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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-8647322
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page No.
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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ITEM 1.
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FINANCIAL STATEMENTS
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Three Months Ended September 30,
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Nine Months Ended
September 30, |
||||||||||||
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2017
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2016
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2017
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2016
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||||||||
Revenue
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$
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900,606
|
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$
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838,982
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$
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2,716,622
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$
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2,543,767
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Cost of revenue
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631,970
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593,650
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1,882,623
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1,704,232
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Selling, general and administrative
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91,840
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155,182
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383,137
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435,924
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||||
Impairment and related charges
|
—
|
|
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—
|
|
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92,022
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—
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||||
Operating income
|
176,796
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90,150
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358,840
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403,611
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Other income (expense):
|
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Interest expense, net
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(38,919
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)
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(38,002
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)
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(116,577
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)
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(116,414
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)
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||||
Loss on extinguishment of debt
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(1,012
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)
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(3,683
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)
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(1,012
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)
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(3,683
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)
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||||
Joint venture equity income
|
357
|
|
|
718
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|
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1,768
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|
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2,244
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Other, net
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(3,802
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)
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281
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(19,788
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)
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4,517
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Total other expense, net
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(43,376
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)
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(40,686
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)
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(135,609
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)
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(113,336
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)
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Income from continuing operations before income taxes
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133,420
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49,464
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223,231
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290,275
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Provision for income taxes
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40,595
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7,208
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56,836
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79,905
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Income from continuing operations
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92,825
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42,256
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166,395
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210,370
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(Loss) Income from discontinued operations, net of tax
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(529
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)
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(394
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)
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(2,228
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)
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10,858
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Net income
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92,296
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41,862
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164,167
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221,228
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Net income attributable to noncontrolling interests
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1,307
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1,047
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3,726
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3,227
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Income attributable to common stockholders
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$
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90,989
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$
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40,815
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$
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160,441
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$
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218,001
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Basic net income per share attributable to common
stockholders: |
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Income from continuing operations
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$
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0.33
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$
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0.15
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$
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0.59
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$
