What changed in this filing

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Item 1. Financial Statements

2023-08-03 compared with 2023-05-04 · 265 added, 181 removed, 614 unchanged (42% of the section changed)

3 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended March 31,

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

2023 2022 2023 2022

Revenue $ 737,529 $ 657,532 $ 1,480,224 $ 1,242,442

5 unchanged sentences

Interest expense, net ( 106,134 ) ( 66,884 ) ( 205,918 ) ( 127,942 )

Loss on extinguishment of debt — ( 3,533 )

Equity method income (loss) 423 ( 170 )

Gain (loss) on extinguishment of debt 12,543 — 12,543 ( 3,533 )

Equity method income 459 186 882 16

Other, net 17,225 ( 43,937 ) 19,632 147,304

Total other (expense) income, net ( 75,907 ) ( 110,635 ) ( 172,861 ) 15,845

(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) income ( 99,769 ) 47,678

Loss from continuing operations before income taxes ( 118,090 ) ( 180,828 ) ( 215,257 ) ( 133,880 )

Provision for income taxes 5,909 5,390 8,108 4,794

Loss from continuing operations ( 123,999 ) ( 186,218 ) ( 223,365 ) ( 138,674 )

Income (loss) from discontinued operations, net of tax 2 ( 284 ) ( 401 ) ( 150 )

Net loss ( 123,997 ) ( 186,502 ) ( 223,766 ) ( 138,824 )

Net (loss) income attributable to noncontrolling interests ( 66 ) 885 ( 901 ) 1,157

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

Net loss attributable to Sabre Corporation ( 123,931 ) ( 187,387 ) ( 222,865 ) ( 139,981 )

Preferred stock dividends 5,347 5,347 10,693 10,693

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

Net loss attributable to common stockholders $ ( 129,278 ) $ ( 192,734 ) $ ( 233,558 ) $ ( 150,674 )

Basic net loss per share attributable to common stockholders:

Loss from continuing operations $ ( 0.39 ) $ ( 0.59 ) $ ( 0.71 ) $ ( 0.46 )

Net loss per common share $ ( 0.39 ) $ ( 0.59 ) $ ( 0.71 ) $ ( 0.46 )

Diluted net loss per share attributable to common stockholders:

Loss from continuing operations $ ( 0.39 ) $ ( 0.59 ) $ ( 0.71 ) $ ( 0.46 )

Net loss per common share $ ( 0.39 ) $ ( 0.59 ) $ ( 0.71 ) $ ( 0.46 )

Weighted-average common shares outstanding:

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SABRE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

Three Months Ended March 31,

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

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

2023 2022 2023 2022

Net loss $ ( 123,997 ) $ ( 186,502 ) $ ( 223,766 ) $ ( 138,824 )

Other comprehensive income, net of tax:

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

( 470 ) 2,210 1,151 3,993

Net change in retirement-related benefit plans, net of tax ( 828 ) 1,852 435 4,948

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

Unrealized gains (losses), net of taxes of $ — , $ — , $ — , $ —

1,181 ( 18 ) 885 ( 18 )

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

( 1,427 ) 244 ( 2,416 ) 244

Net change in derivatives, net of tax ( 246 ) 226 ( 1,531 ) 226

1 unchanged sentence

Other comprehensive income 1,172 1,878 2,423 4,342

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

Comprehensive loss ( 122,825 ) ( 184,624 ) ( 221,343 ) ( 134,482 )

Comprehensive loss (income) attributable to noncontrolling interests 66 ( 885 ) 901 ( 1,157 )

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

Comprehensive loss attributable to Sabre Corporation $ ( 122,759 ) $ ( 185,509 ) $ ( 220,442 ) $ ( 135,639 )

See Notes to Consolidated Financial Statements.

