What changed in this filing

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Item 1. Financial Statements

2023-05-04 compared with 2022-11-02 · 245 added, 309 removed, 550 unchanged (50% of the section changed)

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(In thousands, except per share amounts)

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

2022 2021 2022 2021

Three Months Ended March 31,

Revenue $ 742,695 $ 584,910

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Operating loss ( 213 ) ( 79,532 )

Other expense:

Other (expense) income:

Interest expense, net ( 99,784 ) ( 61,058 )

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Other, net 2,407 191,241

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

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

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

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

Total other (expense) income, net ( 96,954 ) 126,480

(Loss) income from continuing operations before income taxes ( 97,167 ) 46,948

Provision (benefit) for income taxes 2,199 ( 596 )

(Loss) income from continuing operations ( 99,366 ) 47,544

(Loss) income from discontinued operations, net of tax ( 403 ) 134

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

Net income attributable to noncontrolling interests 776 714 1,933 1,657

Net loss attributable to Sabre Corporation ( 135,376 ) ( 235,241 ) ( 275,357 ) ( 741,773 )

Net (loss) income ( 99,769 ) 47,678

Net (loss) income attributable to noncontrolling interests ( 835 ) 272

Net (loss) income attributable to Sabre Corporation ( 98,934 ) 47,406

Preferred stock dividends 5,346 5,346

Net loss attributable to common stockholders $ ( 140,722 ) $ ( 240,641 ) $ ( 291,396 ) $ ( 758,029 )

Basic net loss per share attributable to common stockholders:

Loss from continuing operations $ ( 0.43 ) $ ( 0.75 ) $ ( 0.89 ) $ ( 2.37 )

Net loss per common share $ ( 0.43 ) $ ( 0.75 ) $ ( 0.89 ) $ ( 2.37 )

Diluted net loss per share attributable to common stockholders:

Loss from continuing operations $ ( 0.43 ) $ ( 0.75 ) $ ( 0.89 ) $ ( 2.37 )

Net loss per common share $ ( 0.43 ) $ ( 0.75 ) $ ( 0.89 ) $ ( 2.37 )

Net (loss) income attributable to common stockholders $ ( 104,280 ) $ 42,060

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

(Loss) income from continuing operations $ ( 0.32 ) $ 0.13

Net (loss) income per common share $ ( 0.32 ) $ 0.13

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

(Loss) income from continuing operations $ ( 0.32 ) $ 0.12

Net (loss) income per common share $ ( 0.32 ) $ 0.12

Weighted-average common shares outstanding:

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SABRE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In thousands)

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

2022 2021 2022 2021

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

Other comprehensive income (loss), net of tax:

Three Months Ended March 31,

Net (loss) income $ ( 99,769 ) $ 47,678

Other comprehensive income, net of tax:

Foreign currency translation adjustments ("CTA") 1,576 ( 1,287 )

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

263 3,701 1,934 25,048

Pension settlement, net of taxes of $ — , $ 973 , $ — , $ —

— 3,170 — 6,544

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

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Amortization of actuarial losses, net of taxes of $ — , $ —

1,998 3,037 5,990 6,400

Net change in retirement-related benefit plans, net of tax 1,263 3,096

Unrealized gains, net of taxes of $ — , $ —

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

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

( 41 ) 3,237 203 9,553

Net change in derivatives, net of tax ( 1,285 ) —

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

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

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

Comprehensive income attributable to noncontrolling interests ( 776 ) ( 714 ) ( 1,933 ) ( 1,657 )

Comprehensive loss attributable to Sabre Corporation $ ( 136,671 ) $ ( 221,675 ) $ ( 272,310 ) $ ( 698,421 )

Share of other comprehensive (loss) income of equity method investments ( 302 ) 655

Other comprehensive income 1,252 2,464

Comprehensive (loss) income ( 98,517 ) 50,142

Comprehensive loss (income) attributable to noncontrolling interests 835 ( 272 )

Comprehensive (loss) income attributable to Sabre Corporation $ ( 97,682 ) $ 49,870

See Notes to Consolidated Financial Statements.

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(In thousands)

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Current assets

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Prepaid expenses and other current assets 189,811 191,979

Current assets held for sale — 21,358

Total current assets 1,442,379 1,361,489

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Other assets, net 348,064 358,333

Long-term assets held for sale — 203,204

Total assets $ 5,026,008 $ 4,962,875

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Current portion of debt 23,480 23,480

Current liabilities held for sale — 21,092

Total current liabilities 863,656 815,571

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Long-term debt 4,831,430 4,717,091

Long-term liabilities held for sale — 15,476

Commitments and contingencies (Note 13)

Redeemable noncontrolling interests 15,564 —

Stockholders’ deficit

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

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

Preferred stock, $ 0.01 par value, 225,000 authorized, 3,290 issued and outstanding as of March 31, 2023 and December 31, 2022;

aggregate liquidation value of $ 329,000 as of March 31, 2023 and December 31, 2022

Common Stock:

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1,000,000 authorized shares;

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

358,108 and 353,436 shares issued, 331,909 and 328,542 shares outstanding at March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital 3,215,580 3,198,580