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0.75
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(Loss) income from discontinued operations
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—
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—
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(0.01
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)
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0.04
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Net income per common share
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$
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0.33
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$
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0.15
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$
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0.58
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$
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0.79
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Diluted net income per share attributable to common stockholders:
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Income from continuing operations
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$
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0.33
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$
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0.15
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$
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0.58
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$
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0.73
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(Loss) income from discontinued operations
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—
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—
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(0.01
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)
|
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0.04
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Net income per common share
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$
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0.33
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$
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0.14
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$
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0.57
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$
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0.77
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Weighted-average common shares outstanding:
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Basic
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277,477
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278,399
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277,754
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277,125
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Diluted
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278,369
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283,462
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279,648
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282,919
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Dividends per common share
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$
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0.14
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$
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0.13
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$
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0.42
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$
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0.39
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Three Months Ended September 30,
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Nine Months Ended
September 30, |
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2017
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2016
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2017
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2016
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Net income
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$
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92,296
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$
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41,862
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$
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164,167
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$
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221,228
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Other comprehensive income, net of tax:
|
|
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Foreign currency translation adjustments ("CTA"), net of tax
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Foreign CTA gains (losses)
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2,781
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(819
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)
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10,450
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|
720
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Reclassification adjustment for realized losses on foreign CTA, net of tax
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—
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—
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—
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|
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(198
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)
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||||
Net change in foreign CTA gains (losses), net of tax
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2,781
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(819
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)
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10,450
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|
522
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Retirement-related benefit plans:
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Amortization of prior service credits, net of taxes of $129, $130, $388 and $389
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(229
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)
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(229
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)
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(686
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)
|
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(686
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)
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Amortization of actuarial losses, net of taxes of $(392), $(520), $(1,747) and $(1,551)
|
745
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1,033
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3,141
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|
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2,852
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|
||||
Total retirement-related benefit plans
|
516
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804
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2,455
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2,166
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|
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Derivatives and available-for-sale securities:
|
|
|
|
|
|
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Unrealized gains, net of taxes of $(1,045), ($1,663), $(2,693) and $658
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2,561
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11,076
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9,561
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|
|
11,361
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|
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Reclassification adjustment for realized (gains) losses, net of taxes of $67, $(154), $(1,531) and $(494)
