What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-02-17 compared with 2022-02-18 · 354 added, 327 removed, 662 unchanged (51% of the section changed)

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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 COVID-19, as well as by government directives that have been enacted to slow the spread of the virus.

The travel industry continues to be adversely affected by the global health crisis due to the outbreak of COVID-19, as well as by the effect of 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.

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

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

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 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 2020 and 2021.

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

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

Additionally, our provision for expected credit losses for the year ended December 31, 2021 decreased $74 million from 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 gradual global recovery from the COVID-19 pandemic.

Our air booking cancellation reserve totaled $11 million and $18 million as of December 31, 2022 and 2021, respectively.

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

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Given the uncertainties surrounding the duration and effects of COVID-19, including any variants, on transaction volumes in the global travel industry, particularly air travel transaction volumes and future cancellation activity, including from airlines’ insolvency or suspension of service or aircraft groundings, we cannot provide assurance that the assumptions used in the estimates will be accurate and the impacts could be material on our cancellation reserves, credit loss provisions and results of operations.

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 in 2021 and 2020 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 in recent years will provide additional flexibility as we manage through the industry's 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.

however, given the magnitude of travel decline, the uncertain economic environment 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, 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:

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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.

As of December 31, 2021, assets including goodwill of $225 million and liabilities of $37 million associated with the disposition are classified as held for sale on our consolidated balance sheet.

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.

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 acquired all of the outstanding stock and ownership interest of Conferma, for net cash considerations of $62 million and conversion of a pre-existing loan receivable into share capital.

We have consolidated the results of Conferma from the date of acquisition into our Travel Solutions segment, which did not have a material impact on our results of operations.

In February 2023, we sold 19% of the share capital of the direct parent company of Conferma to a third party for proceeds of $16 million resulting in a non-controlling interest from that date.

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

As of December 31, 2022, continued to own these 8 million shares.

We recognized unrealized a loss of $26 million during the year ended December 31, 2022 from the investment in GBT.

Fair Value Measurements for further details.

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 $180 million (after-tax $112 million ), which includes an adjustment recorded in the second quarter of 2022 related to $12 million in contingencies identified in connection with the sale in Other, net in our consolidated statements of operations for the year ended December 31, 2022.

Acquisitions and Dispositions for further details.

Military conflict in Ukraine

In March 2022, we terminated our distribution agreement with a Travel Solutions customer located in Russia which has impacted our revenue in 2022.

In August 2022, Russia adopted legislation and related regulations that, effective October 30, 2022, require activities related to the development, creation and operation of automated information systems for processing domestic air transportation within the Russian Federation to be owned and operated by Russian residents or legal entities with no updates from or connection with systems abroad.

A Travel Solutions customer of these types of services located in Russia ceased using our systems on that date.

This legislation and these regulations have prohibited our ability to provide these services in Russia, which has and is expected to continue to negatively impact our revenue and results.

For reference, we recognized revenue of approximately $85 million during the year ended December 31, 2022 from customers located in Russia, including the release of previously deferred revenue mentioned below.

During the year ended December 31, 2022, we recognized $24 million of previously deferred revenue due to a change in facts and circumstances associated with a certain Travel Solutions customer located in Russia.

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

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

During the year ended December 31, 2022, we also recorded an impairment of $5 million due to the expected impact of the Russian legislation described above on the future recoverability of certain assets related to these customers.

In addition, we accelerated the amortization of customer advances into revenue, which reduced our IT Solutions revenue by $4 million.

Factors Affecting our Results

The impacts of COVID-19 on our business as described above are the most significant factors affecting our current results, and they are expected to continue to significantly impact our future results.

The following is a discussion of other trends that we believe are additional significant opportunities and challenges currently impacting our business and industry.

In addition to the "—Recent Developments Affecting our Results of Operations" above, the following is a discussion of other trends that we believe are additional significant opportunities and challenges currently impacting our business and industry.

The discussion also includes management’s assessment of the effects these trends have had and are expected to have on our results of continuing operations.

This information is not an exhaustive list of all of the factors that could affect our results and should be read in conjunction with the factors referred to in the sections entitled “ Risk Factors ,” “ Forward-Looking Statements ,” and "—Recent Developments Affecting our Results of Operations" included elsewhere in this Annual Report on Form 10-K.

Technology transformation and change in mix of technology spend

We expect to further enable our technology transformation with incremental operational and capital expenditure investments in 2022 and continued investment over the next few years which will have a material impact on our financial results.

Technology transformation and investments in modernizing our architecture

We expect to further enable our technology transformation with incremental operational and capital expenditure investments in 2023 and continued investment over the next couple of years which will have a material impact on our financial results.

We expect to continue to make significant investments in our re-platforming efforts to open source and cloud-based solutions, as previously disclosed, with the goal of modernizing our architecture, driving efficiency in development and ongoing technology costs, further enhancing the stability and security of our network, and complying with data privacy regulations, and in next-generation retailing capabilities, including NDC and personalized offers, LCCs and CRS revenue generation.

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The revenue recognized by our Travel Solutions business is affected by the mix between domestic and international travel reservation bookings and the related varying rates paid by airline suppliers.

As a result of the COVID-19 pandemic, our mix of transactions has shifted such that domestic bookings exceed international bookings, negatively impacting our revenue.

As a result of the COVID-19 pandemic, our mix of transactions has shifted such that domestic bookings are a higher portion of our total bookings when compared to 2019 levels, negatively impacting our revenue.

The increase in domestic bookings is also partly due to an increase in leisure bookings over business travel.

As business travelers have moved to a remote working environment with travel restrictions, leisure travel has increased impacting the domestic and international mix further.

However, progressively through the year 2022, our proportional mix of international bookings increased relative to domestic bookings when compared to 2021, as international travel has increased, with a positive impact on our revenue compared to the prior year.

The continuation of this positive trend is dependent upon further increases in international travel, particularly in the APAC region which remains the highest impacted region from the COVID-19 pandemic.

Due to our geographic concentration, our results of operations are particularly sensitive to factors affecting North America, which has been accentuated by the impacts of COVID-19.

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As we continue to invest in our technology and expand the travel content and functionality available in our GDS, we anticipate that we will continue to grow global market share.

Booking share in the near term, however, could be impacted by the regional mix of travel bookings during recovery from COVID-19.

We invest for sustainable share growth, and in certain parts of Asia-Pacific and Latin America, our share may be impacted by travel agency commercial arrangements we have declined to pursue due to credit risk and unfavorable economics.

Booking share in the near term, however, could continue to be impacted by the regional mix of travel bookings during recovery from COVID-19.

We invest for sustainable share growth, and in certain parts of APAC and Latin America, our share may be impacted by travel agency commercial arrangements we have declined to pursue due to credit risk and unfavorable economics.

The geographic mix of our Direct Billable Bookings is summarized below.

The proportional decline in North America in 2022 is primarily attributed to a certain OTA shifting a significant portion of its North America volumes to a competitor.

We began to see the impacts of this shift in the third quarter of 2021.

Year Ended December 31,

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North America 56 % 68 % 64 % 55 %

APAC 10 % 10 % 20 %

EMEA 18 % 16 % 17 % 16 %

APAC 15 % 10 % 10 % 20 %

Latin America 11 % 6 % 9 % 9 %

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(1) “Direct Billable Bookings” is the primary metric utilized by Travel Solutions to measure operating performance and includes bookings made through our GDS and through our joint venture partners in cases where we are paid directly by the travel supplier.

Recent insolvencies and the impact of COVID-19 on Travel Solutions customers

In 2020, several Travel Solutions customers filed for bankruptcy but continued to operate.

In April 2019, a customer of Travel Solutions, Jet Airways suspended flight operations and is now insolvent which negatively impacted our year-over-year revenue growth in 2019 and 2020.

Additionally, given the uncertainties surrounding the duration and effects of COVID-19 on transaction volumes in the global travel industry, particularly air travel and hotel transaction volumes, including from airlines’ insolvency or suspension of service or aircraft groundings, our provision for expected credit losses increased in 2020 partially due to fully reserving for aged balances related to certain customers and bankruptcy-related reserves.

In the future, we may incur additional credit losses if further bankruptcies occur or our customers lack the ability to pay for services performed.

Additionally, bankruptcy proceedings may require the renegotiation of contractual terms that may not be favorable.

Our revenue has and may continue to be impacted by contracting with our customers, including force majeure provisions and requests to renegotiate the terms of existing agreements prior to their expiration, including providing temporary concessions on contractual minimums.

Future revenues may be negatively impacted by, among other things, reduced sales of our software solutions and reduced Passengers Boarded due to delayed or uncertain implementations and insolvencies of airline carriers.

See “ Risk Factors —Our travel supplier customers may experience financial instability or consolidation, pursue cost reductions, change their distribution model or undergo other changes.”

Recent military conflict in Ukraine and the impact of legislation and of air travel in and to Russia, Ukraine, and Belarus

Subsequent to the initiation of the current military conflict in Ukraine, air travel in and to Russia, Ukraine, and Belarus has substantially declined.

While none of Russia, Ukraine, and Belarus constituted a significant portion of our financial results in 2021 or 2022, 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.

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” and “—Any failure to comply with regulations or any changes in such regulations governing our businesses could adversely affect us.”

Increasing interest rates

The global capital markets experienced periods of volatility throughout 2022 in response to the conflict in Ukraine, increases in the rate of inflation, and uncertainty regarding the path of U.S.

monetary policy.