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

Treasury Stock, at cost, 26,199 and 24,895 shares at March 31, 2023 and December 31, 2022, respectively

( 519,504 ) ( 514,215 )

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(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating Activities

Net loss $ ( 273,424 ) $ ( 740,116 )

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

Gain on sale of assets and investments ( 180,081 ) ( 14,532 )

Net (loss) income $ ( 99,769 ) $ 47,678

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

Depreciation and amortization 40,319 50,108

Deferred income taxes ( 19,219 ) ( 2,570 )

Stock-based compensation expense 17,005 27,605

Loss on fair value of investment 34,720 —

Amortization of upfront incentive consideration 8,969 11,325

Deferred income taxes ( 18,869 ) ( 13,489 )

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

Impairment and related charges 5,146 —

Debt modification costs 4,905 2,435

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

Loss on extinguishment of debt 3,533 13,070

Loss from discontinued operations 596 158

Provision for expected credit losses 8,937 1,997

Dividends received from equity method investments 533 698

Amortization of debt discount and issuance costs 5,216 3,438

Loss on investment fair value adjustment 960 —

Other 419 ( 485 )

Pension settlement charge — 6,544

Income from discontinued operations 403 ( 134 )

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

Loss on extinguishment of debt — 3,533

Changes in operating assets and liabilities:

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Investing Activities

Net proceeds from dispositions 392,268 24,874

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

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

Additions to property and equipment ( 18,110 ) ( 17,403 )

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

Net proceeds from dispositions — 392,268

Cash (used in) provided by investing activities ( 18,110 ) 374,865

Financing Activities

Proceeds from borrowings under AR Facility 115,000 —

Proceeds from sale of redeemable shares in subsidiary 16,000 —

Payments on borrowings from lenders ( 5,870 ) ( 625,296 )

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

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

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

Net payment on the settlement of equity-based awards ( 5,294 ) ( 10,309 )

Debt prepayment fees and issuance costs ( 2,253 ) ( 10,185 )

Other financing activities ( 298 ) 301

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

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

Proceeds of borrowings from lenders — 625,000

Cash provided by (used in) financing activities 111,939 ( 25,835 )

Cash Flows from Discontinued Operations

Cash used in operating activities ( 3,231 ) ( 2,376 )

Cash used in discontinued operations ( 3,231 ) ( 2,376 )

Cash provided by (used in) operating activities 52 ( 1,680 )

Cash provided by (used in) discontinued operations 52 ( 1,680 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash 715 ( 205 )

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

Increase in cash, cash equivalents and restricted cash 22,187 208,062

Cash, cash equivalents and restricted cash at beginning of period 815,923 999,391

Cash, cash equivalents and restricted cash at end of period $ 838,110 $ 1,207,453

Non-cash additions to property and equipment $ 5,999 $ 2,392

See Notes to Consolidated Financial Statements.

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Stockholders'

Equity (Deficit)

Shares Amount Shares Amount Shares Amount

Balance at December 31, 2022 3,290,000 $ 33 353,436,503 $ 3,534 $ 3,198,580 24,894,998 $ ( 514,215 ) $ ( 3,506,528 ) $ ( 65,731 ) $ 11,500 $ ( 872,827 )

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

Preferred stock dividends (1)

— — — — — — — ( 5,346 ) — — ( 5,346 )

Settlement of stock-based awards — — 3,883,688 39 ( 9 ) 1,077,178 ( 10,300 ) — — — ( 10,270 )

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

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

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

Comprehensive loss — — — — — — — ( 98,934 ) 1,252 ( 451 ) ( 98,133 )

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Stock-based compensation expense — — — — 17,005 — — — — — 17,005

Other — — — — — — — — — ( 37 ) ( 37 )

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

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

Preferred stock dividends (1)

— — — — — — — ( 5,346 ) — — ( 5,346 )

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

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

Other — — — — — — — — — 1 1

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

Balance at March 31, 2023 3,290,000 $ 33 358,108,284 $ 3,581 $ 3,215,580 26,199,143 $ ( 519,504 ) $ ( 3,610,808 ) $ ( 64,479 ) $ 11,049 $ ( 964,548 )

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

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

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

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

Preferred stock dividends (1)

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

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

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

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

Preferred stock dividends (1)

— — — — — — — ( 5,428 ) ( 5,428 )

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

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

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

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

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

Preferred stock dividends (1)

— — — — — — — ( 5,400 ) — — ( 5,400 )

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

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

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

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

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

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

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

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

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

Despite the continued negative impacts of the COVID-19 pandemic on our business and global travel volumes, as COVID-19 vaccines have continued to be administered and some travel restrictions have been relaxed, we have seen gradual improvement in our key volume metrics during 2021 and 2022.

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

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

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

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

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

The travel ecosystem has shifted over the past few years, including through the COVID-19 pandemic, resulting in the changing needs of our airline, hotel and agency customers.

This pandemic has resulted in continued material headwinds for our consolidated financial results in 2022 and through the first quarter of 2023.

Despite the continued impacts of the COVID-19 pandemic on our business and global travel volumes, as travel restrictions have been relaxed and travel patterns return, we have seen gradual improvement in our key volume metrics during 2022 and through the first quarter of 2023.