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(216
|
)
|
|
227
|
|
|
3,461
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|
|
1,240
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|
||||
Net change in derivatives and available-for-sale securities, net of tax
|
2,345
|
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|
11,303
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13,022
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|
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12,601
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|
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Share of other comprehensive income of joint ventures
|
323
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|
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(336
|
)
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372
|
|
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(336
|
)
|
||||
Other comprehensive income
|
5,965
|
|
|
10,952
|
|
|
26,299
|
|
|
14,953
|
|
||||
Comprehensive income
|
98,261
|
|
|
52,814
|
|
|
190,466
|
|
|
236,181
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|
||||
Less: Comprehensive income attributable to noncontrolling interests
|
(1,307
|
)
|
|
(1,047
|
)
|
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(3,726
|
)
|
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(3,227
|
)
|
||||
Comprehensive income attributable to Sabre Corporation
|
$
|
96,954
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|
|
$
|
51,767
|
|
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$
|
186,740
|
|
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$
|
232,954
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
268,268
|
|
|
$
|
364,114
|
|
Accounts receivable, net
|
567,266
|
|
|
400,667
|
|
||
Prepaid expenses and other current assets
|
111,358
|
|
|
88,600
|
|
||
Total current assets
|
946,892
|
|
|
853,381
|
|
||
Property and equipment, net of accumulated depreciation of $1,173,326 and $986,890
|
800,094
|
|
|
753,279
|
|
||
Investments in joint ventures
|
26,776
|
|
|
25,582
|
|
||
Goodwill
|
2,553,867
|
|
|
2,548,447
|
|
||
Acquired customer relationships, net of accumulated amortization of $680,756 and $646,850
|
357,039
|
|
|
387,632
|
|
||
Other intangible assets, net of accumulated amortization of $580,158 and $538,380
|
346,028
|
|
|
387,805
|
|
||
Deferred income taxes
|
73,658
|
|
|
95,285
|
|
||
Other assets, net
|
562,134
|
|
|
673,159
|
|
||
Total assets
|
$
|
5,666,488
|
|
|
$
|
5,724,570
|
|
|
|
|
|
||||
Liabilities and stockholders’ equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
150,265
|
|
|
$
|
168,576
|
|
Accrued compensation and related benefits
|
104,415
|
|
|
102,037
|
|
||
Accrued subscriber incentives
|
269,778
|
|
|
216,011
|
|
||
Deferred revenues
|
163,556
|
|
|
187,108
|
|
||
Other accrued liabilities
|
251,525
|
|
|
222,879
|
|
||
Current portion of debt
|
59,019
|
|
|
169,246
|
|
||
Tax Receivable Agreement
|
59,452
|
|
|
100,501
|
|
||
Total current liabilities
|
1,058,010
|
|
|
1,166,358
|
|
||
Deferred income taxes
|
84,782
|
|
|
88,957
|
|
||
Other noncurrent liabilities
|
468,075
|
|
|
567,359
|
|
||
Long-term debt
|
3,410,532
|
|
|
3,276,281
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
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Stockholders’ equity
|
|
|
|
|
|
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Common Stock: $0.01 par value; 450,000,000 authorized shares; 288,896,172 and 285,461,125 shares issued, 274,756,197 and 276,949,802 shares outstanding at September 30, 2017 and December 31, 2016, respectively
|
2,889
|
|
|
2,854
|
|
||
Additional paid-in capital
|
2,162,128
|
|
|
2,105,843
|
|
||
Treasury Stock, at cost, 14,139,975 and 8,511,323 shares at September 30, 2017 and December 31, 2016, respectively
|
(329,857
|
)
|
|
(221,746
|
)
|
||
Retained deficit
|
(1,097,149
|
)
|
|
(1,141,116
|
)
|
||
Accumulated other comprehensive loss
|
(96,500
|
)
|
|
(122,799
|
)
|
||
Noncontrolling interest
|
3,578
|
|
|
2,579
|
|
||
Total stockholders’ equity
|
645,089
|
|
|
625,615
|
|
||
Total liabilities and stockholders’ equity
|
$
|
5,666,488
|
|
|
$
|
5,724,570
|
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
164,167
|
|
|
$
|
221,228
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
295,729
|
|
|
303,956
|
|
||
Amortization of upfront incentive consideration
|
50,298
|
|
|
43,372
|
|
||
Litigation-related credits
|
—
|
|
|
(25,527
|
)
|
||
Stock-based compensation expense
|
34,413
|
|
|
36,012
|
|
||
Allowance for doubtful accounts
|
7,879
|
|
|
9,232
|
|
||
Impairment and related charges
|
92,022
|
|
|
—
|
|
||
Deferred income taxes
|
8,340
|
|
|
66,676
|
|
||
Joint venture equity income
|
(1,768
|
)
|
|
(2,244
|
)
|
||
Dividends received from joint venture investments
|
1,088
|
|
|
—
|
|
||
Amortization of debt issuance costs
|
4,916
|
|
|
6,738
|
|
||
Loss on modification of debt
|
14,758
|
|
|
—
|
|
||
Loss on extinguishment of debt
|
1,012
|
|
|
3,683
|
|
||
Other
|
10,680
|
|
|
4,303
|
|
||
Loss (income) from discontinued operations
|
2,228
|
|
|
(10,858
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts and other receivables
|
(188,021
|
)
|
|
(70,906
|
)
|
||
Prepaid expenses and other current assets
|
518
|
|
|
(19,508
|
)
|
||
Capitalized implementation costs
|
(47,968
|
)
|
|
(64,577
|
)
|
||
Upfront incentive consideration
|
(61,087
|
)
|
|
(55,284
|
)
|
||
Other assets
|
(20,957
|
)
|
|
(18,105
|
)
|
||
Accrued compensation and related benefits
|
2,161
|
|
|
(21,540
|
)
|
||
Accounts payable and other accrued liabilities
|
53,444
|
|
|
8,424
|
|
||
Deferred revenue including upfront solution fees
|
32,054
|
|
|
17,459
|
|
||
Cash provided by operating activities
|
455,906
|
|
|
432,534
|
|
||
Investing Activities
|
|
|
|
|
|
||
Additions to property and equipment
|
(242,811
|
)
|
|
(254,232
|
)
|
||
Acquisition, net of cash acquired
|
—
|
|
|
(164,481
|
)
|
||
Other investing activities
|
(141
|
)
|
|
—
|
|
||
Cash used in investing activities
|
(242,952
|
)
|
|
(418,713
|
)
|
||
Financing Activities
|
|
|
|
|
|
||
Proceeds of borrowings from lenders
|
1,897,625
|
|
|
1,055,000
|
|
||
Payments on borrowings from lenders
|
(1,868,655
|
)
|
|
(994,287
|
)
|
||
Payments on Tax Receivable Agreement
|
(99,241
|
)
|
|
—
|
|
||
Debt issuance and modification costs
|
(19,052
|
)
|
|
(11,377
|
)
|
||
Net proceeds on the settlement of equity-based awards
|
11,466
|
|
|
17,111
|
|
||
Cash dividends paid to common stockholders
|
(116,474
|
)
|
|
(108,358
|
)
|
||
Repurchase of common stock
|
(97,671
|
)
|
|
—
|
|
||
Other financing activities
|
(8,934
|
)
|
|
(4,736
|
)
|
||
Cash used in financing activities
|
(300,936
|
)
|
|
(46,647
|
)
|
||
Cash Flows from Discontinued Operations
|
|
|
|
|
|
||
Cash used in operating activities
|
(3,636
|
)
|
|
(15,766
|
)
|
||
Cash provided by investing activities
|
—
|
|
|
—
|
|
||
Cash used in discontinued operations
|
(3,636
|
)
|
|
(15,766
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(4,228
|
)
|
|
(536
|
)
|
||
Decrease in cash and cash equivalents
|
(95,846
|
)
|
|
(49,128
|
)
|
||
Cash and cash equivalents at beginning of period
|
364,114
|
|
|
321,132
|
|
||
Cash and cash equivalents at end of period
|
$
|
268,268
|
|
|
$
|
272,004
|
|
–
|
Under current revenue recognition guidance, we recognize revenue related to license fee and maintenance agreements ratably over the life of the contract. Under the new guidance, revenue for license fees will be recognized upon delivery of the license and ongoing maintenance services will continue to be recognized ratably over the length of the contract. For existing open agreements, this change will result in a beginning balance sheet adjustment and reduced revenue in subsequent years from these agreements, and before the impact of new sales.
|
–
|
Allocation of contract revenues among various products and solutions, and the timing of the recognition of those revenues, will be impacted by agreements with tiered pricing or variable rate structures that do not correspond with the goods or services delivered to the customer. For existing open agreements, this change will also result in a beginning balance sheet adjustment and reduced revenue in subsequent years from these agreements.
