What changed in this filing

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Item 1. Financial Statements

2022-11-02 compared with 2022-08-02 · 188 added, 136 removed, 671 unchanged (33% of the section changed)

3 unchanged sentences

(In thousands, except per share amounts)

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

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

2022 2021 2022 2021

4 unchanged sentences

Operating loss ( 56,535 ) ( 156,688 ) ( 206,260 ) ( 539,611 )

Other (expense) income:

Other expense:

Interest expense, net ( 77,120 ) ( 65,461 ) ( 205,062 ) ( 193,834 )

2 unchanged sentences

Other, net ( 7,687 ) ( 5,993 ) 139,617 2,439

Total other (expense) income, net ( 110,635 ) ( 66,841 ) 15,845 ( 120,222 )

Total other expense, net ( 84,608 ) ( 84,638 ) ( 68,763 ) ( 204,860 )

Loss from continuing operations before income taxes ( 141,143 ) ( 241,326 ) ( 275,023 ) ( 744,471 )

Provision (benefit) for income taxes 5,390 ( 1,897 ) 4,794 2,100

Benefit for income taxes ( 6,989 ) ( 6,613 ) ( 2,195 ) ( 4,513 )

Loss from continuing operations ( 134,154 ) ( 234,713 ) ( 272,828 ) ( 739,958 )

Loss from discontinued operations, net of tax ( 284 ) ( 81 ) ( 150 ) ( 344 )

(Loss) income from discontinued operations, net of tax ( 446 ) 186 ( 596 ) ( 158 )

Net loss ( 134,600 ) ( 234,527 ) ( 273,424 ) ( 740,116 )

16 unchanged sentences

(In thousands)

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

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

2022 2021 2022 2021

12 unchanged sentences

Net change in retirement-related benefit plans, net of tax 1,903 9,516 6,850 37,044

Unrealized losses, net of taxes of $ — , $ 29 , $ — , $ 30

Unrealized gains, net of taxes of $ — , $ 2,715 , $ — , $ 2,745

4,422 2,698 4,405 2,595

Reclassification adjustment for realized losses, net of taxes of $ — , $( 916 ), $ — , $( 1,815 )

Reclassification adjustment for realized (gains) losses, net of taxes of $ — , $( 930 ), $ — , $( 2,745 )

( 41 ) 3,237 203 9,553

Net change in derivatives, net of tax 4,381 5,935 4,608 12,148

Share of other comprehensive income of equity method investments ( 200 ) ( 758 ) 455 ( 224 )

Other comprehensive income 1,878 29,571 4,342 29,786

Share of other comprehensive loss of equity method investments ( 564 ) ( 250 ) ( 110 ) ( 474 )

Other comprehensive (loss) income ( 1,295 ) 13,566 3,047 43,352

Comprehensive loss ( 135,895 ) ( 220,961 ) ( 270,377 ) ( 696,764 )

5 unchanged sentences

(In thousands)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Current assets

34 unchanged sentences

Stockholders’ deficit

Preferred stock, $ 0.01 par value, 225,000 authorized, 3,290 issued and outstanding as of June 30, 2022 and December 31, 2021;

aggregate liquidation value of $ 329,000 as of June 30, 2022 and December 31, 2021

Preferred stock, $ 0.01 par value, 225,000 authorized, 3,290 issued and outstanding as of September 30, 2022 and December 31, 2021;

aggregate liquidation value of $ 329,000 as of September 30, 2022 and December 31, 2021

Common Stock:

1 unchanged sentence

1,000,000 authorized shares;

352,943 and 346,430 shares issued, 328,159 and 323,501 shares outstanding at June 30, 2022 and December 31, 2021, respectively

353,204 and 346,430 shares issued, 328,327 and 323,501 shares outstanding at September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 3,185,790 3,115,719

Treasury Stock, at cost, 24,785 and 22,930 shares at June 30, 2022 and December 31, 2021, respectively

Treasury Stock, at cost, 24,877 and 22,930 shares at September 30, 2022 and December 31, 2021, respectively

( 513,988 ) ( 498,141 )

8 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating Activities

8 unchanged sentences

Amortization of debt discount and issuance costs 11,236 8,815

Impairment and related charges 5,146 —

Debt modification costs 4,905 2,435

Gain on loan converted to equity ( 3,568 ) —

Loss on extinguishment of debt 3,533 13,070

Dividends received from equity method investments 488 698

Provision for expected credit losses 263 ( 3,914 )

Loss from discontinued operations 596 158

Pension settlement charge — 4,347

Provision for expected credit losses 550 ( 3,728 )

Dividends received from equity method investments 533 698

Other 247 3,141

Pension settlement charge — 6,544

Changes in operating assets and liabilities:

11 unchanged sentences

Purchase of investment in equity securities ( 80,000 ) —

Additions to property and equipment ( 33,384 ) ( 17,240 )