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

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

As a result, we believe that we have resources to sufficiently fund our liquidity requirements over at least the next twelve months;

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

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

Operating results for the three months ended March 31, 2023 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2023.

The accompanying interim financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 17, 2023 .

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

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

We adopted this standard in the first quarter of 2022 , which did not have a material impact on our consolidated financial statements.

Revenue from Contracts with Customers

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

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

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

The following table presents our assets and liabilities with customers as of March 31, 2023 and December 31, 2022 (in thousands).

Account Consolidated Balance Sheet Location March 31, 2023 December 31, 2022

Contract assets and customer advances and discounts (1)

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______________________

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

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

(1) Includes contract assets of $ 13 million and $ 12 million for March 31, 2023 and December 31, 2022, respectively.

During the three months ended March 31, 2023, we recognized revenue of approximately $ 15 million from contract liabilities that existed as of January 1, 2023.

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

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

We evaluate collectability of our accounts receivable based on a combination of factors and record reserves as described further in Note 6.

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

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

2022 2021 2022 2021

Three Months Ended March 31,

Distribution $ 525,886 $ 342,888

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

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

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

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

Our air booking cancellation reserve totaled $ 13 million and $ 11 million as of March 31, 2023, and December 31, 2022, respectively.

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

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

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

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

Acquisitions and Dispositions

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

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

We ac quired all of the outstanding stock and ownership interest of Conferma through the exercise of a call option, for net cash of $ 62 million and the conversion of a pre-existing loan receivable into share capital of $ 11 million.

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

Conferma is part of our Travel Solutions segment.

Pr eliminary Purchase Price Allocation

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

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

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

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

Cash and cash equivalents $ 7,203

Other current and non-current assets 5,950

Goodwill 51,992

Intangible assets 22,644

Current and non-current liabilities ( 4,053 )

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

Total acquisition price $ 72,455

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

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

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

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

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

The accounting related to tax liabilities remains subject to finalization due to ongoing analysis as of March 31, 2023.

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.

Redeemable Noncontrolling Interest for further details.

AirCentre Disposition

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The net assets of AirCentre disposed of primarily included goodwill of $ 146 million, working capital of $ 34 million, and other assets, net of $ 25 million.

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

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

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

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

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

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

We recorded a pre-tax gain on sale of approximately $ 192 million (after-tax $ 121 million) in Other, net in our consolidated statements of operations for the three months ended March 31, 2022 , which was subsequently adjusted in the second quarter of 2022 by $ 12 million due to contingencies identified in connection with the sale.

Redeemable Noncontrolling Interest

On February 1, 2023, Sabre sold common shares, representing a 19 % interest in Conferma’s direct parent (referred to as “Conferma”), to a third party for cash consideration of $ 16 million.

In connection with the sale, we entered into a governing agreement which requires us under limited conditions to redeem the 19 % interest in Conferma, if requested, for the original purchase price of $ 16 million.

We currently do not believe it is probable that the noncontrolling interest will become redeemable, given the remote likelihood of the applicable conditions being satisfied.

As the common shares are redeemable upon the occurrence of conditions not solely within our control, we recorded the noncontrolling interest as redeemable and classified it as temporary equity within our consolidated balance sheet initially at fair value.

The noncontrolling interest is adjusted each reporting period for loss or income attributable to the noncontrolling interest.

As of March 31, 2023, the redeemable noncontrolling interest is $ 16 million.

The following table shows the changes in redeemable noncontrolling interest in temporary equity of consolidated subsidiary during the period ended March 31, 2023 (in thousands):

Three Months Ended

March 31, 2023

Proceeds from sale of redeemable noncontrolling interest $ 16,000

Net loss attributable to redeemable noncontrolling interest ( 436 )

Redeemable noncontrolling interest, end of period $ 15,564

For the three months ended March 31, 2023, we recognized a $ 2 million income tax expense, representing an effective tax rate of less than 1 %, compared to an income tax benefit of $ 1 million, representing an effective tax rate of less than 1 % for the three months ended March 31, 2022.

The effective tax rate remained relatively flat for the three months ended March 31, 2023 as compared to the same period in 2022 primarily due to an increase in valuation allowance recorded in the current period and various discrete items recorded in each of the respective three month periods.

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

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

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

On the basis of this evaluation, as of March 31, 2023, a cumulative valuation allowance of $ 499 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized.

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

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

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

Our net unrecognized tax benefits, excluding interest and penalties, included in our consolidated balance sheets, were $ 70 million and $ 76 million as of March 31, 2023 and December 31, 2022, respectively.

Credit Losses

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

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

Nine Months Ended

September 30, 2022

Our allowance for credit losses for the three months ended March 31, 2023 for our portfolio segment is summarized as follows (in thousands):

Three Months Ended

March 31, 2023

Balance at December 31, 2022 $ 38,815

1 unchanged sentence

Write-offs ( 242 )

Other ( 1,147 )

Balance at September 30, 2022 $ 49,058

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

Balance at March 31, 2023 $ 47,632

Our provision for expected credit losses for the three months ended March 31, 2023 increased $ 7 million to a provision of $ 9 million from a provision of $ 2 million in the same period in the prior year.

