions utilized to test recoverability of capitalized implementation costs and customer and subscriber advances, (v) judgments in capitalization of software developed for internal use, (vi) the evaluation of uncertainties surrounding the calculation of our tax assets and liabilities, (vii) estimation of the air booking cancellation reserve, and (viii) the evaluation of the allowance for credit losses.

(i) estimation for revenue recognition and multiple performance obligation arrangements, (ii) determination of the fair value of assets and liabilities

acquired in a business combination, (iii) the evaluation of the recoverability of the carrying value of long-lived assets and goodwill, (iv) assumptions utilized to test recoverability of capitalized implementation costs and customer and subscriber advances, (v) judgments in capitalization of software developed for internal use, (vi) the evaluation of uncertainties surrounding the calculation of our tax assets and liabilities, (vii) estimation of the air booking cancellation reserve, and (viii) the evaluation of the allowance for credit losses.

Our use of estimates and the related accounting policies are discussed in the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 18, 2022.

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

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

Debt for additional information.

Adoption of New Accounting Standards

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.

In January 2021, the FASB issued additional clarification related to reference rate reform, permitting entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, computing variation margin settlements, and calculating price alignment interest in connection with reference rate reform activities under way in global financial markets.

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

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

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

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 was a decrease in interest, net of $ 3 million and $ 6 million for the three and nine months ended September 30, 2020, respectively, an immaterial decrease in benefit for income taxes for the three months ended September 30, 2020 and a decrease of $ 2 million in benefit for income taxes for the nine months ended September 30, 2020.

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

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

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

December 31, 2020

As 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.

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

In March 2022, the Financial Accounting Standards Board ("FASB") issued updated guidance on derivatives and hedging which allows entities to apply fair value hedging to closed portfolios of prepayable financial assets without having to consider prepayment risk or credit risk when measuring the assets.

The amendments allow multiple hedged layers to be designated for a single closed portfolio for financial assets or one or more beneficial interests secured by a portfolio of financial instruments.

As a result, an entity can achieve hedge accounting for hedges of a greater proportion of the interest rate risk inherent in the assets included in the closed portfolio, further aligning hedge accounting with risk management strategies.

The standard is effective for public entities for fiscal years beginning after December 15, 2022, with early adoption permitted.

We adopted this standard in the first quarter of 2022 and there was no impact to our consolidated financial statements for the three months ended March 31, 2022 as a result of the adoption.

Revenue from Contracts with Customers

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

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

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

The following table presents our assets and liabilities with customers as of March 31, 2022 and December 31, 2021 (in thousands).

Account Consolidated Balance Sheet Location March 31, 2022 December 31, 2021

Contract assets and customer advances and discounts (1)

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______________________

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

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

(1) Includes contract assets of $ 12 million and $ 11 million for March 31, 2022 and December 31, 2021, respectively.

During the three months ended March 31, 2022, we recognized revenue of approximately $ 7 million from contract liabilities that existed as of January 1, 2022.

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

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

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

2021 2020 2021 2020

Three Months Ended March 31,

Distribution $ 342,888 $ 151,781

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Total Sabre Revenue $ 584,910 $ 327,484

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

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

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

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

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

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

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

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

Given the uncertainties surrounding the duration and effects of COVID-19, including any variants, on transaction volumes in the global travel industry, particularly air travel

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

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

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

whether an estimate of variable consideration is constrained.

For the three months ended March 31, 2022, the impact on revenue recognized in the current period from performance obligations partially or fully satisfied in the previous period is $ 24 million, which is due to the recognition of revenue that was previously deferred but became recognizable due to a change in facts and circumstances associated with an IT Solutions customer located in Eastern Europe.

It is no longer considered probable that this revenue will be reversed and this amount was fully paid by the customer.

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

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

Restructuring Activities

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

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

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

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

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

During the nine months ended September 30, 2020, we incurred $ 74 million in connection with these restructuring activities, of which $ 22 million is recorded within cost of revenue, excluding technology costs, $ 32 million is recorded within technology costs and $ 20 million is recorded within selling, general and administrative costs within our consolidated statement of operations.

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

Nine Months Ended

September 30, 2021

Balance as of December 31, 2020 $ 23,253

Cash Payments ( 12,204 )

Non-cash adjustments ( 4,881 )

Balance as of September 30, 2021 $ 6,168

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

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

AirCentre Disposition

On October 28, 2021, we announced that we 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.