Acquisitions, net of cash acquired ( 72,543 ) —

Cash provided by investing activities 271,898 7,634

Additions to property and equipment ( 53,474 ) ( 30,409 )

Cash provided by (used in) investing activities 186,251 ( 5,535 )

Financing Activities

1 unchanged sentence

Proceeds of borrowings from lenders 1,273,937 1,070,380

Net payment on the settlement of equity-based awards ( 15,330 ) ( 22,016 )

Debt discount and issuance costs ( 23,751 ) ( 12,194 )

Dividends paid on preferred stock ( 16,039 ) ( 16,283 )

Debt prepayment fees and issuance costs ( 9,747 ) —

Net payment on the settlement of equity-based awards ( 15,857 ) ( 22,378 )

Other financing activities 397 ( 269 )

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

Cash used in financing activities ( 61,646 ) ( 37,013 )

3 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 2,197 ) ( 1,781 )

Increase (decrease) in cash, cash equivalents and restricted cash 13,828 ( 377,551 )

Decrease in cash, cash equivalents and restricted cash ( 195,593 ) ( 454,857 )

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

26 unchanged sentences

Balance at June 30, 2022 3,290,000 $ 33 352,943,330 $ 3,529 $ 3,169,441 24,784,524 $ ( 513,462 ) $ ( 3,200,369 ) $ ( 75,945 ) $ 10,191 $ ( 606,582 )

Comprehensive loss ( 135,376 ) ( 1,295 ) 776 ( 135,895 )

Preferred stock dividends (1)

— — — — — — — ( 5,346 ) — — ( 5,346 )

Settlement of stock-based awards — — 260,577 3 — 92,784 ( 526 ) — — — ( 523 )

Stock-based compensation expense — — — — 16,349 — — — — — 16,349

Other — — — — — — — — — 1 1

Balance at September 30, 2022 3,290,000 33 353,203,907 3,532 3,185,790 24,877,308 ( 513,988 ) ( 3,341,091 ) ( 77,240 ) 10,968 ( 731,996 )

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

22 unchanged sentences

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

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

Preferred stock dividends (1)

— — — — — — — ( 5,400 ) — — ( 5,400 )

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

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

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

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

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

10 unchanged sentences

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

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

Recent Events— The travel industry continues to be adversely affected by the global health crisis due to the outbreak of the coronavirus, including variants ("COVID-19"), 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.

3 unchanged sentences

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 $ 9 million and $ 18 million as of June 30, 2022, and December 31, 2021, respectively, as cancellation activity has continued to decline over the year.

Our air booking cancellation reserve totaled $ 9 million and $ 18 million as of September 30, 2022, and December 31, 2021, respectively, as cancellation activity has continued to decline over the year.

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.

4 unchanged sentences

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

Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2022.

Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2022.

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

16 unchanged sentences

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

We adopted this standard in the first quarter of 2022 and there was no impact to our consolidated financial statements for the six months ended June 30, 2022 as a result of the adoption.

We adopted this standard in the first quarter of 2022 and there was no impact to our consolidated financial statements for the nine months ended September 30, 2022 as a result of the adoption.

Revenue from Contracts with Customers

2 unchanged sentences

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

The following table presents our assets and liabilities with customers as of June 30, 2022 and December 31, 2021 (in thousands).

Account Consolidated Balance Sheet Location June 30, 2022 December 31, 2021

The following table presents our assets and liabilities with customers as of September 30, 2022 and December 31, 2021 (in thousands).

Account Consolidated Balance Sheet Location September 30, 2022 December 31, 2021

Contract assets and customer advances and discounts (1)

4 unchanged sentences

______________________

(1) Includes contract assets of $ 11 million for June 30, 2022 and December 31, 2021.

During the six months ended June 30, 2022, we recognized revenue of approximately $ 17 million from contract liabilities that existed as of January 1, 2022.

(1) Includes contract assets of $ 12 million and $ 11 million for September 30, 2022 and December 31, 2021, respectively.

During the nine months ended September 30, 2022, we recognized revenue of approximately $ 28 million from contract liabilities that existed as of January 1, 2022.

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

During the three months ended September 30, 2022, we recorded an impairment of $ 5 million on our unbilled receivables due to the expected impact of Russian legislation and related regulations enacted during the quarter on the future recoverability of these assets.

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

1 unchanged sentence

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

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

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

2022 2021 2022 2021

8 unchanged sentences

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

For the six months ended June 30, 2022, the impact on revenue recognized in the current period from performance obligations partially or fully satisfied in the previous period is $ 25 million, which is primarily due to the recognition of revenue that was previously deferred but became recognizable due to a change in facts and circumstances associated with an IT Solutions customer located in Russia.

