What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-05-03 compared with 2021-11-02 · 195 added, 407 removed, 316 unchanged (66% of the section changed)

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Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, such as statements regarding our future financial condition or results of operations, our prospects and strategies for future growth, the development and introduction of new products, and the implementation of our marketing and branding strategies.

In many cases, you can identify forward-looking statements by terms such as “expects,” “outlook,” “believes,” “may,” “intends,” “plans,” “provisional,” “will,” “predicts,” “potential,” “anticipates,” “estimates,” “should,” “could,” “likely,” “commit,” “guidance,” “anticipate,” “incremental,” “preliminary,” “forecast,” “continue,” “strategy,” “confidence,” “momentum,” “estimate,” “objective,” “project,” or the negative of these terms or other comparable terminology.

In many cases, you can identify forward-looking statements by terms such as “expects,” “outlook,” "intends," "will," "may," "believes," “plans,” “provisional,” “predicts,” “potential,” “anticipates,” “estimates,” “should,” “could,” “likely,” “commit,” “guidance,” “anticipate,” “incremental,” “preliminary,” “forecast,” “continue,” “strategy,” “confidence,” “momentum,” “estimate,” “objective,” “project,” or the negative of these terms or other comparable terminology.

The forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions and are subject to risks, uncertainties and changes in circumstances that may cause events or our actual activities or results to differ significantly from those expressed in any forward-looking statement.

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We connect people and places with technology that reimagines the business of travel.

Effective the third quarter of 2020, we operate our business and present our results through two business segments:

We operate our business and present our results through two business segments:

(i) Travel Solutions, our global business-to-business travel marketplace 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 have been consolidated into a unified revenue and expense structure now reported as the Travel Solutions business segment.

There have been 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 realigning certain expenses previously classified as cost of revenue to selling, general and administrative classification, considering how we assess our results of operations in the current organizational structure.

Certain historical amounts have been reclassified to align with the current presentation.

General Information for further information.

A significant portion of our revenue is generated through transaction-based fees that we charge to our customers.

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Recent Developments Affecting our Results of Operations

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.

In the second and third quarters of 2020, we experienced significant decreases in transaction-based revenue in our Travel Solutions segment, including increased cancellation activity beyond what was initially estimated, as well as a reduction in SynXis Software and Services revenue in our Hospitality Solutions segment due to a decrease in transaction volumes as a result of the COVID-19 pandemic.

As expected, this pandemic has continued to have a material impact to 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 and some travel restrictions have been relaxed, we have seen some continued improvement in our key volume metrics during the third quarter of 2021.

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

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

In 2020, we experienced significant decreases in transaction-based revenue in our Travel Solutions segment, including increased cancellation activity beyond what was initially estimated, as well as a reduction in SynXis Software and Services revenue in our Hospitality Solutions segment due to a decrease in transaction volumes as a result of the COVID-19 pandemic.

As expected, this pandemic has continued to have a material impact to our consolidated financial results in 2021 and 2022.

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 and some travel restrictions have been relaxed, we have seen some gradual improvement in our key volume metrics during 2021 and 2022.

With the continued increase in volumes, our incentive consideration costs are also increasing significantly compared to 2021 and 2020.

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 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 slow global economic recovery from the COVID-19 pandemic.

During the year ended December 31, 2020, several of our customers filed for bankruptcy protection in various jurisdictions.

Due to our creditor position, we do not expect significant recovery for amounts due to us prior to the customer's filing for bankruptcy protection and have fully reserved for any amounts due;

however, we continue to provide services and receive timely payment for post-bankruptcy balances due in most cases.

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

Additionally, 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.

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

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

We believe our cash position and the liquidity measures we have taken since 2020 will provide additional flexibility as we manage through the global economic recovery from the COVID-19 pandemic.

See “—Recent Events Impacting Our Liquidity and Capital Resources” and “—Senior Secured Credit Facilities.” As a result, we believe that we have resources to sufficiently fund our liquidity requirements over at least the next twelve months;

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

During 2020, and particularly during the second quarter of 2020, we took several actions with regard to our workforce and compensation programs as both temporary and permanent cost reduction efforts which are impacting our year-over-year results of operations, including:

a temporary reduction in base compensation pay for our US-based salaried workforce;

a temporary reduction in the cash retainer for members of our Board of Directors;

a temporary furlough of approximately one-third of our workforce;

the temporary suspension of our 401(k) match program for US-based employees;

reductions in third-party contracting, vendor costs and other discretionary spending;

an offering of voluntary unpaid time off, voluntary severance and a voluntary early retirement program;

and a right-sizing of our global organization through a reduction in force.

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.

Approximately 500 employees are also expected to have the opportunity to transition to the purchaser in connection with the sale.

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

In connection with the closing, we expect to enter into a transition services agreement with the purchaser, pursuant to which we will continue to provide certain services and conduct certain operations in connection with the transferred business while it transitions to the purchaser’s system, in return for compensation from the purchaser with respect to these costs.

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

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 within Travel Solution’s IT Solutions.

On February 28, 2022, we sold the AirCentre product portfolio, related technology and intellectual property for $392 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, we entered into a transition services agreement with the purchaser, pursuant to which we will continue to provide certain services and conduct certain operations in connection with the transferred business while it transitions to the purchaser’s system, in return for compensation from the purchaser with respect to these costs.

Dispositions for further details.

Subsequent to the initiation of the current military conflict in Ukraine, we terminated our distribution agreement with 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.

See “Risk Factors—Our business could be harmed by adverse global and regional economic and political conditions.”

During the three months ended March 31, 2022, we recognized $24 million of previously deferred revenue 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.

Revenue from Contracts with Customers for details regarding the impact on revenue.

Our consolidated balance sheets include net assets of approximately $15 million as of March 31, 2022 related to customers located in Russia.

If our performance under our IT Solutions agreements with such customers were terminated, or if we are unable to collect amounts due to us in the future, these net assets could be impaired.

Factors Affecting our Results

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Travel Solutions generates revenues from distribution activities through Direct Billable Bookings processed on our GDS, adjusted for estimated cancellations of those bookings.

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

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

Additionally, Travel Solutions generates revenue through software licensing and maintenance fees.

Recognition of license fees upon delivery has previously resulted and will continue to result in periodic fluctuations in revenue recognized.

Our distribution revenue in the current quarter and in future periods is expected to be impacted by a certain online travel agency ("OTA") notifying us of their intent to shift a significant portion of its North America volumes to a competitor.

This shift began in the third quarter of 2021 and is expected to result in a decline in our volumes offset by an increase in our rate going forward.

Hospitality Solutions generates revenue through upfront solution fees and recurring usage-based fees for the use of our software solutions hosted on secure platforms or deployed through our SaaS and through other professional service fees including Digital Experience ("DX").

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“Direct Billable Bookings” and “Passengers Boarded” are the primary metrics utilized by Travel Solutions to measure operating performance.

Travel Solutions generates distribution revenue for each Direct Billable Booking, which includes bookings made through our GDS (e.g., Air, and Lodging, Ground and Sea ("LGS")) and through our equity method investments in cases

where we are paid directly by the travel supplier.

Air Bookings are presented net of bookings cancelled within the period presented.

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The following table sets forth these key metrics for the periods indicated (in thousands):

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

2021 2020 % Change 2021 2020 % Change

Three Months Ended March 31,

2022 2021 % Change

Travel Solutions

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We have included both financial measures compiled in accordance with GAAP and certain non-GAAP financial measures in this Quarterly Report on Form 10-Q, including Adjusted Operating Loss , Adjusted Net Loss from continuing operations ("Adjusted Net Loss"), Adjusted EBITDA, Free Cash Flow and ratios based on these financial measures.

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.

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.