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(In thousands)

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Current assets

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Stockholders’ deficit

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

Preferred stock, $ 0.01 par value, 225,000 authorized, 3,290 issued and outstanding as of June 30, 2023 and December 31, 2022;

aggregate liquidation value of $ 329,000 as of June 30, 2023 and December 31, 2022

Common Stock:

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1,000,000 authorized shares;

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

358,563 and 353,436 shares issued, 332,297 and 328,542 shares outstanding at June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 3,224,318 3,198,580

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

Treasury Stock, at cost, 26,267 and 24,895 shares at June 30, 2023 and December 31, 2022, respectively

( 519,765 ) ( 514,215 )

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(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating Activities

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

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

Net loss $ ( 223,766 ) $ ( 138,824 )

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

Depreciation and amortization 77,207 99,334

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

Stock-based compensation expense 25,743 53,732

Deferred income taxes ( 18,734 ) ( 8,600 )

Amortization of upfront incentive consideration 18,010 23,785

Provision for expected credit losses 8,937 1,997

(Gain) loss on extinguishment of debt ( 12,543 ) 3,533

Amortization of debt discount and issuance costs 11,464 7,003

Loss on investment fair value adjustment 960 —

Provision for expected credit losses 8,292 263

(Gain) loss on investment fair value adjustment ( 3,840 ) 29,520

Other ( 3,576 ) 3,363

Income from discontinued operations 403 ( 134 )

Dividends received from equity method investments 1,514 488

Loss from discontinued operations 401 150

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

Loss on extinguishment of debt — 3,533

Changes in operating assets and liabilities:

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Additions to property and equipment ( 48,190 ) ( 33,384 )

Acquisitions, net of cash acquired ( 13,355 ) ( 6,986 )

Net proceeds from dispositions — 392,268

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

Cash (used in) provided by investing activities ( 61,545 ) 271,898

Financing Activities

Payments on borrowings from lenders ( 718,722 ) ( 629,479 )

Proceeds on borrowings from lenders 677,486 625,000

Proceeds from borrowings under AR Facility 178,600 —

Payments on borrowings under AR Facility ( 48,600 ) —

Debt prepayment fees and issuance costs ( 23,007 ) ( 9,747 )

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

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

Dividends paid on preferred stock ( 10,693 ) ( 10,693 )

Net payment on the settlement of equity-based awards ( 5,555 ) ( 15,330 )

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

Other financing activities 4,851 ( 159 )

Proceeds of borrowings from lenders — 625,000

Cash provided by (used in) financing activities 70,360 ( 40,408 )

3 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,554 ( 2,652 )

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

(Decrease) increase in cash, cash equivalents and restricted cash ( 88,739 ) 13,828

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

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SABRE CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(In thousands, except share data)

14 unchanged sentences

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 )

Comprehensive loss ( 123,931 ) 1,172 516 ( 122,243 )

Preferred stock dividends (1)

— — — — — — — ( 5,347 ) — — ( 5,347 )

Settlement of stock-based awards — — 455,208 5 — 67,470 ( 261 ) — — — ( 256 )

Stock-based compensation expense — — — — 8,738 — — — — — 8,738

Other — — — — — — — — — — —

Balance at June 30, 2023 3,290,000 $ 33 358,563,492 $ 3,586 $ 3,224,318 26,266,613 $ ( 519,765 ) $ ( 3,740,086 ) $ ( 63,307 ) $ 11,565 $ ( 1,083,656 )

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

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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 — — — — — — — ( 187,387 ) 1,878 885 ( 184,624 )

Preferred stock dividends (1)

— — — — — — — ( 5,347 ) ( 5,347 )

Settlement of stock-based awards — — 2,629,221 26 ( 1 ) 777,678 ( 5,021 ) — — ( 4,996 )

Stock-based compensation expense — — — — 26,127 — — — — — 26,127

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 )

(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").

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.

Recent Events— 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.

These effects have resulted in continued material headwinds for our consolidated financial results in 2022 and through the second quarter of 2023.

Despite continued impacts 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 second 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.

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.

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

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

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

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

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

Operating results for the three 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.

Operating results for the three and six months ended June 30, 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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Adoption of New Accounting Standards

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

In March 2020, the Financial Accounting Standards Board ("FASB") issued updated guidance which provides optional expedients and exceptions for applying U.S.

GAAP to existing contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued, if certain criteria are met.

This standard is effective for all entities upon issuance and is optional through December 31, 2024.

We elected the optional expedient in the second quarter of 2023 in connection with the SOFR Amendment (defined in Note 8.

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

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

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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 March 31, 2023 and December 31, 2022 (in thousands).

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

The following table presents our assets and liabilities with customers as of June 30, 2023 and December 31, 2022 (in thousands).

Account Consolidated Balance Sheet Location June 30, 2023 December 31, 2022

Contract assets and customer advances and discounts (1)

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______________________

(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.

(1) Includes contract assets of $ 12 million for June 30, 2023 and December 31, 2022.