For the nine months ended September 30, 2022, the impact on revenue recognized in the current period from performance obligations partially or fully satisfied in the previous period is $ 27 million, which is primarily due to the recognition of revenue that was previously deferred but became recognizable due to a change in facts and circumstances associated with an IT Solutions customer located in Russia.

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

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

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

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

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

Acquisitions and Dispositions

Exercise of option to acquire

In July 2022, we exercised a contractually binding option to acquire the outstanding shares of an entity in the payments industry for a price determined pursuant to an independent valuation process.

Our obligation under the agreement is expected to result in a payment of approximately $ 70 million in August 2022 to the current shareholders.

We will consolidate the results of this entity from the date of acquisition, which are not expected to have a material impact on our results of operations in the current year.

In August 2022, we completed the acquisition of Conferma Limited ("Conferma"), a virtual payments technology company, to expand our investment in technology for the payments ecosystem in the travel industry .

We ac quired all of the outstanding stock and ownership interest of Conferma through the exercise of a call option, for net cash of $ 65 million and the conversion of a pre-existing loan into share capital of $ 11 million.

We recognized a gain of approximately $ 4 million upon conversion of the loan for the difference between the carrying value and fair value of the loan, which is recorded to Other, net within our results of operations.

Conferma is part of our Travel Solutions segment.

Pr eliminary Purchase Price Allocation

The purchase price allocation presented below is preliminary and based on available information as of the filing date of this Quarterly Report on Form 10-Q.

Primarily, we consider the accounting related to intangible assets and the associated deferred taxes to be incomplete due to ongoing analysis.

We expect to finalize the purchase price allocation during the first half of 2023.

A summary of the acquisition price and estimated fair values of assets acquired and liabilities assumed as of the date of acquisition is as follows (in thousands):

Cash and cash equivalents $ 7,203

Other current and non-current assets 5,950

Goodwill 51,992

Intangible assets 22,644

Current and non-current liabilities ( 4,053 )

Fair value of loan converted to equity in Conferma ( 11,281 )

Total acquisition price $ 72,455

In connection with this acquisition, we recognized a $ 6 million tax benefit during the three months ended September 30, 2022 related to the release of valuation allowances on prior period net operating loss carryovers.

This benefit is based on preliminary purchase accounting and subject to change based on the final valuation.

Under the purchase accounting method, the total purchase price was allocated to the net assets of Conferma based upon estimated fair values as of the acquisition date.

The excess purchase price over the estimated fair value of the net tangible and intangible assets was recorded as goodwill, reflecting the growth potential of the business.

The acquisition of Conferma did not have a material impact to our consolidated financial statements, and therefore pro forma information is not presented.

AirCentre Disposition

1 unchanged sentence

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

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

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

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

The net assets of AirCentre disposed of primarily included goodwill of $ 146 million, working capital of $ 17 million, and other assets, net of $ 25 million.

We recorded a pre-tax gain on sale of approximately $ 180 million, which includes an adjustment recorded in the second quarter of 2022 related to $ 12 million in contingencies identified in connection with the sale (after-tax $ 112 million) in Other, net in our consolidated statements of operations for the six months ended June 30, 2022.

We recorded a pre-tax gain on sale of approximately $ 180 million, which includes an adjustment recorded in the second quarter of 2022 related to $ 12 million in contingencies identified in connection with the sale (after-tax $ 112 million ) in Other, net in our consolidated statements of operations for the nine months ended September 30, 2022.

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

1 unchanged sentence

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

For the six months ended June 30, 2022, we recognized $ 5 million of income tax expense, representing a negative effective tax rate of 4 %, compared to an income tax expense of $ 2 million, representing a negative effective tax rate of less than 1 % for the six months ended June 30, 2021 .

The decrease in the effective tax rate for the six months ended June 30, 2022 as compared to the same period in 2021 was primarily due to a increase in valuation allowance recorded in the current period and various discrete items recorded in each of the respective six month periods.

For the nine months ended September 30, 2022, we recognized a $ 2 million income tax benefit, representing an effective tax rate of less than 1 %, compared to an income tax benefit of $ 5 million, representing an effective tax rate of less than 1 % for the nine months ended September 30, 2021.

The slight increase in the effective tax rate for the nine months ended September 30, 2022 as compared to the same period in 2021 was primarily due to a decrease in valuation allowance recorded in the current period and various discrete items recorded in each of the respective nine month periods.

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

5 unchanged sentences

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

On the basis of this evaluation, as of June 30, 2022, a cumulative valuation allowance of $ 443 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized.

On the basis of this evaluation, as of September 30, 2022, a cumulative valuation allowance of $ 450 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized.

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

2 unchanged sentences

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

Our net unrecognized tax benefits, excluding interest and penalties, included in our consolidated balance sheets, were $ 81 million and $ 85 million as of June 30, 2022 and December 31, 2021, respectively.

Our net unrecognized tax benefits, excluding interest and penalties, included in our consolidated balance sheets, were $ 77 million and $ 85 million as of September 30, 2022 and December 31, 2021, respectively.