We define Adjusted Net Loss as net loss attributable to common stockholders adjusted for loss from discontinued operations, net of tax, net income (loss) attributable to noncontrolling interests, preferred stock dividends, acquisition-related amortization, other, net, loss on extinguishment of debt, restructuring and other costs, acquisition-related costs, litigation costs, net, stock-based compensation, and the tax impact of adjustments.

We define Adjusted EBITDA as Loss from continuing operations adjusted for depreciation and amortization of property and equipment, amortization of capitalized implementation costs, acquisition-related amortization, restructuring and other costs, interest expense, net, other, net, loss on extinguishment of debt, acquisition-related costs, litigation costs, net, stock-based compensation and the remaining (benefit) provision for income taxes.

We have revised our calculation of Adjusted EBITDA to no longer exclude the amortization of upfront incentive consideration in all periods presented.

We define Free Cash Flow as cash (used in) provided by operating activities less cash used in additions to property and equipment.

We define Adjusted Net Loss from continuing operations per share as Adjusted Net Loss divided by diluted weighted-average common shares outstanding.

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

We define Adjusted Net Loss as net income (loss) attributable to common stockholders adjusted for loss from discontinued operations, net of tax, net income attributable to noncontrolling interests, preferred stock dividends, acquisition-related amortization, restructuring and other costs, loss on extinguishment of debt, other, net, acquisition-related costs, litigation costs, net, stock-based compensation, and the tax impact of adjustments.

We define Adjusted EBITDA as income (loss) from continuing operations adjusted for depreciation and amortization of property and equipment, amortization of capitalized implementation costs, acquisition-related amortization, restructuring and other costs, interest expense, net, other, net, loss on extinguishment of debt, acquisition-related costs, litigation costs, net, stock-based compensation and the remaining (benefit) provision for income taxes.

We define Free Cash Flow as cash used in operating activities less cash used in additions to property and equipment.

We define Adjusted Net Loss from continuing operations per share as Adjusted Net Loss divided by adjusted diluted weighted-average common shares outstanding.

These non-GAAP financial measures are key metrics used by management and our board of directors to monitor our ongoing core operations because historical results have been significantly impacted by events that are unrelated to our core operations as a result of changes to our business and the regulatory environment.

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• other companies, including companies in our industry, may calculate Adjusted Operating Loss, Adjusted Net Loss, Adjusted EBITDA or Free Cash Flow differently, which reduces their usefulness as comparative measures.

The following table sets forth the reconciliation of net loss attributable to common stockholders to Adjusted Net Loss from continuing operations, operating loss to Adjusted Operating Loss, and loss from continuing operations to Adjusted EBITDA (in thousands):

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

2021 2020 2021 2020

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

The following table sets forth the reconciliation of Net income (loss) attributable to common stockholders to Adjusted Net Loss from continuing operations, Operating loss to Adjusted Operating Loss, and Income (loss) from continuing operations to Adjusted EBITDA (in thousands):

Three Months Ended March 31,

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

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

Net income attributable to non-controlling interests (1)

714 125 1,657 837

Net income attributable to noncontrolling interests (1)

Preferred stock dividends 5,346 5,428

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

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

Acquisition-related amortization (2a)

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Restructuring and other costs (4)

269 947 (5,722) 74,229

Loss on extinguishment of debt 3,533 —

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Acquisition-related costs (5)

870 591 3,299 22,791

Litigation costs, net (6)

4,862 247 17,113 2,103

Stock-based compensation 27,605 24,426

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Adjusted Net Loss from continuing operations per share $ (0.29) $ (0.72)

Diluted weighted-average common shares outstanding 322,720 292,392 320,055 280,750

Adjusted diluted weighted-average common shares outstanding 323,658 317,634

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

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Restructuring and other costs (4)

269 947 (5,722) 74,229

Acquisition-related costs (5)

870 591 3,299 22,791

Litigation costs, net (6)

4,862 247 17,113 2,103

Stock-based compensation 27,605 24,426

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

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

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

Depreciation and amortization of property and equipment (2b)

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Amortization of capitalized implementation costs (2c)

8,718 9,146 25,506 28,110

Acquisition-related amortization (2a)

1 unchanged sentence

Restructuring and other costs (4)

269 947 (5,722) 74,229

Interest expense, net 61,058 64,101

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Acquisition-related costs (5)

870 591 3,299 22,791

Litigation costs, net (6)

4,862 247 17,113 2,103

Stock-based compensation 27,605 24,426

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

Adjusted EBITDA $ (54,928) $ (123,814) $ (234,886) $ (346,988)

The following tables set forth the reconciliation of Adjusted Operating Loss to operating loss in our statement of operations and Adjusted EBITDA to loss from continuing operations in our statement of operations by business segment (in thousands):

Three Months Ended September 30, 2021

Travel Solutions Hospitality Solutions Corporate Total

Adjusted Operating Loss $ (39,078) $ (8,868) $ (54,698) $ (102,644)

Equity method loss (114) — — (114)

Acquisition-related amortization (2a)

— — 15,939 15,939

Restructuring and other costs (4)

Acquisition-related costs (5)

Litigation costs, net (6)

— — 4,862 4,862

Stock-based compensation — 32,218 32,218

Operating loss $ (38,964) $ (8,868) $ (108,856) $ (156,688)

Adjusted EBITDA $ 2,421 $ (2,880) $ (54,469) $ (54,928)

Depreciation and amortization of property and equipment (2b)

33,866 4,903 229 38,998

Amortization of capitalized implementation costs (2c)

7,633 1,085 — 8,718

Acquisition-related amortization (2a)

— — 15,939 15,939

Restructuring and other costs (4)

Acquisition-related costs (5)

Litigation costs, net (6)

— — 4,862 4,862

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

Equity method loss (114) — — (114)

Operating loss $ (38,964) $ (8,868) $ (108,856) $ (156,688)

Interest expense, net (65,461)

Other, net (3)

Loss on extinguishment of debt (13,070)

Equity method loss (114)

Benefit for income taxes 6,613

Loss from continuing operations $ (234,713)

Three Months Ended September 30, 2020

Travel Solutions Hospitality Solutions Corporate Total

Adjusted Operating Loss $ (146,337) $ (12,609) $ (37,747) $ (196,693)

Equity method loss (460) — — (460)

Acquisition-related amortization (2a)

— — 16,465 16,465

Restructuring and other costs (4)

Acquisition-related costs (5)

Litigation costs, net (6)

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

Operating loss $ (145,877) $ (12,609) $ (74,563) $ (233,049)

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

Adjusted EBITDA $ 5,150 $ (109,500)

Depreciation and amortization of property and equipment (2b)

53,291 9,293 1,149 63,733

Amortization of capitalized implementation costs (2c)

8,052 1,094 — 9,146

Acquisition-related amortization (2a)

— — 16,465 16,465

Restructuring and other costs (4)

Acquisition-related costs (5)

Litigation costs, net (6)

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

Equity method loss (460) — — (460)

Operating loss $ (145,877) $ (12,609) $ (74,563) $ (233,049)

Interest expense, net (64,376)

Other, net (3)

Loss on extinguishment of debt (10,333)

Equity method loss (460)

Benefit for income taxes 19,874

Loss from continuing operations $ (306,775)

Nine Months Ended September 30, 2021

The following table sets forth the reconciliation of diluted weighted-average common shares outstanding, calculated in

accordance with GAAP, to the adjusted diluted weighted-average shares outstanding (in thousands):

Three Months Ended March 31,

GAAP diluted weighted-average common shares outstanding 409,378 317,634

Dilutive effect of stock options and restricted stock awards 4,251 —

Dilutive effect of exchangeable notes 42,302 —

Dilutive effect of preferred shares 39,167 —

Adjusted diluted weighted-average common shares outstanding 323,658 317,634

The following tables set forth the reconciliation of Adjusted Operating Income (Loss) to Operating income (loss) in our statement of operations and Adjusted EBITDA to Income (loss) from continuing operations in our statement of operations by business segment (in thousands):