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

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

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

Rate Maturity September 30, 2022 December 31, 2021

As of March 31, 2023 and December 31, 2022, our outstanding debt included in our consolidated balance sheets totaled $ 4,855 million and $ 4,741 million, respectively, which are net of debt issuance costs of $ 41 million and $ 44 million, respectively, and unamortized discounts of $ 52 million and $ 54 million, respectively.

The following table sets forth the face values of our outstanding debt as of March 31, 2023 and December 31, 2022 (in thousands):

Rate Maturity March 31, 2023 December 31, 2022

Senior secured credit facilities:

2021 Term Loan B-1 L + 3.50 %

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

Term Loan B-1 L + 3.50 %

December 2027 $ 396,930 $ 397,940

5 unchanged sentences

June 2028 671,625 673,313

AR Facility (2)

S (1) + 2.25 %

January 2025 115,000 —

9.25 % senior secured notes due 2025

4 unchanged sentences

4.00 % April 2025 333,220 333,220

11.25 % senior secured notes due 2027

11.25 % December 2027 555,000 555,000

Face value of total debt outstanding 4,948,255 4,839,126

3 unchanged sentences

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

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

(2) The AR Facility (as defined below) is subject to certain "springing" maturity conditions;

the maturity may extend to February 2026 at the latest.

We had outstanding letters of credit totaling $ 11 million and $ 12 million as of March 31, 2023 and December 31, 2022, respectively, which were secured by a $ 20 million cash collateral deposit account.

Senior Secured Credit Facilities

Refinancing Transactions

On August 23, 2017, Sabre GLBL entered into a Fourth Incremental Term Facility Amendment to our Amended and Restated Credit Agreement, Term Loan A Refinancing Amendment to our Amended and Restated Credit Agreement, and Second Revolving Facility Refinancing Amendment to our Amended and Restated Credit Agreement (the “2017 Refinancing”).

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

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

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

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

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

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

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

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

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

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.

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

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

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

The 2021 Refinancing included the application of the proceeds of (i) a new $ 404 million term loan “B-1” facility (the “New Term B-1 Facility”) and (ii) a new $ 644 million term loan “B-2” facility (the "New Term B-2 Facility" and together with the New Term B-1 Facility, the “New Facilities”), borrowed by Sabre GLBL under our Amended and Restated Credit Agreement, to pay down in full approximately $ 634 million of Other Term B Loans and the outstanding $ 400 million Revolver balance, and to terminate the revolving commitments thereunder.

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

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

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

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

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

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

Our Senior Secured Credit Facility is governed by the Amended and Restated Credit Agreement including the Sixth Term A Loan Refinancing and Incremental Amendments entered into in December 2020 and all preceding amendments.

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

2 unchanged sentences

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.

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

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

5 unchanged sentences

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

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

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.

1 unchanged sentence

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.

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

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

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

As of March 31, 2023, we are in compliance with all covenants under the terms of the Amended and Restated Credit Agreement.

Senior Secured Notes

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”).

The December 2027 Notes were issued at a discount of 1.866 %.

The December 2027 Notes are jointly and severally, irrevocably and unconditionally guaranteed by Sabre Holdings and all of Sabre GLBL’s restricted subsidiaries that guarantee Sabre GLBL’s credit facility.

The December 2027 Notes bear interest at a rate of 11.250 % per annum and interest payments are due semi-annually in arrears on June 15 and December 15 of each year, beginning June 15, 2023.

The December 2027 Notes mature on December 15, 2027.

The net proceeds of $ 545 million received from the sale of the December 2027 Notes, net of a discount of $ 10 million, were used to repay approximately $ 536 million principal amount of debt under the Term Loan B, plus $ 1 million of accrued interest.

The remaining proceeds of $ 8 million, plus cash on hand, were used to pay $ 10 million in underwriting fees and commissions, and other expenses.

On February 14, 2023, Sabre Securitization, LLC, our indirect, consolidated subsidiary and a special purpose entity (“Sabre Securitization”), entered into a three-year committed accounts receivable securitization facility (the “AR Facility”) of up to $ 200 million with PNC Bank, N.A.

On March 30, 2023, we borrowed $ 115 million under the AR Facility.

These proceeds are being used for general corporat e p urposes.

The amount available for borrowings at any one time under the AR Facility is limited to a borrowing base calculated based on the outstanding balance of eligible receivables, subject to certain reserves.

Borrowings under the AR Facility bear interest at a rate equal to SOFR, subject to a 0 % floor, plus a drawn fee, initially in the amount of 2.25 %.

The drawn fee varies based on our leverage, and Sabre Securitization also pays a fee on the undrawn committed amount of the AR Facility.

Interest and fees payable by Sabre Securitization under the AR Facility are due monthly.

Net debt issuance costs related to our AR Facility are $ 2 million and are recorded in other assets, net in our consolidated financial statements.

The AR Facility is scheduled to terminate on February 13, 2026, unless extended in accordance with its terms.

The AR Facility is subject to a springing maturity date should certain events occur in relation to material indebtedness (as defined in the AR Facility) of ours, Sabre Securitization and certain other subsidiaries.