During 2022, we refinanced portions of our debt which resulted in interest rates higher than prior years, increasing current and future interest expense.

We expect to further refinance portions of our debt in 2023 and 2024 which, at current interest rates, would negatively impact our interest expense.

These events could lead to further market disruption and potential increases to our funding costs.

approximately 29% of our debt, net of cash and hedging impacts from interest rates swaps, is variable and impacted by changes in interest rates.

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

Increasing travel agency incentive consideration

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Consideration on a per booking basis declined in 2021 and 2020 as compared to the respective prior years, due to regional mix and increased leisure bookings over business travel.

In 2022, consideration on a per booking basis increased as volumes reached and exceeded volume or percentage thresholds, which we expect to continue in 2023.

We remain focused on managing incentive consideration and expect growth in the near term.

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For example, certain travel agencies have adopted a dual GDS provider strategy and shifted a sizeable portion of their business from our GDS to a competitor GDS, while other agencies have shifted a sizable portion their business to our GDS.

Additionally, the impact of COVID-19 on travel buyers has caused them, and may continue to cause them, to select the GDS with the most favorable terms or contractual commitment.

Our distribution revenue in 2021 and in future periods has been, and is expected to be impacted by a certain OTA notifying us of their intent to shift a significant portion of its North America volumes to a competitor.

We began to see the impacts of this shift in the third quarter of 2021 and expect a decline in our volumes partially offset by an increase in our rate going forward.

Additionally, the impact of COVID-19 on travel buyers has caused, and may continue to cause, travel agencies to select the GDS with the most favorable terms or contractual commitment.

Our distribution revenue in 2021 and 2022 has been impacted by a certain OTA shifting a significant portion of its North America volumes to a competitor.

We began to see the impacts of this shift in the third quarter of 2021 which resulted in a decline in our volumes partially offset by an increase in our rate.

Increasing importance of LCC/hybrids

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We believe the impact of COVID-19 on the hospitality industry highlights the benefits of a scalable solution such as our SynXis Central Reservation System.

As these markets recover and begin to grow, we believe both independent and enterprise hotel owners and operators will continue to seek increased connectivity and integrated solutions to ensure access to global travelers.

As these markets recover and begin to grow, we believe both

independent and enterprise hotel owners and operators will continue to seek increased connectivity and integrated solutions to ensure access to global travelers.

We anticipate that this will contribute to the continued growth of Hospitality Solutions, which is ultimately dependent upon these hoteliers accepting and utilizing our products and services.

Impact of customer consolidation in Hospitality Solutions

Growth through acquisition and brand consolidation is emerging as a strategy for enterprise hoteliers.

This has resulted, and may continue to result, in customer de-migration as larger hotel chains consolidate acquired brands onto their existing technology platforms.

Certain of our Hospitality Solutions customers were acquired by larger hoteliers, and it is possible that additional customer consolidations could occur in the future.

We expect these consolidations to adversely impact revenue growth for the Hospitality Solutions business.

Continued focus by travel suppliers on cost cutting and distribution methods

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Cost of revenue, excluding technology costs, also includes amortization of upfront incentive consideration representing upfront payments or other consideration provided to travel agencies for reservations made on our GDS which are capitalized and amortized over the expected life of the contract.

The technology costs excluded from Cost of revenue, excluding technology costs, are presented separately below.

The technology costs excluded from Cost of revenue are presented separately below.

Corporate cost of revenue, excluding technology costs, includes certain expenses such as stock-based compensation, restructuring charges and other items not identifiable with either of our segments.

Depreciation and amortization included in cost of revenue, excluding technology costs, is associated with capitalized implementation costs and intangible assets associated with contracts, supplier and distributor agreements purchased through acquisitions or established with our take private transaction in 2007.

Technology Costs

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Technology costs are less variable in nature and therefore may not correlate with related changes in revenue.

Depreciation and amortization included in technology costs is associated with software developed for internal use that supports our products, assets supporting our technology platform, businesses and systems and intangible assets for technology purchased through acquisitions or established through the take private transaction in 2007.

Selling, General and Administrative Expenses

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

Depreciation and amortization included in selling, general and administrative expenses is associated with property and equipment, acquired customer relationships, trademarks and brand names purchased through acquisitions or established through the take private transaction in 2007.

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

Intersegment Transactions

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Definitions of Non-GAAP Financial Measures

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

We have included both financial measures compiled in accordance with GAAP and certain non-GAAP financial measures in this Annual Report on Form 10-K, including Adjusted Operating Income (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, we have separated our technology costs from cost of revenue and moved certain expenses previously classified as cost of revenue to selling, general and administrative to provide increased visibility to our technology costs for analytical and decision-making purposes and to align costs with the current leadership and operational organizational structure.

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

We define Adjusted Net (Loss) Income as net (loss) income attributable to common stockholders adjusted for loss (income) from discontinued operations, net of tax, net income attributable to noncontrolling interests, preferred stock dividends, impairment and related charges, 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 (Loss) Income from continuing operations adjusted for depreciation and amortization of property and equipment, amortization of capitalized implementation costs, acquisition-related amortization, impairment and related charges, 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 Adjusted Operating Income (Loss) as operating loss adjusted for equity method income (loss), impairment and related charges, 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 (income) from discontinued operations, net of tax, net income attributable to noncontrolling interests, preferred stock dividends, impairment and related charges, 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 loss from continuing operations adjusted for depreciation and amortization of property and equipment, amortization of capitalized implementation costs, acquisition-related amortization, impairment and related charges, 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 provision (benefit) 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) Income from continuing operations per share as Adjusted Net (Loss) Income divided by diluted weighted-average common shares outstanding.

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.

We believe that these non-GAAP financial measures are used by investors, analysts and other interested parties as measures of financial performance and to evaluate our ability to service debt obligations, fund capital expenditures, fund our investments in technology transformation, and meet

working capital requirements.

We believe that these non-GAAP financial measures are used by investors, analysts and other interested parties as measures of financial performance and to evaluate our

ability to service debt obligations, fund capital expenditures, fund our investments in technology transformation, and meet working capital requirements.

We also believe that Adjusted Operating (Loss) Income, Adjusted Net (Loss) Income and Adjusted EBITDA assist investors in company-to-company and period-to-period comparisons by excluding differences caused by variations in capital structures (affecting interest expense), tax positions and the impact of depreciation and amortization expense.

In addition, amounts derived from Adjusted EBITDA are a primary component of certain covenants under our senior secured credit facilities.

Adjusted Operating (Loss) Income, Adjusted Net (Loss) Income, Adjusted EBITDA, Free Cash Flow and ratios based on these financial measures are not recognized terms under GAAP.

Adjusted Operating Income (Loss), Adjusted Net Loss, Adjusted EBITDA, Free Cash Flow and ratios based on these financial measures are not recognized terms under GAAP.

These non-GAAP financial measures and ratios based on them are unaudited and have important limitations as analytical tools, and should not be viewed in isolation and do not purport to be alternatives to net income as indicators of operating performance or cash flows from operating activities as measures of liquidity.

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• Adjusted EBITDA does not reflect amortization of capitalized implementation costs associated with our revenue contracts, which may require future working capital or cash needs in the future;

• Adjusted Operating (Loss) Income, Adjusted Net (Loss) Income and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

• Adjusted Operating Income (Loss), Adjusted Net Loss and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

• Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness;

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• Free Cash Flow removes the impact of accrual-basis accounting on asset accounts and non-debt liability accounts, and does not reflect the cash requirements necessary to service the principal payments on our indebtedness;

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

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

Non-GAAP Financial Measures

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

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):

Year Ended December 31,

2022 2021 2020

Net (loss) income attributable to common stockholders $ (950,071) $ (1,289,998) $ 158,592

Net loss attributable to common stockholders $ (456,833) $ (950,071) $ (1,289,998)

Loss (income) from discontinued operations, net of tax 679 2,532 (2,788)

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21,385 21,602 7,659

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

Loss from continuing operations (432,099) (923,775) (1,283,927)

Impairment and related charges (2)

5,146 — 8,684

Acquisition-related amortization (3a)

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847 (6,867) 23,273

Adjusted Net (Loss) Income from continuing operations $ (709,390) $ (926,774) $ 279,215

Adjusted Net (Loss) Income from continuing operations per share $ (2.21) $ (3.20) $ 1.01

Adjusted Net Loss from continuing operations $ (371,092) $ (709,390) $ (926,774)

Adjusted Net Loss from continuing operations per share $ (1.14) $ (2.21) $ (3.20)

Diluted weighted-average common shares outstanding 326,742 320,922 289,855

Operating (loss) income $ (665,487) $ (988,039) $ 363,417

Equity method (loss) income (264) (2,528) 2,044

Operating loss $ (261,060) $ (665,487) $ (988,039)

Equity method income (loss) 686 (264) (2,528)

Impairment and related charges (2)

5,146 — 8,684

Acquisition-related amortization (3a)

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Stock-based compensation 82,872 120,892 69,946

Adjusted Operating (Loss) Income $ (459,317) $ (745,274) $ 513,408

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

Adjusted Operating Loss $ (68,042) $ (459,317) $ (745,274)

Loss from continuing operations $ (432,099) $ (923,775) $ (1,283,927)

Depreciation and amortization of property and equipment (3b)

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Impairment and related charges (2)

5,146 — 8,684

Restructuring and other costs (5)

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Stock-based compensation 82,872 120,892 69,946

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

Provision (benefit) for income taxes 8,666 (14,612) (21,012)