Credit Losses

3 unchanged sentences

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

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

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

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

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

1 unchanged sentence

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

Our allowance for credit losses for the six months ended June 30, 2022 for our portfolio segment is summarized as follows (in thousands):

Six Months Ended

June 30, 2022

Our allowance for credit losses for the nine months ended September 30, 2022 for our portfolio segment is summarized as follows (in thousands):

Nine Months Ended

September 30, 2022

Balance at December 31, 2021 $ 59,646

2 unchanged sentences

Other ( 1,147 )

Balance at June 30, 2022 $ 51,985

Balance at September 30, 2022 $ 49,058

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

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

As of June 30, 2022 and December 31, 2021, our outstanding debt included in our consolidated balance sheets totaled $ 4,749 million and $ 4,753 million, respectively, which are net of debt issuance costs of $ 39 million and $ 45 million, respectively, and unamortized discounts of $ 14 million and $ 9 million, respectively.

The following table sets forth the face values of our outstanding debt as of June 30, 2022 and December 31, 2021 (in thousands):

Rate Maturity June 30, 2022 December 31, 2021

As of September 30, 2022 and December 31, 2021, our outstanding debt included in our consolidated balance sheets totaled $ 4,742 million and $ 4,753 million, respectively, which are net of debt issuance costs of $ 38 million and $ 45 million, respectively, and unamortized discounts of $ 46 million and $ 9 million, respectively.

The following table sets forth the face values of our outstanding debt as of September 30, 2022 and December 31, 2021 (in thousands):

Rate Maturity September 30, 2022 December 31, 2021

Senior secured credit facilities:

1 unchanged sentence

February 2024 $ 536,457 $ 1,805,806

Other Term Loan B S (1) + 4.25 %

June 2028 623,438 —

Term Loan B-1 L + 3.50 %

2 unchanged sentences

December 2027 635,950 640,780

2022 Term Loan B-1 S (1) + 4.25 %

June 2028 621,875 —

2022 Term Loan B-2 S (1) + 5.00 %

June 2028 675,000 —

9.25 % senior secured notes due 2025

9 unchanged sentences

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

We had outstanding letters of credit totaling $ 12 million and $ 10 million as of June 30, 2022 and December 31, 2021, respectively, which were secured by a $ 20 million cash collateral deposit account.

We had outstanding letters of credit totaling $ 11 million and $ 10 million as of September 30, 2022 and December 31, 2021, respectively, which were secured by a $ 20 million cash collateral deposit account.

Senior Secured Credit Facilities

2 unchanged sentences

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

Refinancing Amendment, the "2020 Refinancing"), which extended the maturity of the Revolver from July 1, 2022 to November 23, 2023 at the earliest and February 22, 2024 at the latest, depending on certain "springing" maturity conditions as described in the Third Revolving Refinancing Amendment.

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

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

6 unchanged sentences

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

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

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

6 unchanged sentences

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

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

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

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

We recognized a loss on extinguishment of debt in connection with these transactions during the six months ended June 30, 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.

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

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

The March 2022 Refinancing included the application of the proceeds of a new $ 625 million term loan “B” facility (the “2022 Term Loan B-1 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.

The remaining proceeds, net of a discount of $ 1 million, were used to pay $ 1 million in other fees and expenses.

We incurred an additional discount of $ 5 million and other fees of $ 3 million which were funded with cash on hand.

We recognized a loss on extinguishment of debt in connection with the March 2022 Refinancing during the nine months ended September 30, 2022 of $ 4 million and debt modification costs for financing fees of $ 1 million recorded to Other, net.

The 2022 Term Loan B-1 Facility matures on June 30, 2028 and offers us the ability to prepay or repay the 2022 Term Loan B-1 Facility after 12 months or to prepay or repay at a 101 premium before that date.

The interest rates on the 2022 Term Loan B-1 Facility are based on Term SOFR, replacing LIBOR, plus an applicable margin.

On August 15, 2022, we entered into an amendment to refinance a portion of the Term Loan B facility (the "August 2022 Refinancing").

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

The August 2022 Refinancing included the application of the proceeds of a new $ 675 million term loan “B” facility (the “2022 Term Loan B-2 Facility”), borrowed by Sabre GLBL under our Amended and Restated Credit Agreement, with the effect of extending the maturity of approximately $ 647 million of the existing Term Loan B credit facility under the Amended and Restated Credit Agreement.

The remaining proceeds, net of a discount of $ 25 million, were used to pay $ 3 million in other fees and expenses.

We incurred an additional discount of $ 9 million and other fees of $ 2 million which were funded with cash on hand.

We recognized debt modification costs for financing fees in connection with the August 2022 Refinancing during the nine months ended September 30, 2022 of $ 5 million recorded to Other, net.