Three Months Ended March 31, 2022

Travel Solutions Hospitality Solutions Corporate Total

Adjusted Operating Loss $ (212,393) $ (30,976) $ (147,529) $ (390,898)

Adjusted Operating Income (Loss) $ 45,306 $ (15,117) $ (59,344) $ (29,155)

Equity method loss (170) — — (170)

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— — 15,803 15,803

Restructuring and other costs (4)

— — (5,722) (5,722)

Acquisition-related costs (5)

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

Operating loss $ (211,998) $ (30,976) $ (296,637) $ (539,611)

Operating income (loss) $ 45,476 $ (15,117) $ (109,891) $ (79,532)

Adjusted EBITDA $ 73,560 $ (9,317) $ (59,093) $ 5,150

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— — 15,803 15,803

Restructuring and other costs (4)

— — (5,722) (5,722)

Acquisition-related costs (5)

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Equity method loss (170) — — (170)

Operating loss $ (211,998) $ (30,976) $ (296,637) $ (539,611)

Operating income (loss) $ 45,476 $ (15,117) $ (109,891) $ (79,532)

Interest expense, net (61,058)

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Benefit for income taxes 596

Loss from continuing operations $ (739,958)

Nine Months Ended September 30, 2020

Income from continuing operations $ 47,544

Three Months Ended March 31, 2021

Travel Solutions Hospitality Solutions Corporate Total

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Acquisition-related costs (5)

— — 22,791 22,791

Litigation costs, net (6)

— — 2,103 2,103

Stock-based compensation — 24,426 24,426

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Acquisition-related costs (5)

— — 22,791 22,791

Litigation costs, net (6)

— — 2,103 2,103

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

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Other, net (3)

Loss on extinguishment of debt (10,333)

Equity method loss (911)

Benefit for income taxes 51,757

Provision for income taxes (3,997)

Loss from continuing operations $ (259,931)

The following tables present information from our statements of cash flows and set forth the reconciliation of Free Cash Flow to cash (used in) provided by operating activities, the most directly comparable GAAP measure (in thousands):

Nine Months Ended September 30,

The following tables present information from our statements of cash flows and set forth the reconciliation of Free Cash Flow to cash used in operating activities, the most directly comparable GAAP measure (in thousands):

Three Months Ended March 31,

Cash used in operating activities $ (139,083) $ (197,403)

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

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

Nine Months Ended September 30,

Cash provided by investing activities 374,865 8,405

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

Three Months Ended March 31,

Cash used in operating activities $ (139,083) $ (197,403)

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______________________________

(1) Net income attributable to non-controlling interests represents an adjustment to include earnings allocated to non-controlling interests held in (i) Sabre Travel Network Middle East of 40%, (ii) Sabre Seyahat Dagitim Sistemleri A.S.

(1) Net income attributable to noncontrolling interests represents an adjustment to include earnings allocated to noncontrolling interests held in (i) Sabre Travel Network Middle East of 40%, (ii) Sabre Seyahat Dagitim Sistemleri A.S.

of 40%, (iii) Sabre Travel Network Lanka (Pte) Ltd of 40%, and (iv) Sabre Bulgaria of 40%.

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(c) Amortization of capitalized implementation costs represents amortization of upfront costs to implement new customer contracts under our SaaS and hosted revenue model.

(3) Other, net includes a $15 million gain on sale of equity securities during the first quarter of 2021, a $4 million and $2 million pension settlement charge recorded in the second and third quarters of 2021, respectively, debt modification costs for financing fees of $2 million

recorded in the third quarter of 2021, a $46 million charge related to termination payments incurred in the first quarter of 2020 in connection with the now-terminated acquisition of Farelogix Inc.

("Farelogix") and a $14 million pension settlement charge recorded in the third quarter of 2020.

(3) Other, net includes a $192 million gain on the sale of AirCentre during the three months ended March 31, 2022 and a $15 million gain on sale of equity securities during the three months ended March 31, 2021.

In addition, all periods presented include foreign exchange gains and losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into the relevant functional currency.

Accumulated Other Comprehensive Loss for discussion of the pension settlement.

(4) Restructuring and other costs represents 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 to our consolidated financial statements for further details.

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

(5) Acquisition-related costs represent fees and expenses incurred associated with the AirCentre disposition and other potential transactions.

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

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Results of Operations

The following table sets forth our consolidated statement of operations data for each of the periods presented:

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

2021 2020 2021 2020

(Amounts in thousands) (Amounts in thousands)

The following table sets forth our consolidated statements of operations data for each of the periods presented:

Three Months Ended March 31,

(Amounts in thousands)

Revenue $ 584,910 $ 327,484

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Interest expense, net (61,058) (64,101)

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

Loss on debt extinguishment (3,533) —

Equity method loss (170) (911)

Other, net 191,241 11,631

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)

Three Months Ended September 30, 2021 and 2020

Three Months Ended September 30,

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)

Three Months Ended March 31, 2022 and 2021

Three Months Ended March 31,

2022 2021 Change

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Total revenue $ 584,910 $ 327,484 $ 257,426 79 %

Travel Solutions— Revenue increased $153 million, or 65%, for the three months ended September 30, 2021 compared to the same period in the prior year, primarily due to:

• a $141 million, or 135%, increase in transaction-based distribution revenue primarily due to a 169% increase in Direct Billable Bookings to 54 million as a result of the continued recovery from the COVID-19 pandemic, partially offset by revenue recognized in the third quarter of 2020 of $18 million resulting from less cancellation activity on bookings scheduled to depart during the third quarter than was estimated.

Additionally, our revenue in the current quarter was impacted by a certain OTA shifting a significant portion of its North America volumes to a competitor, as described above.

This shift diluted our volume growth at a rate that is lower than our average rate due to the nature of these bookings as leisure;

• a $12 million increase in IT solutions revenue consisting of a $22 million, or 61% increase in reservation revenue primarily due to a 103% increase in Passengers Boarded to 116 million as a result of the continued recovery from

the COVID-19 pandemic, partially offset by a dilution in rate due to revenue that does not fluctuate with our volumes.

This increase was partially offset by a decrease in commercial and operations revenue of $9 million primarily due to license fee revenue from new implementations recognized upon delivery to customers in the prior year and certain product divestitures.

Travel Solutions— Revenue increased $245 million, or 85%, for the three months ended March 31, 2022 compared to the same period in the prior year, primarily due to:

• a $191 million, or 126%, increase in transaction-based distribution revenue due to a 67% increase in Direct Billable Bookings to 65 million primarily as a result of continued recovery trends from the COVID-19 pandemic and favorable rate impacts as international and corporate bookings have improved at an accelerating rate since January 2022;

• a $54 million increase in IT solutions revenue consisting of a $42 million, or 102%, increase in reservation revenue primarily due to a 72% increase in Passengers Boarded to 129 million as a result of continued recovery trends from the COVID-19 pandemic and $24 million of previously deferred revenue recognized during the three months ended March 31, 2022 due to a change in facts and circumstances associated with an Eastern European customer.

Revenue from Contracts with Customers .

This increase was pa rtially offset by an unfavorable rate mix due to revenue that does not fluctuate with our volumes.

Additionally, commercial and operations revenue increased $12 million primarily due to license fee revenue related to AirCentre recognized upon delivery to the customer and increased volumes from the existing cust omer base, partially offset by reduced revenue due to the sale of our AirCentre portfolio on February 28, 2022.

Recognition of license fees upon delivery has previously resulted and will continue to result in periodic fluctuations in revenue recognized.

Hospitality Solutions— Revenue increased $10 million, or 23%, for the three months ended September 30, 2021 compared to the same period in the prior year.