Adjusted EBITDA $ 65,337 $ (261,276) $ (447,529)

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

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 Loss from Continuing Operations in our statement of operations by business segment (in thousands):

Year Ended December 31, 2022

Solutions Corporate Total

Adjusted Operating Loss $ (222,679) $ (39,806) $ (196,832) $ (459,317)

Equity method loss (264) — — (264)

Adjusted Operating Income (Loss) $ 213,290 $ (51,579) $ (229,753) $ (68,042)

Equity method income 686 — — 686

Impairment and related charges (2)

— — 5,146 5,146

Acquisition-related amortization (3a)

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Stock-based compensation — — 82,872 82,872

Operating loss $ (222,415) $ (39,806) $ (403,266) $ (665,487)

Operating income (loss) $ 212,604 $ (51,579) $ (422,085) $ (261,060)

Adjusted EBITDA 323,803 (29,794) (228,672) 65,337

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— — 51,254 51,254

Impairment and related charges (2)

— — 5,146 5,146

Restructuring and other costs (5)

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Stock-based compensation — — 82,872 82,872

Equity method loss (264) — — (264)

Operating loss $ (222,415) $ (39,806) $ (403,266) $ (665,487)

Equity method income 686 — — 686

Operating income (loss) $ 212,604 $ (51,579) $ (422,085) $ (261,060)

Interest expense, net (295,231)

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Loss on extinguishment of debt (4,473)

Equity method loss (264)

Benefit for income taxes 14,612

Equity method income 686

Provision for income taxes (8,666)

Loss from continuing operations $ (432,099)

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Equity method loss (264) — — (264)

Impairment and related charges (2)

— — 8,684 8,684

Acquisition-related amortization (3a)

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— — 64,144 64,144

Impairment and related charges (2)

— — 8,684 8,684

Restructuring and other costs (5)

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Solutions Corporate Total

Adjusted Operating Income (Loss) $ 729,266 $ (21,632) $ (194,226) $ 513,408

Equity method income 2,044 — — 2,044

Adjusted Operating Loss $ (523,122) $ (63,915) $ (158,237) $ (745,274)

Equity method loss (2,528) — — (2,528)

Impairment and related charges 8,684 8,684

Acquisition-related amortization (3a)

— — 65,998 65,998

Restructuring and other costs (6)

— — 85,797 85,797

Acquisition-related costs (6)

3 unchanged sentences

Stock-based compensation — — 69,946 69,946

Operating income (loss) $ 727,222 $ (21,632) $ (342,173) $ 363,417

Operating loss $ (520,594) $ (63,915) $ (403,530) $ (988,039)

Adjusted EBITDA $ (272,582) $ (21,126) $ (153,821) $ (447,529)

5 unchanged sentences

— — 65,998 65,998

Impairment and related charges — — 8,684 8,684

Restructuring and other costs (6)

— — 85,797 85,797

Acquisition-related costs (6)

3 unchanged sentences

Stock-based compensation — — 69,946 69,946

Equity method income 2,044 — — 2,044

Operating income (loss) $ 727,222 $ (21,632) $ (342,173) $ 363,417

Equity method loss (2,528) — — (2,528)

Operating loss $ (520,594) $ (63,915) $ (403,530) $ (988,039)

Interest expense, net (225,785)

Other, net (4)

Loss on extinguishment of debt (21,626)

Equity method income (2,528)

Provision for income taxes (35,326)

Income from continuing operations $ 164,312

Benefit for income taxes 21,012

Loss from continuing operations $ (1,283,927)

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

1 unchanged sentence

2022 2021 2020

Cash (used in) provided by operating activities $ (414,654) $ (770,245) $ 581,260

Cash used in investing activities (29,428) (1,291) (243,026)

Cash used in operating activities $ (276,458) $ (414,654) $ (770,245)

Cash provided by (used in) investing activities 173,977 (29,428) (1,291)

Cash (used in) provided by financing activities (75,370) (50,558) 1,837,741

1 unchanged sentence

2022 2021 2020

Cash (used in) provided by operating activities $ (414,654) $ (770,245) $ 581,260

Cash used in operating activities $ (276,458) $ (414,654) $ (770,245)

Additions to property and equipment (69,494) (54,302) (65,420)

1 unchanged sentence

________________________________

(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%.

(2) Impairment and related charges consists of $5 million associated with s oftware developed for internal use and $4 million associated with capitalized implementation costs related to a specific customer based on our analysis of the recoverability of such amounts.

(2) 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 for the year ended December 31, 2022 and $5 million associated with software developed for internal use and $4 million associated with capitalized implementation costs related to a specific customer based on our analysis of the recoverability of such amounts for the year ended December 31, 2020.

(3) Depreciation and amortization expenses:

2 unchanged sentences

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

(4) Other, net includes a $15 million gain on sale of equity securities during the first quarter of 2021, an $8 million pension settlement charge recorded in 2021, 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 2020 in connection with the now-terminated acquisition of Farelogix Inc.

("Farelogix") and an $18 million pension settlement charge recorded in 2020, partially offset by a $10 million gain on sale of our headquarters building in the fourth quarter of 2020.

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.

Acquisitions and Dispositions to our consolidated financial statements regarding the Farelogix termination and Note 16.

(4) Other, net includes a $180 million gain on the sale of AirCentre during 2022, a fair value loss of $26 million on our GBT investment during 2022, a $15 million gain on sale of equity securities during the first quarter of 2021, debt modification costs for financing fees of $2 million recorded in the third quarter of 2021 and a $46 million charge related to termination payments incurred in 2020 in connection with the now-terminated acquisition of Farelogix Inc.

("Farelogix"), and a $10 million gain on sale of our headquarters building in the fourth quarter of 2020.

In addition, all periods presented include pension settlement charges and 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.

Acquisitions and Dispositions to our consolidated financial statements regarding the AirCentre sale and the Farelogix termination and Note 15.

Pension and Other Postretirement Benefit Plans to our consolidated financial statements regarding the pension settlements.

(5) 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.

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

(5) 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 2020, 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.

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

Acquisitions and Dispositions to our consolidated financial statements.

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

In 2020, we reversed the previously accrued non-income tax expense of $4 million due to success in our claims.

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

In 2020, we reversed the previously accrued non-income tax expense of $4 million due to success in our claims See Note 16.

Commitments and Contingencies to our consolidated financial statements.

8 unchanged sentences

Selling, general and administrative 661,159 610,078 586,406

Operating (loss) income (665,487) (988,039) 363,417

Operating Loss (261,060) (665,487) (988,039)

Interest expense, net (295,231) (257,818) (225,785)

Loss on debt extinguishment (4,473) (13,070) (21,626)

Equity method (loss) income (264) (2,528) 2,044

Other expense, net (1,748) (66,961) (9,432)

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

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

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

Equity method income (loss) 686 (264) (2,528)

Other, net 136,645 (1,748) (66,961)

Loss from continuing operations before income taxes (423,433) (938,387) (1,304,939)

Provision (benefit) for income taxes 8,666 (14,612) (21,012)

Loss from continuing operations $ (432,099) $ (923,775) $ (1,283,927)

Years Ended December 31, 2022 and 2021

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Travel Solutions —Revenue increased $808 million, or 54%, for the year ended December 31, 2022 compared to the prior year, primarily due to:

• a $319 million, or 55%, increase in distribution revenue, which was primarily due to a 66% increase in Direct Billable Bookings to 207 million.

This increase consists of a $243 million decrease in primarily transaction-based revenue during the first quarter of 2021, offset by a $562 million increase during the remainder of the year.

These year-over- year 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.

We are currently experiencing a gradual recovery in volumes, offset by an unfavorable regional rate mix driven by growth in North America bookings, resulting in the overall increase in revenue for the year ended December 31, 2021 compared to the prior year.

Additionally, our revenue and volumes in the last two quarters of 2021 were impacted by a certain OTA shifting a significant portion of its North America volumes to a competitor.

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;

• an $8 million, or 1%, increase in IT solutions revenue consisting of a $39 million, or 22% increase in reservation revenue primarily due to a 31% increase in Passengers Boarded to 424 million as a result of the gradual recovery from the COVID-19 pandemic, partially offset by an unfavorable rate mix due to revenue that does not fluctuate with our volumes.

Commercial and operations revenue decreased $32 million primarily due to the continued impact of the COVID-19 pandemic on our customer base of $20 million, certain product divestitures of $8 million, and lower license fee revenue from new implementations recognized upon delivery to the customer of $11 million, partly offset by improved professional services revenue of $7 million.

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

• a $721 million, or 80%, increase in distribution revenue, which was primarily due to a 46% increase in Direct Billable Bookings to 302 million primarily as a result of continued recovery trends from the COVID-19 pandemic and favorable

rate impacts from improved international and corporate bookings;

• an $87 million, or 14%, increase in IT solutions revenue consisting of a $114 million, or 52% in crease in reservation revenue primarily due to a 50% increase in Passengers Boarded to 637 million as a result of the continued recovery trends from the COVID-19 pandemic, $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 a Russian carrier, a $15 million increase due to the recognition of termination fees on a carrier in the process of de-migrating from our systems, which will not repeat throughout 2023 and the recognition of $3 million in previously deferred revenue from a customer that entered liquidation.

Revenue from Contracts with Customers.

These increases were partially offset by an unfavorable rate mix due to revenue that does not fluctuate with our volumes and a $4 million redu ction associated with a Russian carrier.