No loss on extinguishment of debt was recorded as a result of the August 2022 Refinancing.

The 2022 Term Loan B-2 Facility matures on June 30, 2028 and offers us the ability to prepay or repay the 2022 Term Loan B-2 Facility after 12 months or to prepay or repay at a 101 premium before that date.

The interest rates on the 2022 Term Loan B-2 Facility are based on Term SOFR, replacing LIBOR, plus an applicable margin.

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

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

As of June 30, 2022, we are in compliance with all covenants under the terms of the Amended and Restated Credit Agreement.

As of September 30, 2022, we are in compliance with all covenants under the terms of the Amended and Restated Credit Agreement.

Exchangeable Notes

2 unchanged sentences

During the year ended December 31, 2021, a certain holder elected to exchange $ 10 million of the Exchangeable Notes for 1,269,497 shares of common stock, which we elected to settle in shares of our common stock.

Additionally, certain holders

elected to exchange $ 2 million of the Exchangeable Notes for $ 3 million in cash, which we elected to settle in cash.

As of June 30, 2022 , we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

Additionally, certain holders elected to exchange $ 2 million of the Exchangeable Notes for $ 3 million in cash, which we elected to settle in cash.

As of September 30, 2022 , we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

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

• during any calendar quarter commencing after the calendar quarter ended June 30, 2020, if the last reported sale price per share of our common stock exceeds 130 % of the exchange price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

• during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the "Measurement Period") if the trading price per $1,000 principal amount of Exchangeable Notes, as determined following a request by their holder in accordance with the procedures in the indenture, for each trading day of the Measurement Period was less than 98 % of the product of the last reported sale price per share of our common stock on such trading day and the exchange rate on such trading day;

3 unchanged sentences

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

As of June 30, 2022, none of the conditions allowing holders of the Exchangeable Notes to exchange have been met.

As of September 30, 2022, none of the conditions allowing holders of the Exchangeable Notes to exchange have been met.

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

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

The following table sets forth the carrying value of the Exchangeable Notes as of June 30, 2022 and December 31, 2021, (in thousands):

June 30, 2022 December 31, 2021

The following table sets forth the carrying value of the Exchangeable Notes as of September 30, 2022 and December 31, 2021, (in thousands):

September 30, 2022 December 31, 2021

Principal $ 333,220 $ 333,220

1 unchanged sentence

Net Carrying Value $ 326,999 $ 325,303

The following table sets forth interest expense recognized related to the Exchangeable Notes for the three and six months ended June 30, 2022 and 2021 (in thousands):

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

The following table sets forth interest expense recognized related to the Exchangeable Notes for the three and nine months ended September 30, 2022 and 2021 (in thousands):

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

2022 2021 2022 2021

3 unchanged sentences

The primary risks managed by using derivative instruments are foreign currency exchange rate risk and interest rate risk.

Forward contracts on various foreign currencies are entered into to manage the foreign currency exchange rate risk on operational expenditures' exposure

denominated in foreign currencies.

Forward contracts on various foreign currencies are entered into to manage the foreign currency exchange rate risk on operational expenditures' exposure denominated in foreign currencies.

Interest rate swaps are entered into to manage interest rate risk associated with our floating-rate borrowings.

1 unchanged sentence

Cash Flow Hedging Strategy —To protect against the reduction in value of forecasted foreign currency cash flows, we hedge portions of our revenues and expenses denominated in foreign currencies with forward contracts.

For example, when the dollar strengthens significantly against the foreign currencies, the decline in present value of future foreign currency expense is offset by losses in the fair value of the forward contracts designated as hedges.

For example, when the

dollar strengthens significantly against the foreign currencies, the decline in present value of future foreign currency expense is offset by losses in the fair value of the forward contracts designated as hedges.

Conversely, when the dollar weakens, the increase in the present value of future foreign currency expense is offset by gains in the fair value of the forward contracts.

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We designated these instruments as cash flow hedges.

As of June 30, 2022 and December 31, 2021, we had no unsettled forward contracts.

Interest Rate Swap Contracts — Interest rate swaps outstanding during the six months ended June 30, 2022 and 2021 are as follows:

As of September 30, 2022 and December 31, 2021, we had no unsettled forward contracts.

Interest Rate Swap Contracts — Interest rate swaps outstanding during the nine months ended September 30, 2022 and 2021 are as follows:

Notional Amount Interest Rate

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(4) Fixed fee of 2.79 % effective June 30, 2022, and expiring December 30, 2022, and 3.98 % effective December 31, 2022, and expiring December 31, 2023.

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

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

On April 1, 2022, we entered into an interest rate swap to hedge the interest payments associated with $ 200 million of the floating-rate Other Term Loan B for the years 2022 and 2023.

On June 15, 2022, we entered into an interest rate swap to hedge the interest payments associated with $ 150 million of the floating-rate Other Term Loan B for the years 2022 and 2023.