|
–
|
In the year of adoption, as a result of the new revenue recognition standard, the changes detailed above will result in a significant beginning balance sheet adjustment and we preliminarily estimate our consolidated revenue could be reduced by approximately
$40 million
to
$80 million
. Our assessment is ongoing and subject to finalization, such that the actual impact of the adoption may differ materially from this estimated range. This estimate will be updated in our Annual Report on Form 10-K for the year ending December 31, 2017.
|
•
|
Capitalization of incremental costs to obtain a contract (such as sales commissions), and recognition of these costs over the contract period will result in the recognition of an asset on our balance sheet and will impact our Airline and Hospitality Solutions segment. We currently expect that our results of operations will not be significantly impacted from the capitalization of these incremental costs.
|
Cash and cash equivalents
|
$
|
4,209
|
|
Accounts receivable
|
10,564
|
|
|
Other current assets
|
917
|
|
|
Goodwill
|
98,930
|
|
|
Intangible assets:
|
|
||
Customer relationships
|
52,292
|
|
|
Purchased technology
|
23,362
|
|
|
Trademarks and brand names
|
2,183
|
|
|
Property and equipment, net
|
1,556
|
|
|
Current liabilities
|
(11,091
|
)
|
|
Deferred income taxes
|
(22,548
|
)
|
|
Total acquisition price
|
$
|
160,374
|
|
Cash and cash equivalents
|
$
|
65,641
|
|
Accounts receivable, net
|
49,099
|
|
|
Other current assets
|
12,522
|
|
|
Intangible assets:
|
|
||
Customer relationships
|
319,000
|
|
|
Reacquired rights
(1)
|
113,500
|
|
|
Purchased technology
|
14,000
|
|
|
Supplier agreements
|
13,000
|
|
|
Trademarks and brand names
|
4,000
|
|
|
Property and equipment, net
|
6,402
|
|
|
Other assets
|
66,423
|
|
|
Current liabilities
|
(123,307
|
)
|
|
Noncurrent liabilities
|
(44,245
|
)
|
|
Noncurrent deferred income taxes
|
(78,054
|
)
|
|
Goodwill
|
292,267
|
|
|
|
710,248
|
|
|
Fair value of Sabre Corporation's previously held equity investment in AIPL
|
(200,000
|
)
|
|
Fair value of AIPL's previously held equity investment in NMCs
|
(1,880
|
)
|
|
Total acquisition price
|
$
|
508,368
|
|
|
Rate
|
|
Maturity
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Senior secured credit facilities:
|
|
|
|
|
|
|
|
|
|
||
New Term Loan A
|
L + 2.25%
|
|
July 2022
|
|
$
|
562,875
|
|
|
$
|
—
|
|
New Term Loan B
|
L + 2.25%
|
|
February 2024
|
|
1,885,774
|
|
|
—
|
|
||
Term Loan A
(1)
|
L + 2.50%
|
|
July 2021
|
|
—
|
|
|
585,000
|
|
||
Term Loan B
(1)
|
L + 2.75%
|
|
February 2024
|
|
—
|
|
|
—
|
|
||
Prior Term Loan B
(2)
|
L + 3.00%
|
|
February 2019
|
|
—
|
|
|
1,420,896
|
|
||
Incremental Term Loan Facility
(2)
|
L + 3.50%
|
|
February 2019
|
|
—
|
|
|
282,354
|
|
||
Term Loan C
(2)
|
L + 3.00%
|
|
December 2017
|
|
—
|
|
|
49,313
|
|
||
Revolver, $400 million
(3)
|
L + 2.25%
|
|
July 2022
|
|
—
|
|
|
—
|
|
||
5.375% senior secured notes due 2023
|
5.375%
|
|
April 2023
|
|
530,000
|
|
|
530,000
|
|
||
5.25% senior secured notes due 2023
|
5.25%
|
|
November 2023
|
|
500,000
|
|
|
500,000
|
|
||
Mortgage facility
(4)
|
5.80%
|
|
April 2017
|
|
—
|
|
|
79,741
|
|
||
Capital lease obligations
|
|
|
|
|
24,485
|
|
|
31,190
|
|
||
Face value of total debt outstanding
|
|
|
|
|
3,503,134
|
|
|
3,478,494
|
|
||
Less current portion of debt outstanding
|
|
|
|
|
(59,019
|
)
|
|
(169,246
|
)
|
||
Face value of long-term debt outstanding
|
|
|
|
|
$
|
3,444,115
|
|
|
$
|
3,309,248
|
|
(1)
|
Refinanced on August 23, 2017 by the New Term Loan A and the New Term Loan B. Term Loan B was executed on February 22, 2017.