Additionally, commercial and operations revenue decrease d $27 million du e to a $69 million decline as a result of the sale of our AirCentre portfolio on February 28, 2022, partially offset by a $31 million increase in other product revenue and a $10 million inc rease due to the aforementioned termination fees on the carrier that is de-migrating.

Hospitality Solutions —Revenue increased $52 million, or 26%, for the year ended December 31, 2022 compared to 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 37% to 92 million, as a result of continued recovery from the COVID-19 pandemic, and an increase of $6 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 2020.

The increase was primarily driven by a $48 million increase in SynXis Software and Services revenue due to an increase in transaction volumes of 21% to 111 million, as a result of continued recovery from the COVID-19 pandemic, and a $4 million increase in DX revenue.

Cost of Revenue, excluding technology costs

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Travel Solutions —Cost of revenue, excluding technology costs, increased $330 million, or 59%, for the year ended December 31, 2022 compared to the prior year.

The increase was primarily the result of a $131 million increase in incentive consideration due to higher overall transaction volume, compared to the prior year.

This increase is partially offset by a $3 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, increased $5 million, or 6%, for the year ended December 31, 2021 compared to the prior year primarily driven by an increase in transaction-related costs associated with higher volumes as well as costs related to growth in other products such as our call center and DX.

Corporate—Cost of revenue, excluding technology costs, decreased $20 million, or 70%, for the year ended December 31, 2021 compared to the prior year.

The decrease was primarily due to a decline in severance costs of $21 million associated with the reduction of our workforce in 2020 and a decline in impairment charges of $2 million related to an impairment recorded in the prior year associated with capitalized implementation costs related to a specific customer.

The decrease was partially offset by a $3 million 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.

Equity-Based Awards, to our consolidated financial statements for further details on stock-based compensation.

Depreciation and amortization —Depreciation and amortization increased $1 million, or 2%, for the year ended December 31, 2021 compared to the prior year due to assets placed in service.

The increase was primarily driven by a $337 million increase in incentive consideration due to higher transaction volume as well as an increase in rates given the continued recovery from the COVID-19 pandemic.

This increase was partially 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 $30 million, or 31%, for the year ended December 31, 2022 compared to the prior year primarily due to costs associated with increased transaction volumes.

Technology Costs

6 unchanged sentences

Total technology costs $ 1,096,097 $ 1,052,833 $ 43,264 4 %

Travel Solutions— Technology costs decreased $70 million, or 7%, for the year ended December 31, 2021 compared to the prior year.

The decrease was primarily driven by a decrease in depreciation and amortization of $88 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 $10 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 $20 million associated with higher transaction volumes, and an increase in labor costs of $9 million resulting from the 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 2022 than in the prior year due to the lower capitalization rate on technology spend.

Hospitality Solutions— Technology costs decreased $1 million, or 1%, for the year ended December 31, 2021 compared to the prior year.

The decrease was primarily due to a $17 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 partially offset by an increase in labor and professional services costs of $10 million resulting from 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.

Additionally, technology hosting costs increased by $4 million resulting from higher transaction volumes and 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.

Corporate— Technology costs decreased $33 million, or 29%, for the year ended December 31, 2021 compared to the prior year primarily due to a decline in severance costs of $35 million associated with the reduction of our workforce in 2020, a decline in impairment charges of $6 million related to an impairment recorded in the prior year associated with software developed for internal use, and 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.

This decrease was partially offset by an increase in labor costs of $14 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.

Equity-Based Awards, to our consolidated financial statements for further details on stock-based compensation.

Travel Solutions— Technology costs increased $34 million, or 4%, for the year ended December 31, 2022 compared to the prior year.

The increase was due to a $59 million increase in technology costs due to higher transaction volumes given the continued recovery from the COVID-19 pandemic and expected temporary costs resulting from our cloud migration efforts.

Additionally, labor and professional services increased $30 million to support our technology transformation initiatives, and other ongoing business expenses increased by $2 million.

W e have incurred 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 $57 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.

We expect decreases in depreciation and amortization to continue due to these factors .

Hospitality Solutions— Technology costs increased $26 million, or 28%, for the year ended December 31, 2022 compared to the prior year due to a $16 million increase in technology costs to support our technology transformation initiatives, including the migration of SynXis to the cloud, and a $14 million increase in labor and professional services costs.

These increases were partially offset by a $3 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 softw are.

The migration to the cloud for SynXis is expected to result in higher cloud-based transaction costs for Hospitality Solutions whereas historically it incurred data center operating costs and incurred hardware and infrastructure costs, which were capitalized, and became fully depreciated in prior periods.

Corporate— Technology costs decreased $17 million, or 21%, for the year ended December 31, 2022 compared to the prior year primarily due to a $10 million decrease in depreciation and amortization associated with a reduction in intangible amortization as a result of the completion of amortization of technology assets from prior acquisitions, and a $7 million decrease in labor and professional services costs.

Selling, General and Administrative Expenses

6 unchanged sentences

Total selling, general and administrative expenses $ 661,159 $ 610,078 $ 51,081 8 %

Travel Solutions— Selling, general and administrative expenses decreased $29 million, or 10%, for the year ended December 31, 2021 compared to the prior year.

The decrease is driven by a $65 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 credit losses in the current year given the gradual global recovery from the COVID-19 pandemic.

This decrease was partially offset by an increase in legal costs due to litigation of $21 million, an increase in labor and professional services costs of $12 million associated with the reversal of certain third-party commissions in the prior year which did not reoccur in the current year, consulting related to our business strategy to support the long-term growth of the business, labor costs due to the expiration of the temporary cost reduction measures implemented in the second quarter of 2020 and increases in risk and security, and an increase in depreciation and amortization of $7 million.

Hospitality Solutions— Selling, general and administrative expenses remained flat for the year ended December 31, 2021 compared to the prior year.

A decrease of $9 million 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 is offset by increases in technology costs, labor and professional services costs, and depreciation and amortization.

Travel Solutions— Selling, general and administrative expenses increased $7 million, or 3%, for the year ended December 31, 2022 compared to the prior year.

The increase was driven by a $9 million in crease 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 and a $4 million increase due to continued investment in our internal business systems .

These increases were partially offset by a $5 million d ecrease in depreciation and amortization and a $2 million decrease in labor and professional services costs.

Hospitality Solutions— Selling, general and administrative expenses increased $7 million, or 15%, for the year ended December 31, 2022 compared to the prior year primarily due to a $7 million increase in labor and professional services costs related to our business strategy to support the long-term growth of the business and a $2 million increase in technology costs related to internal investments in business systems.

This increase was partially offset by a $2 million 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 the continued recovery from the COVID-19 pandemic, and lower depreciation and amortization.

Corporate— Selling, general and administrative expenses increased $38 million, or 12%, for the year ended December 31, 2022 compared to the prior year.

The increase is driven by an increase in labor costs of $37 million as a result of a $34 million increase in stock-based compensation primarily associated with previously awarded performance-based units, a $21 million increase in labor costs to support the business and increased costs associated with improving our internal business systems, 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 $23 million decrease in severance costs.

Additionally, legal and professional fees increased $19 million due to a $39 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, and other operating expenses increased due to higher insurance and other administrative costs.

These increases were offset by a $14 million abandonment charge associated with the closure of certain office locations in connection with the restructuring

activities in 2020.

Restructuring Activities, to our consolidated financial statements for further details on restructuring activities, and see Note 13.

Equity-Based Awards, to our consolidated financial statements for further details on stock-based compensation.

This increase was driven by a $19 million increase consisting of $7 million related to labor and professional services and $12 million related to our business structure and strategy to support the long-term growth of the business, a $15 million increase due to litigation reserves, an $8 million increase in risk and security costs, a $7 million increase in transaction tax expense, a $5 million increase related to an impairment associated with an IT Solutions customer located in Russia, a $5 million increase for restructuring costs and the reversal of severance costs in the prior year associated with the reduction of our workforce in 2020, and an $6 million increase in other ongoing business expenses.

increases were partially offset by a $29 million decrease in stock-based compensation primarily due to forfeitures of unvested shares.

Interest expense, net

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Interest expense, net $ 295,231 $ 257,818 $ 37,413 15 %

Interest expense increased $32 million, or 14%, for the year ended December 31, 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.

Debt for further details these debt transactions .

Interest expense increased $37 million, or 15%, for the year ended December 31, 2022 compared to the same period in the prior year primarily due to higher interest rates on our term loans.

This increase was partially offset by the impact of our interest rate swaps.

Debt for further details these debt transactions and Note 9.

Derivatives for further details regarding our interest rate swaps .

Loss on Extinguishment of Debt

We recognized a loss on extinguishment of debt of $13 million during the year ended December 31, 2021 as a result of the refinancing that occurred in the third quarter of 2021 (the "2021 Refinancing") and a loss on extinguishment of debt of $22 million in 2020 as a result of the refinancing that occurred in the third quarter of 2020 (the "2020 Refinancing").

Debt for further details these debt transactions .

Other expense, net

We recognized a loss on extinguishment of debt of $4 million during the year ended December 31, 2022 as a result of the refinancings that occurred in 2022 and a loss on extinguishment of debt of $13 million during the year ended December 31, 2021 as a result of the refinancing that occurred in 2021.

Debt for further details regarding these debt transactions .

Year Ended December 31,

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(Amounts in thousands)

Other expense, net $ 1,748 $ 66,961 $ (65,213) (97) %

Other expense, net decreased $65 million for the year ended December 31, 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 and a reduction of pension related expense of $17 million compared to the same period in 2020.