In connection with the AR Facility, certain of our subsidiaries (the “Originators”) have sold and contributed, and will continue to sell or contribute, substantially all of their accounts receivable and certain related assets (collectively, the "Receivables") to Sabre Securitization to be held as collateral for borrowings under the AR Facility.

Sabre Securitization’s assets are not available to satisfy the obligations of Sabre Corporation or any of its affiliates.

Under the terms of the AR Facility, the lenders under the AR Facility would have a senior priority claim to the assets of Sabre Securitization, which will primarily consist of the Receivables of the Originators participating in the AR Facility.

As of March 31, 2023, $ 415 million of Receivables are held as assets by Sabre Securitization, consisting of $ 401 million of accounts receivable, net of allowance for credit losses and $ 14 million of other as sets, net in our conso lidated balance sheet.

The AR Facility is accounted for as a secured borrowing on a consolidated basis, rather than a sale of assets;

as a result, (i) Receivables balances pledged as collateral are presented as assets and the borrowings are presented as liabilities on our consolidated balance sheets, (ii) our consolidated statements of operations reflect the associated charges for bad debt expense (a component of general and administrative expenses) related to the pledged Receivables and interest expense associated with the AR Facility and (iii) receipts from customers related to the underlying Receivables are reflected as operating cash flows and borrowings and repayments u nder the AR Facility are reflected as financing cash flows within our consolidated statements of cash flows.

The receivables and other assets of Sabre Securitization are not available to satisfy creditors of any entity other than Sabre Securitization.

The AR Facility contains certain customary representations, warranties, affirmative covenants, and negative covenants, subject to certain cure periods in some cases, including the eligibility of the Receivables being sold by the Originators and securing the loans made by the lenders, as well as customary reserve requirements, events of default, termination events, and servicer defaults.

As of March 31, 2023, we were in compliance with and expect to be in compliance with the financial covenants of the AR Facility for at least the next twelve months.

Exchangeable Notes

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

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

The Exchangeable Notes are senior, unsecured

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

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

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

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

As of March 31, 2023 , we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

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

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

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

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

3 unchanged sentences

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

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

As of March 31, 2023, none of the conditions allowing holders of the Exchangeable Notes to exchange have been met.

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

3 unchanged sentences

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

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

September 30, 2022 December 31, 2021

The following table sets forth the carrying value of the Exchangeable Notes as of March 31, 2023 and December 31, 2022, (in thousands):

March 31, 2023 December 31, 2022

Principal $ 333,220 $ 333,220

1 unchanged sentence

Net carrying value $ 328,164 $ 327,578

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

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

2022 2021 2022 2021

The following table sets forth interest expense recognized related to the Exchangeable Notes for the three months ended March 31, 2023 and 2022 (in thousands):

Three Months Ended March 31,

Contractual interest expense $ 3,332 $ 3,332

Amortization of debt issuance costs $ 572 $ 547 $ 1,696 $ 1,657

Amortization of issuance costs 586 559

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

4 unchanged sentences

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

For example, when the

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

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

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

8 unchanged sentences

We designated these instruments as cash flow hedges.

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

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

As of March 31, 2023 and December 31, 2022, we had no unsettled forward contracts.

Interest Rate Swap Contracts —We had no interest rate swaps outstanding during the three months ended March 31, 2022.

Interest rate swaps outstanding during the three months ended March 31, 2023, are as follows:

Notional Amount Interest Rate

5 unchanged sentences

June 30, 2022 December 31, 2023

$ 600 million 1 month LIBOR (2)

2.81 % December 31, 2020 December 31, 2021

______________________

(1) Subject to a 0.5 % floor.

(2) Subject to a 0 % floor.

(2) Fixed fee of 1.71 % effective April 30, 2022, and expiring December 30, 2022, and 3.09 % effective December 31, 2022, and expiring December 31, 2023.

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

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

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

1 unchanged sentence

We designated these swaps as cash flow hedges.

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

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

Derivative Assets (Liabilities)

The estimated fair values of our derivatives designated as hedging instruments as of March 31, 2023 and December 31, 2022 are as follows (in thousands):

Derivative Assets

Fair Value as of

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

Derivatives Designated as Hedging Instruments Consolidated Balance Sheet Location March 31, 2023 December 31, 2022

Interest rate swaps Prepaid expenses and other current assets

Interest rate swaps Other assets, net 757

$ 3,620 $ 4,905

Interest rate swaps Other noncurrent liabilities ( 173 ) ( 168 )

Total $ 3,447 $ 4,737

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

Amount of Gains Recognized in OCI on Derivative,

The effects of derivative instruments, net of taxes, on OCI for the three months ended March 31, 2023 are as follows (in thousands):

Amount of Losses Recognized in OCI on Derivative,

Effective Portion

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

Derivatives in Cash Flow Hedging Relationships 2022 2021 2022 2021

Derivatives in Cash Flow Hedging Relationships Three Months Ended March 31, 2023

Interest rate swaps $ ( 296 )

Total $ ( 296 )

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

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

2022 2021 2022 2021

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

Three Months Ended March 31, 2023

Interest rate swaps Interest expense, net $ ( 989 )

11 unchanged sentences

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

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

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

Money market funds —Our valuation technique used to measure the fair values of our money market funds was derived from quoted market prices and active markets for these instruments that exist.