In 2018, we entered into forward starting interest rate swaps to hedge the interest payments associated with $ 600 million of the floating-rate Term Loan B related to the year 2021.

In April 2022, we entered into an interest rate swap to hedge the interest payments associated with $ 200 million of the floating-rate 2022 Term Loan B-1 for the years 2022 and 2023.

In June 2022, we entered into an interest rate swap to hedge the interest payments associated with $ 150 million of the floating-rate 2022 Term Loan B-1 for the years 2022 and 2023.

We designated these swaps as cash flow hedges.

We had no derivatives designated as hedging instruments as of December 31, 2021.

The estimated fair values of our derivatives designated as hedging instruments as of June 30, 2022 are as follows (in thousands):

The estimated fair values of our derivatives designated as hedging instruments as of September 30, 2022 are as follows (in thousands):

Derivative Assets (Liabilities)

Fair Value as of

Derivatives Designated as Hedging Instruments Consolidated Balance Sheet Location June 30, 2022

Derivatives Designated as Hedging Instruments Consolidated Balance Sheet Location September 30, 2022

Interest rate swaps Prepaid expenses and other current assets

Interest rate swaps Other assets, net 757

Interest rate swaps Other noncurrent liabilities ( 256 )

The effects of derivative instruments, net of taxes, on OCI for the three and six months ended June 30, 2022 and 2021 are as follows (in thousands):

Amount of Gains (Losses) Recognized in OCI on Derivative,

Total $ 4,351

The effects of derivative instruments, net of taxes, on OCI for the three and nine months ended September 30, 2022 and 2021 are as follows (in thousands):

Amount of Gains Recognized in OCI on Derivative,

Effective Portion

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

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

Derivatives in Cash Flow Hedging Relationships 2022 2021 2022 2021

1 unchanged sentence

Total $ 4,422 $ 2,698 $ 4,405 $ 2,595

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

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

Amount of (Gains) Losses Reclassified from Accumulated OCI into Income, Effective Portion

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

2022 2021 2022 2021

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Global Business Travel Group, Inc.("GBT") Investment— In May 2022, we acquired 8 million shares of Class A Common Stock, par value of $ 0.0001 per share, of GBT for an aggregate purchase price of $ 80 million.

As of June 30, 2022, we continued to own these 8 million shares.

As of September 30, 2022, we continued to own these 8 million shares.

The terms of these shares do not contain any restrictions that would impact our ability to sell the shares in the future.

The fair value of our investment in GBT is based on its share price, a Level 1 input, as the stock is publicly traded on the New York Stock Exchange under the symbol GBTG.

The following tables present our assets that are required to be measured at fair value on a recurring basis as of June 30, 2022 (in thousands):

The following tables present our assets that are required to be measured at fair value on a recurring basis as of September 30, 2022 (in thousands):

Fair Value at Reporting Date Using

June 30, 2022 Level 1 Level 2 Level 3

September 30, 2022 Level 1 Level 2 Level 3

Derivatives (1)

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There were no (liabilities) assets that were required to be measured at fair value on a recurring basis as of December 31, 2021.

There were no transfers between Levels 1 and 2 within the fair value hierarchy for the three and six months ended June 30, 2022.

Unrealized losses recognized during the three and six months ended June 30, 2022 from the investment in GBT totaled $ 30 million.

There were no transfers between Levels 1 and 2 within the fair value hierarchy for the three and nine months ended September 30, 2022.

Unrealized losses recognized during the three and nine months ended September 30, 2022 from the investment in GBT totaled $ 5 million and $ 35 million, respectively.

Other Financial Instruments

1 unchanged sentence

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

The following table presents the fair value and carrying value of our senior notes and borrowings under our senior secured credit facilities as of June 30, 2022 and December 31, 2021 (in thousands):

The following table presents the fair value and carrying value of our senior notes and borrowings under our senior secured credit facilities as of September 30, 2022 and December 31, 2021 (in thousands):

Fair Value at Carrying Value at (1)

Financial Instrument June 30, 2022 December 31, 2021 June 30, 2022 December 31, 2021

Financial Instrument September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021

Term Loan B $ 530,087 $ 1,767,432 $ 535,971 $ 1,803,318

Other Term Loan B 587,979 — 616,763 —

Term Loan B-1 369,527 397,458 398,120 401,036

Term Loan B-2 574,740 633,171 631,234 635,416

2022 Term Loan B-1 581,064 — 615,450 —

2022 Term Loan B-2 638,719 — 641,393 —

9.25 % senior secured notes due 2025

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

We have not identified any triggering events or changes in circumstances since the performance of our annual goodwill impairment test that would require us to perform another goodwill impairment test and we did no t record any goodwill impairment charges for the three and six months ended June 30, 2022 or June 30, 2021.