These decreases were partially offset by a $10 million gain resulting from the sale of our headquarters buildings in the fourth quarter of 2020, as well as realized and unrealized foreign currency exchange fluctuations during the year ended December 31, 2021.

Provision for Income Taxes

Other, net $ (136,645) $ 1,748 $ (138,393) (7,917) %

Other, net increased $138 million for the year ended December 31, 2022 compared to the same period in the prior year primarily due to the gain on the sale of AirCentre of $180 million partially offset by a fair value loss of $26 million on our GBT investment and a $15 million gain on sale of investment recorded in the first quarter of 2021.

Acquisitions and Dispositions for further details regarding the AirCentre sale and Note 10.

Fair Value Measurements for further details regarding the GBT investment.

Provision (benefit) for Income Taxes

Year Ended December 31,

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(Amounts in thousands)

Benefit for income taxes $ (14,612) $ (21,012) $ 6,400 (30) %

Our effective tax rate for the year ended December 31, 2021 and 2020 was 1.6%.

The effective tax rate for the year ended December 31, 2021, as compared to the same period in 2020 remained flat primarily due to a lower valuation allowance recorded on current year net operating losses and other deferred balances.

Summary of Business and Significant Accounting Policies for details regarding the adoption of guidance applied retroactively, which adjusted our 2020 benefit for income taxes from previously reported amounts.

Provision (benefit) for income taxes $ 8,666 $ (14,612) $ 23,278 (159) %

Our effective tax rate for the year ended December 31, 2022 and 2021 was less than 1% and 2%, respectively.

The effective tax rate for the year ended December 31, 2022, as compared to the same period in 2021 decreased primarily due to non-deductible goodwill related to the disposition of AirCentre.

The differences between our effective tax rate and the U.S.

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Total revenue $ 1,688,875 $ 1,334,100 $ 354,775 27 %

Travel Solutions —Revenue decreased $2,546 million, or 68%, for the year ended December 31, 2020 compared to the prior year, primarily due to:

• a $2,149 million, or 79%, decrease in transaction-based distribution revenue due to a 78% decrease in Direct Billable Bookings to 125 million resulting from lower transaction volume primarily as a result of reduced travel caused by the COVID-19 pandemic;

• a $397 million decrease in IT solutions revenue consisting of a $265 million, or 52%, decrease in reservation revenue primarily due to the impact of the COVID-19 pandemic on our existing customer base and a $28 million decrease in revenue compared to the same period in the prior year due to the transition away from our services by certain customers and Jet Airways' insolvency in April 2019, partially offset by an increase of $12 million driven by the acquisition of Radixx in October 2019.

Passengers Boarded, inclusive of Radixx, decreased by 56% to 323 million for the year ended December 31, 2020.

Additionally, commercial and operations revenue decreased $132 million primarily due to the impact of the COVID-19 pandemic on our existing customer base.

Hospitality Solutions —Revenue decreased $118 million, or 40%, for the year ended December 31, 2020 compared to the prior year.

The decrease was primarily driven by a reduction in SynXis Software and Services revenue due to a decrease in transaction volumes of 38% to 67 million, as a result of the COVID-19 pandemic.

Travel Solutions —Revenue increased $327 million, or 28%, for the year ended December 31, 2021 compared to the prior year, primarily due to:

• a $319 million, or 55%, increase in distribution revenue, which was primarily due to a 66% increase in Direct Billable Bookings to 207 million.

This increase consists of a $243 million decrease in primarily transaction-based revenue during the first quarter of 2021, offset by a $562 million increase during the remainder of the year.

During 2021 we experienced a gradual recovery in volumes, offset by an unfavorable regional rate mix driven by growth in North America bookings, resulting in the overall increase in revenue for the year ended December 31, 2021 compared to the prior year.

Additionally, our revenue and volumes in the last two quarters of 2021 were impacted by a certain OTA shifting a significant portion of its North America volumes to a competitor.

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;

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

Hospitality Solutions —Revenue increased $28 million, or 16%, for the year ended December 31, 2021 compared to the prior year.

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 2020.

Cost of Revenue, excluding technology costs

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Total cost of revenue, excluding technology costs $ 691,451 $ 579,010 $ 112,441 19 %

Travel Solutions —Cost of revenue decreased $1,128 million, or 72%, for the year ended December 31, 2020 compared to the prior year.

The decrease was primarily the result of a $1,086 million decline in incentive consideration in all regions due to lower transaction volumes as a result of the COVID-19 pandemic, as well as a $37 million reduction in labor and professional services costs in connection with our cost reduction measures.

Hospitality Solutions —Cost of revenue decreased $62 million, or 40%, for the year ended December 31, 2020 compared to the prior year.

The decrease was primarily driven by $55 million reduction in transaction-related costs due to the decline in transaction volume as a result of the COVID-19 pandemic and a reduction in labor costs in connection with our cost reduction measures.

Corporate —Cost of revenue associated with corporate costs increased $20 million, or 244%, for the year ended December 31, 2020 compared to the prior year.

This increase was primarily due to a restructuring charge of $19 million for severance benefits.

The increase is partially offset by a reduction in labor costs in connection with our cost reduction measures.

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

Depreciation and amortization —Depreciation and amortization decreased $1 million, or 2%, for the year ended December 31, 2020 compared to the prior year.

The decrease is primarily due to customer implementations that became fully amortized during the year.

Travel Solutions —Cost of revenue, excluding technology costs, increased $126 million, or 29%, for the year ended December 31, 2021 compared to the prior year.

The increase was primarily the result of a $131 million increase in incentive consideration due to higher overall transaction volume, compared to the prior year.

Corporate —Cost of revenue, excluding technology costs, decreased $20 million, or 70%, for the year ended December 31, 2021 compared to the prior year.

The decrease was partially offset by a $3 million increase in labor costs resulting from an increase in stock-based compensation, primarily associated with previously awarded performance-based units.

Equity-Based Awards, to our consolidated financial statements for further details on stock-based compensation.

Depreciation and amortization —Depreciation and amortization increased $1 million, or 2%, for the year ended December 31, 2021 compared to the prior year due to assets placed in service.

Technology Costs

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Total technology costs $ 1,052,833 $ 1,156,723 $ (103,890) (9) %

Travel Solutions— Technology costs decreased $155 million, or 14%, for the twelve months ended December 31, 2020 compared to the prior year.

This decrease was due to a decrease in technology labor of $91 million in connection with our cost reduction measures, a decrease in depreciation and amortization of $46 million primarily due to a change in the mix of our technology spend in 2019 resulting in less capitalized internal use software, and a decrease in technology costs of $55 million associated with lower transaction volumes resulting from the COVID-19 pandemic.

This decrease is partially offset by an increase in labor costs of $40 million due to a continued decline in the capitalization mix of our technology spend as we implement open source and cloud-based solutions.

Hospitality Solutions— Technology costs decreased $15 million, or 13%, for the twelve months ended December 31, 2020 compared to the prior year.

This decrease is due to a decrease in technology labor of $12 million in connection with our cost reduction measures, and a decrease in depreciation and amortization of $10 million primarily due to a change in the mix of our technology spend in 2019 resulting in less capitalized internal use software.

This decrease is partially offset by an increase in labor costs of $6 million due to a continued decline in the capitalization mix of our technology spend as we implement open source and cloud-based solutions.

Corporate— Technology costs increased $41 million, or 57%, for the twelve months ended December 31, 2020 compared to the prior year.

This increase was primarily driven by a restructuring charge of $32 million for severance benefits.

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

Travel Solutions— Technology costs decreased $70 million, or 7%, for the year ended December 31, 2021 compared to the prior year.

Hospitality Solutions— Technology costs decreased $1 million, or 1%, for the year ended December 31, 2021 compared to the prior year.

Equity-Based Awards, to our consolidated financial statements for further details on stock-based compensation.

Selling, General and Administrative Expenses

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Travel Solutions— Selling, general and administrative expenses decreased $29 million, or 10%, for the year ended December 31, 2021 compared to the prior year.

This decrease was primarily driven by a $43 million decrease in labor and professional services costs in connection with our cost reduction measures and a decline in other costs in conjunction with our expense management initiatives.

This decrease was offset by an increase in the provision for expected credit losses of $38 million.

Hospitality Solutions— Selling, general and administrative expenses increased $2 million, or 5%, for the twelve months ended December 31, 2020 compared to the prior year.

This increase was primarily due to an increase in the provision for expected credit losses of $8 million, partially offset by a decrease of $3 million in labor and professional services costs in connection with our cost reduction measures and a decline in other costs in conjunction with our expense management initiatives.

Corporate— Selling, general and administrative expenses remained flat for the twelve months ended December 31, 2020 compared to the prior year.

Increases in costs included a $20 million charge for severance benefits recorded in the current year, a $14 million abandonment charge associated with the closure of certain office locations in connection with our restructuring activities in the current year, and an increase of $32 million due to the reversal of a previously accrued loss in the prior year related to the US Airways legal matter.

These costs were offset by a decrease of $29 million in labor and professional services costs in connection with our cost reduction measures, a decrease of $27 million in legal costs associated with the now-terminated acquisition of Farelogix and a decline in other costs in conjunction with our expense management initiatives.

Hospitality Solutions— Selling, general and administrative expenses remained flat for the year ended December 31, 2021 compared to the prior year.

Corporate— Selling, general and administrative expenses increased $53 million, or 20%, for the year ended December 31, 2021 compared to the prior year.