Time deposits —Our valuation technique used to measure the fair values of our time deposit instruments was derived from the following:

non-binding market consensus prices that were corroborated by observable market data and quoted market prices for similar instruments.

Investment in securities— 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, which is included in prepaid expenses and other current assets in our consolidated balance sheets.

As of March 31, 2023, we continued to own these

8 million shares.

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

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

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

The following tables present our assets that are required to be measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022 (in thousands):

Fair Value at Reporting Date Using

September 30, 2022 Level 1 Level 2 Level 3

March 31, 2023 Level 1 Level 2 Level 3

Derivatives (1)

Interest rate swap contracts $ 3,447 $ — $ 3,447 $ —

GBT Common Stock 45,280 45,280 —

Investment in securities 53,362 53,362 — —

Money market funds 439,420 439,420 — —

Time deposits 203,198 — 203,198 —

Total $ 699,427 $ 492,782 $ 206,645 $ —

Fair Value at Reporting Date Using

December 31, 2022 Level 1 Level 2 Level 3

Derivatives (1)

Interest rate swap contracts $ 4,737 $ — $ 4,737 $ —

Investment in securities 54,303 54,303 — —

Money market funds 153,252 153,252 — —

Time deposits 444,835 — 444,835 —

Total $ 657,127 $ 207,555 $ 449,572 $ —

______________________

1 unchanged sentence

Derivatives for further detail.

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

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

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

There were no transfers between Levels 1 and 2 within the fair value hierarchy for the three months ended March 31, 2023.

Unrealized losses recognized during the three months ended March 31, 2023 from our investments in securities totaled $ 1 million which is recorded to Other, net within our results of operations.

Other Financial Instruments

1 unchanged sentence

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

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

The outstanding principal balance of our AR Facility approximated its fair value as of March 31, 2023.

The following table presents the fair value and carrying value of our senior notes and borrowings under our senior secured credit facilities as of March 31, 2023 and December 31, 2022 (in thousands):

Fair Value at Carrying Value at (1)

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

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

Financial Instrument March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022

2021 Term Loan B-1 $ 355,252 $ 362,872 $ 396,174 $ 397,147

8 unchanged sentences

302,121 358,440 333,220 333,220

11.25 % senior secured notes due 2027

513,109 572,058 545,156 544,770

______________________

(1) Excludes net unamortized debt issuance costs.

2 unchanged sentences

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

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

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

Accumulated Other Comprehensive Loss

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

September 30, 2022 December 31, 2021

As of March 31, 2023 and December 31, 2022, the components of accumulated other comprehensive loss, net of related deferred income taxes, are as follows (in thousands):

March 31, 2023 December 31, 2022

Defined benefit pension and other postretirement benefit plans $ ( 72,483 ) $ ( 73,746 )

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

Unrealized foreign currency translation gain 6,833 5,257

Unrealized gain on interest rate swaps 3,292 4,577

4 unchanged sentences

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

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

As of March 31, 2023, we have not contributed to our defined benefit pension plan in 2023.

Based on current assumptions, we expect to make a contribution of up to $ 10 million in 2023 to our defined benefit pension plan.

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

9 unchanged sentences

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

We recorded $ 5 million and $ 16 million of accrued preferred stock dividends in our consolidated results of operations for the three and nine months ended September 30, 2022 and 2021, respectively.

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

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

We recorded $ 5 million of accrued preferred stock dividends in our consolidated results of operations for the three months ended March 31, 2023 and 2022.

During the three months ended March 31, 2023 and 2022, we paid cash dividends on our preferred stock of $ 5 million.

On April 26, 2023, the Board of Directors declared a dividend of $ 1.625 per share on Preferred Stock payable on June 1, 2023 to holders of record of the Preferred Stock on May 15, 2023.

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

The number of shares of our common stock issuable upon conversion will be determined based on the average volume-weighted average price per share of our common stock over the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately before September 1, 2023.

The number of shares of our common stock issuable upon conversion will be determined based on the average volume-weighted average price per share of our common stock over the 20

consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately before September 1, 2023.

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

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

In the event that Preferred Stock dividends have not been declared

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

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

Share Repurchase Program

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

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

During the three months ended March 31, 2023, we did not repurchase any shares pursuant to the Share Repurchase Program.

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

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

Approximately $ 287 million remains authorized for repurchases under the Share Repurchase Program as of March 31, 2023.

Exchangeable Notes

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

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

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

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

As of March 31, 2023, we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

Debt for further details.

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

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

2022 2021 2022 2021

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

Three Months Ended March 31,

(Loss) income from continuing operations $ ( 99,366 ) $ 47,544

Net income attributable to noncontrolling interests ( 835 ) 272

Preferred stock dividends 5,346 5,346

Net loss from continuing operations available to common stockholders, basic and diluted $ ( 140,276 ) $ ( 240,827 ) $ ( 290,800 ) $ ( 757,871 )

Net (loss) income from continuing operations available to common stockholders, basic ( 103,877 ) 41,926

Interest expense, net of tax for exchangeable notes — 3,074

Preferred stock dividends — 5,346

Net (loss) income from continuing operations available to common stockholders, diluted $ ( 103,877 ) $ 50,346

Basic weighted-average common shares outstanding 328,928 323,658

Dilutive effect of stock options and restricted stock awards

Dilutive effect of exchangeable notes

Dilutive effect of preferred shares — 39,167

Diluted weighted-average common shares outstanding 328,928 409,378

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

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

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

The diluted weighted-average common shares outstanding calculation excludes 1 million of dilutive stock options and restricted stock awards for the three months ended March 31, 2023 as their effect would be anti-dilutive given the net loss incurred in the period.

The calculation of diluted weighted-average shares excludes the impact of 3 million and 2 million of anti-dilutive common stock equivalents for the three months ended March 31, 2023 and 2022, respectively.

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

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

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

The approximately 42 million resulting common shares related to the Exchangeable Notes for the three months ended March 31, 2023 are not included in the dilutive weighted-average common shares outstanding calculation as their effect would be anti-dilutive given the net loss incurred in the period.

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

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

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

The approximately 47 million resulting common shares related to the Preferred Stock for the three months ended March 31, 2023 are not included in the dilutive weighted-average common shares outstanding calculation as their effect would be anti-dilutive given the net loss incurred in the period.

Contingencies

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Given the inherent uncertainties of litigation, the ultimate outcome of these matters cannot be predicted at this time, nor can the amount of possible loss or range of loss, if any, be reasonably estimated, except in circumstances where an aggregate litigation accrual has been recorded for probable and reasonably estimable loss contingencies.

A determination of the amount of accrual required, if any, for these contingencies is made after careful analysis of each matter.

A determination of the amount of accrual required, if any, for these contingencies is

made after careful analysis of each matter.

The required accrual may change in the future due to new information or developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters.

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

The claims that were not dismissed are claims brought under Section 1 of the Sherman Act, relating to our contracts with US Airways, which US Airways claims contain anticompetitive provisions, and an alleged conspiracy with the other GDSs, allegedly to maintain the industry structure and not to compete for content.

The claims that were not dismissed were claims brought under Section 1 of the Sherman Act, relating to our contracts with US Airways, which US Airways claimed contain anticompetitive provisions, and an alleged conspiracy with the other GDSs, allegedly to maintain the industry structure and not to compete for content.

We strongly deny all of the allegations made by US Airways.

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As a result of the jury's verdict, US Airways was also entitled to receive reasonable attorneys’ fees and costs under the Sherman Act.

As such, it filed a motion seeking approximately $ 125 million in attorneys’ fees and costs, the amount of which we strongly dispute.

As such, it filed a motion seeking approximately $ 125 million in attorneys’ fees and costs, the amount of which we strongly disputed.

In January 2018, the court denied US Airways' motion seeking attorneys' fees and costs, without prejudice.

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In addition, the Second Circuit affirmed the trial court’s ruling limiting US Airways’ damages.

The judgment in our favor on US Airways' conspiracy claim remains intact.

The judgment in our favor on US Airways' conspiracy claim remained intact.

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

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The jury, however, only awarded US Airways $ 1.00 in single damages.

Based on the jury’s

verdict, in June 2022 the court entered final judgment in favor of US Airways in the amount of $ 3.00 , which is three times the jury’s award of $ 1.00 as required by the Sherman Act.

Based on the jury’s verdict, in June 2022 the court entered final judgment in favor of US Airways in the amount of $ 3.00 , which is three times the jury’s award of $ 1.00 as required by the Sherman Act.

We have paid US Airways $ 3.05 to satisfy this portion of the judgment.

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In addition, the court’s entry of judgment regarding the monopolization claim under Section 2 of the Sherman Act entitles US Airways to receive reasonable attorneys’ fees and costs under the Sherman Act.

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

The court has referred the issue of the attorneys' fees and costs to a magistrate judge.

On April 10, 2023, the magistrate issued a recommendation that US Airways is entitled to a reasonable attorneys' fees award, but that the award is subject to a reduction to reflect their nominal recovery.

The magistrate's recommendation is subject to the approval of the court.

To date, US Airways has not yet filed any papers with the court seeking a particular amount for its attorneys’ fees and costs.

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

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

American Airlines Commercial Litigation

On June 29, 2021, American Airlines filed suit against us in state district court in Tarrant County, Texas, alleging that our New Airline Storefront, a modern retailing experience designed to enhance comparison shopping of airline offers in the GDS, and a new value-based incentive model with agencies breach our contract with American Airlines.

American Airlines is seeking a temporary and permanent injunction preventing the alleged breach of contract.

We strongly deny the allegations and have filed our response denying American Airlines’ allegations and seeking a declaratory judgment that, among other things, New Airline Storefront does not violate the contract and that the contract does not prohibit Sabre’s value-based fee arrangements.

In October 2021, the court heard arguments to determine whether to grant a temporary injunction preventing the alleged breach of contract, and on October 27, 2021, the court issued a ruling denying the temporary injunction.

