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Interest Rate Risk
−Removed: As of December 31, 2022, our exposure to interest rates relates primarily to our interest rate swaps and our senior secured credit facilities.
+Added: Historically, our exposure to interest rate risk has primarily related to our interest rate swaps and interest rates under our Amended and Restated Credit Agreement on our senior secured credit facilities.
+Added: In June 2023, we entered into a new senior secured term loan facility, the Senior Secured Term Loan Due 2028, that bears interest at a floating rate 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.
+Added: 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.
+Added: An increase in the Reference Rate, up to the ceiling rates, would negatively impact our interest expense.
Offsetting some of this exposure is interest income received from our time deposits and money market funds.
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This amount was determined by applying the hypothetical interest rate change to our average time deposits and money market funds invested.
−Removed: In September 2017, we entered into forward starting interest rate swaps to hedge the interest payments associated with $750 million of the floating-rate Term Loan B for the year 2020.
−Removed: In 2018, we entered into forward starting interest rate swaps to hedge the interest payments associated with $450 million and $600 million of the floating-rate Term Loan B related to the years 2020 and 2021, respectively.
+Added: In 2018, we entered into forward starting interest rate swaps to hedge the interest payments associated with $600 million of the then floating-rate Term Loan B related to the year 2021.
In April 2022, we entered into an interest rate swap to hedge the interest payments associated with $200 million of the floating-rate 2022 Term Loan B-1 for the years 2022 and 2023.
In June 2022, we entered into an interest rate swap to hedge the interest payments associated with $150 million of the floating-rate 2022 Term Loan B-1 for the years 2022 and 2023.
+Added: 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.
+Added: 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 periods through June 2026.
We designated these swaps as cash flow hedges.
−Removed: Interest rate swaps matured during the years ended December 31, 2022, 2021 and 2020 are as follows:
+Added: Subsequent to December 31, 2023, on January 11, 2024, we entered into an interest rate swap to hedge interest payments associated with $250 million of the floating rate 2022 Term Loan B-1 related to the years 2024 and 2025.
+Added: The total notional outstanding of $250 million became effective January 16, 2024.
+Added: Interest rate swaps outstanding at December 31, 2023 and matured during the years ended December 31, 2023, 2022 and 2021 are as follows:
Notional Amount Interest Rate
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Designated as Hedging Instrument
+Added: $600 million 1 month LIBOR (1)
+Added: 2.81% December 31, 2020 December 31, 2021
$200 million 1 month SOFR (2)
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June 30, 2022 December 31, 2023
−Removed: $600 million 1 month LIBOR (2)
−Removed: 2.81% December 31, 2020 December 31, 2021
−Removed: $1,200 million 1 month LIBOR (2)
+Added: $250 million 1 month SOFR (2)
+Added: June 30, 2023 June 30, 2026
+Added: $250 million 1 month SOFR (2)
December 31, 2023 December 31, 2024
+Added: (1) ____________________
(1) Subject to a 0% floor.
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(4) Fixed fee of 2.79% effective June 30, 2022, and expiring December 30, 2022, and 3.98% effective December 31, 2022, and expiring December 31, 2023.
−Removed: Since outstanding balances under our senior secured credit facilities incur interest at rates based on LIBOR and/or SOFR, subject to an applicable floor, increases in short-term interest rates would impact our interest expense.
+Added: Since outstanding balances under our senior secured credit facilities incur interest at rates based on SOFR, subject to an applicable floor, increases in short-term interest rates would impact our interest expense.
If our mix of interest rate-sensitive assets and liabilities changes significantly, we may enter into additional derivative transactions to manage our net interest rate exposure.
−Removed: The fair value of these interest rate swaps was an asset of $5 million as of December 31, 2022.
−Removed: We did not have any assets or liabilities from interest rate swaps for the year ended December 31, 2021.
−Removed: As of December 31, 2022, we had outstanding approximately $1.0 billion of variable debt that is indexed to the London Interbank Offered Rate ("LIBOR") consisting of 2021 Term Loan B-1 for $397 million and 2021 Term Loan B-2 for $630 million.
−Removed: These term loans included hard-wired fallback language, as published by the Alternative Reference Rates Committee, that will replace LIBOR with Term 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.
−Removed: 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.
+Added: The fair value of these interest rate swaps was a net liability of $2 million as of December 31, 2023 and a net asset of $5 million as of December 31, 2022.
+Added: The global capital markets experienced periods of volatility throughout 2022 and 2023 in response to the geopolitical conflict, increases in the rate of inflation, and uncertainty regarding the path of U.S.
+Added: monetary policy.
+Added: During 2022 and 2023, we refinanced portions of our debt which resulted in interest rates higher than prior years, increasing current and future interest expense.
+Added: We may decide to further refinance portions of our debt in 2024 and 2025 which, at current interest rates, could negatively impact our interest expense.
+Added: Although interest rate increases have recently moderated, they continue to remain volatile, which could drive higher funding costs.