|
(2)
|
Refinanced on February 22, 2017 by the Term Loan B.
|
(3)
|
Pursuant to the August 23, 2017 refinancing, the interest rate on the Preexisting Revolver was reduced from L+
2.50%
to L+
2.25%
and the maturity was extended from July 2021 to July 2022.
|
(4)
|
Extinguished on March 31, 2017 using proceeds from the Term Loan B.
|
(1)
|
Subject to a
1%
floor.
|
(2)
|
Subject to a
0%
floor.
|
(3)
|
As of February 22, 2017.
|
|
|
Derivative Assets (Liabilities)
|
||||||||
|
|
|
|
Fair Value as of
|
||||||
Derivatives Designated as Hedging Instruments
|
|
Consolidated Balance Sheet Location
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Foreign exchange contracts
|
|
Other accrued liabilities
|
|
$
|
—
|
|
|
$
|
(7,360
|
)
|
Foreign exchange contracts
|
|
Prepaid expenses and other
|
|
5,796
|
|
|
—
|
|
||
Interest rate swaps
|
|
Other accrued liabilities
|
|
(498
|
)
|
|
(8,345
|
)
|
||
Interest rate swaps
|
|
Other noncurrent liabilities
|
|
(952
|
)
|
|
(7,339
|
)
|
||
|
|
|
|
$
|
4,346
|
|
|
$
|
(23,044
|
)
|
|
|
Derivative Assets (Liabilities)
|
||||||||
|
|
|
|
Fair Value as of
|
||||||
Derivatives Not Designated as Hedging Instruments
|
|
Consolidated Balance Sheet Location
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Interest rate swaps
|
|
Prepaid expenses and other
|
|
$
|
648
|
|
|
$
|
—
|
|
Interest rate swaps
|
|
Other assets, net
|
|
12
|
|
|
—
|
|
||
Interest rate swaps
|
|
Other accrued liabilities
|
|
(7,878
|
)
|
|
—
|
|
||
Interest rate swaps
|
|
Other noncurrent liabilities
|
|
(1,823
|
)
|
|
—
|
|
||
|
|
|
|
$
|
(9,041
|
)
|
|
$
|
—
|
|
|
|
|
|
Amount of Net Losses (Gains) Reclassified from Accumulated OCI into Income (Effective Portion)
|
||||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
Income Statement Location
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||
Foreign exchange contracts
|
|
Cost of revenue
|
|
$
|
(1,385
|
)
|
|
$
|
227
|
|
|
$
|
(502
|
)
|
|
$
|
1,240
|
|
Interest rate swaps
|
|
Interest Expense
|
|
1,169
|
|
|
589
|
|
|
3,963
|
|
|
1,753
|
|
||||
Total
|
|
|
|
$
|
(216
|
)
|
|
$
|
816
|
|
|
$
|
3,461
|
|
|
$
|
2,993
|
|
|
|
|
Fair Value at Reporting Date Using
|
||||||||||||
|
September 30, 2017
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
$
|
5,796
|
|
|
$
|
—
|
|
|
$
|
5,796
|
|
|
$
|
—
|
|
Interest rate swap contracts
|
(10,491
|
)
|
|
—
|
|
|
(10,491
|
)
|
|
—
|
|
||||
Total
|
$
|
(4,695
|
)
|
|
$
|
—
|
|
|
$
|
(4,695
|
)
|
|
$
|
—
|
|
|
|
|
Fair Value at Reporting Date Using
|
|||||||||||||
|
December 31, 2016
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||
Derivatives
|
|
|
|
|
|
|
|
|||||||||
Foreign currency forward contracts
|
$
|
(7,360
|
)
|
|
$
|
—
|
|
|
$
|
(7,360
|
)
|
|
$
|
—
|
|
|
Interest rate swap contracts
|
(15,684
|
)
|
|
—
|
|
|
(15,684
|
)
|
|
—
|
|
|||||
Total
|
$
|
(23,044
|
)
|
—
|
|
$
|
—
|
|
|
$
|
(23,044
|
)
|
|
$
|
—
|
|
|
|
Fair Value at
|
|
Carrying Value at
(4)
|
||||||||||||
Financial Instrument
|
|
September 30, 2017
|
|
December 31, 2016
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||
New Term Loan A
|
|
$
|
564,282
|
|
|
$
|
—
|
|
|
$