These increases were offset by a $14 million abandonment charge associated with the closure of certain office locations in connection with the restructuring activities in 2020.

Interest expense, net

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Interest expense, net $ 257,818 $ 225,785 $ 32,033 14 %

Interest expense increased $69 million, or 44%, for the year ended December 31, 2020 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 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.

Debt for further details these debt transactions.

Loss on Extinguishment of Debt

As a result of the debt refinancing transactions during the year ended December 31, 2020, we recognized a loss on extinguishment of $22 million.

In connection with t he extinguishment in August 2020 of our 5.375% senior secured notes due April 2023 , we recognized a loss on extinguishment of debt of $10 million which consisted of a redemption premium of $7 million and the write-off of unamortized debt issuance costs of $3 million.

In connection with our extinguishment of our 5.25% senior secured notes due November 2023 and our Term Loan A in December 2020, we recognized a loss on extinguishment of debt of $11 million which consisted of a redemption premium of $6 million and the write-off of unamortized debt issuance costs of $5 million.

Debt, to our consolidated financial statements for further details regarding these debt transactions .

Other expense, net

Debt for further details these debt transactions.

Year Ended December 31,

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(Amounts in thousands)

Other expense, net $ 66,961 $ 9,432 $ 57,529 610 %

Other expense, net increased $58 million for the year ended December 31, 2020 compared to the same period in the prior year primarily due to a $46 million charge related to termination payments in connection with our proposed acquisition of Farelogix, a pension plan settlement charge of $18 million, and a benefit recognized in the prior year associated with a reduction to our Tax Receivable Agreement ("TRA") liability due to the settlement of an audit.

The increase is partially offset by a $10 million gain resulting from the sale of our headquarters buildings in the fourth quarter of 2020.

Acquisitions, to our consolidated financial statements for further details regarding the Farelogix acquisition, Note 12.

Leases, to our consolidated financial statements for further details regarding the sale and leaseback transaction, and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" for additional information regarding the TRA.

Other, net $ 1,748 $ 66,961 $ (65,213) (97) %

Other, net decreased $65 million for the year ended December 31, 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 and a reduction of pension related expense of $17 million compared to the same period in 2020.

Provision for Income Taxes

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(Benefit) provision for income taxes $ (14,612) $ (21,012) $ 6,400 (30) %

Our effective tax rate for the year ended December 31, 2020 and 2019 was 1.6% and 17.7%, respectively.

The decrease in the effective tax rate for the year ended December 31, 2020 as compared to the same period in 2019 was primarily due to a $268 million valuation allowance recorded on tax losses generated in the current tax year related to the impact of COVID-19 on our results of operations and various discrete items recorded in each of the respective periods.

Our effective tax rate for the year ended December 31, 2021 and 2020 was 1.6%.

The differences between our effective tax rate and the U.S.

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

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

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

As of December 31,

Cash and cash equivalents $ 794,888 $ 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 8,473 10,018

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

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

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

We do not consider undistributed foreign earnings to be indefinitely reinvested as of December 31, 2021, with certain limited exceptions and have, in those cases, recorded corresponding deferred taxes.

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

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

Our cash, cash equivalents and marketable securities held by our foreign subsidiaries are available to satisfy domestic liquidity needs arising in the ordinary course of business, including liquidity needs associated with our domestic debt service requirements.

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.

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

Liquidity Outlook

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

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.

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 notwithstanding any ongoing recovery from the outbreak.

Given the uncertainties surrounding the duration and effects of COVID-19, 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.

However, based on our assumptions and estimates with respect to our financial condition, we believe that we have resources to sufficiently fund our liquidity requirements over at least the next twelve months.

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 amended the financial performance covenant to remove minimum liquidity and leverage ratio requirements.

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

During 2021, our free cash flow has improved on a sequential quarter-over-quarter basis.

Given the magnitude of travel decline, the uncertain economic environment 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.

As previously disclosed, we responded to the impact of COVID-19 on our business 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, and completing debt and equity offerings.

Additionally, given the market conditions resulting from COVID-19, we responded with cost savings measures during 2020, including the reduction of our workforce through voluntary severance and early retirement programs and a right-sizing of our global organization.

In 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.

In 2022, we further refinanced and extended the maturity on other portions of our debt, which were also impacted by increasing interest rates.

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

We will continue to monitor our liquidity levels and take additional steps should we determine they are necessary.

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.

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.

We expect the full year 2023 free cash flow to be positive.

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.

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 December 31, 2021, which were secured by a $20 million cash

collateral deposit account.

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

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.”

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.

On an ongoing basis, we will evaluate and consider strategic acquisitions, divestitures, joint ventures, equity method investments, refinancing our existing debt 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.

While the COVID-19 pandemic has had an adverse impact on our business, we recognized federal taxable income in 2022 based on our operating and non-operating results along with provisions of the Tax Cuts and Jobs Act that limit interest expense deductions and the annual use of Net Operating Loss (“NOL”) carryforwards, and requires companies to capitalize and amortize research and development costs.

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

federal cash taxpayer in 2023, and we also expect to benefit from the usage of NOLs in 2023 to the extent available.

We expect to continue to benefit from our NOLs and certain tax credits in the near-term beyond 2023.

We do not consider undistributed foreign earnings to be indefinitely reinvested as of December 31, 2022, with certain limited exceptions and have, in those cases, recorded corresponding deferred taxes.

We consider the undistributed capital investments in most of our foreign subsidiaries to be indefinitely reinvested as of December 31, 2022 and have not provided deferred taxes on any outside basis differences.

Contractual Obligations

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Pension and Other Postretirement Benefit Plans, to our consolidated financial statements.

We do not have any off balance sheet arrangements as of December 31, 2021.

Our debt obligation includes all interest and principal of borrowings under our senior secured credit facilities, senior secured notes due 2025, senior exchangeable notes due 2025 and finance lease obligations.

We had no off balance sheet arrangements during the years ended December 31, 2022, 2021 and 2020.

Our debt obligation includes all interest and principal of borrowings under our senior secured credit facilities, senior secured notes due 2025 and 2027 and senior exchangeable notes due 2025.

Under certain circumstances, we are required to pay a percentage of the excess cash flow, if any, generated each year to our lenders which is not reflected in the amount disclosed below.

Interest on the term loan is based on the LIBOR rate plus a base margin and includes the effect of interest rate swaps.

Interest on the term loan is based on the LIBOR or SOFR rate plus a base margin and includes the effect of interest rate swaps.

Debt, to our consolidated financial statements.

As of December 31, 2021, we had a total debt obligation of $5.6 billion, with $256 million due within the next 12 months.

For purposes of this disclosure, we have used projected LIBOR rates for all future periods.

Operating lease obligations

We lease approximately 1.3 million square feet of office space in 65 locations in 38 countries.

As of December 31, 2022, we had a total debt obligation, including interest, of $6.5 billion, with $450 million due within the next 12 months.

For purposes of this disclosure, we have used projected LIBOR/SOFR rates for all future periods.

Lease obligations

We lease approximately 700 thousand square feet of office space in 59 locations in 42 countries.

Lease payment escalations are based on fixed annual increases, local consumer price index changes or market rental reviews.

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Unrecognized tax benefits include associated interest and penalties.

The timing of related cash payments for substantially all of these liabilities is inherently uncertain because the ultimate amount and timing of such liabilities is affected by factors which

are variable and outside our control.

As of December 31, 2021, we had a total obligation of $110 million , with $6 million due within the next 12 months.

Subscription agreement

In December 2021, we entered into a subscription agreement with Apollo Strategic Growth Capital, a special purpose acquisition company, that has entered into a business combination agreement with GBT JerseyCo Limited (“GBT”).

The Subscription Agreement provides that, concurrently with the closing of the business combination, we will purchase shares in the combined company for an aggregate purchase price of $80 million.

The transaction is expected to be completed in the first half of 2022.

The Subscription Agreement provides that it will terminate upon the earliest to occur of:

(a) the termination of the business combination agreement in accordance with its terms;

(b) the mutual written agreement of the parties to the Subscription Agreement and GBT or (c) if the transactions contemplated by the Subscription Agreement have not been consummated within 10 months after the date of the Subscription Agreement, other than as a result of breach by the terminating party.

The timing of related cash payments for substantially all of these liabilities is inherently uncertain because the ultimate amount and timing of such liabilities is affected by factors which are variable and outside our control.

As of December 31, 2022, we had a total obligation of $97 million, with $21 million d ue within the next 12 months.

Capital Resources

As of December 31, 2022, our outstanding debt totaled $4.7 billion, which is net of debt issuance costs and unamortized discounts.

Currently approximately 29% of our debt, net of cash and hedging impacts from interest rates swaps, is variable and impacted by changes in interest rates.

See “Risk Factors—We are exposed to interest rate fluctuations." In the future, 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.

The global capital markets experienced periods of volatility throughout 2022 in response to the conflict in Ukraine, increases in the rate of inflation, and uncertainty regarding the path of U.S.

monetary policy.

During 2022, we refinanced portions of our debt which resulted in interest rates higher than prior years, increasing current and future interest expense.

We expect to further refinance portions of our debt in 2023 and 2024 which, at current interest rates, would negatively impact our interest expense.

In addition, as a result of the judgment in our antitrust litigation with US Airways, we may be required as early as 2024 to pay US Airways' reasonable attorneys' fees and costs.

Commitments and Contingencies, to our consolidated financial statements.