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

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

Indian Income Tax Litigation

We are currently a defendant in income tax litigation brought by the Indian Director of Income Tax (“DIT”) in the Supreme Court of India.

We were a defendant in income tax litigation brought by the Indian Director of Income Tax (“DIT”) in the Supreme Court of India.

The dispute arose in 1999 when the DIT asserted that we have a permanent establishment within the meaning of the Income Tax Treaty between the United States and the Republic of India and accordingly issued tax assessments for assessment years ending March 1998 and March 1999, and later issued further tax assessments for assessment years ending March 2000 through March 2006.

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The DIT appealed those decisions to the Delhi High Court, which found in our favor on July 19, 2010.

The DIT has appealed the decision to the Supreme Court of India and our case is currently pending before that court.

The DIT has appealed the decision to the Supreme Court of India which upheld the Delhi High Court ruling on April 19, 2023.

We have appealed the tax assessments for the assessment years ended March 2013 to March 2018 with the ITAT and no trial date has been set for these subsequent years.

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

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

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

the High Court dismissed the case for assessment years ending March 2001 through March 2004.

The DIT also assessed taxes on a similar basis plus some additional issues for assessment years ending March 2006 through March 2018 and appeals for assessment years ending March 2006 through March 2016 and March 2018 through March 2020 are pending before the ITAT or the High Court depending on the year.

If the DIT were to fully prevail on every claim against us, including SAPPL and other group companies, we could be subject to taxes, interest and penalties of approximately $ 18 million as of March 31, 2023.

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

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We do not believe that any of these routine proceedings will have a material impact on the business or our financial condition.

SynXis Central Reservation System

As previously disclosed, we became aware of an incident involving unauthorized access to payment information contained in a subset of hotel reservations processed through the Sabre Hospitality Solutions SynXis Central Reservation System (the “HS Central Reservation System”).

Our investigation was supported by third party experts, including a leading cybersecurity firm.

Our investigation determined that an unauthorized party:

obtained access to account credentials that permitted access to a subset of hotel reservations processed through the HS Central Reservation System;

used the account credentials to view a credit card summary page on the HS Central Reservation System and access payment card information (although we use encryption, this credential had the right to see unencrypted card data);

and first obtained access to payment card information and some other reservation information on August 10, 2016.

The last access to payment card information was on March 9, 2017.

The unauthorized party was able to access information for certain hotel reservations, including cardholder name;

payment card number;

card expiration date;

and, for a subset of reservations, card security code.

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

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

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

We took successful measures to ensure this unauthorized access to the HS Central Reservation System was stopped and is no longer possible.

There is no indication that any of our systems beyond the HS Central Reservation System, such as Sabre’s Travel Solutions platforms, were affected or accessed by the unauthorized party.

We notified law enforcement and the payment card brands and engaged a payment card industry data ("PCI") forensic investigator to investigate this incident at the payment card brands' request.

We have notified customers and other companies that use or interact with, directly or indirectly, the HS Central Reservation System about the incident.

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

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

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

We deactivated the compromised accounts and notified law enforcement of this activity.

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

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

Although the costs related to these incidents, including any associated penalties assessed by any other governmental authority or payment card brand or indemnification obligations to our customers, as well as any other impacts or remediation related to this incident, may be material, it is not possible at this time to determine whether we will incur, or to reasonably estimate the amount of, any liabilities in connection with them, with the exception of the payment related to the settlement agreements as described above.

We maintain insurance that covers certain aspects of cyber risks, including the payment related to the settlement agreements, and we continue to work with our insurance carriers in these matters.

Other Tax Matters

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We routinely receive inquiries and may also from time to time receive challenges or assessments from these taxing authorities.

With respect to non-income based taxes, we recognize liabilities when we believe it is probable that amounts will be owed to the taxing authorities and such amounts are estimable.

With respect to non-income based taxes, we recognize liabilities when we determine it is probable that amounts will be owed to the taxing authorities and such amounts are estimable.

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

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

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

As of March 31, 2023, we have not determined that an adverse outcome is probable with respect to current outstanding claims;

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

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

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

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

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

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

Our CODM does not review total assets by segment as operating evaluations and resource allocation decisions are not made on the basis of total assets by segment.

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

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

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

2022 2021 2022 2021

Segment information for the three months ended March 31, 2023 and 2022 is as follows (in thousands):

Three Months Ended March 31,

Travel Solutions $ 677,441 $ 533,998

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

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

2022 2021 2022 2021

Three Months Ended March 31,

Operating loss $ ( 213 ) $ ( 79,532 )

Equity method income (loss) 423 ( 170 )

Impairment and related charges (1)

5,146 — 5,146 —

Acquisition-related amortization (1)

9,824 15,939 41,075 48,296

Restructuring and other costs (2)

9,944 269 14,279 ( 5,722 )

Acquisition-related costs (3)

424 870 6,333 3,299

Litigation costs, net (4)

15,365 4,862 31,380 17,113

Stock-based compensation 17,005 27,605

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______________________

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

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

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

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

(2) Restructuring and other costs represents adjustments to charges recorded in previous periods associated with severance benefits related to employee terminations.

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

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

What changed 10-Q

Item 1. Financial Statements