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

Accumulated Other Comprehensive Loss

As of June 30, 2022 and December 31, 2021, the components of accumulated other comprehensive loss, net of related deferred income taxes, are as follows (in thousands):

June 30, 2022 December 31, 2021

As of September 30, 2022 and December 31, 2021, the components of accumulated other comprehensive loss, net of related deferred income taxes, are as follows (in thousands):

September 30, 2022 December 31, 2021

Defined benefit pension and other postretirement benefit plans $ ( 77,924 ) $ ( 84,773 )

Unrealized foreign currency translation gain 4,996 6,282

Unrealized loss on interest rate swaps 226 —

Unrealized foreign currency translation (loss) gain ( 2,018 ) 6,282

Unrealized gain on interest rate swaps 4,608 —

Share of other comprehensive loss of equity method investments ( 1,906 ) ( 1,796 )

3 unchanged sentences

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

As of June 30, 2022, we have not contributed to our defined benefit pension plan in 2022 and do not expect to make any contributions for the year.

As of September 30, 2022, we have not contributed to our defined benefit pension plan in 2022 and do not expect to make any contributions for the year.

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

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

We recorded $ 5 million and $ 11 million of accrued preferred stock dividends in our consolidated results of operations for the three and six months ended June 30, 2022 and 2021, respectively.

During the three and six months ended June 30, 2022 and 2021, we paid cash dividends on our preferred stock of $ 5 million and $ 11 million.

On May 4, 2022, the Board of Directors declared a dividend of $ 1.625 per share on Preferred Stock payable on June 1, 2022 to holders of record of the Preferred Stock on May 15, 2022.

On July 27, 2022, the Board of Directors declared a dividend of $ 1.625 per share on Preferred Stock payable on September 1, 2022 to holders of record of the Preferred Stock on August 15, 2022.

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, 2022 and 2021, respectively.

During the three and nine months ended September 30, 2022 and 2021, we paid cash dividends on our preferred stock of $ 5 million and $ 16 million, respectively.

On October 18, 2022, the Board of Directors declared a dividend of $ 1.625 per share on Preferred Stock payable on December 1, 2022 to holders of record of the Preferred Stock on November 15, 2022.

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

6 unchanged sentences

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

In the event that Preferred Stock dividends have not been declared and paid in an aggregate amount corresponding to six or more dividend periods, whether or not consecutive, the holders of the Preferred Stock will have the right to elect two new directors until all accumulated and unpaid Preferred Stock dividends have been paid in full, at which time that right will terminate.

In the event that Preferred Stock dividends have not been declared

and paid in an aggregate amount corresponding to six or more dividend periods, whether or not consecutive, the holders of the Preferred Stock will have the right to elect two new directors until all accumulated and unpaid Preferred Stock dividends have been paid in full, at which time that right will terminate.

Share Repurchase Program

1 unchanged sentence

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

During the six months ended June 30, 2022, we did no t repurchase any shares pursuant to the Share Repurchase Program.

During the nine months ended September 30, 2022, we did no t repurchase any shares pursuant to the Share Repurchase Program.

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

Approximately $ 287 million remains authorized for repurchases under the Share Repurchase Program as of June 30, 2022.

Approximately $ 287 million remains authorized for repurchases under the Share Repurchase Program as of September 30, 2022.

Exchangeable Notes

3 unchanged sentences

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

As of June 30, 2022, we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

As of September 30, 2022, we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

Debt for further details.

2 unchanged sentences

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

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

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

2022 2021 2022 2021

10 unchanged sentences

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

The diluted weighted-average common shares outstanding calculation excludes 3 million of dilutive stock options and restricted stock awards for the three and six months ended June 30, 2022, respectively, and 5 million of dilutive stock options and restricted stock awards for the three and six months ended June 30, 2021, respectively, as their effect would be anti-dilutive given the net loss incurred in those periods.

The calculation of diluted weighted-average shares excludes the impact of 4 million and 2 million of anti-dilutive common stock equivalents for the three and six months ended June 30, 2022, respectively, and 1 million of anti-dilutive common stock equivalents for the three and six months ended June 30, 2021, respectively.

The diluted weighted-average common shares outstanding calculation excludes 1 million and 2 million of dilutive stock options and restricted stock awards for the three and nine months ended September 30, 2022, respectively, and 3 million and 4 million of dilutive stock options and restricted stock awards for the three and nine months ended September 30, 2021, respectively, as their effect would be anti-dilutive given the net loss incurred in those periods.

The calculation of diluted weighted-average shares excludes the impact of 5 million and 3 million of anti-dilutive common stock equivalents for the three and nine months ended September 30, 2022, respectively, and 2 million and 1 million of anti-dilutive common stock equivalents for the three and nine months ended September 30, 2021, respectively.