Depending on the amount of attorneys' fees and costs, if any, that might be awarded to US Airways, if we do not have sufficient cash on hand, we may be required to seek financing from private or public financing sources, which may not be assured.

Our continued access to capital resources depends on multiple factors, including global economic conditions, the condition of global financial markets, the availability of sufficient amounts of financing, our ability to meet debt covenant requirements, our operating performance, and our credit ratings.

These external events could lead to further market disruption and potential increases to our funding costs.

While the terms of our outstanding indebtedness allow us to incur additional debt, subject to limitations, our ability to incur additional secured indebtedness is significantly limited.

As a result, we expect that any such additional indebtedness (other than the securitization transaction on our accounts receivable balances described below), to the extent issued in the future, would likely be unsecured.

If our credit ratings were to be downgraded, or financing sources were to ascribe higher risk to our rating levels or our industry, our access to capital and the cost of any financing would be negatively impacted.

There is no guarantee that additional debt financing will be available in the future to fund our obligations, or that it will be available on commercially reasonable terms, in which case we may need to seek other sources of funding.

In addition, the terms of future debt agreements could include more restrictive covenants than those we are currently subject to, which could

restrict our business operations.

For more information, see "Risk Factors—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."

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.

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

In February 2023, we entered into a securitization transaction on our accounts receivable balances which is expected to provide a minimum of approximately $100 million in additional funding.

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

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

Based on our results for the year ended December 31, 2021, we were not required to make an excess cash flow payment in 2022, and no excess cash flow payment is expected to be required in 2023 with respect to our results for the year ended December 31, 2022.

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

As of December 31, 2022, we have reinvested $250 million of the proceeds from the disposition of AirCentre.

Additional reinvestments are expected prior to May of 2023.

To the extent not considered reinvested into the business, any remaining proceeds from the disposition of AirCentre, net of taxes, will be used to pay down the term loans.

As of December 31, 2022, we had outstanding approximately $1.0 billion of variable debt that is indexed to LIBOR consisting of 2021 Term Loan B-1 for $397 million and 2021 Term Loan B-2 for $630 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.

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 2021 Term Loan B-1 and 2021 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 and August 2022, we entered into the March 2022 Refinancing and August 2022 Refinancing, respectively, which extended the maturity and replaced LIBOR with Term SOFR on a portion of our Term Loan B facility.

In December 2022, we used the proceeds of the December 2027 Notes (as defined below) issuance to redeem the remaining principal balance on the Term Loan B Facility.

Recent Events Impacting Our Liquidity and Capital Resources

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

On March 9, 2022 and August 15, 2022, we refinanced and extended the maturity on a portion of the Term Loan B facility.

See “— Senior Secured Credit Facilities" below.

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 $61 million during the year ended December 31, 2021, compared to the prior year.

On December 6, 2022, Sabre GLBL entered into a new debt agreement consisting of $555 million aggregate principal amount of 11.250% senior secured notes due 2027 (the “December 2027 Notes”).

Debt, to our consolidated financial statements for further information.

Equity Offerings

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If the Company liquidates, dissolves or winds up, whether voluntarily or involuntarily, then, subject to the rights of any of the Company’s creditors or holders of any outstanding liquidation senior stock, each share of Preferred Stock will entitle the holder thereof to receive payment for the following amount out of the Company’s assets or funds legally available for distribution to its stockholders, before any such assets or funds are distributed to, or set aside for the benefit of, any liquidation junior stock:

(1) the liquidation preference per share of Preferred Stock, which is equal to $100.00 per share;

(1) the liquidation preference per share of Preferred Stock, which is equal to

$100.00 per share;

and (2) all unpaid dividends that will have accumulated on such share to, but excluding, the date of such payment.

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

Dividends on Preferred Stock

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.

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On February 1, 2023, the Board of Directors declared a dividend of $1.625 per share on Preferred Stock payable on March 1, 2023 to holders of record of the Preferred Stock on February 15, 2023.

purchased, redeemed or otherwise acquired for value by the Company or any of its subsidiaries unless, in each case, all accumulated and unpaid dividends for all prior completed dividend periods, if any, have been paid in full.

Subject to certain exceptions, so long as any share of Preferred Stock remains outstanding, no dividends or distributions will be declared or paid on shares of the Company’s common stock or any other class or series of stock ranking junior to the Preferred Stock, and no common stock or any other class or series stock ranking junior to the Preferred Stock will be purchased, redeemed or otherwise acquired for value by the Company or any of its subsidiaries unless, in each case, all accumulated and unpaid dividends for all prior completed dividend periods, if any, have been paid in full.

In addition, if (i) less than all accumulated and unpaid dividends on the outstanding Preferred Stock have been declared and paid as of any dividend payment date or (ii) the board of directors declares a dividend on the Preferred Stock that is less than the total amount of unpaid dividends on the outstanding preferred stock that would accumulate to, but excluding, any dividend payment date, no dividends may be declared or paid on any parity stock, unless dividends are declared on the shares of Preferred Stock on a pro rata basis.

If accumulated dividends on the outstanding Preferred Stock have not been declared and paid in an aggregate amount corresponding to six or more dividend periods, whether or not consecutive, then, subject to the other provisions of the Preferred Stock, the authorized number of the Company’s directors will automatically increase by two and the holders of the Preferred Stock, voting together as a single class with the holders of each class or series of voting parity stock, if any, will have the right to elect two directors to fill such two new directorships at the Company’s next annual meeting of stockholders (or, if earlier, at a special meeting of the Company’s stockholders called for such purpose).

Dividends on Common Stock

During the year ended December 31, 2022, we did not pay cash dividends on our common stock.

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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 repurchase under the Share Repurchase Program as of December 31, 2021.

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

Senior Secured Credit Facilities

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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.

The applicable margins for the

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

These interest rate spreads for the Revolver were increased by 0.25%, during covenant suspension, in connection with the 2020 Refinancing.

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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").

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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.

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

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

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 1.01 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 year ended December 31, 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.

On December 6, 2022, we used the proceeds of the December 2027 Notes issuance to redeem the remaining principal balance on the Term Loan B of $536 million, plus $1 million of accrued interest (the “December 2022 Refinancing”).

We recognized a loss on extinguishment of debt of $1 million during the year ended December 31, 2022 in connection the December 2022 Refinancing, which consisted of the write-off of unamortized debt issuance costs and discount of $1 million.

Applicable margins for the 2021 Term Loan B-1 and 2021 Term Loan B-2 are 3.50% per annum for Eurocurrency rate loans and 2.50% per annum for base rate loans over the life of the loan, with a floor of 0.50% for the Eurocurrency rate, and 1.50% for the base rate, respectively.

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

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

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

We are further required to pay down the term 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 December 31, 2021, we had outstanding approximately $2.8 billion of variable debt that is indexed to the London Interbank Offered Rate ("LIBOR") consisting of Term Loan B for $1.8 billion, Term Loan B-1 for $401 million and Term Loan B-2 for $635 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.

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.

Term Loan B allows for a transition to the Prime rate plus a margin, and assuming the discontinuation of LIBOR in June 2023 and assuming no change in Prime rates in effect as of December 31, 2021, we estimate the impact of transitioning to the Prime rate in June 2023 would result in an aggregate of approximately $25 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.”

Tax Receivable Agreement

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

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

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

As a result, no future payments are required to be made to the Pre-IPO Existing Stockholders under the TRA.

Applicable margins for the 2022 Term Loan B-1 are 4.25% per annum for Term SOFR loans and 3.25% per annum for base rate loans over the life of the loan, with a floor of 0.50% for the Term SOFR rate, and 1.50% for the base rate, respectively, and a credit spread adjustment factor of 0.10%.

Applicable margins for the 2022 Term Loan B-2 are 5.00% per annum for Term SOFR loans and 4.00% per annum for base rate loans over the life of the loan, with a floor of 0.50% for the Term SOFR rate, and 1.50% for the base rate, respectively, and a credit spread adjustment factor of 0.10%.

Operating Activities

Cash used in operating activities totaled $276 million for the year ended December 31, 2022.

The $356 million decrease in cash used for operating activities from 2020 was primarily due to an improvement in our results of operations as a result of the gradual global recovery from the COVID-19 pandemic during 2021, 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 $34 million related to restructuring activities initiated in 2020, and a $21 million reduction in upfront incentive consideration payments.

This increase in operating cash flow was partially offset by additional interest payments of $61 million resulting from debt refinancing activities during 2020.

The $138 million increase in operating cash flow from 2021 was primarily due to an improvement in our results of operations as a result of the gradual global recovery from the COVID-19 pandemic during 2022 , partially offset by payments of $67 million to our employees under performance-based bonus plans that did not occur in the prior year and an increase in interest payments of $39 million related to our term loans.

Cash used in operating activities totaled $415 million for the year ended December 31, 2021.

The $1.4 billion decrease in operating cash flow from 2019 is primarily due to the impact of COVID-19 on the travel industry and on our results of operations during 2020, severance payments of $48 million related to restructuring activities during 2020, additional interest payments of $29 million resulting from debt refinancing activities during 2020, acquisition termination fees paid in 2020 of $21 million, and net cash outflows to carriers resulting from the cancellations of previous bookings.

This decrease in operating cash flow was partially offset by a $44 million decrease in upfront incentive consideration payments and a $31 million decrease in tax payments.

The $356 million increase in operating cash flow from 2020 was primarily due to an improvement in our results of operations as a result of the gradual global recovery from the COVID-19 pandemic during 2021, 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 $34 million related to restructuring activities initiated in 2020, and a $21 million reduction in upfront incentive consideration payments.