The increase was primarily driven by an increase in SynXis Software and Services revenue due to an increase in transaction volumes of 39% to 27 million, as a result of the continued recovery trends from the COVID-19 pandemic and an increase of $3 million in DX revenue.

This increase was partially offset by dilution in rate from the prior year due to revenue that does not fluctuate with volumes.

Hospitality Solutions— Revenue increased $14 million, or 33%, for the three months ended March 31, 2022 compared to the same period in the prior year.

The increase was primarily driven by an $11 million increase in SynXis Software and Services revenue due to an increase in transaction volumes of 31% to 23 million, as a result of continued recovery from the COVID-19 pandemic and an increase of $3 million in DX revenue.

Cost of revenue, excluding technology costs

Three Months Ended September 30,

2021 2020 Change

Three Months Ended March 31,

2022 2021 (1)

(Amounts in thousands)

6 unchanged sentences

Total cost of revenue, excluding technology costs $ 223,034 $ 146,761 $ 76,273 52 %

Travel Solutions— Cost of revenue, excluding technology costs, increased $50 million, or 57%, for the three months ended September 30, 2021 compared to the same period in the prior year.

The increase was primarily the result of a $49 million increase in incentive consideration due to higher transaction volume given the continued recovery trends from the COVID-19 pandemic offset by a temporary reduction in rate due to certain travel agencies not meeting certain contractual volume commitments.

Hospitality Solutions— Cost of revenue, excluding technology costs, increased $6 million, or 28%, for the three months ended September 30, 2021 compared to the same period in the prior year.

The increase was primarily driven by a $3 million increase in transaction-related costs and a $2 million increase in professional services costs related to our call center due to the increase in transaction volume as a result of the continued recovery trends from the COVID-19 pandemic.

Corporate— Cost of revenue, excluding technology costs, increased $1 million, or 31%, for the three months ended September 30, 2021 compared to the same period in the prior year.

The increase was primarily due to a $1 million increase in labor costs resulting from an increase in stock-based compensation primarily associated with previously awarded performance-based units .

Depreciation and amortization —Depreciation and amortization increased $1 million, or 10%, for the three months ended September 30, 2021 compared to the same period in the prior year due to assets placed in service.

______________________

(1) Certain amounts previously presented for the three months ended March 31, 2021 have been reclassified between Travel Solutions and Corporate;

total cost of revenue, excluding technology costs, was not impacted by this reclassification.

Travel Solutions— Cost of revenue, excluding technology costs, increased $73 million, or 62%, for the three months ended March 31, 2022 compared to the same period in the prior year.

The increase was primarily driven by a $78 million increase in incentive consideration due to higher transaction volume given continued recovery from the COVID-19 pandemic.

This increase was slightly offset by a decrease in labor and professional services costs resulting from the sale of AirCentre and other labor related expenses.

Hospitality Solutions— Cost of revenue, excluding technology costs, increased $8 million, or 39%, for the three months ended March 31, 2022 compared to the same period in the prior year primarily due to costs associated with increased transaction volumes.

Depreciation and amortization —Depreciation and amortization decreased $1 million, or 14%, for the three months ended March 31, 2022 compared to the same period in the prior year primarily due to the sale of previously held for sale assets within our AirCentre portfolio that incurred no depreciation charges for the current quarter.

Technology Costs

Three Months Ended September 30,

Three Months Ended March 31,

2022 2021 Change

4 unchanged sentences

Total technology costs $ 273,730 $ 252,663 $ 21,067 8 %

Travel Solutions— Technology costs decreased $11 million, or 5%, for the three months ended September 30, 2021 compared to the same period in the prior year.

The decrease was driven by a decrease in depreciation and amortization of $23 million primarily due to a change in the mix of our technology spend beginning in 2019 resulting in less capitalized internal use software and a decrease in labor and professional services costs of $6 million resulting from cost reduction measures and attrition.

This decrease was partially offset by an increase in technology hosting costs of $16 million associated with higher transaction volumes.

We expect depreciation and amortization expense to be significantly lower in 2021 than in the prior year due to the lower capitalization rate on technology spend.

Hospitality Solutions— Technology costs increased $1 million, or 5%, for the three months ended September 30, 2021 compared to the same period in the prior year.

This increase was due to an increase of $4 million in labor and professional services costs to support our technology operations and a $2 million increase as the result of higher transaction volumes.

This increase was partially offset by a $4 million decline in depreciation and amortization primarily driven by a change in the mix of our technology spend beginning in 2019 resulting in less capitalized internal use software.

Corporate— Technology costs increased $2 million, or 13%, for the three months ended September 30, 2021 compared to the same period in the prior year primarily due to an increase in labor and professional services costs of $4 million resulting from an increase in stock-based compensation primarily associated with previously awarded performance-based units.

This increase was partially offset by a $1 million decrease in severance costs associated with the reduction of our workforce in 2020.

Restructuring Activities, to our consolidated financial statements for further details on restructuring activities.

Travel Solutions— Technology costs increased $11 million, or 5%, for the three months ended March 31, 2022 compared to the same period in the prior year.

The increase was primarily driven by a $25 million increase in technology costs due to higher transaction volumes given continued recovery from the COVID-19 pandemic and expected temporary costs resulting from our cloud migration efforts.

Additionally, labor and professional services increased $5 million to support our technology transformation initiatives.

We expect to incur a significant amount of incremental technology costs in 2022 over the prior year as a result of our technology transformation.

These increases were partially offset by a decrease in depreciation and amortization of $18 million primarily due to a change in the mix of our technology spend beginning in 2019 resulting in less capitalized internal use software as well as a reduction due to the sale of our AirCentre portfolio as these assets were classified as held for sale as of December 31, 2021 and incurred no depreciation for the three months ended March 31, 2022.

We expect depreciation and amortization expense to be significantly lower in 2022 than in the prior year due to the lower capitalization rate on technology spend beginning in 2019 and due to the sale of our AirCentre portfolio.

Hospitality Solutions— Technology costs increased $6 million, or 27%, for the three months ended March 31, 2022 compared to the same period in the prior year due to a $6 million increase in labor and professional services costs and a $2 million increase in technology costs to support our technology transformation initiatives.

This increase was partially offset by a $2 million decrease in depreciation and amortization primarily driven by a change in the mix of our technology spend beginning in 2019 resulting in less capitalized internal use software.

Corporate— Technology costs increased $3 million, or 21%, for the three months ended March 31, 2022 compared to the same period in the prior year primarily due to a $2 million increase in stock-based compensation associated with previously awarded performance-based units and a reversal of severance costs in the prior year associated with the reduction of our workforce in 2020.

Selling, General and Administrative Expenses

Three Months Ended September 30,

Three Months Ended March 31,

2022 2021 Change

4 unchanged sentences

Total selling, general and administrative expenses $ 167,678 $ 130,613 $ 37,065 28 %

Travel Solutions— Selling, general and administrative expenses increased $7 million, or 12%, for the three months ended September 30, 2021 compared to the same period in the prior year.

The increase is driven by an increase in professional services costs of $11 million primarily resulting from the reversal of certain third-party commissions in the prior year which did not reoccur in the current year, and increases in professional services for risk and security and consulting related to our business strategy to support the long-term growth of the business .

This increase was partially offset by a $6 million decline in the provision for expected credit losses primarily related to an overall improvement in our expected credit losses in the current year as a result of the continued recovery from the COVID-19 pandemic.

Hospitality Solutions— Selling, general and administrative expenses remained flat for the three months ended September 30, 2021 compared to the same period in the prior year.

The decrease in the provision for expected credit losses, which is related to an overall improvement in our expected credit losses in the current year as a result of the continued recovery from the COVID-19 pandemic, was offset by a slight increase in labor and professional services costs.

Corporate— Selling, general and administrative expenses increased $31 million, or 58%, due to a $21 million increase in labor costs resulting from a $10 million increase in stock-based compensation primarily associated with previously awarded performance based units and an $11 million increase due to continued investments in business systems and other labor related expenses.

Additionally, legal and professional services costs increased by $9 million, primarily due to ongoing litigation.

Interest expense, net

Three Months Ended September 30,

2021 2020 Change

(Amounts in thousands)

Travel Solutions— Selling, general and administrative expenses increased $12 million, or 22%, for the three months ended March 31, 2022 compared to the same period in the prior year.

The increase was driven by a $5 million increase in legal costs incurred due to ongoing litigation and a $7 million increase in the provision for expected credit losses due to the unfavorable comparison to a provision reversal in the prior year as the economy began to recover and payment experience began to improve.

Hospitality Solutions— Selling, general and administrative expenses increased $1 million, or 9%, for the three months ended March 31, 2022 compared to the same period in the prior year.

An increase in consulting related to our business strategy to support the long-term growth of the business was partially offset by a decrease in the provision for expected credit losses due to an improvement in our expected credit losses in the current year as a result of continued recovery from the COVID-19 pandemic, and lower depreciation and amortization.

Corporate— Selling, general and administrative expenses increased $24 million, or 38%, for the three months ended March 31, 2022 compared to the same period in the pri or year.

This increase was driven by a $6 million increase in professional services for consulting related to our business strategy to support the long-term growth of the business, a $5 million increase in risk and security costs, a $2 million increase as a result of increased compensation to attract and retain talent, a $3 million increase due to continued investments in our inter nal business systems, a $2 million increase in legal costs resulting from ongoing litigation, a $2 million increase in stock-based compensation associated with previously awarded performance-based units, a $2 million increase due to the reversal of severance costs in the prior year associated with the reduction of our workforce in 2020, and other ongoing business expenses.

Interest expense, net

Interest expense increased $1 million, or 2% during the three months ended September 30, 2021 compared to the same period in the prior year primarily due to additional borrowings under the 7.375% senior secured notes due 2025 entered into in the third quarter of 2020.

Loss on Extinguishment of Debt

We recognized a loss on extinguishment of debt of $13 million in 2021 as a result of the refinancing that occurred in the current quarter (the "2021 Refinancing") and a loss on extinguishment of debt of $10 million in 2020 as a result of the refinancing that occurred in the third quarter of 2020 (the "2020 Refinancing").

Debt for additional details.

Three Months Ended September 30,

2021 2020 Change

(Amounts in thousands)

Other, net $ 5,993 $ 18,431 $ (12,438) (67) %

Other, net decreased $12 million, or 67% for the three months ended September 30, 2021 compared to the same period in the prior year primarily due to realized and unrealized foreign currency exchange gains in the current period as well as a reduction in pension related expense of $12 million.

Benefit for income taxes

Three Months Ended September 30,

2021 2020 Change

(Amounts in thousands)

Benefit for income taxes $ (6,613) $ (19,874) $ 13,261 (67) %

For the three months ended September 30, 2021, we recognized $7 million income tax benefit, representing an effective tax rate of 2.7%, compared to an income tax benefit of $20 million, representing an effective tax rate of 6.1% for the three months ended September 30, 2020.

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

federal statutory income tax rate primarily results from valuation allowances, our geographic mix of taxable income in various tax jurisdictions, tax permanent differences and tax credits.

Nine Months Ended September 30, 2021 and 2020

Nine Months Ended September 30,

2021 2020 Change

(Amounts in thousands)

Travel Solutions $ 1,052,613 $ 900,868 $ 151,745 17 %

Hospitality Solutions 148,145 133,163 14,982 11 %

Total segment revenue 1,200,758 1,034,031 166,727 16 %

Eliminations (12,520) (13,645) 1,125 8 %

Total revenue $ 1,188,238 $ 1,020,386 $ 167,852 16 %

Travel Solutions— Revenue increased $152 million, or 17%, for the nine months ended September 30, 2021 compared to the same period in the prior year, primarily due to:

• a $164 million, or 36%, increase in transaction-based distribution revenue, which consists of a $243 million decrease in transaction based revenue during the first quarter of 2021, a $266 million increase during the second quarter of 2021 and a $141 million increase in the third quarter of 2021.

These quarterly changes are due to the significant impact of the COVID-19 pandemic on our revenue beginning in the latter portion of the first quarter of 2020, which included significant cancellations beyond original estimates of approximately $100 million in the second quarter of 2020.

Additionally, during the third quarter of 2020 we recognized $18 million resulting from less cancellation activity on bookings scheduled to depart during the third quarter than was estimated.

We are currently experiencing a continued recovery in volumes, offset by an unfavorable rate mix due to higher domestic leisure bookings, resulting in the overall increase in revenue for the nine months ended September 30, 2021 compared to the prior period.

Direct Billable Bookings increased 52% to 149 million due to these factors;

• a $13 million decrease in IT solutions revenue consisting of a $76 million decrease during the first quarter of 2021, a $51 million increase during the second quarter of 2021 and a $12 million increase in the third quarter of 2021.

These quarterly changes are due to the significant impact of the COVID-19 pandemic on our revenue beginning in the latter portion of the first quarter of 2020.

Commercial and operations revenue decreased $28 million primarily due to the continued impact of the COVID-19 pandemic on our customer base and certain product divestitures, offset by license fee revenue from new implementations recognized upon delivery to the customer.

Recognition of license fees upon delivery has previously resulted and will continue to result in periodic fluctuations in revenue recognized.

In addition, we are currently experiencing a continued recovery in Passengers Boarded volumes, offset by an unfavorable rate mix due to revenue that does not fluctuate with our volumes, resulting in an overall increase

in reservation revenue of $16 million for the nine months ended September 30, 2021 compared to the prior period.

Passengers Boarded increased 21% to 294 million due to these factors.

Hospitality Solutions— Revenue increased $15 million, or 11%, for the nine months ended September 30, 2021 compared to the same period in the prior year.

The increase was primarily driven by an increase in SynXis Software and Services revenue due to an increase in transaction volumes of 33% to 68 million, as a result of the continued recovery from the COVID-19 pandemic, and an increase of $2 million in DX revenue.

This increase is partially offset by dilution in rate from the prior year due to revenue that does not fluctuate with volumes and a change in transaction mix versus 2021.

Cost of revenue, excluding technology costs

Nine Months Ended September 30,

2021 2020 Change

(Amounts in thousands)

Travel Solutions $ 403,933 $ 344,330 $ 59,603 17 %

Hospitality Solutions 70,762 71,573 (811) (1) %

Eliminations (12,518) (13,645) 1,127 8 %

Total segment cost of revenue, excluding technology costs 462,177 402,258 59,919 15 %

Corporate 5,646 27,964 (22,318) (80) %

Depreciation and amortization 30,188 27,846 2,342 8 %

Total cost of revenue, excluding technology costs $ 498,011 $ 458,068 $ 39,943 9 %

Travel Solutions— Cost of revenue, excluding technology costs, increased $60 million, or 17%, for the nine months ended September 30, 2021 compared to the same period in the prior year.

The increase was primarily the result of a $64 million increase in incentive consideration due to high er overall transaction volume consisting of a $115 million decline in the first quarter of 2021, a $130 million increase in the second quarter of 2021, and a $49 million increase in the third quarter of 2021, compared to the same periods in the prior year.

This i ncrease is offset primarily by a $2 million decline in labor and professional services costs resulting from the reduction in workforce from our cost reduction measures implemented in the prior year.

Restructuring Activities , to our consolidated financial statements for further details on restructuring activities.

Hospitality Solutions— Cost of revenue, excluding technology costs, decreased $1 million, or 1%, for the nine months ended September 30, 2021 compared to the same period in the prior year.

The decrease was primarily driven by a $ 6 million reduction in transaction-related costs due to the change in mix of bookings offset by an increase in transaction volumes as a result of the continued recovery from the COVID-19 pandemic.

This decrease is offset by a $5 million increase in labor and professional services costs resulting from the expiration of the temporary cost reduction measures implemented in the second quarter of 2020 and an increase in professional services costs related to our call center to support the increase in transaction volumes in the current year.

Corporate— Cost of revenue, excluding technology costs, decreased $22 million, or 80%, for the nine months ended September 30, 2021 compared to the same period in the prior year.

The decrease was due to a decline in severance costs of $23 million associated wi th the reduction of our workforce in 2020.

The decrease was partially offset by a slight increase in labor costs resulting from an increase in stock-based compensation primarily associated with previously awarded performance-based units.

Restructuring Activities , to our consolidated financial statements for further details on restructuring activities.

Depreciation and amortization —Depreciation and amortization increased $2 million, or 8%, for the nine months ended September 30, 2021 compared to the same period in the prior year due to assets placed in service .

Technology Costs

Nine Months Ended September 30,

2021 2020 Change

(Amounts in thousands)

Travel Solutions $ 653,147 $ 724,609 $ (71,462) (10) %

Hospitality Solutions 71,324 74,954 (3,630) (5) %

Corporate 58,520 84,274 (25,754) (31) %

Total technology costs $ 782,991 $ 883,837 $ (100,846) (11) %

Travel Solutions— Technology costs decreased $71 million, or 10%, for the nine months ended September 30, 2021 compared to the same period in the prior year.

The decrease was primarily driven by a decrease in depreciation and amortization of $67 million primarily due to a change in the mix of our technology spend beginning in 2019 resulting in less capitalized internal

use software, and a decrease in labor and professional services costs of $24 million resulting from the reduction in workforce from our cost reduction measures implemented in the prior year and attrition and cost reduction measures in the current year.

This decrease was partially offset by an increase in technology hosting costs of $10 million associated with higher transaction volumes and an increase in labor costs of $9 million resulting from continued decline in the capitalization mix of our technology spend as we implement open-source and cloud-based solutions.

We expect depreciation and amortization expense to be significantly lower in 2021 than in the prior year due to the lower capitalization rate on technology spend.

Hospitality Solutions— Technology costs decreased $4 million, or 5%, for the nine months ended September 30, 2021 compared to the same period in the prior year.

The decrease was primarily due to a $14 million decline in depreciation and amortization primarily driven by a change in the mix of our technology spend beginning in 2019 resulting in less capitalized internal use software.

This decrease was partiall y offset by an increase in labor and professional services costs of $6 million resulting fro m the expiration of the temporary cost reduction measures implemented in the second quarter of 2020 and to support our technology operations in the current year.

The continued decline in the capitalization mix of our technology spend as we implement open-source and cloud-based solutions also resulted in an increase in labor costs of $2 million.

Additionally, technology hosting costs increased by $2 million resulting from higher transaction volumes.

Corporate— Technology costs decreased $26 million, or 31%, for the nine months ended September 30, 2021 compared to the same period in the prior year primarily due to a decline in severance costs of $34 million associated with the reduction of our workforce in 2020, partially offset by an increase in labor costs of $10 million resulting from an increase in stock-based compensation primarily associated with previously awarded performance-based units.

Restructuring Activities , to our consolidated financial statements for further details on restructuring activities.

Selling, General and Administrative Expenses

Nine Months Ended September 30,

2021 2020 Change

(Amounts in thousands)

Travel Solutions $ 183,165 $ 217,103 $ (33,938) (16) %

Hospitality Solutions 33,830 31,498 2,332 7 %

Corporate 229,852 198,410 31,442 16 %

Total selling, general and administrative expenses $ 446,847 $ 447,011 $ (164) — %

Travel Solutions— Selling, general and administrative expenses decreased $34 million, or 16%, for the nine months ended September 30, 2021 compared to the same period in the prior year.

The decrease is driven by a $58 million decline in the provision for expected credit losses 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 slow global economic recovery from the COVID-19 pandemic.

This decrease was partially offset by an increase in labor and professional services costs of $24 million primarily resulting from the expiration of the temporary cost reduction measures implemented in the second quarter of 2020, the reversal of certain third-party commissions in the prior year which did not reoccur in the current year, and increases in professional services for risk and security and consulting related to our business strategy to support the long-term growth of the business .

Hospitality Solutions— Selling, general and administrative expenses increased $2 million, or 7%, for the nine months ended September 30, 2021 compared to the same period in the prior year.

The increase is primarily driven by higher depreciation and amortization.

Corporate— Selling, general and administrative expenses increased $31 million, or 16%, for the nine months ended September 30, 2021 compared to the same period in the prior year.

The increase is driven by an increase in labor costs of $23 million as a result of a $28 million increase in stock-based compensation primarily associated with previously awarded performance-based units, an $11 million increase due to continued investments in business systems in the current year and other labor related expenses, and a $5 million increase resulting from the expiration of the temporary cost reduction measures implemented in the second quarter of 2020, partially offset by a $21 million decrease in severance costs associated with the reduction of our workforce in 2020.

Additionally, legal and professional fees increased $6 million due to a $26 million increase in costs primarily associated with ongoing legal matters in the current year, partially offset by a $20 million decrease in acquisition-related costs primarily associated with the now terminated Farelogix acquisition.

Restructuring Activities , to our consolidated financial statements for further details on restructuring activities.

Interest, net

Nine Months Ended September 30,

Three Months Ended March 31,

2022 2021 Change

1 unchanged sentence

Interest expense, net $ 61,058 $ 64,101 $ (3,043) (5) %

Interest expense increased $36 million, or 23% during the nine months ended September 30, 2021 compared to the same period in the prior year primarily due to additional borrowings under the 9.250% senior secured notes due 2025 and the 4.000% senior exchangeable notes due 2025 (the "Exchangeable Notes") entered into during the second quarter of 2020, and the 7.375% senior secured notes due 2025 entered into in the third quarter of 2020.

We expect interest expense will be significantly higher in 2021 as compared to the prior year due to these changes to our capital structure, implemented during 2020.

Interest expense decreased $3 million, or 5% during the three months ended March 31, 2022 compared to the same period in the prior year primarily due to the maturation of our interest rate swaps in the fourth quarter of 2021.

Loss on extinguishment of debt

We recognized a loss on extinguishment of debt of $13 million in 2021 as a result of the 2021 Refinancing and a loss on extinguishment of debt of $10 million in 2020 as a result of the 2020 Refinancing.

Other expense, net

Nine Months Ended September 30,

We recognized a loss on extinguishment of debt of $4 million during the three months ended March 31, 2022 as a result of the refinancing that occurred in the first quarter of 2022.

Debt for further details.

Three Months Ended March 31,

2022 2021 Change

1 unchanged sentence

Other, net $ (191,241) $ (11,631) $ (179,610) 1,544 %

** Not meaningful

Other, net decreased $74 million for the nine months ended September 30, 2021 compared to the same period in the prior year primarily due to a $46 million charge related to the termination payments in connection with the now-terminated acquisition of Farelogix recorded in the first quarter of 2020, a $15 million gain on sale in investment recorded in the first quarter of 2021, a reduction of pension related expense of $9 million compared to the same period in 2020, as well as realized and unrealized foreign currency exchange gains during the nine months ended September 30, 2021.

Benefit for income taxes

Nine Months Ended September 30,

Other, net decreased $180 million for the three months ended March 31, 2022 compared to the same period in the prior year primarily due to the gain on the sale of AirCentre.

Dispositions for further details regarding the AirCentre sale.