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

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

The approximately 42 million and 43 million resulting common shares related to the Exchangeable Notes for the three and six months ended June 30, 2022 and 2021, respectively, are not included in the dilutive weighted-average common shares outstanding calculation as their effect would be anti-dilutive given the net loss incurred in those periods.

The approximately 42 million resulting common shares related to the Exchangeable Notes for the three and nine months ended September 30, 2022 and 2021, are not included in the dilutive weighted-average common shares outstanding calculation as their effect would be anti-dilutive given the net loss incurred in those periods.

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

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

The approximately 39 million and 40 million resulting common shares related to the Preferred Stock for the three and six months ended June 30, 2022 and 2021, respectively, are not included in the dilutive weighted-average common shares outstanding calculation as their effect would be anti-dilutive given the net loss incurred in those periods.

The approximately 39 million and 40 million resulting common shares related to the Preferred Stock for the three and nine months ended September 30, 2022 and 2021, respectively, are not included in the dilutive weighted-average common shares outstanding calculation as their effect would be anti-dilutive given the net loss incurred in those periods.

Contingencies

44 unchanged sentences

US Airways has not filed its motion seeking attorneys’ fees and costs to date.

We are currently unable to estimate these reasonable attorneys’ fees and costs;

therefore, we do not have any losses accrued for this matter as of June 30, 2022.

During the quarter ended September 30, 2022, we accrued an estimated loss in selling, general and administrative expenses for these attorneys' fees and costs, which did not have a significant effect on our results of operations for 2022.

At this time, we do not have sufficient information to estimate a range of reasonably possible or probable attorneys' fees and costs in excess of the amount recorded.

The amount of attorneys’ fees and costs to be awarded is subject to the final decision by the trial court, which may be appealed.

The ultimate resolution of this matter may be greater or less than the amount recorded and, if greater, could adversely affect our results of operations.

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

American Airlines Commercial Litigation

4 unchanged sentences

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

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

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

If we cannot resolve this matter favorably, we could be limited in our ability to develop and use innovative new displays and make the value-based incentive payments until our contract with American Airlines terminates.

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

On October 10, 2022, the court dismissed the case with prejudice.

Indian Income Tax Litigation

16 unchanged sentences

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

If the DIT were to fully prevail on every claim against us, including SAPPL and other group companies, we could be subject to taxes, interest and penalties of approximately $ 49 million as of June 30, 2022.

If the DIT were to fully prevail on every claim against us, including SAPPL and other group companies, we could be subject to taxes, interest and penalties of approximately $ 50 million as of September 30, 2022.

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

44 unchanged sentences

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

As of June 30, 2022, we do not believe that an adverse outcome is probable with respect to current outstanding claims;

As of September 30, 2022, we do not believe that an adverse outcome is probable with respect to current outstanding claims;

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

7 unchanged sentences

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

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

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

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

6 unchanged sentences

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

Segment information for the three and six months ended June 30, 2022 and 2021 is as follows (in thousands):

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

Segment information for the three and nine months ended September 30, 2022 and 2021 is as follows (in thousands):

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

2022 2021 2022 2021

3 unchanged sentences

Total revenue $ 663,394 $ 441,086 $ 1,905,836 $ 1,188,238

Adjusted Operating Loss (a)

Adjusted Operating Income (Loss) (a)

Travel Solutions $ 69,311 $ ( 39,078 ) $ 172,501 $ ( 212,393 )

15 unchanged sentences

______________________

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

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

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

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

2022 2021 2022 2021

1 unchanged sentence

Equity method income (loss) 199 ( 114 ) 215 ( 395 )

Impairment and related charges (1)

5,146 — 5,146 —

Acquisition-related amortization (2)

7 unchanged sentences

Stock-based compensation 16,349 32,218 70,081 86,122

Adjusted Operating Loss $ ( 9,312 ) $ ( 121,752 ) $ ( 38,467 ) $ ( 288,254 )

Adjusted Operating Income (Loss) $ 716 $ ( 102,644 ) $ ( 37,751 ) $ ( 390,898 )

______________________

(1) Impairment and related charges represents a $ 5 million impairment charge associated with the impact of regulatory changes in Russia on the future recoverability of certain assets.

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

(2) Restructuring and other costs represents charges, and adjustments to those charges, associated with planning and implementing business restructuring activities, including costs associated with third party consultants advising on our business structure and strategy going forward which are integral to the restructuring plan and will result in severance benefits related to employee terminations, which primarily occurred in July 2022.

(3) Restructuring and other costs represents charges, and adjustments to those charges, associated with planning and implementing business restructuring activities, including costs associated with third party consultants advising on our business structure and strategy going forward which are integral to the restructuring plan and severance benefits related to employee terminations, which primarily occurred in the third quarter of 2022.

During 2021, adjustments to charges were recorded in conjunction with the changes implemented in 2020 to support the new organizational structure and to respond to the impacts of the COVID-19 pandemic on our business, facilities and cost structure.

3 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements