What changed in this filing

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Item 1A. Risk Factors

2023-08-03 compared with 2023-05-04 · 78 added, 103 removed, 469 unchanged (28% of the section changed)

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Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, results of operations and stock price.

Risks Related to the Effects of the COVID-19 Pandemic

The COVID-19 pandemic has had and is expected to continue to have a significant adverse impact on our business, including our financial results and prospects, and the travel suppliers on whom our business relies.

The spread of COVID-19 and the developments surrounding the global pandemic have had and are continuing to have significantly negative impacts on all aspects of our business.

In response to the pandemic, many governments around the world implemented a variety of measures to reduce the spread of COVID-19, including travel restrictions and bans, instructions to residents to practice social distancing, quarantine advisories, shelter-in-place orders and required closures of non-essential businesses.

These government mandates have had a significant negative impact on the travel industry and many of the travel suppliers on whom our business relies, including airlines and hotels, and forced many of them, including airlines, to pursue cost reduction measures and seek financing, including government financing and support, in order to reduce financial distress and continue operating, and to curtail drastically their service offerings.

The pandemic has resulted and may continue to result in the restructuring or bankruptcy of certain of those travel suppliers and the renegotiation of the terms of our agreements with them.

The pandemic and these measures have significantly adversely affected, and may further affect, consumer sentiment and discretionary spending patterns, economies and financial markets, and our workforce, operations and customers.

See “—Our Travel Solutions and Hospitality Solutions businesses depend on maintaining and renewing contracts with their customers and other counterparties.”

The COVID-19 pandemic and the resulting economic conditions and government orders have resulted in a material decrease in consumer spending and an unprecedented decline in transaction volumes in the global travel industry.

Risks Related to Our Business and Industry

The ongoing recovery from the effects of the COVID-19 outbreak on our business and the impact on our results of operations is highly uncertain.

The spread of COVID-19 and the developments surrounding the global pandemic significantly and negatively impacted all aspects of our business.

The COVID-19 pandemic and the resulting economic conditions and government orders resulted in a material decrease in consumer spending and an unprecedented decline in transaction volumes in the global travel industry, and the extent to which these transaction volumes will recover cannot be predicted with certainty.

Our financial results and prospects are largely dependent on these transaction volumes.

Although it is impossible to accurately predict the ultimate impact of these developments on our business, our financial results for the years ended December 31, 2020, 2021 and 2022 and for the first three months of 2023 (excluding the positive impacts from disposition activity) have been significantly and negatively impacted, with a material decline in total revenues, net income, cash flow from operations and Adjusted EBITDA as compared to 2019.

Although it is impossible to accurately predict the ultimate impact of these developments on our business, our financial results for the years ended December 31, 2020, 2021 and 2022 and for the first six months of 2023 (excluding the positive impacts from disposition activity) have been significantly and negatively impacted, with a material decline in total revenues, net income, cash flow from operations and Adjusted EBITDA as compared to 2019.

This negative impact could continue for an unpredictable period.

Due to the uncertain and evolving nature of current conditions around the world, we expect the effects of the outbreak to continue to have a significant adverse impact on our business, financial condition and operating results.

The COVID-19 pandemic may result in potential impairments of goodwill, long-term investments and long-lived assets;

increasing provisions for bad debt including risks associated with travel agencies ability to repay us for incentive fees associated with bookings that have now cancelled;

and increases in cash outlays to refund travel service providers for cancelled bookings.

We did not record any material impairments in 2022 or in the first three months of 2023 as a result of the COVID-19 pandemic;

however, future changes in our expected cash flows or other factors as a result of the COVID-19 pandemic may cause our goodwill or other assets to be impaired, resulting in a non-cash charge.

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

Throughout 2021, and to a lesser extent in 2022, we experienced the reversal of certain provisions for bad debt recorded during 2020, as the travel industry began to recover and payment experience began to improve.

Any material increase in our provisions for bad debt and any material impact of payment experience would have a corresponding effect on our results of operations, liquidity and related cash flows.

The ongoing effects of the COVID-19 outbreak on our business and the impact on our results of operations is highly uncertain.