During the six months ended June 30, 2023, we recognized revenue of approximately $ 21 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.

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

Three Months Ended March 31,

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

2023 2022 2023 2022

Distribution $ 530,405 $ 431,538 $ 1,056,291 $ 774,426

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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 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.

For the six months ended June 30, 2023, there was no impact on revenue recognized in the current period from performance obligations partially or fully satisfied in the previous period.

Our air booking cancellation reserve totaled $ 12 million and $ 11 million as of June 30, 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

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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.

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 was recorded to Other, net within our results of operations.

Conferma is part of our Travel Solutions segment.

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

The accounting related to tax liabilities was finalized as of June 30, 2023 and did not result in any additional adjustments.

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.

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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 $ 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.

We recorded a pre-tax gain on sale of approximately $ 180 million (after-tax $ 112 million) in Other, net in our consolidated statements of operations for the six months ended June 30, 2022, which includes a decrease recorded in the second quarter of 2022 of $ 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.

On February 1, 2023, Sabre sold common shares, representing a 19 % interest in Conferma’s direct parent, 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, 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.

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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

As of June 30, 2023, the redeemable noncontrolling interest is $ 15 million.

The following table presents the changes in redeemable noncontrolling interest of a consolidated subsidiary in temporary equity during the period ended June 30, 2023 (in thousands):

Six Months Ended

June 30, 2023

Proceeds from sale of redeemable noncontrolling interest $ 16,000

1 unchanged sentence

Redeemable noncontrolling interest, end of period $ 15,014

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.

Restructuring Activities

During the second quarter of 2023, we announced and began to implement a cost reduction plan designed to reposition our business and to structurally reduce our cost base.

As a result of this cost reduction plan, we incurred restructuring costs beginning in the second quarter of 2023 associated with our workforce.

This cost reduction plan will continue to be implemented over the remainder of 2023 and may result in additional restructuring charges as we continue to evaluate third-party costs including our geographic and real estate footprints.

During the three and six months ended June 30, 2023, we incurred $ 56 million in connection with this business plan, of which $ 12 million is recorded within cost of revenue, excluding technology costs, $ 21 million is recorded within technology costs and $ 23 million is recorded within selling, general and administrative costs within our consolidated statement of operations .

A substantial portion of these costs represent future cash expenditures for the payment of severance and related benefits costs.

Costs associated with our cost reduction plan are expected to be approximately $ 70 million for the year, with the majority of disbursements occurring in 2023.

The following table summarizes the accrued liability related to severance and related benefits costs as recorded within accrued compensation and related benefits within our consolidated balance sheets, related to this cost reduction plan (in thousands):

Six Months Ended

June 30, 2023

Balance as of January 1, 2023 $ —

Charges 55,648

Cash Payments ( 21,691 )

Balance as of June 30, 2023 $ 33,957

For the six months ended June 30, 2023, we recognized an $ 8 million income tax expense, representing an effective tax rate of less than 1 %, compared to an income tax expense of $ 5 million, representing an effective tax rate of less than 1 % for the six months ended June 30, 2022.

The effective tax rate remained relatively flat for the six months ended June 30, 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 six 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 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.

On the basis of this evaluation, as of June 30, 2023, a cumulative valuation allowance of $ 515 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 $ 70 million and $ 76 million as of March 31, 2023 and December 31, 2022, respectively.

Our net unrecognized tax benefits, excluding interest and penalties, included in our consolidated balance sheets, were $ 69 million and $ 76 million as of June 30, 2023 and December 31, 2022, respectively.

Credit Losses

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

The estimate of credit losses is developed by analyzing historical twelve-month collection rates and adjusting for current customer-specific factors indicating financial instability and other macroeconomic factors that correlate with the expected collectability of our receivables.

The estimate of credit

losses is developed by analyzing historical twelve-month collection rates and adjusting for current customer-specific factors indicating financial instability and other macroeconomic factors that correlate with the expected collectability of our receivables.

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

Three Months Ended

March 31, 2023

Our allowance for credit losses for the six months ended June 30, 2023 for our portfolio segment is summarized as follows (in thousands):

Six Months Ended

June 30, 2023

Balance at December 31, 2022 $ 38,815

1 unchanged sentence

Write-offs ( 4,808 )

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 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

Balance at June 30, 2023 $ 42,458

Our provision for expected credit losses for the six months ended June 30, 2023 increased $ 8 million from an immaterial provision in the same period in the prior year.