|
560,424
|
|
|
$
|
—
|
|
New Term Loan B
|
|
1,898,738
|
|
|
—
|
|
|
1,878,452
|
|
|
—
|
|
||||
Term Loan A
(1)
|
|
—
|
|
|
583,538
|
|
|
—
|
|
|
582,595
|
|
||||
Term Loan B
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Prior Term Loan B
(2)
|
|
—
|
|
|
1,435,993
|
|
|
—
|
|
|
1,417,616
|
|
||||
Incremental Term Loan Facility
(2)
|
|
—
|
|
|
283,413
|
|
|
—
|
|
|
282,354
|
|
||||
Term Loan C
(2)
|
|
—
|
|
|
49,436
|
|
|
—
|
|
|
49,237
|
|
||||
Revolver, $400 million
(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
5.375% Senior secured notes due 2023
|
|
549,085
|
|
|
542,919
|
|
|
530,000
|
|
|
530,000
|
|
||||
5.25% Senior secured notes due 2023
|
|
516,840
|
|
|
515,000
|
|
|
500,000
|
|
|
500,000
|
|
(1)
|
Refinanced on August 23, 2017 by the New Term Loan A and the New Term Loan B. Term Loan B was executed on February 22, 2017.
|
(2)
|
Refinanced on February 22, 2017 by the Term Loan B.
|
(3)
|
Pursuant to the August 23, 2017 refinancing, the interest rate on the Preexisting Revolver was reduced from L+
2.50%
to L+
2.25%
and the maturity was extended from July 2021 to July 2022.
|
(4)
|
Excludes net unamortized debt issuance costs.
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Defined benefit pension and other post retirement benefit plans
|
$
|
(102,583
|
)
|
|
$
|
(105,036
|
)
|
Unrealized loss on foreign currency forward contracts, interest rate swaps, and available-for-sale securities
|
(2,476
|
)
|
|
(15,499
|
)
|
||
Unrealized foreign currency translation gain (losses)
|
8,559
|
|
|
(2,264
|
)
|
||
Total accumulated other comprehensive loss, net of tax
|
$
|
(96,500
|
)
|
|
$
|
(122,799
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
92,825
|
|
|
$
|
42,256
|
|
|
$
|
166,395
|
|
|
$
|
210,370
|
|
Less: Net income attributable to noncontrolling interests
|
1,307
|
|
|
1,047
|
|
|
3,726
|
|
|
3,227
|
|
||||
Net income from continuing operations available to common stockholders, basic and diluted
|
$
|
91,518
|
|
|
$
|
41,209
|
|
|
$
|
162,669
|
|
|
$
|
207,143
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average common shares outstanding
|
277,477
|
|
|
278,399
|
|
|
277,754
|
|
|
277,125
|
|
||||
Add: Dilutive effect of stock options and restricted stock awards
|
892
|
|
|
5,063
|
|
|
1,894
|
|
|
5,794
|
|
||||
Diluted weighted-average common shares outstanding
|
278,369
|
|
|
283,462
|
|
|
279,648
|
|
|
282,919
|
|
||||
Earning per share from continuing operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.33
|
|
|
$
|
0.15
|
|
|
0.59
|
|
|
0.75
|
|
||
Diluted
|
$
|
0.33
|
|
|
$
|
0.15
|
|
|
0.58
|
|
|
0.73
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
||||||
Travel Network
|
$
|
632,349
|
|
|
$
|
582,364
|
|
|
$
|
1,931,441
|
|
|
$
|
1,805,750
|
|
Airline and Hospitality Solutions
|
274,923
|
|
|
262,391
|
|
|
804,679
|
|
|
752,940
|
|
||||
Eliminations
|
(6,666
|
)
|
|
(5,773
|
)
|
|
(19,498
|
)
|
|
(14,923
|
)
|
||||
Total revenue
|
$
|
900,606
|
|
|
$
|
838,982
|
|
|
$
|
2,716,622
|
|
|
$
|
2,543,767
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Gross Profit
(a)
|
|
|
|
|
|
|
|
|
|
||||||