The extent of the effects of the COVID-19 outbreak on our business, results of operations, cash flows and growth prospects is highly uncertain and will ultimately depend on future developments.

These include, but are not limited to, the global pandemic's impact on the travel industry and consumer spending more broadly;

actions taken by national, state and local governments to contain the disease or treat its impact, including travel restrictions and bans;

the effect of the changes in hiring levels and remote working arrangements that we have implemented on our operations, as well as our ability to maintain our financial reporting processes and related controls;

the impact on the financial condition on our partners, and any potential restructurings or bankruptcies of our partners;

the impact on our contracts with our partners, including force majeure provisions and requests to renegotiate the terms of existing agreements prior to their expiration, including providing temporary concessions regarding contractual minimums;

our ability to withstand increased cyberattacks;

Our business is dependent on the ability and willingness of consumers to travel, particularly by air.

While we have experienced a gradual recovery in our primary metrics over the past few years, we cannot predict the long-term effects of the pandemic on our business or the travel industry as a whole.

If the travel industry is fundamentally changed by the COVID-19 outbreak in ways that are detrimental to our operating model, our business may continue to be adversely affected even as the broader global economy or the travel industry recovers.

The extent of the recovery from the effects of the COVID-19 outbreak on our business, results of operations, cash flows and growth prospects is highly uncertain and will ultimately depend on future developments.

These include, but are not limited to, the effect of changes in hiring levels and remote working arrangements;

the speed and extent of the recovery across the broader travel ecosystem;

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and the duration, timing and severity of the impact on customer spending including from recessions or inflationary pressures, resulting from or following the pandemic.

Governmental restrictions and societal norms with respect to travel may change permanently in ways that cannot be predicted and that can change the travel industry in a manner adverse to our business.

Additionally, the potential failure of travel

service providers and travel agencies (or acquisition of troubled travel service providers or travel agencies) may result in further consolidation of the industry, potentially affecting market dynamics for our services.

Our business is dependent on the ability and willingness of consumers to travel, particularly by air.

While we have experienced a gradual recovery in our primary metrics over the past few years, we do not expect economic and operating conditions for our business to fully recover until consumers, including business travelers, are once again willing and able to travel, and our travel suppliers are once again able to fully serve those consumers, the timing of which is uncertain.

Additionally, our business is also dependent on consumer sentiment and discretionary spending patterns.

Even when economic and operating conditions for our business improve, we cannot predict the long-term effects of the pandemic on our business or the travel industry as a whole.

To the extent that the ongoing effects of the COVID-19 outbreak continue to adversely affect our business and financial performance, it may also heighten many of the other risks identified in this “Risk Factors” section, such as those relating to our substantial amount of outstanding indebtedness and our need to generate sufficient cash flows to service our indebtedness.

Risks Related to Our Business and Industry

Societal norms with respect to travel may change permanently in ways that cannot be predicted and that can change the travel industry in a manner adverse to our business.

Additionally, the potential failure of travel service providers and travel agencies (or acquisition of troubled travel service providers or travel agencies) may result in further consolidation of the industry, potentially affecting market dynamics for our services.

The pandemic and related measures had a significant negative impact on the travel industry and many of the travel suppliers on whom our business relies, including airlines and hotels.

The pandemic has resulted and may continue to result in the restructuring or bankruptcy of certain of those travel suppliers and the renegotiation of the terms of our agreements with them.

See “—Our Travel Solutions and Hospitality Solutions businesses depend on maintaining and renewing contracts with their customers and other counterparties.”

To the extent that the ongoing effects related to the recovery from the COVID-19 outbreak continue to adversely affect our business and financial performance, it may also heighten many of the other risks identified in this “Risk Factors” section, such as those relating to our substantial amount of outstanding indebtedness and our need to generate sufficient cash flows to service our indebtedness.

Our ability to recruit, train and retain employees, including our key executive officers and technical employees, is critical to our results of operations and future growth .

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Similarly, uncertainty in the global political environment may adversely affect our ability to hire and retain key employees.

Furthermore, the ongoing effects of COVID-19 on our business have adversely affected and may continue to affect our ability to retain key employees and hire new employees.

See “—The COVID-19 pandemic has had and is expected to continue to have a significant adverse impact on our business, including our financial results and prospects, and the travel suppliers on whom our business relies.” Any of our employees may choose to terminate their employment with us at any time, and a lengthy period of time is required to hire and train replacement employees when such skilled individuals leave the company.

Furthermore, the ongoing effects from the recovery from COVID-19 on our business have adversely affected and may continue to affect our ability to retain key employees and hire new employees.

See “—The ongoing recovery from the effects of the COVID-19 outbreak on our business and the impact on our results of operations is highly uncertain.” Any of our employees may choose to terminate their employment with us at any time, and a lengthy period of time is required to hire and train replacement employees when such skilled individuals leave the company.

Furthermore, changes in our employee population, including our executive team, could impact our results of operations and growth.

For example, we have announced modifications to our business strategies and increased long-term investment in key areas, such as technology infrastructure, that may continue to have a negative impact in the short term due to expected increases in operating expenses and capital expenditures.

If we fail to attract well-qualified employees or to retain or motivate existing employees, our business could be materially hindered by, for example, a delay in our ability to deliver products and services under contract, bring new products and services to market or respond swiftly to customer demands or new offerings from competitors.

If we fail to

attract well-qualified employees or to retain or motivate existing employees, our business could be materially hindered by, for example, a delay in our ability to deliver products and services under contract, bring new products and services to market or respond swiftly to customer demands or new offerings from competitors .

In 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.

Our cost reduction plan may be disruptive to our operations and our workforce reductions could yield unanticipated consequences, such as attrition beyond planned workforce reductions, increased difficulties in our day-to-day operations and reduced employee morale.

If employees who were not affected by the reduction in force seek alternate employment, this could result in the need for contract support at unplanned additional expense or harm our productivity.

Our workforce reductions could also harm our ability to attract and retain qualified personnel.

In addition, we may not realize the anticipated benefits, savings and improvements from our cost reduction efforts due to unforeseen difficulties, delays or unexpected costs.

We operate in highly competitive, evolving markets, and if we do not continue to innovate and evolve, our business operations and competitiveness may be harmed.

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We depend upon the use of sophisticated information technology and systems.

Our competitiveness and future results depend on our ability to maintain and make timely and cost-effective enhancements, upgrades and additions to our products,

services, technologies and systems in response to new technological developments, industry standards and trends and customer requirements.

Our competitiveness and future results depend on our ability to maintain and make timely and cost-effective enhancements, upgrades and additions to our products, services, technologies and systems in response to new technological developments, industry standards and trends and customer requirements.

As another example, migration of our enterprise applications and platforms to other hosting environments has caused us and will continue to cause us to incur substantial costs, and has resulted in and could in the future result in instability and business interruptions, which could materially harm our business.

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This revenue is generally not contractually committed to recur annually under our agreements with our travel suppliers.

As a result, our revenue is highly dependent on the global travel industry, particularly air travel from which we derive a substantial amount of our revenue, and directly correlates with global travel, tourism and transportation transaction volumes.

As a result, our revenue is highly dependent on the global travel industry, particularly air travel from which we derive a substantial amount of our revenue, and directly correlates with global

travel, tourism and transportation transaction volumes.

Our revenue is therefore highly susceptible to declines in or disruptions to leisure and business travel that may be caused by factors entirely out of our control, and therefore may not recur if these declines or disruptions occur.

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and (6) factors that affect supply of travel, such as travel restrictions, regulatory actions, aircraft groundings, or changes to regulations governing airlines and the travel industry, like government sanctions that do or would prohibit doing business with certain state-owned travel suppliers, work stoppages or labor unrest at any of the major airlines, hotels or airports.

Sustained disruptions from COVID-19 have negatively impacted our business, and we expect these negative impacts to continue.

Sustained disruptions from COVID-19 negatively impacted our business, and the extent of recovery following these disruptions is uncertain.

See “—The ongoing recovery from the effects of the COVID-19 outbreak on our business and the impact on our results of operations is highly uncertain.”

Our travel supplier customers may experience financial instability or consolidation, pursue cost reductions, change their distribution model or undergo other changes.

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Adverse changes in any of these relationships or the inability to enter into new relationships could negatively impact the demand for and competitiveness of our travel products and services.

For example, a lack of liquidity in the capital markets or weak economic performance, including as a result of the impacts of COVID-19, may cause our travel suppliers to increase the time they take to pay, or to default, on their payment obligations, which could lead to a higher provision for expected credit losses and negatively affect our results.

For example, a lack of liquidity in the capital markets or weak economic performance may cause our travel suppliers to increase the time they take to pay, or to default, on their payment obligations, which could lead to a higher provision for expected credit losses and negatively affect our results.

Any large-scale bankruptcy or other insolvency proceeding of an airline or hospitality supplier could subject our agreements with that customer to rejection or early termination, and, if applicable, result in asset impairments which could be significant.

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legislators and regulatory agencies, such as the Federal Trade Commission, as well as U.S.

states, have increased their focus on protecting personal data by law and regulation, and have increased enforcement actions for violations of privacy and data protection requirements.

The General Data Protection Regulation ("GDPR"), a data protection law adopted by the European Commission and various other country-specific and U.S.

states, have increased their focus on protecting personal data by law and regulation, and have increased enforcement actions for violations of privacy and data protection requirements.The General Data Protection Regulation ("GDPR"), a data protection law adopted by the European Commission and various other country-specific and U.S.

state data protection laws have gone into effect or are scheduled to go into effect.

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Additionally, some regulations allow travel buyers to terminate their contracts earlier.

These risks are exacerbated by increased consolidation among travel agencies and TMCs, including as a result of the impacts of COVID-19 on the travel industry, which may ultimately reduce the pool of travel agencies that subscribe to GDSs.

These risks are exacerbated by increased consolidation among travel agencies and TMCs, which may ultimately reduce the pool of travel agencies that subscribe to GDSs.

We must compete with other GDSs and other competitors for their business by offering competitive upfront incentive consideration, which, due to the strong bargaining power of these large travel buyers, tend to increase in each round of contract renewals.

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

Parts of our business operate in regulated industries and could be adversely affected by unfavorable changes in or the enactment of new laws, rules or regulations applicable to us, which could decrease demand for our products and services, increase costs or subject us to additional liabilities.

Parts of our business operate in regulated industries and could be adversely affected by unfavorable changes in or the enactment of new laws, rules or regulations applicable to us, which could decrease demand for, or restrict access to, our products and services, increase costs or subject us to additional liabilities.

Moreover, regulatory authorities have relatively broad discretion to grant, renew and revoke licenses and approvals and to implement or interpret regulations.

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These include data protection and privacy legislation and regulations, as well as legislation and regulations affecting issues such as:

trade sanctions, exports of technology, antitrust, anticorruption, telecommunications, cybersecurity, environmental, social and governance matters, and e-commerce.

trade sanctions, exports of technology, antitrust, anticorruption, antiboycott, telecommunications, cybersecurity, environmental, social and governance matters, and e-commerce.

Our failure to comply with any of these requirements, interpretations, legislation or regulations could have a material adverse effect on our operations.

Further, the United States has imposed economic sanctions, and could impose further sanctions in the future, that affect transactions with designated countries, including but not limited to, Cuba, Iran, the Crimea, Donetsk and Luhansk regions of Ukraine, North Korea and Syria, and nationals and others of those countries, and certain specifically targeted individuals and entities engaged in conduct detrimental to U.S.

Ukraine, North Korea and Syria, and nationals and others of those countries, and certain specifically targeted individuals and entities engaged in conduct detrimental to U.S.

national security interests.

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Failure to comply with these regulations could subject us to legal and reputational consequences, including civil and criminal penalties.

We have GDS contracts with carriers that fly to Cuba, Iran, the Crimea, Donetsk and Luhansk regions of Ukraine, North Korea and Syria but are based outside of those countries and are not owned by those governments or nationals of those governments.

We have GDS contracts with carriers that fly to Cuba, Iran, the Crimea, Donetsk and Luhansk regions of Ukraine, North Korea and Syria but are based outside of those countries and are neither owned by those governments or nationals of those countries/regions nor themselves sanctioned.

With respect to Iran, Sudan, North Korea and Syria we believe that our activities are designed to comply with certain information and travel-related exemptions.

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Based on advice of counsel, we believe these activities to fall under an exemption from OFAC regulations applicable to the transmission of information and informational materials and transactions related thereto.

We believe that our activities with respect to these countries are known to OFAC.

We note, however, that OFAC regulations and related interpretive guidance are complex and subject to varying interpretations.

Due to this complexity, OFAC’s interpretation of its own regulations and guidance vary on a case by case basis.

As a result, we cannot provide any guarantees that OFAC will not challenge any of our activities in the future, which could have a material adverse effect on our results of operations.

We believe that our activities with respect to these countries are known to OFAC and other regulators.

We note, however, that sanctions regulations and related interpretive guidance are complex and subject to varying interpretations.

Due to this complexity, a regulator’s interpretation of its own regulations and guidance varies on a case by case basis.

As a result, we cannot provide any guarantees that a regulator will not challenge any of our activities in the future, which could have a material adverse effect on our results of operations.

In Europe, GDS regulations or interpretations thereof may increase our cost of doing business or lower our revenues, limit our ability to sell marketing data, impact relationships with travel buyers, airlines, rail carriers or others, impair the enforceability of existing agreements with travel buyers and other users of our system, prohibit or limit us from offering services or products, or limit our ability to establish or change fees.

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We do not currently maintain a central database of all regulatory requirements affecting our worldwide operations and, as a result, the risk of non-compliance with the laws and regulations described above is heightened.

Our failure to comply with these laws and regulations

could subject us to fines, penalties and potential criminal violations.

Our failure to comply with these laws and regulations could subject us to fines, penalties and potential criminal violations.

Any changes to these laws or regulations or any new laws or regulations may make it more difficult for us to operate our business.

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In the third quarter of 2022, we identified elements of our sanctions compliance program that were not functioning as we intended, which we are addressing.

It is possible that our enhanced program will identify items that do not comply with these regulatory or sanction requirements.

It is possible that our enhanced program will identify material items that do not comply with these regulatory or sanction requirements.

The amount of any penalties and other impacts, costs or remediations related to these items may adversely impact our results.

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Although the trial court did not grant the DOJ's request, the U.S.

Court of Appeals for the Third Circuit granted the DOJ's motion to vacate the judgment as moot, following the termination of the acquisition agreement as described below.

Court of Appeals for the Third Circuit granted the DOJ's motion

to vacate the judgment as moot, following the termination of the acquisition agreement as described below.

In addition, the U.K.

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For example, we have previously experienced a significant outage of the Sabre platform due to a failure on the part of one of our service providers, and such outages may occur in the future.

This outage, which affected our Travel Solutions business, lasted several hours and caused significant problems for our customers.

This outage, which affected our Travel Solutions business, lasted several hours and caused

significant problems for our customers.

Any such future outages could cause damage to our reputation, customer loss and require us to pay compensation to affected customers for which we may not be indemnified or compensated.

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Our systems have in the past been and at any time, including in the future, could be damaged or disrupted by events such as power, hardware, software or telecommunication failures, human errors, natural events including floods, hurricanes, fires, winter storms, earthquakes and tornadoes, terrorism, break-ins, hostilities, war or similar events.

telecommunication services or our systems have caused in the past and could at any time, including in the future, cause service interruptions or the loss of critical data, preventing us from providing timely services.

Computer viruses, malware, denial of service attacks, ransomware attacks, attacks on, or exploitations of, hardware or software vulnerabilities, physical or electronic break-ins, phishing attacks, cybersecurity incidents or other security incidents, and similar disruptions affecting the Internet, telecommunication services, our systems, or our customers' systems have caused in the past and could at any time, including in the future, cause service interruptions or the loss of critical data, preventing us from providing timely services.

For example, in April 2021 our subsidiary Radixx announced an event impacting its Radixx reservation system.

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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").

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

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Similarly, we expect to continue to make significant investments in our information technology infrastructure.

The implementation of these investments may be

more costly or take longer than we anticipate, or could otherwise adversely affect our business operations, which could negatively impact our financial position, results of operations or cash flows.