Given the uncertainties surrounding the travel industry and the global economic recovery, we cannot provide assurance that the assumptions used in our estimates will be accurate and actual write-offs may vary from our estimates.

As of June 30, 2023 and December 31, 2022, our outstanding debt included in our consolidated balance sheets totaled $ 4,802 million and $ 4,741 million, respectively, which are net of debt issuance costs of $ 57 million and $ 44 million, respectively, and unamortized discounts of $ 71 million and $ 54 million, respectively.

The following table sets forth the face values of our outstanding debt as of June 30, 2023 and December 31, 2022 (in thousands):

Rate Maturity June 30, 2023 December 31, 2022

Senior secured credit facilities:

2021 Term Loan B-1 L + 3.50 %

2021 Term Loan B-1 S (1) + 3.50 %

December 2027 $ 394,035 $ 397,940

2021 Term Loan B-2 L + 3.50 %

2021 Term Loan B-2 S (1) + 3.50 %

December 2027 614,151 634,340

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June 2028 645,310 673,313

Senior Secured Term Loan Due 2028

RR (3) + 1.75 % (4)

December 2028 700,000 —

AR Facility (2)

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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.

(3) Represents the Reference Rate as defined below.

(4) At our election, if interest is paid in cash the spread is 0.25 % per annum, and in the case of interest paid in kind the spread is 1.75 %.

We had outstanding letters of credit totaling $ 13 million and $ 12 million as of June 30, 2023 and December 31, 2022, respectively, which were secured by a $ 21 million cash collateral deposit account.

Senior Secured Credit Facilities

On May 16, 2023, Sabre GLBL entered into Amendment No.

5 to the Credit Agreement (the “SOFR Amendment”).

The SOFR Amendment was entered into pursuant to the Amended and Restated Credit Agreement, dated as of February 19, 2013.

The SOFR Amendment provides for the replacement of LIBOR-based rates with a SOFR-based rate for the 2021 Term Loan B-1 and 2021 Term Loan B-2 and amends certain provisions of the Credit Agreement.

The change from LIBOR to SOFR is due to the reference rate reform and the phasing out of LIBOR as a loan benchmark.

The SOFR Amendment did not have a material impact on our financial position or results of operations.

Refinancing Transactions

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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 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.

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

The 2022 Term Loan B-1 Facility matures on June 30, 2028 and offers us the ability to prepay or repay

the 2022 Term Loan B-1 Facility after 12 months or to prepay or repay at a 101 premium before that date.

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

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

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

As of June 30, 2023, we are in compliance with all covenants under the terms of the Amended and Restated Credit Agreement.

Senior Secured Term Loan Due 2028

On June 13, 2023, Sabre Financial Borrower, LLC (“Sabre FB”), our indirect, consolidated subsidiary entered into a series of transactions including a new term loan credit agreement with certain lenders (the "2023 Term Loan Agreement") and an intercompany secured term loan agreement (the "Pari Passu Loan Agreement").

The 2023 Term Loan Agreement provides for a senior secured term loan (the “Senior Secured Term Loan Due 2028”) of up to $ 700 million in aggregate principal amount, subject to Sabre FB using the proceeds from the Senior Secured Term Loan Due 2028 for an intercompany loan to Sabre GLBL.

On June 13, 2023, Sabre FB borrowed the full $ 700 million amount under the 2023 Term Loan Agreement and lent the funds to Sabre GLBL under the Pari Passu Loan Agreement.

Borrowings under 2023 Term Loan Agreement are secured by the assets of Sabre FB, including Sabre FB's claims under the Pari Passu Loan Agreement, and assets of certain of our foreign subsidiaries.

Borrowings under the Pari Passu Loan Agreement are secured by first-priority liens on the same collateral securing the indebtedness owing under the Senior Secured Credit Facilities and Sabre GLBL's outstanding Senior Secured Notes.

Sabre GLBL used the proceeds borrowed under the Pari Passu Loan Agreement to repurchase $ 650 million of its outstanding 9.25 % Senior Secured Notes due 2025 (the “June 2023 Refinancing”) and $ 15 million of its outstanding 2021 Term Loan B-1, 2021 Term Loan B-2 and 2022 Term Loan B-2.

The remaining proceeds, net of a discount of $ 23 million, were used to pay $ 13 million in other fees and expenses.

We incurred additional fees of $ 13 million, plus $ 10 million of accrued and unpaid interest on the 9.25 % Senior Secured Notes, which were funded with cash on hand.

We recognized a net gain on extinguishment of debt in connection with the June 2023 Refinancing during the six months ended June 30, 2023 of $ 14 million.

As of June 30, 2023, we are in compliance with the covenants under the 2023 Term Loan Agreement and the Pari Passu Loan Agreement.

The Senior Secured Term Loan Due 2028 matures on December 15, 2028 and offers us the ability to prepay subject to prepayment premiums as follows (i) with respect to any prepayment occurring on or prior to the second anniversary of the 2023 Term Loan Agreement, a customary make-whole amount, and (ii) with respect to any prepayment occurring after the second anniversary of the 2023 Term Loan Agreement and on or prior the third anniversary of the 2023 Term Loan Agreement, 25 % of the applicable interest margin assuming all interest is payable in kind.

After the third anniversary of the 2023 Term Loan Agreement, all prepayments can be made at par plus accrued interest.

The interest on the Senior Secured Term Loan Due 2028 is payable in cash;

provided that, at our election, from the date of the agreement, until the last interest payment date occurring on or prior to December 31, 2025, the interest may be payable in kind.

The Senior Secured Term Loan Due 2028 bears interest at a floating rate, with interest periods ending on each successive three month anniversary of the closing date and set in arrears based on the average of the highest yield to maturity of any tranche of Sabre GLBL’s or any of its affiliates’ outstanding secured indebtedness (as defined within the 2023 Term Loan Agreement) on each of the 20 prior trading days (the “Reference Rate”), plus (i) 25 basis points for cash interest or (ii) 175 basis points for payable-in-kind interest, with the Reference Rate for the first interest period deemed to be 13.00 % per annum.

The all-in interest rate floor is 11.50 % for cash interest and 13.00 % for payable-in-kind interest and the all-in interest rate ceiling is 17.50 % for cash interest and 19.00 % for payable-in-kind interest.

We have currently elected interest to be payable in kind.

Sabre FB’s obligations under the Senior Secured Term Loan Due 2028 are required to be guaranteed by certain of our existing and future foreign subsidiaries (the "Foreign Guarantors”).

The 2023 Term Loan Agreement requires that we maintain

cash balances of at least $ 100 million in certain foreign subsidiaries and other covenants to ensure collateral of the applicable Foreign Guarantors meet certain minimum levels.

The 2023 Term Loan Agreement also includes various non-financial covenants, including restrictions on making certain investments, disposition activities and affiliate transactions.

In addition, the 2023 Term Loan Agreement contains customary prepayment events and financial and negative covenants and other representations, covenants and events of default based on, but in certain instances more restrictive than, the Amended and Restated Credit Agreement.

As of June 30, 2023, we were in compliance with all covenants under the terms of the 2023 Term Loan Agreement.

Senior Secured Notes

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

As of June 30, 2023, we had $ 130 million outstanding under the AR Facility.

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

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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.

The AR Facility is subject to a springing maturity date of January 2025 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.

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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.

As of June 30, 2023 , $ 471 million of Receivables are held as assets by Sabre Securitization, consisting of $ 456 million of accounts receivable and $ 15 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;

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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.

As of June 30, 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.

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.

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

During the year ended December 31, 2021, a certain holder elected to exchange $ 10 million of the Exchangeable Notes

for 1,269,497 shares of common stock, which we elected to settle in shares of our common stock.

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

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

As of June 30, 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:

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

As of June 30, 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.

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

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

March 31, 2023 December 31, 2022

The following table sets forth the carrying value of the Exchangeable Notes as of June 30, 2023 and December 31, 2022, (in thousands):

June 30, 2023 December 31, 2022

Principal $ 333,220 $ 333,220

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Net carrying value $ 328,757 $ 327,578

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,

The following table sets forth interest expense recognized related to the Exchangeable Notes for the three and six months ended June 30, 2023 and 2022 (in thousands):

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

2023 2022 2023 2022

Contractual interest expense $ 3,332 $ 3,332 $ 6,664 $ 6,664

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

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

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

denominated in foreign currencies.

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

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Due to the uncertainty driven by the COVID-19 pandemic on our foreign currency exposures, we have paused entering into new cash flow hedges of forecasted foreign currency cash flows until we have more clarity regarding the recovery trajectory and its impacts on net exposures.

As of June 30, 2023 and December 31, 2022, we had no unsettled forward contracts.

We enter into interest rate swap agreements to manage interest rate risk exposure.

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

Forward Contracts —In order to hedge our operational expenditures' exposure to foreign currency movements, we were a party to certain foreign currency forward contracts that extended until December 31, 2020.

We designated these instruments as cash flow hedges.

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:

Interest Rate Swap Contracts — Interest rate swaps outstanding during the six months ended June 30, 2023 and 2022, are as follows:

Notional Amount Interest Rate

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June 30, 2022 December 31, 2023

$ 250 million 1 month SOFR (1)

June 30, 2023 June 30, 2026

$ 250 million 1 month SOFR (1)

December 31, 2023 December 31, 2024

______________________

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

In February 2023, we entered into a forward-starting interest rate swap to hedge the interest payments associated with $ 250 million of the floating-rate 2022 Term Loan B-1 for the year ended 2024.

In June 2023, we entered into an interest rate swap to hedge the interest payments associated with $ 250 million of the floating-rate 2022 Term Loan B-2 for the years 2023 through 2026.

We designated these swaps as cash flow hedges.

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):

The estimated fair values of our derivatives designated as hedging instruments as of June 30, 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 March 31, 2023 December 31, 2022

Derivatives Designated as Hedging Instruments Consolidated Balance Sheet Location June 30, 2023 December 31, 2022

Interest rate swaps Prepaid expenses and other current assets

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Total $ 3,247 $ 4,737

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,

The effects of derivative instruments, net of taxes, on OCI for the three and six months ended June 30, 2023 and 2022 are as follows (in thousands):

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

Effective Portion

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

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

2023 2022 2023 2022

Interest rate swaps $ 1,181 $ ( 18 ) $ 885 $ ( 18 )

Total $ 1,181 $ ( 18 ) $ 885 $ ( 18 )

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

Three Months Ended March 31, 2023

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

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

2023 2022 2023 2022

Interest rate swaps Interest expense, net $ ( 1,427 ) $ 244 $ ( 2,416 ) $ 244

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("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.

As of June 30, 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 March 31, 2023 and December 31, 2022 (in thousands):

The following tables present our assets that are required to be measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 (in thousands):

Fair Value at Reporting Date Using

March 31, 2023 Level 1 Level 2 Level 3

June 30, 2023 Level 1 Level 2 Level 3

Derivatives (1)

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Derivatives for further detail.

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.

There were no transfers between Levels 1 and 2 within the fair value hierarchy for the three and six months ended June 30, 2023.

Unrealized gains recognized during the three and six months ended June 30, 2023 from our investments in securities totaled $ 5 million and $ 4 million, respectively, which is recorded to Other, net within our results of operations.

Other Financial Instruments

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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 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):

The outstanding principal balances of our AR Facility, and our Senior Secured Term Loan Due 2028, approximated their fair values as of June 30, 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 June 30, 2023 and December 31, 2022 (in thousands):

Fair Value at Carrying Value at (1)

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

Financial Instrument June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022

2021 Term Loan B-1 $ 311,288 $ 362,872 $ 393,318 $ 397,147

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

We have not identified any triggering events or changes in circumstances since the performance of our annual goodwill impairment test that would require us to perform another goodwill impairment test and we did no t record any goodwill impairment charges for the three months ended March 31, 2023.

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 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

As of June 30, 2023 and December 31, 2022, the components of accumulated other comprehensive loss, net of related deferred income taxes, are as follows (in thousands):

June 30, 2023 December 31, 2022

Defined benefit pension and other postretirement benefit plans $ ( 73,311 ) $ ( 73,746 )

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

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

As of June 30, 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 $ 13 million in 2023 to our defined benefit pension plan.

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provided, however, that any undeclared and unpaid dividends will continue to accumulate.

Dividends are payable when, as and if declared by our Board of Directors, out of funds legally available for their payment to the extent paid in cash, quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, beginning on December 1, 2020 and ending on, and including, September 1, 2023.

Dividends are payable when, as and if declared by our Board of Directors, out of funds legally available for their payment to the extent paid in cash, quarterly in arrears on March 1, June 1,

September 1 and December 1 of each year, beginning on December 1, 2020 and ending on, and including, September 1, 2023.

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

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

We recorded $ 5 million 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.

We recorded $ 5 million and $ 11 million of accrued preferred stock dividends in our consolidated results of operations for the three and six months ended June 30, 2023 and 2022, respectively.

During the three and six months ended June 30, 2023 and 2022, we paid cash dividends on our preferred stock of $ 5 million and $ 11 million, respectively.

On July 26, 2023, the Board of Directors declared a dividend of $ 1.625 per share on Preferred Stock payable on September 1, 2023 to holders of record of the Preferred Stock on August 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 befo re 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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Repurchases under the Share Repurchase Program may take place in the open market or privately negotiated transactions.

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

During the six months ended June 30, 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 March 31, 2023.

Approximately $ 287 million remains authorized for repurchases under the Share Repurchase Program as of June 30, 2023.

Exchangeable Notes

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

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

As of June 30, 2023, we have $ 333 million aggregate principal amount of Exchangeable Notes outstanding.

Debt for further details.

2 unchanged sentences

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

Three Months Ended 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) income from continuing operations available to common stockholders, basic ( 103,877 ) 41,926

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

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

2023 2022 2023 2022

Loss from continuing operations $ ( 123,999 ) $ ( 186,218 ) $ ( 223,365 ) $ ( 138,674 )

Net (loss) income attributable to noncontrolling interests ( 66 ) 885 ( 901 ) 1,157

Preferred stock dividends 5,347 5,347 10,693 10,693

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

Net loss from continuing operations available to common stockholders, diluted $ ( 129,280 ) $ ( 192,450 ) $ ( 233,157 ) $ ( 150,524 )

Basic weighted-average common shares outstanding 332,147 326,573 330,547 325,124

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 332,147 326,573 330,547 325,124

Earnings per share from continuing operations:

Loss per share from continuing operations:

Basic $ ( 0.39 ) $ ( 0.59 ) $ ( 0.71 ) $ ( 0.46 )

Diluted $ ( 0.39 ) $ ( 0.59 ) $ ( 0.71 ) $ ( 0.46 )

Basic 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 during each period.

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 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.

Basic earnings per share is computed by dividing net loss from continuing operations available to common stockholders by the weighted-average number of common shares outstanding during each period.

Diluted earnings per share is computed by dividing net loss 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 six months ended June 30, 2023, respectively, and 3 million of dilutive stock options and restricted stock awards for the three and six months ended June 30, 2022 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 9 million and 6 million of anti-dilutive common stock equivalents for the three and six months ended June 30, 2023, respectively, and 4 million and 2 million of anti-dilutive common stock equivalents for the three and six months ended June 30, 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 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.

The approximate ly 42 million re sulting common shares related to the Exchangeable Notes for the three and six months ended June 30, 2023 and 2022 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 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.

The approximatel y 47 million and 39 million re sulting common shares related to the Preferred Stock for the three and six months ended June 30, 2023 and 2022, 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 the period.

Contingencies

Legal Proceedings

While certain legal proceedings and related indemnification obligations to which we are a party specify the amounts claimed, these claims may not represent reasonably possible losses.

While certain legal proceedings and related indemnification obligations to which we are a party specify the amounts claimed, these amounts may not represent reasonably possible losses.

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.

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.

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

The amount of the 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.

Antitrust Litigation and Investigations

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

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.

The surviving claims included claims brought under Section 1 of the Sherman Act, relating to our contracts with US Airways, that 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.

Sabre filed summary judgment motions in April 2014.

In January 2015, the court issued an order granting Sabre's summary judgment motions in part, eliminating a majority of US Airways' alleged damages and rejecting its request for injunctive relief by which US Airways sought to bar Sabre from enforcing certain provisions in our contracts.

In January 2015, the court issued an order granting Sabre's summary judgment motions in part, eliminating a majority of US Airways' alleged damages and rejecting its request for injunctive relief to bar Sabre from enforcing certain provisions in our contracts.

In September 2015, the court also dismissed US Airways' claim for declaratory relief.

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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 disputed.

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

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

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In April 2017, we filed an appeal with the United States Court of Appeals for the Second Circuit seeking a reversal of the judgment.

US Airways also filed a counter-appeal challenging earlier court orders, including the above-referenced orders dismissing and/or issuing summary judgment as to portions of its claims and damages.

US Airways also filed a counter-appeal challenging earlier court orders, including the above-referenced dismissal and/or summary judgment orders as to portions of its claims and damages.

In connection with this appeal, we posted an appellate bond equal to the aggregate amount of the $ 15 million judgment entered plus interest, which stayed the judgment pending the appeal.

The Second Circuit heard oral arguments on this matter in December 2018.

In September 2019, the Second Circuit issued its Order and Opinion.

The Second Circuit vacated the judgment with respect to US Airways’ claim under Section 1, reversed the trial court’s dismissal of US Airways’ claims relating to Section 2, and remanded the case to district court for a new trial.

In September 2019, the Second Circuit issued its Order and Opinion in which it vacated the judgment with respect to US Airways’ claim under Section 1, reversed the trial court’s dismissal of US Airways’ claims relating to Section 2, and remanded the case to district court for a new trial.

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 remained intact.

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

The lawsuit was remanded to federal court in the Southern District of New York for further proceedings consistent with the Second Circuit's Order and Opinion.

The retrial began in April 2022.

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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.

The magistrate issued a recommendation, which the court has adopted in full, 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.

In June 2023, US Airways filed a motion seeking approximately $ 139 million in attorneys' fees and costs, an amount that we strongly dispute.

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

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

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

Indian Income Tax Litigation

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.

The DIT has continued to issue further tax assessments on a similar basis for subsequent years;

however, the tax assessments for assessment years ending March 2007 and later are no longer material.

The DIT later issued further tax assessments for assessment years ending March 2000 through March 2006.

The DIT has continued to issue tax assessments on a similar basis for subsequent years;

however, the tax assessments for assessment years ending March 2007 and later are not material.

We appealed the tax assessments for assessment years ending March 1998 through March 2006 and the Indian Commissioner of Income Tax Appeals returned a mixed verdict.

We filed further appeals with the Income Tax Appellate Tribunal (“ITAT”).

The ITAT ruled in our favor on June 19, 2009 and July 10, 2009, stating that no income would be chargeable to tax for assessment years ending March 1998 and March 1999, and from March 2000 through March 2006.

On June 19, 2009 and July 10, 2009, the ITAT ruled in our favor, stating that no income would be chargeable to tax for assessment years ending March 1998 and March 1999, and from March 2000 through March 2006.

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 which upheld the Delhi High Court ruling on April 19, 2023.

The DIT 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 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.

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 $ 21 million as of June 30, 2023.

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

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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 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.

Nevertheless, we may incur expenses in future periods related to such matters, including litigation costs and possible pre-payment of a portion of any assessed tax amount to defend our position, and if our positions are ultimately rejected, it could have a material impact to our results of operations.

During the three and six months ended June 30, 2023 we accrued $ 9 million associated with these other tax matters in selling, general and administrative expense.

We will continue to monitor and update this estimate as additional information becomes available.

We may incur expenses in future periods related to such matters, including litigation costs and possible pre-payment of a portion of any assessed tax amount to defend our position, and if our positions are ultimately rejected, it could have a material impact to our results of operations.

Segment Information

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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.

We define Adjusted Operating Income (Loss) as operating loss adjusted for equity method income, 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 months ended March 31, 2023 and 2022 is as follows (in thousands):

Three Months Ended March 31,

Segment information for the three and six months ended June 30, 2023 and 2022 is as follows (in thousands):

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

2023 2022 2023 2022

Travel Solutions $ 670,761 $ 599,149 $ 1,348,202 $ 1,133,147

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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 March 31,

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

2023 2022 2023 2022

Operating loss $ ( 42,183 ) $ ( 70,193 ) $ ( 42,396 ) $ ( 149,725 )

Equity method income (loss) 423 ( 170 )

Equity method income 459 186 882 16

Acquisition-related amortization (1)

9,934 15,448 19,867 31,251

Restructuring and other costs (2)

59,372 4,336 59,053 4,336

Acquisition-related costs (3)

541 2,245 1,388 5,909

Litigation costs, net (4)

9,234 12,539 9,234 16,014

Stock-based compensation 8,738 26,127 25,743 53,732

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

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

(2) Restructuring and other costs in the current year primarily represents charges associated with our cost reduction plan implemented in the second quarter of 2023.

Restructuring Activities to our consolidated financial statements.

During 2022, charges, and adjustments to those charges, were recorded associated with planning and implementing business restructuring activities, including costs associated with third party consultants advising on our business structure and strategy.

(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