(Benefit) provision for Income Taxes

Three Months Ended March 31,

2022 2021 Change

(Amounts in thousands)

Benefit for income taxes $ (4,513) $ (51,757) $ 47,244 (91) %

For the nine months ended September 30, 2021, we recognized $5 million 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 5.1% for the nine months ended September 30, 2021.

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 current 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.

(Benefit) provision for income taxes $ (596) $ 3,997 $ (4,593) (115) %

For the three months ended March 31, 2022, we recognized $1 million 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.

2 unchanged sentences

Our current principal source of liquidity is our cash and cash equivalents on hand.

As of September 30, 2021 and December 31, 2020, our cash and cash equivalents, Revolver, bilateral letter of credit facility and outstanding letters of credit were as follows (in thousands):

September 30, 2021 December 31, 2020

As of March 31, 2022 and December 31, 2021, our cash and cash equivalents and outstanding letters of credit were as follows (in thousands):

March 31, 2022 December 31, 2021

Cash and cash equivalents $ 1,186,414 $ 978,352

Available balance under the Revolver — 15,326

Reductions to the Revolver:

Revolver outstanding balance — 375,000

Outstanding letters of credit — 9,674

Available under the bilateral letter of credit facility 6,921 10,018

4 unchanged sentences

We invest in a money market fund which is classified as cash and cash equivalents in our consolidated balance sheets and statements of cash flows.

We held no short-term investments as of September 30, 2021 and December 31, 2020.

We had $21 million held as cash collateral for standby letters of credit in restricted cash on our consolidated balance sheets as of September 30, 2021.

We had no restricted cash as of December 31, 2020.

As of December 31, 2020, we have significant U.S.

federal NOLs and U.S.

federal tax credits.

Because of the continued adverse impact of the COVID-19 pandemic on our business, we expect to have significant NOLs related to the current year, and we do not expect to be a U.S.

federal cash tax payer for 2021.

We held no short-term investments as of March 31, 2022 and December 31, 2021.

We had $21 million held as cash collateral for standby letters of credit in restricted cash on our consolidated balance sheets as of March 31, 2022 and December 31, 2021.

While the COVID-19 pandemic has had an adverse impact on our business, we expect to recognize federal taxable income in 2022 based on our operating and non-operating results, the annual limitation on the use of NOL carryforwards and a provision of the Tax Cuts and Jobs Act set to take effect.

As a result, while we expect to be a U.S.

federal cash taxpayer in 2022, we expect to also benefit from the usage of NOLs in 2022 to the extent available.

We expect to continue to benefit from our NOLs in the near-term beyond 2022.

Liquidity Outlook

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

We believe that approximately two-thirds of our cost structure is adjustable in the near-term, comprised largely of incentive expenses that decline proportionally with bookings and including other variable expenses that are subject to cost savings measures.

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, including from airlines’ insolvency or suspension of service or aircraft groundings, we cannot provide assurance that the assumptions used to estimate our liquidity requirements will be accurate.

1 unchanged sentence

As previously disclosed, we responded with measures to increase our cash position during 2020, including the suspension of quarterly cash dividends on our common stock, effective with respect to the dividends occurring after the March 30, 2020 payment and share repurchases under our $500 million share repurchase program (the "Share Repurchase Program"), borrowing under our Revolver, implementing cost savings measures, and completing debt and equity offerings.

In addition, in the third quarter of 2021, we refinanced and extended the maturity on a portion of our debt, and established the $300 million at-the-market equity distribution program (the "ATM Program").

In addition, in the third quarter of 2021, we refinanced and extended the maturity on a portion of our debt and amended the financial performance covenant to remove minimum liquidity and leverage ratio requirements and in the first quarter of 2022, we refinanced and extended the maturity on another portion of our debt.

We believe these actions will provide additional flexibility as we manage through the global economic recovery from the COVID-19 pandemic.

Free cash flow is calculated as cash flow from operations reduced by additions to property and equipment.

For 2022, we expect our free cash flow to improve on an annual basis from 2021, turning positive within the second half of 2022.

This expectation is based on industry projections regarding anticipated recovery levels in air travel and could change.

See “—Risk Factors" for further details.

Given the magnitude of travel decline and the unknown duration of the COVID-19 impact, we will continue to monitor travel activity and take additional steps should we determine they are necessary.

Additionally, we may review opportunities to refinance our existing debt, as well as conduct debt or equity offerings to support future strategic investments, provide additional liquidity, or pay down debt.

We utilize cash and cash equivalents primarily to pay our operating expenses, make capital expenditures, invest in our information technology infrastructure, products and offerings, pay taxes, and service our debt and other long-term liabilities.

On July 12, 2021 we refinanced the Revolver and terminated the commitments thereunder.

Additionally, we may review opportunities to refinance our existing debt, as well as conduct debt or equity offerings to support future strategic investments, support operational requirements, provide additional liquidity, or pay down debt.

We utilize cash and cash equivalents primarily to pay our operating expenses, make capital expenditures, invest in our information technology infrastructure, products and offerings, pay taxes, pay quarterly dividends on our Preferred Stock (as defined below) when declared, and service our debt and other long-term liabilities.

On July 12, 2021, we refinanced the Revolver

and terminated the commitments thereunder, replacing it with term loans.

See “— Senior Secured Credit Facilities 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.

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.

Our ability to generate cash depends on many factors beyond our control, and any failure to meet our debt service obligations could harm our business, financial condition and results of operations.

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See “Risk Factors—The COVID-19 pandemic has had and is expected to continue to have a significant adverse impact on our business, including our financial results and prospects, and the travel suppliers on whom our business relies." and "—We may require more cash than we generate in our operating activities, and additional funding on reasonable terms or at all may not be available.”

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

On an ongoing basis, we will evaluate and consider strategic acquisitions, divestitures, joint ventures, equity method investments, repurchasing shares of our common stock (including pursuant to our multi-year $500 million Share Repurchase Program) or our outstanding debt obligations in open market or in privately negotiated transactions, as well as other transactions we believe may create stockholder value or enhance financial performance.

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

On an ongoing basis, we will evaluate and consider strategic acquisitions, divestitures, joint ventures, equity method investments, or repurchasing our outstanding debt obligations in open market or in privately negotiated transactions, as well as other transactions we believe may create stockholder value or enhance financial performance.

These transactions may require cash expenditures or generate proceeds and, to the extent they require cash expenditures, may be funded through a combination of cash on hand, debt or equity offerings.

Recent Events Impacting Our Liquidity and Capital Resources

Interest Payments

As a result of the 9.250% senior secured notes due 2025 and the 4.000% Exchangeable Notes entered into during the second quarter of 2020, and the 7.375% senior secured notes due 2025 entered into in the third quarter of 2020, interest payments increased $79 million during the nine months ended September 30, 2021, compared to the same period in the prior year and will continue to remain a significant use of cash during 2021.

Debt Agreements

On March 9, 2022, we refinanced and extended the maturity on a portion of the Term Loan B facility.

See “— Senior Secured Credit Facilities" below.

The Preferred Stock accumulates cumulative dividends at a rate per annum equal to 6.50% and dividends are payable when, as and if declared by our board of directors, out of funds legally available for their payment to the extent paid in cash, quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, beginning on December 1, 2020 and ending on, and including, September 1, 2023.

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

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.

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

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

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

On March 16, 2020, we announced the suspension of the payment of quarterly cash dividends on our common stock, effective with respect to the dividends occurring after the March 30, 2020 payment.

At-the-Market (ATM) Program

On August 19, 2021, we established the $300 million 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.

Share Repurchase Program

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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 not repurchase any shares pursuant to the Share Repurchase Program.

For the three months ended March 31, 2022, we did not 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 the 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.

Approximately $287 million remains authorized for repurchases under the Share Repurchase Program as of March 31, 2022.