The implementation of these investments may be more costly or take longer than we anticipate, or could otherwise adversely affect our business operations, which could negatively impact our financial position, results of operations or cash flows.

Intellectual property infringement actions against us could be costly and time consuming to defend and may result in business harm if we are unsuccessful in our defense.

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In addition, open source license terms may be ambiguous and many of the risks associated with usage of open source cannot be eliminated, and could, if not properly addressed, negatively affect our business.

If we were found to have inappropriately used open source software, we may be required to seek licenses from third parties in order to continue offering our software, to re-engineer our solutions, to discontinue the sale of our solutions in the event re-engineering cannot be accomplished on a timely basis or take other remedial action that may divert resources away from our development efforts, any of which could adversely affect our business, operating results and financial condition.

engineering cannot be accomplished on a timely basis or take other remedial action that may divert resources away from our development efforts, any of which could adversely affect our business, operating results and financial condition.

Risks Related to Economic, Political and Global Conditions

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Our geographic concentration in the United States and Europe, as well as our expanded focus in APAC, makes our business potentially vulnerable to economic and political conditions that adversely affect business and leisure travel originating in or traveling to these regions.

The COVID-19 outbreak has significantly and negatively impacted the global economy, including increased unemployment, inflation and supply constraints, reduced financial capacity of both business and leisure travelers, diminished liquidity and credit availability, declines in consumer confidence and discretionary income and general uncertainty about economic stability.

Furthermore, recent changes in the U.S.

political environment have resulted in additional uncertainties with respect to travel restrictions, and the regulatory, tax and economic environment in the United States, which could adversely impact travel demand, our business operations or our financial results.

The global economy continues to face significant uncertainty, including increased unemployment, inflation and supply constraints, reduced financial capacity of both business and leisure travelers, diminished liquidity and credit availability, declines in consumer confidence and discretionary income and general uncertainty about economic stability.

Furthermore, changes in the regulatory, tax and economic environment in the United States could adversely impact travel demand, our business operations or our financial results.

We cannot predict the magnitude, length or recurrence of these impacts to the global economy, which have impacted, and may continue to impact, demand for travel and lead to reduced spending on the services we provide.

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These adverse economic conditions may negatively impact our business results in those regions.

has exited from the E.U.

Brexit and related processes have created significant economic uncertainty in the U.K.

and in EMEA, which may negatively impact our business results in those regions.

In addition, the terms of the U.K.’s withdrawal from the E.U.

could potentially disrupt the markets we serve and the tax jurisdictions in which we operate and adversely change tax benefits or liabilities in these or other jurisdictions, including our ability to obtain Value Added Tax ("VAT") refunds on transactions between the U.K.

and the E.U., and may cause us to lose customers, suppliers, and employees.

In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the U.K.

determines which E.U.

laws to replace or replicate.

In addition, the current military conflict in Ukraine and the related imposition of sanctions and export controls on Russia and Belarus has created global economic uncertainty and contributed to inflationary pressures, including fuel prices.

A significant

escalation or expansion of economic disruption, the conflict's current scope or additional sanctions and export controls and actions taken in response to these sanctions and export controls could disrupt our business, broaden inflationary costs, and have a material adverse effect on our results of operations.

A significant escalation or expansion of economic disruption, the conflict's current scope or additional sanctions and export controls and actions taken in response to these sanctions and export controls could disrupt our business, broaden inflationary costs, and have a material adverse effect on our results of operations.

See “—Our revenue is highly dependent on transaction volumes in the global travel industry, particularly air travel transaction volumes.”

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(2) adverse laws and regulatory requirements, including more comprehensive regulation in the E.U.

and the continued effects of Brexit and recent legislation and related regulations in Russia (see "—Any failure to comply with regulations or any changes in such regulations governing our businesses could adversely affect us.”);

and the continued effects of the U.K.'s exit from the E.U.

("Brexit") and recent legislation and related regulations in Russia (see "—Any failure to comply with regulations or any changes in such regulations governing our businesses could adversely affect us.”);

(3) changes in foreign currency exchange rates and financial risk arising from transactions in multiple currencies;

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We have a significant amount of indebtedness.

As of March 31, 2023, we had $4.9 billion of indebtedness outstanding which is net of debt issuance costs and unamortized discounts.

As of June 30, 2023, we had $4.8 billion of indebtedness outstanding which is net of debt issuance costs and unamortized discounts.

Our substantial level of indebtedness increases the possibility that we may not generate enough cash flow from operations to pay, when due, the principal of, interest on or other amounts due in respect of, these obligations.

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(1) increased vulnerability to general adverse economic and industry conditions;

(2) higher interest expense if interest rates increase on our floating rate borrowings and our hedging strategies do not effectively mitigate the effects of these increases;

(2) higher interest expense if interest rates increase on our floating rate borrowings and our hedging strategies do not effectively mitigate the effects of these increases or if we have to incur additional indebtedness in a higher interest rate environment;

(3) need to divert a significant portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of cash to fund working capital, capital expenditures, acquisitions, investments and other general corporate purposes;

(4) limited ability to refinance our existing indebtedness or to obtain additional financing, on terms we find acceptable, if needed, for working capital, capital expenditures, expansion plans and other investments, which may adversely affect our ability to implement our business strategy;

(4) limited ability to refinance our existing indebtedness or to obtain additional financing,

on terms we find acceptable, if needed, for working capital, capital expenditures, expansion plans and other investments, which may adversely affect our ability to implement our business strategy;

(5) limited flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate or to take advantage of market opportunities;

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

As a result, we expect that any such additional indebtedness to the extent issued in the future, would likely be unsecured.

As a result, we expect that any such additional indebtedness to the extent issued in the future, may be unsecured or secured on a subordinated basis to our currently outstanding indebtedness.

The terms of our Amended and Restated Credit Agreement allow us to incur additional debt subject to certain limitations.

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We may require more cash than we generate in our operating activities, and additional funding on reasonable terms or at all may not be available.

We cannot guarantee that our business will generate sufficient cash flow from operations to fund our capital investment requirements or other liquidity needs, particularly following the COVID-19 outbreak.

See “—The COVID-19 pandemic has had and is expected to continue to have a significant adverse impact on our business, including our financial results and prospects, and the travel suppliers on whom our business relies.” Moreover, because we are a holding company with no material direct operations, we depend on loans, dividends and other payments from our subsidiaries to generate the funds necessary to meet our financial obligations.

We cannot guarantee that our business will generate sufficient cash flow from operations to fund our capital investment requirements or other liquidity needs, particularly in light of the uncertainty related to the recovery from the COVID-19 outbreak.

See “—The ongoing recovery from the effects of the COVID-19 outbreak on our business and the impact on our results of operations is highly uncertain.” Moreover, because we are a holding company with no material direct operations, we depend on loans, dividends and other payments from our subsidiaries to generate the funds necessary to meet our financial obligations.

Our subsidiaries are legally distinct from us and may be prohibited or restricted from paying dividends or otherwise making funds available to us under certain conditions.

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Recent increases in interest rates, including due to increased inflationary pressures, have significantly increased our interest expense, and further increases in interest rates would result in additional interest expense, which would adversely impact our financial performance.

In addition, any downgrade of our debt ratings by Standard & Poor’s, Moody’s Investor Service or similar ratings agencies, increases in general interest rate levels and credit spreads or overall weakening in the credit markets including as a result of uncertainty from US debt ceiling negotiations, could increase our cost of capital.

Furthermore, raising capital through public or private sales of equity could cause earnings or ownership dilution to your shareholding interests in our company.

We are exposed to interest rate fluctuations.

Our floating rate indebtedness exposes us to fluctuations in prevailing interest rates.

Our floating rate indebtedness and the potential refinancing of fixed rate indebtedness exposes us to fluctuations in prevailing interest rates.

To reduce the impact of large fluctuations in interest rates, we typically hedge a portion of our interest rate risk by entering into derivative agreements with financial institutions.

Our exposure to interest rates relates primarily to our borrowings under the Amended and Restated Credit Agreement.

Our exposure to floating interest rates relates primarily to our borrowings under the Amended and Restated Credit Agreement.

The derivative agreements that we use to manage the risk associated with fluctuations in interest rates may not be able to eliminate the exposure to these changes.

Additionally, recent interest rate increases have generally increased the cost of debt and we may be required to pay higher interest rates on new fixed rate indebtedness we incur in the future in comparison to the interest rates payable on our currently outstanding fixed rate

indebtedness, including in connection with the refinancing of such indebtedness.

Interest rates are sensitive to numerous factors outside of our control, such as government and central bank monetary policy in the jurisdictions in which we operate.

Depending on the size of the exposures and the relative movements of interest rates, if we choose not to hedge or fail to effectively hedge our exposure, we could experience a material adverse effect on our results of operations and financial condition.

As of March 31, 2023, we had outstanding approximately $1.0 billion of variable debt that is indexed to the London Interbank Offered Rate ("LIBOR") consisting of Term Loan B-1 for $396 million and Term Loan B-2 for $628 million.

These term loans included hard-wired fallback language, as published by the Alternative Reference Rates Committee, that will replace LIBOR with Term Secured Overnight Financing Rate ("SOFR") plus specified credit spread adjustments when LIBOR ceases to be published in June 2023 or such sooner date on which we may opt in.

See " Management's Discussion and Analysis of Financial Condition and Results of Operations —Liquidity and Capital Resources —Senior Secured Credit Facilities" for the estimated impacts of this change, which we do not expect to be material.

The market price of our common stock could decline due to the large number of outstanding shares of our common stock eligible for future sale.

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We may recognize impairments on long-lived assets, including goodwill and other intangible assets, or recognize impairments on our equity method investments.

Our consolidated balance sheets at March 31, 2023 contained goodwill and intangible assets, net totaling $2.9 billion.

Future acquisitions that result in the recognition of additional goodwill and intangible assets would cause an increase in these

types of assets.

Our consolidated balance sheets as of June 30, 2023 contained goodwill and intangible assets, net totaling $2.9 billion.

Future acquisitions that result in the recognition of additional goodwill and intangible assets would cause an increase in these types of assets.

We do not amortize goodwill and intangible assets that are determined to have indefinite useful lives, but we amortize definite-lived intangible assets on a straight-line basis over their useful economic lives, which range from four to thirty years, depending on classification.

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As a result, our failure to satisfy the requirements of Section 404 on a timely basis could result in the loss of investor confidence in the reliability of our financial statements, which in turn could cause the market value of our common stock to decline.

Various rules and regulations applicable to public companies make it more difficult and more expensive for us to maintain directors’ and officers’ liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to maintain coverage.

Various rules and regulations applicable to public companies

make it more difficult and more expensive for us to maintain directors’ and officers’ liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to maintain coverage.

If we are unable to maintain adequate directors’ and officers’ liability insurance, our ability to recruit and retain qualified officers and directors, especially those directors who may be deemed independent for purposes of the NASDAQ rules, will be significantly curtailed.

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Such changes could result in an increase or decrease in the effective tax rate applicable to all or a portion of our income or losses which would impact our profitability.

We consider the undistributed capital investments in our foreign subsidiaries to be indefinitely reinvested as of March 31, 2023, and, accordingly, have not provided deferred taxes on any outside basis differences for most subsidiaries.

We consider the undistributed capital investments in our foreign subsidiaries to be indefinitely reinvested as of June 30, 2023, and, accordingly, have not provided deferred taxes on any outside basis differences for most subsidiaries.

We establish reserves for our potential liability for U.S.

taxes, including sales, occupancy and VAT, consistent with applicable accounting principles and considering all current facts and circumstances.

We also establish reserves when required relating to the collection of refunds related to value-added taxes, which are subject to audit and collection risks in

various countries.

taxes, including sales, occupancy and Value Added Taxes ("VAT"), consistent with applicable accounting principles and considering all current facts and circumstances.

We also establish reserves when required relating to the collection of refunds related to value-added taxes, which are subject to audit and collection risks in various countries.

Historically our right to recover certain value-added tax receivables associated with our European businesses has been questioned by tax authorities.

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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 1A. Risk Factors