+Added: Currently approximately 45% of our debt, net of cash and hedging impacts from interest rates swaps, is variable and impacted by changes in interest rates.
+Added: Excluding the impact of the Senior Secured Term Loan due in 2028, approximately 28% of our debt is variable.
+Added: See “Risk Factors—We are exposed to interest rate fluctuations.
Foreign Currency Risk
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The principal foreign currencies involved include the Euro, the Indian Rupee, the British Pound Sterling, the Australian Dollar, the Polish Zloty, and the Singapore Dollar.
−Removed: Our most significant foreign currency denominated operating expenses is in the Euro, which comprised approximately 5% of our operating expenses for each of the years ended December 31, 2022 and 2021.
+Added: Our most significant foreign currency denominated operating expenses is in the Euro, which comprised approximately 7% and 5% of our operating expenses for the years ended December 31, 2023 and 2022, respectively.
In recent years, exchange rates between foreign currencies and the U.S.
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During times of volatile currency movements, this risk can impact our earnings.
−Removed: To reduce the impact of this earnings volatility, we have historically hedged a portion of our foreign currency exposure in our operating expenses by entering into foreign currency forward contracts on several of our largest exposures, including the Indian Rupee, the British Pound Sterling, the Australian Dollar, the Polish Zloty, the Singaporean Dollar, and the Swedish Krona.
Additionally, approximately 32% of our exposure in foreign currency operating expenses is naturally hedged by foreign currency cash receipts associated with foreign currency revenue.
−Removed: Our forward contracts represent obligations to purchase foreign currencies at a predetermined exchange rate to fund a portion of our expenses that are denominated in foreign currencies.
−Removed: 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.
+Added: Due to the impacts of the uncertain economic environment 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.
As a result, as of December 31, 2023, we have no unsettled forward contracts and have not entered into any foreign currency forward contracts for 2023.
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These gains and losses are recognized as a component of accumulated other comprehensive loss and is included in stockholders’ (deficit) equity.
−Removed: We recognized net translation gains in other comprehensive income (loss) of $1 million and $7 million for the years ended December 31, 2022 and 2021, respectively, and net translation losses of $8 million for the year ended December 31, 2020.
+Added: We recognized net translation gain in other comprehensive income (loss) of $4 million for the year ended December 31, 2023, and net translation losses in other comprehensive income (loss) of $1 million and $7 million for the years ended December 31, 2022 and 2021, respectively.
Our customers are primarily located in the United States, Canada, Europe, Latin America and Asia, and are concentrated in the travel industry.
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We believe the credit risk related to the air carriers’ difficulties is significantly mitigated by the fact that we collect a significant portion of the receivables from these carriers through clearing houses, such as the Airline Clearing House (“ACH”).
−Removed: As of December 31, 2022, 2021 and 2020, approximately 48%, 53%, and 52%, respectively, of our air customers make payments through the ACH which accounts for approximately 82%, 82% and 63%, respectively, of transaction revenue related to air customers.
+Added: As of December 31, 2023, 2022 and 2021, approximately 53%, 48%, and 53%, respectively, of our air customers make payments through the ACH, or other similar clearing houses, which accounts for approximately 82%, 82% and 82%, respectively, of transaction revenue related to air customers.
ACH requires participants to deposit certain balances into their demand deposit accounts by certain deadlines, which facilitates a timely settlement process.
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We monitor these carriers and account for the related credit risk through our normal reserve policies.
−Removed: Competitive market conditions and the general economic environment have minimized inflation’s impact on our results of operations in recent periods.
−Removed: There can be no assurance, however, that our operating results will not be affected by inflation in the future.
−Removed: The global capital markets experienced periods of volatility throughout 2022, partially due to increases in the rate of inflation.
−Removed: During 2022, we refinanced portions of our debt which resulted in interest rates higher than prior years, increasing current and future interest expense.
−Removed: We expect to further refinance portions of our debt in 2023 and 2024 which, at current interest rates, would negatively impact our interest expense.
−Removed: These events could lead to further market disruption and potential increases to our funding costs.
−Removed: Currently approximately 29% of our debt, net of cash and hedging impacts from interest rates swaps, is variable and impacted by changes in interest rates.
−Removed: See “Risk Factors—We are exposed to interest rate fluctuations.
−Removed: An overall labor shortage, lack of skilled labor, increased turnover or labor inflation, caused by COVID-19 or as a result of general macroeconomic factors, could have a material adverse impact on our operations, results of operations, liquidity or cash flows.
+Added: An overall labor shortage, lack of skilled labor, increased turnover or labor inflation, as a result of general macroeconomic factors, could have a material adverse impact on our operations, results of operations, liquidity or cash flows.
See Item 7 , “ Management’s Discussion and Analysis of Financial Condition and Results of Operations —Factors Affecting our Results—Technology transformation and investments in modernizing our architecture” and “Risk Factors—Our business could be harmed by adverse global and regional economic and political conditions."
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.