This increase in operating cash flow was partially offset by additional interest payments of $61 million resulting from debt refinancing activities during 2020.

Investing Activities

For the year ended December 31, 2021, we received proceeds of $25 million from the sale of certain investments and assets, offset by $54 million of cash used on capital expenditures primarily related to software developed for internal use.

For the year ended December 31, 2020, we had $69 million provided by proceeds from the sale of our two headquarter buildings.

Cash provided from the sale was offset by cash used of $65 million on capital expenditures, including $41 million related to software developed for internal use.

For the year ended December 31, 2022, we received proceeds of $392 million from the sale of AirCentre, partially offset by $69 million of cash used on capital expenditures primarily related to software developed for internal use, $80 million for the investment in GBT, and $69 million for Conferma and other acquisitions.

For the year ended December 31, 2021, we received proceeds of $25 million f rom the sale of certain investments and assets, offset by $54 million of cash used on capital expenditures primarily related to software developed for internal use.

Financing Activities

For the year ended December 31, 2022, we used $75 million for financing activities.

Significant highlights of our financing ac tivities included:

• proceeds of $624 million, $650 million, and $545 million from the issuance of the 2022 Term Loan B-1 Facility, the 2022 Term Loan B-2 Facility and the December 2027 Notes;

• payment of $1.8 billion on Term Loan B;

• payment of $17 million on 2021 Term B-1 Facility, 2021 Term B-2 Facility, 2022 Term Loan B-1 Facility and 2022 Term Loan B-2 Facility;

• payment of $33 million in debt discount and issuance costs;

• payment of $21 million in dividends on our preferred stock;

• net payments of $16 million from the settlement of employee stock-option awards.

For the year ended December 31, 2021, we used $51 million for financing activities.

Significant highlights of our financing activities included:

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• payment of $3 million for the settlement of exchangeable notes.

For the year ended December 31, 2020, proceeds from financing activities were $1,838 million.

Significant highlights of our financing activities included:

• proceeds from borrowings under the senior secured and exchangeable notes of $1,970 million;

• proceeds from issuance of stock of $598 million;

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

• payment of $1,030 million on senior secured notes due 2023;

• payment of $503 million on Term Loan A and Term Loan B;

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

• payment of $78 million on debt issuance costs;

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

• net payments of $6 million from the settlement of employee stock-option awards, including payments of $6 million in income tax withholdings associated with the settlement of employee restricted-stock awards;

• payment of $5 million on our capital leases.

Recent Accounting Pronouncements

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Our agreements with customers of our Travel Solutions business may have multiple performance obligations which generally include software solutions through SaaS and hosted delivery, professional service fees and implementation services.

In addition, from time to time, we enter into agreements with customers to provide access to Travel Solutions' GDS and, at or near the same time, enter into a separate agreement to provide IT solutions through SaaS and hosted delivery.

We also evaluate performance obligations across multiple agreements when entered into with the same customer at or near the same time.

These multiple performance obligation arrangements involve judgments, including estimating the selling prices of goods and services, estimating the total contract consideration and allocating amounts to each distinct performance obligation, forecasting future volumes and estimating total costs and costs to complete a project.

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Contract assets are reviewed for recoverability on a periodic basis based on a review of impairment indicators.

Deferred customer advances and discounts are reviewed for recoverability based on future contracted revenues and estimated direct costs of the contract when a significant event occurs that could impact the recoverability of the assets, such as a significant contract modification or early renewal of contract terms.

Deferred customer advances and discounts are reviewed for recoverability based on future contracted revenues and estimated

direct costs of the contract when a significant event occurs that could impact the recoverability of the assets, such as a significant contract modification or early renewal of contract terms.

These assets are directly supported by estimates of Passengers Boarded and booking volumes for specific customers over their remaining contractual terms.

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Factors that could have a significant effect on our estimates include global security issues, epidemics or pandemics (such as that experienced in the current year as a result of COVID-19), natural disasters, general economic conditions, the financial condition of travel suppliers, and travel related accidents.

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

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

The air booking cancellation reserve was $11 million as of December 31, 2022.

If international cancellations increased by 10% on the same estimated base of cancelled bookings, the reserve as of December 31, 2021 would increase by $1 million.

If international cancellations increased by 10% on the same estimated base of cancelled bookings, the reserve as of December 31, 2022 would increase by less than $1 million.

If total bookings expected to cancel increased by 10%, the reserve as of December 31, 2022 would increase by $1 million.

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

Additionally, as a result of the Conferma acquisition in August 2022, the related goodwill and intangible asset balances were combined into the Travel Solutions reporting unit.

There was no change to our historical Hospitality Solutions reporting unit.

Goodwill related to our reporting units totaled $2.5 billion as of December 31, 2021.

We evaluate goodwill for impairment on an annual basis or when impairment indicators exist.

We begin our evaluation with a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying value before applying a quantitative assessm ent.

Our qualitative assessments considered recent information available regarding the anticipated duration of the recovery period which we believe to be a key assumption, including information as of April 2021 from the International Air Transport Association ("IATA") that forecast in its base-case scenario that global passenger traffic is not expected to return to pre-COVID-19 levels until 2024.

If it is determined through the evaluation of events or circumstances that the carrying value may not be recoverable, we perform a comparison of the estimated fair value of the reporting unit to which the goodwill has been assigned to the sum of the carrying value of the assets and liabilities of that unit.

Our qualitative assessments consider the most recent information from the International Air Transport Association ("IATA") about its base-case scenario of global passenger traffic returning to pre-COVID-19 levels, which we believe to be a key assumption.

If it is determined through the evaluation of events or circumstances that the carrying value may not be recoverable, we perform a comp arison of the estimated fair value of the reporting unit to which the goodwill has been assigned to the sum of the carrying value of the assets and liabilities of that unit.

If the sum of the carrying value of the assets and liabilities of a reporting unit exceeds the estimated fair value of that reporting unit, the carrying value of the reporting unit’s goodwill is reduced to its fair value through an adjustment to the goodwill balance, resulting in an impairment charge.

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W e did not record any goodwill impairment charges for the years ended December 31, 2022, 2021 and 2020.

As part of this disposition, we allocated goodwill of $153 million from the Travel Solutions reporting unit to assets held for sale as of December 31, 2021 based on relative fair value.

In February 2022, we completed the sale and performed a final allocation of goodwill to this portfolio of $146 million.

The determination of fair value of both the Travel Solutions reporting unit and the AirCentre business requires us to make judgements and estimates including cash flow projections and assumptions related to the value of this portfolio in the principal market.

We evaluated goodwill for impairment both prior and subsequent to allocation to the held for sale assets.

We evaluated goodwill for impairment both prior and subsequent to allocation to the held for sale assets and the final disposition.

We did not record any goodwill impairment charges as a result of this evaluation for the year ended December 31, 2022 .

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Capitalized Implementation Costs

Capitalized implementation costs represents upfront costs to implement new customer contracts under our SaaS and hosted revenue model.

Capitalized implementation costs represent upfront costs to implement new customer contracts under our SaaS and hosted revenue model.

Capitalized implementation costs are amortized on a straight-line basis over the related contract term, ranging from three to ten years, as they are recoverable through deferred or future revenues associated with the relevant contract.

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

During 2021 and 2020, we considered current estimates of recovery from the COVID-19 pandemic to 2019 levels, which we believe to be a key assumption in our assessment of recoverability.

In recent years, we considered current estimates of recovery from the COVID-19 pandemic to 2019 levels, which we believe to be a key assumption in our assessment of recoverability.

We record an impairment charge for the portion of the asset considered unrecoverable in the period identified, while considering the uncertainties associated with these types of contracts and judgments made in estimating revenue and direct costs.

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Due to the long-term nature of the relevant contracts, recovery of these assets is not sensitive to near-term declines in volumes such as those that have occurred in 2021 and 2020.

For the year ended December 31, 2021, we recorded $1 million in impairments associated with unrecoverable amounts in capitalized implementation costs.

During the year ended December 31, 2020, we recorded $10 million in impairments associated with unrecoverable amounts in capitalized implementation costs.

For the year ended December 31, 2022 and 2021 , we recorded immaterial impairments associated with unrecoverable amounts in capitalized implementation costs.

Income and Non-Income Taxes

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

The COVID-19 pandemic has caused increased uncertainty in determining certain key assumptions within the assessment of our future taxable income upon which recognition of deferred tax

assets is assessed.

At year end, we had a valuation allowance on a portion of our deferred tax assets based on our assessment that it is more likely than not that the deferred tax asset will not be realized.

The COVID-19 pandemic has caused increased uncertainty in determining certain key assumptions within the assessment of our future taxable income upon which recognition of deferred tax assets is assessed.

At year end, we had a valuation allowance on a portion of our deferred tax assets based on our assessment

that it is more likely than not that the deferred tax asset will not be realized.

We believe that our estimates for the valuation allowances against deferred tax assets are appropriate based on current facts and circumstances.

When assessing the need for a valuation allowance, all positive and negative evidence is analyzed, including our ability to carry back net operating losses ("NOLs") to prior periods, the reversal of deferred tax liabilities, tax planning strategies and projected future taxable income.

When assessing the need for a valuation allowance, all positive and negative evidence is analyzed, including our ability to carry back NOLs to prior periods, the reversal of deferred tax liabilities, tax planning strategies and projected future taxable income.

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

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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-K

Item 7. Management’s Discussion and Analysis