The assets and liabilities associated with the AirCentre portfolio are presented as held for sale on our consolidated balance sheets as of December 31, 2021.

On February 28, 2022, we completed the sale of AirCentre to a third party for cash proceeds of $ 392 million.

The operating results of AirCentre are included within Travel Solutions for all periods presented through the date of sale.

The net assets of AirCentre disposed of primarily included goodwill of $ 146 million, working capital of $ 18 million, and other assets, net of $ 25 million.

We recorded a pre-tax gain on sale of approximately $ 192 million (after-tax $ 121 million) in Other, net in our consolidated statements of operations for the three months ended March 31, 2022.

In connection with the closing of the transaction, we entered into a Transition Services Agreement ("TSA") with the acquirer, under which we will provide transition services consisting of technology, administrative and other services for up to a twenty-four month period to provide for an orderly transition and facilitate the ongoing operations of the AirCentre business.

Consideration received under the TSA is primarily based on a fixed fee for each service provided.

To the extent a contract was unable to be assigned by the time of close, we will continue to invoice and collect any relevant consideration and transfer the economic benefit to the acquirer.

For the three months ended March 31, 2022, we recognized $ 1 million of income tax benefit, representing a negative effective tax rate of 1 %, compared to an income tax expense of $ 4 million, representing a negative effective tax rate of 2 % for the three months ended March 31, 2021.

The effective tax rate remained relatively flat for the three months ended March 31, 2022 as compared to the same period in 2021 .

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

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

On the basis of this evaluation, as of September 30, 2021, a cumulative valuation allowance of $ 395 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized.

On the basis of this evaluation, as of March 31, 2022, a cumulative valuation allowance of $ 420 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized.

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

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

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

Our net unrecognized tax benefits, excluding interest and penalties, included in our consolidated balance sheets, were $ 80 million and $ 85 million as of March 31, 2022 and December 31, 2021, respectively.

Credit Losses

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

In circumstances where we are aware of a specific customer’s inability to meet its financial obligations to us, such as bankruptcy filings or failure to pay amounts due to us or others, we specifically reserve for bad debts against amounts due to reduce the recorded receivable to the amount we reasonably believe will be collected.

In circumstances where we are aware of a specific customer’s inability to meet its financial obligations to us, such as bankruptcy filings or failure to pay amounts due to

us or others, we specifically reserve for bad debts against amounts due to reduce the recorded receivable to the amount we reasonably believe will be collected.

For all other customers, we record reserves for receivables, including unbilled receivables and contract assets, based on historical experience and the length of time the receivables are past due.

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

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

Nine Months Ended

September 30, 2021

Our allowance for credit losses for the three months ended March 31, 2022 for our portfolio segment is summarized as follows (in thousands):

Three Months Ended

March 31, 2022

Balance at December 31, 2021 $ 59,646

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Other ( 263 )

Balance at September 30, 2021 $ 78,474

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

Our provision for expected credit losses for the nine months ended September 30, 2021 decreased $ 62 million from the same period in the prior year, primarily related to fully reserving for aged balances of certain customers in the prior year and an overall improvement in our forecasted credit losses in the current year given the start of the global economic recovery from the COVID-19 pandemic.

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

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

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

Balance at March 31, 2022 $ 57,516

Our provision for expected credit losses for the three months ended March 31, 2022 increased $ 4 million to a provision of $ 2 million from a reversal of $ 2 million in the same period in the prior year.

In the prior year quarter and throughout the year of 2021, we experienced the reversal of provisions recorded during 2020, as the economy began to recover and payment experience began to improve.

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 or the current economic environment may continue to result in restructuring or bankruptcy of additional customers.

As of September 30, 2021 and December 31, 2020, our outstanding debt included in our consolidated balance sheets totaled $ 4,758 million and $ 4,744 million, respectively, which are net of debt issuance costs of $ 48 million and $ 54 million respectively, and unamortized discounts of $ 9 million and $ 10 million, respectively.

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

Rate Maturity September 30, 2021 December 31, 2020

As of March 31, 2022 and December 31, 2021, our outstanding debt included in our consolidated balance sheets totaled $ 4,749 million and $ 4,753 million, respectively, which are net of debt issuance costs of $ 43 million and $ 45 million, respectively, and unamortized discounts of $ 14 million and $ 9 million, respectively.

The following table sets forth the face values of our outstanding debt as of March 31, 2022 and December 31, 2021 (in thousands):

Rate Maturity March 31, 2022 December 31, 2021

Senior secured credit facilities:

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February 2024 $ 1,183,129 $ 1,805,806

Other Term Loan B (1)

December 2027 — 637,000

Term Loan B-1 (1)

Other Term Loan B S (1) + 4.25 %

June 2028 625,000 —

Term Loan B-1 L + 3.50 %

December 2027 400,970 401,980

Term Loan B-2 (1)

Term Loan B-2 L + 3.50 %

December 2027 639,170 640,780

Revolver, $ 400 million (1)

November 2023 — 375,000

9.25 % senior secured notes due 2025

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4.000 % April 2025 333,220 333,220

Finance lease obligations 833 889

Face value of total debt outstanding 4,806,489 4,806,786

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______________________

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

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

See the discussion of the 2021 Refinancing below.

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

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

(1) Represents the Secured Overnight Financing Rate ("SOFR")

We had outstanding letters of credit totaling $ 13 million and $ 10 million as of March 31, 2022 and December 31, 2021, respectively, which were secured by a $ 20 million cash collateral deposit account.

Senior Secured Credit Facilities

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

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

rate, respectively.

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

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

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

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

In addition, on July 2, 2021, in anticipation of the Revolver repayment and termination of the revolving commitments (and related letter of credit subfacility), Sabre GLBL entered into a new $ 20 million bilateral letter of credit facility, which is secured by a cash collateral deposit account and included as Restricted cash on our consolidated balance sheets as of September 30, 2021.

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

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

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.

On March 9, 2022, we entered into an amendment to refinance a portion of the Term Loan B facility (the "2022 Refinancing").

We incurred no additional indebtedness as a result of the 2022 Refinancing, other than amounts covering certain fees and expenses.

The 2022 Refinancing included the application of the proceeds of a new $ 625 million term loan “B” facility (the “New Other Term B Facility”), borrowed by Sabre GLBL under our Amended and Restated Credit Agreement, with the effect of extending the maturity of approximately $ 623 million of the existing Term Loan B credit facility under the Amended and Restated Credit Agreement.

We recognized a loss on extinguishment of debt in connection with these transactions during the three months ended March 31, 2022 of $ 4 million and debt modification costs for financing fees of $ 1 million recorded to Other, net.

The New Other Term B Facility matures on June 30, 2028 and offers us the ability to prepay or repay the New Other Term B Facility after 12 months or to prepay or repay at a 101 premium before that date.

The interest rates on the New Other Term B Facility are based on Term SOFR, replacing LIBOR, plus an applicable margin.

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

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 March 31, 2022, we are in compliance with all covenants under the terms of the Amended and Restated Credit Agreement.

Exchangeable Notes

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

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

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

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 March 31, 2022 , we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

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

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• on or after October 15, 2024, until the close of business on the second scheduled trading day immediately preceding the maturity date, April 15, 2025.

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

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

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

Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date.

As of March 31, 2022, none of the conditions allowing holders of the Exchangeable Notes to exchange have been met.

As of March 31, 2022, the if-converted value of the Exchangeable Notes exceeds the outstanding principal amount by $ 150 million.

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

The exchange rate is subject to anti-dilution and other

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

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

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

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

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

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

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

September 30, 2021 December 31, 2020

The following table sets forth the carrying value of the Exchangeable Notes as of March 31, 2022 and December 31, 2021, (in thousands):

March 31, 2022 December 31, 2021

Principal $ 333,220 $ 333,220

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Net Carrying Value $ 325,861 $ 325,303

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

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

2021 2020 2021 2020

The following table sets forth interest expense recognized related to the Exchangeable Notes for the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended March 31,

Contractual interest expense $ 3,332 $ 3,450

Amortization of issuance costs $ 547 $ 538 $ 1,657 $ 982

Amortization of debt discount and issuance costs $ 559 $ 551

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

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

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

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

affects earnings.

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.

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

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 three and nine months ended September 30, 2020.

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

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

As of March 31, 2022 and December 31, 2021, we had no unsettled forward contracts.

Interest Rate Swap Contracts —We had no interest rate swaps outstanding as of March 31, 2022 or December 31, 2021.

Interest rate swaps matured during the year ended December 31, 2021 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 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 extended through the full year 2020.

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

In December 2018, we entered into forward starting interest rate swaps to hedge the interest payments associated with $ 150 million of the floating-rate Term Loan B for the years 2020 and 2021.

We have designated these swaps as cash flow hedges.

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

Derivative Assets (Liabilities)

Fair Value as of

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

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

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

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

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

In April 2018, we entered into forward starting interest rate swaps to hedge the interest payments associated with $ 450 million of the floating-rate Term Loan B related to the year 2021.

In December 2018, we entered into forward starting interest rate swaps to hedge the interest payments associated with $ 150 million of the floating-rate Term Loan B for the year 2021.

We designated these swaps as cash flow hedges.

Subsequent to March 31, 2022, on April 1, 2022, we entered into an interest rate swap to hedge interest payments associated with $ 200 million of the floating rate Other Term Loan B related to the years 2022 and 2023.

The total notional outstanding of $ 200 million became effective April 30, 2022.

There are no effects of derivative instruments, net of taxes, on OCI for the three months ended March 31, 2022.

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

Amount of Loss Recognized in OCI on Derivative,

Effective Portion

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

Three Months Ended March 31,

Derivatives in Cash Flow Hedging Relationships 2021

Foreign exchange contracts $ — $ 2,164 $ — $ ( 4,837 )

Interest rate swaps ( 3 )

Total $ ( 3 )

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

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

2021 2020 2021 2020

Foreign exchange contracts Cost of revenue, excluding technology costs $ — $ ( 319 ) $ — $ 2,904

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

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

Interest rate swaps Interest expense, net 3,128

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We also consider the counterparty and our own non-performance risk in our assessment of fair value.

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

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

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

Fair Value at Reporting Date Using

September 30, 2021 Level 1 Level 2 Level 3

Derivatives (1)

Interest rate swap contracts $ ( 4,148 ) $ — $ ( 4,148 ) $ —

Total $ ( 4,148 ) $ — $ ( 4,148 ) $ —

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 ) $ —

______________________

(1) See Note 7.

Derivatives for further detail.

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

Other Financial Instruments

Financial Instruments

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

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

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

The following table presents the fair value and carrying value of our senior notes and borrowings under our senior secured credit facilities as of March 31, 2022 and December 31, 2021 (in thousands):

Fair Value at Carrying Value at (1)

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

Financial Instrument March 31, 2022 December 31, 2021 March 31, 2022 December 31, 2021

Term Loan B $ 1,168,340 $ 1,767,432 $ 1,181,690 $ 1,803,318

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Term Loan B-2 633,178 633,171 634,011 635,416

Revolver, $ 400 million

— 375,000 — 375,000

9.25 % senior secured notes due 2025

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

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

We have not identified any triggering events or changes in circumstances since the performance of our annual goodwill impairment test that would require us to perform another goodwill impairment test and we did no t record any goodwill impairment charges for the three months ended March 31, 2022 or March 31, 2021..

Accumulated Other Comprehensive Loss

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

September 30, 2021 December 31, 2020

Defined benefit pension and other post-retirement benefit plans $ ( 98,553 ) $ ( 135,596 )

Unrealized loss on foreign currency forward contracts and interest rate swaps ( 707 ) ( 12,837 )

As of March 31, 2022 and December 31, 2021, the components of accumulated other comprehensive loss, net of related deferred income taxes, are as follows (in thousands):

March 31, 2022 December 31, 2021

Defined benefit pension and other postretirement benefit plans $ ( 81,678 ) $ ( 84,773 )

Unrealized foreign currency translation gain 4,997 6,282

Share of other comprehensive loss of equity method investments ( 1,142 ) ( 1,796 )

Total accumulated other comprehensive loss, net of tax $ ( 77,823 ) $ ( 80,287 )

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

During the second and third quarters of 2021, a settlement accounting event was triggered within our defined benefit pension plan which resulted in a charge of $ 4 million and $ 2 million, respectively, recorded to Other, net in the consolidated statements of operations.

The decline in Defined benefit pension and other post-retirement benefit plans is also due to a $ 25 million pension remeasurement, as a result of pension settlement accounting.

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

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

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

We have elected to use excess contributions resulting from a reduction to past contribution requirements allowed by ARPA to offset remaining required contributions.

As of March 31, 2022, we have not contributed to our defined benefit pension plan in 2022 and do not expect to make any contributions for the year.

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

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On August 24, 2020, we completed an offering of 3,340,000 shares of our 6.50 % Series A Mandatory Convertible Preferred Stock (the "Preferred Stock"), which generated net proceeds of approximately $ 323 million for use as general corporate purposes.

During the year ended December 31, 2021, a certain holder elected to convert 50,000 shares of preferred stock to 595,240 shares of common stock, leaving 3,290,000 shares outstanding.

The Preferred Stock accumulates cumulative dividends at a rate per annum equal to 6.50 % of the liquidation preference of $ 100 per share (equivalent to $ 6.50 annually per share) payable in cash or, subject to certain limitations, by delivery of shares of our common stock or any combination of cash and shares of our common stock, at our election;

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

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

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

On October 19, 2021, the Board of Directors declared a dividend of $ 1.625 per share on Preferred Stock payable on December 1, 2021 to holders of record of the Preferred Stock on November 15, 2021.

We recorded $ 5 million of accrued preferred stock dividends in our consolidated results of operations for the three months ended March 31, 2022 and 2021.

During the three months ended March 31, 2022 and 2021, we paid cash dividends on our preferred stock of $ 5 million.

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

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The number of shares issued at conversion based on the unadjusted conversion rates will be between 39 million and 47 million shares.

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

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

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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 will not be redeemable at our election before the mandatory conversion date.

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

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

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

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

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

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

During the three months ended March 31, 2022, we did no t repurchase any shares pursuant to the Share Repurchase Program.

On March 16, 2020, we announced the suspension of share repurchases under the Share Repurchase Program in conjunction with certain cash management measures we 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 March 31, 2022.

Exchangeable Notes

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

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

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

As of March 31, 2022, we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

Debt for further details.

At-the-Market (ATM) Program

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

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

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

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

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

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

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

Earnings Per Share

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

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

2021 2020 2021 2020

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

Net income attributable to non-controlling interests 714 125 1,657 837

Three Months Ended March 31,

Income (loss) from continuing operations $ 47,544 $ ( 259,931 )

Net income attributable to noncontrolling interests 272 484

Preferred stock dividends 5,346 5,428

Net loss from continuing operations available to common stockholders, basic and diluted $ ( 240,827 ) $ ( 309,131 ) $ ( 757,871 ) $ ( 961,583 )

Net income (loss) from continuing operations available to common stockholders, basic 41,926 ( 265,843 )

Interest expense and amortization of debt discount and issuance costs for exchangeable notes, net of tax 3,074 —

Preferred stock dividends 5,346 —

Net income (loss) from continuing operations available to common stockholders, diluted $ 50,346 $ ( 265,843 )

Basic weighted-average common shares outstanding 323,658 317,634

Dilutive effect of stock options and restricted stock awards

Dilutive effect of exchangeable notes

Dilutive effect of preferred shares 39,167 —

Diluted weighted-average common shares outstanding 409,378 317,634

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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 4 million and 2 million of dilutive stock options and restricted stock awards for the nine months ended September 30, 2021 and 2020, respectively, as their effect would be anti-dilutive given the net loss incurred in the periods.

The diluted weighted-average common shares outstanding calculation excludes 3 million of dilutive stock options and restricted stock awards for the three months ended September 30, 2021 as their effect would be anti-dilutive given the net loss incurred in the period.

The dilutive stock options and restricted stock awards for the three months ended September 30, 2020 are less than one million.

The calculation of diluted weighted-average shares excludes the impact of 2 million and 1 million of anti-dilutive common stock equivalents for each of the three and nine months ended September 30, 2021, respectively, and 6 million and 3 million of anti-dilutive common stock equivalents for each of the three and nine months ended September 30, 2020, respectively.

The diluted weighted-average common shares outstanding calculation excludes 6 million of dilutive stock options and restricted stock awards for the three months ended March 31, 2021, 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 and 1 million of anti-dilutive common stock equivalents for the three months ended March 31, 2022 and 2021, respectively.

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

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

The approximately 42 million resulting common shares related to the Exchangeable Notes are not included in the dilutive weighted-average common shares outstanding calculation for the three and nine months ended September 30, 2021 and 2020 as their effect would be anti-dilutive given the net loss incurred in those periods.

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

General Information for further information.

The approximately 42 million resulting common shares related to the Exchangeable Notes are not included in the dilutive weighted-average common shares outstanding calculation for the three months ended March 31, 2021 as their effect would be anti-dilutive given the net loss incurred in the period.

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.

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

The resulting common shares are included in the denominator of the diluted earnings per share calculation for the entire period being presented and preferred stock dividends are added back to the numerator, only in the periods in which such effect is dilutive.

The approximately 39 million resulting common shares related to the Preferred Stock are not included in the dilutive weighted-average common shares outstanding calculation for the three months ended March 31, 2021 as their effect would be anti-dilutive given the net loss incurred in the period.

We lease certain facilities under long-term operating leases.

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

Nine Months Ended September 30,

Three Months Ended March 31,

Supplemental Cash Flow Information

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Operating cash flows used in operating leases $ 6,408 $ 6,162

Right-of-use assets obtained in exchange for lease obligations:

Operating leases $ 298 $ 42,405

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

September 30, 2021 December 31, 2020

Three Months Ended March 31,

March 31, 2022 December 31, 2021

Operating Leases

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others include options to terminate the agreement within two years .

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

Future minimum lease payments under non-cancellable operating leases as of March 31, 2022 are as follows (in thousands):

Year Ending December 31, Operating Leases

2022 $ 14,965

Thereafter 48,993

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

The complaint was filed fewer than two

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

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

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

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In February 2017, US Airways sought reconsideration of the court's opinion dismissing the claim for declaratory relief, which the court denied in March 2017.

US Airways estimated its damages in a range of $ 317 million to $ 482 million (before trebling), depending on certain assumptions;

this quantification was substantially reduced following the court’s summary judgment ruling described above.

The trial on the remaining claims commenced in October 2016.

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The lawsuit has been remanded to federal court in the Southern District of New York for further proceedings.

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

The trial began April 22, 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;

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

therefore, in the third quarter of 2019, we reversed our previously accrued loss of $ 32 million and do no t have any losses accrued for this matter as of March 31, 2022.

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

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If favorable resolution of the matter is not reached upon remand, any monetary damages are subject to trebling under the antitrust laws and US Airways would be eligible to be reimbursed by us for its reasonable costs and attorneys’ fees.

US Airways has quantified its damages for the retrial in a range of $ 204 million to $ 299 million (before trebling), based on its payments of GDS booking fees to Sabre and depending on certain assumptions.

We believe these estimates are based on faulty assumptions and analysis and therefore are highly overstated.

In the event US Airways were to prevail on the merits of its claim, we believe any monetary damages awarded (before trebling) would be significantly less than either of US Airways’ proposed damage amounts.

Depending on the amount of any such judgment, if we do not have sufficient cash on hand, we may be required to seek private or public financing.

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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.

The court has scheduled the trial to begin on January 17, 2023.

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

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

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.

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 2018 and appeals for assessment years ending March 2006 through 2016 and March 2018 are pending before the ITAT or the High Court depending on the year.

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

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 2016 and March 2018 are pending before the ITAT or the High Court depending on the year.

If the DIT were to fully prevail on every claim against us, including SAPPL, we could be subject to taxes, interest and penalties of approximately $ 45 million as of March 31, 2022.

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

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

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

not accessed.

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

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

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

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

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

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

As of March 31, 2022, 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.

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and overall materiality considerations.

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 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.

We 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 software solutions for hoteliers.

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

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

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

As a result of the strategic realignment in the third quarter of 2020, we have separated our technology costs from cost of revenue and moved certain expenses previously classified as cost of revenue to selling, general and administrative to provide

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

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

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

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.

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

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

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

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

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

2021 2020 2021 2020

Segment information for the three months ended March 31, 2022 and 2021 is as follows (in thousands):

Three Months Ended March 31,

Travel Solutions $ 533,998 $ 288,875

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Total revenue $ 584,910 $ 327,484

Adjusted Operating Loss (a)

Adjusted Operating Income (Loss) (a)

Travel Solutions $ 45,306 $ ( 106,133 )

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

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

2021 2020 2021 2020

Three Months Ended March 31,

Operating loss $ ( 79,532 ) $ ( 202,553 )

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Restructuring and other costs (2)

269 947 ( 5,722 ) 74,229

Acquisition-related costs (3)

870 591 3,299 22,791

Litigation costs, net (4)

4,862 247 17,113 2,103

Stock-based compensation 27,605 24,426

Adjusted Operating Loss $ ( 29,155 ) $ ( 166,502 )

______________________

(1) 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.

(2) Restructuring and other costs represent charges, and adjustments to those charges, associated with business restructuring and associated changes, 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.

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

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

(3) Acquisition-related costs represent fees and expenses incurred associated with acquisition and disposition related activities.

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

Contingencies.

Subsequent Events

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

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

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

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

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

What changed 10-Q

Item 1. Financial Statements