Senior Secured Credit Facilities

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

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

In addition, during this covenant suspension, the 2020 Refinancing limited certain payments to equity holders, certain investments, certain

prepayments of unsecured debt and the ability of certain subsidiaries to incur additional debt.

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

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

On July 12, 2021, we completed the 2021 Refinancing, which included entering into agreements to refinance the Other Term Loan B facility and the Revolver, and terminated the revolving commitments thereunder.

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

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

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

Among other things, the 2021 Refinancing amended the financial performance covenant to remove the minimum liquidity requirement of $300 million, the Total Net Leverage Ratio maintenance requirement, and certain other limitations.

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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.

We recognized a loss on extinguishment of debt in connection with these transactions during the year ended December 31, 2021 of $13 million and debt modification costs for financing fees of $2 million recorded to Other, net.

The New Facilities mature on December 17, 2027, and we have the ability to prepay the New Facilities after December 17, 2021 without a premium.

In addition, on July 2, 2021, in anticipation of the Revolver repayment and termination of the revolving commitments (and related letter of credit subfacility), Sabre GLBL entered into a new $20 million bilateral letter of credit facility, which is secured by a cash collateral deposit account and included as restricted cash on our consolidated balance sheets as of December 31, 2021.

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 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.

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

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

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

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

The Eurocurrency rate is based on LIBOR.

We are further required to pay down the term loans with proceeds from certain asset sales or borrowings, that are not otherwise reinvested in the business, as defined in the Amended and Restated Credit Agreement.

As of March 31, 2022, we had outstanding approximately $2.2 billion of variable debt that is indexed to the London Interbank Offered Rate ("LIBOR") consisting of Term Loan B for $1.2 billion, Term Loan B-1 for $400 million and Term Loan B-2 for $634 million.

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

If a published U.S.

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

dollar LIBOR were available in its current form.

See “Risk Factors—We are exposed to interest rate fluctuations.” We anticipate amending our Amended and Restated Credit Agreement prior to the phaseout of LIBOR to provide for a Eurocurrency rate alternative to LIBOR.

Nine Months Ended September 30,

In July 2021, we entered into the 2021 Refinancing which, among other things, allows for the LIBOR rate to be phased out and replaced with SOFR plus a credit spread adjustment factor for Term Loan B-1 and Term Loan B-2, and we therefore do not anticipate a material impact from the anticipated phase out of LIBOR with respect to these loans.

In March 2022, we entered into the 2022 Refinancing, which extended the maturity and replaced LIBOR with Term SOFR on a portion of our Term Loan B facility.

The remaining Term Loan B allows for a transition to the Prime rate plus a margin, and assuming the discontinuation of LIBOR in June 2023, we estimate the impact of transitioning to

the Prime rate in June 2023, assuming changes in Prime rates aligned with expected changes in the federal funds rate, which are based on market data and analysts’ forecasts, would result in an aggregate of approximately $15 million of incremental interest expense over the remaining life of Term Loan B.

We intend to seek an amendment with our lenders of Term Loan B prior to June 2023 to provide for a transition to SOFR or another alternative to LIBOR in anticipation of its discontinuation, but there can be no assurance that we will be able to reach an agreement with our lenders for any such amendment or that the incremental amount of any interest pursuant to such amendment would be significantly less than current requirements.

See “Risk Factors—We are exposed to interest rate fluctuations.”

Three Months Ended March 31,

(Amounts in thousands)

Cash used in operating activities $ (139,083) $ (197,403)

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

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

Cash provided by investing activities 374,865 8,405

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

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)

Operating Activities

Cash used in operating activities totaled $408 million for the nine months ended September 30, 2021.

The $179 million increase in operating cash flow from the same period in the prior year was primarily due to the impact of COVID-19 on the travel industry and on our results of operations, acquisition termination fees of $21 million paid in the first quarter of 2020 in connection with the now-terminated agreement to acquire Farelogix, a reduction in severance payments of $21 million related to restructuring activities initiated in 2020 and a $23 million reduction in upfront incentive consideration payments.

This increase in operating cash flow was partially offset by additional interest payments of $79 million re sulting from debt refinancing activities during 2020.

Cash used in operating activities totaled $139 million for the three months ended March 31, 2022.

The $58 million increase in operating cash flow from the same period in the prior year was primarily due to the impact of COVID-19 on the travel industry and on our results of operations and a $5 million decline in interest payments as our interest rate swaps have matured, offset by an increase of $67 million associated with payments to our employees under performance-based bonus plans that did not occur in the prior year.

Investing Activities

For the nine months ended September 30, 2021, we received proceeds of $25 million from the sale of certain investments and assets, offset by $30 million of cash used on capital expenditures primarily related to software developed for internal use.

For the nine months ended September 30, 2020, we used cash of $48 million on capital expenditures, including $32 million related to software developed for internal use.

For the three months ended March 31, 2022, we received proceeds of $392 million from the sale of AirCentre, partially offset by $17 million of cash used on capital expenditures related to software developed for internal use.

For the three months ended March 31, 2021, we received proceeds of $15 million from the sale of an investment, partially offset by $6 million of cash used on capital expenditures related to software developed for internal use.

Financing Activities

For the nine months ended September 30, 2021, financing activities used $37 million.

For the three months ended March 31, 2022, financing activities used $26 million.

Significant highlights of our financing activities include:

• proceeds of $403 million and $642 million from the issuance of New Term B-1 Facility and New Term B-2 Facility, respectively;

• proceeds of $25 million from the Revolver;

• ne t payments of $22 million from the settlement of employee stock-option awards;

• proceeds of $625 million from the issuance of New Other Term B Facility;

• payment of $623 million on Term Loan B;

• payment of $3 million on Term B-1 Facility and Term B-2 Facility;

• payment of $10 million for debt prepayment fees and issuance costs;

• net payments of $10 million from the settlement of employee stock-option awards;

• payment of $5 million in dividends on our preferred stock.

• payment of $12 million in debt prepayment fees and issuance costs;

• payments of $400 million for the Revolver;

• payment of $654 million on Term Loan B and Other Term Loan B;

For the nine months ended September 30, 2020, financing activities provided $1,874 million.

For the three months ended March 31, 2021, financing activities used $24 million.

Significant highlights of our financing activities include:

• proceeds from borrowings under the Notes of $1,970 million;

• proceeds from issuance of stock of $598 million;

• proceeds from borrowings under the Revolver of $375 million;

• fourth and final annual payment on the TRA liability for $72 million, excluding interest;

• payment of $39 million in dividends on our common stock;

• payment of $530 million on 5.375% senior secured notes due 2023;

• payment of $365 million on Term Loan A and Term Loan B;

• payment of $54 million on debt issuance costs;

• net payments of $5 million from the settlement of employee stock-option awards, including payments of $5 million in income tax withholdings associated with the settlement of employee restricted-stock awards;

• payment of $5 million on our capital leases.

• net payments of $12 million from the settlement of employee stock-option awards;

• payment of $6 million on Term Loan B and Other Term Loan B;

• payment of $5 million in dividends on our preferred stock.

Contractual Obligations

There were no material changes to our future minimum contractual obligations since December 31, 2020 as previously disclosed in our Annual Report on Form 10-K filed with the SEC on February 25, 2021.

Off Balance Sheet Arrangements

We had no off balance sheet arrangements during the nine months ended September 30, 2021 and year ended December 31, 2020.

There were no material changes to our future minimum contractual obligations since December 31, 2021 as previously disclosed in our Annual Report on Form 10-K filed with the SEC on February 18, 2022, other than the impact of interest rates on our debt.

As of March 31, 2022, we had a total debt obligation of $6.1 billion, with $286 million due for the remainder of 2022.

We had no off balance sheet arrangements during the three months ended March 31, 2022 and year ended December 31, 2021.

Recent Accounting Pronouncements

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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 2. Management’s Discussion and Analysis