Travel Network
|
$
|
270,140
|
|
|
$
|
255,657
|
|
|
$
|
863,307
|
|
|
$
|
842,557
|
|
Airline and Hospitality Solutions
|
132,069
|
|
|
114,136
|
|
|
360,259
|
|
|
323,481
|
|
||||
Corporate
|
(30,977
|
)
|
|
(24,812
|
)
|
|
(82,979
|
)
|
|
(59,596
|
)
|
||||
Total
|
$
|
371,232
|
|
|
$
|
344,981
|
|
|
$
|
1,140,587
|
|
|
$
|
1,106,442
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA
(b)
|
|
|
|
|
|
|
|
|
|
||||||
Travel Network
|
$
|
237,295
|
|
|
$
|
219,865
|
|
|
$
|
773,408
|
|
|
$
|
744,626
|
|
Airline and Hospitality Solutions
|
111,653
|
|
|
95,072
|
|
|
298,895
|
|
|
269,955
|
|
||||
Total segments
|
348,948
|
|
|
314,937
|
|
|
1,072,303
|
|
|
1,014,581
|
|
||||
Corporate
|
(86,022
|
)
|
|
(77,080
|
)
|
|
(250,399
|
)
|
|
(217,760
|
)
|
||||
Total
|
$
|
262,926
|
|
|
$
|
237,857
|
|
|
$
|
821,904
|
|
|
$
|
796,821
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
||||||
Travel Network
|
$
|
20,511
|
|
|
$
|
19,519
|
|
|
$
|
61,620
|
|
|
$
|
57,725
|
|
Airline and Hospitality Solutions
|
43,205
|
|
|
41,732
|
|
|
121,839
|
|
|
114,080
|
|
||||
Total segments
|
63,716
|
|
|
61,251
|
|
|
183,459
|
|
|
171,805
|
|
||||
Corporate
|
33,326
|
|
|
47,979
|
|
|
112,270
|
|
|
132,151
|
|
||||
Total
|
$
|
97,042
|
|
|
$
|
109,230
|
|
|
$
|
295,729
|
|
|
$
|
303,956
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Capital Expenditures
(c)
|
|
|
|
|
|
|
|
|
|
||||||
Travel Network
|
$
|
19,895
|
|
|
$
|
25,763
|
|
|
$
|
69,151
|
|
|
$
|
72,918
|
|
Airline and Hospitality Solutions
|
53,034
|
|
|
68,990
|
|
|
171,423
|
|
|
200,455
|
|
||||
Total segments
|
72,929
|
|
|
94,753
|
|
|
240,574
|
|
|
273,373
|
|
||||
Corporate
|
18,996
|
|
|
16,195
|
|
|
50,205
|
|
|
45,436
|
|
||||
Total
|
$
|
91,925
|
|
|
$
|
110,948
|
|
|
$
|
290,779
|
|
|
$
|
318,809
|
|
(a)
|
The following table sets forth the reconciliation of Adjusted Gross Profit to operating income in our statement of operations (in thousands):
|
|
Three Months Ended September 30,
|
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Adjusted Gross Profit
|
$
|
371,232
|
|
|
$
|
344,981
|
|
|
$
|
1,140,587
|
|
|
$
|
1,106,442
|
|
Less adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative
|
91,840
|
|
|
155,182
|
|
|
383,137
|
|
|
435,924
|
|
||||
Impairment and related charges
(7)
|
—
|
|
|
—
|
|
|
92,022
|
|
|
—
|
|
||||
Cost of revenue adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
(1)
|
79,976
|
|
|
77,397
|
|
|
229,688
|
|
|
209,276
|
|
||||
Restructuring and other costs
(4)
|
—
|
|
|
—
|
|
|
12,976
|
|
|
—
|
|
||||
Amortization of upfront incentive consideration
(2)
|
18,005
|
|
|
17,139
|
|
|
50,298
|
|
|
43,372
|
|
||||
Stock-based compensation
|
4,615
|
|
|
5,113
|
|
|
13,626
|
|
|
14,259
|
|
||||
Operating income
|
$
|
176,796
|
|
|
$
|
90,150
|
|
|
$
|
358,840
|
|
|
$
|
403,611
|
|
(b)
|
The following table sets forth the reconciliation of Adjusted EBITDA to income from continuing operations in our statement of operations (in thousands):
|
|
Three Months Ended September 30,
|
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Adjusted EBITDA
|
$
|
262,926
|
|
|
$
|
237,857
|
|
|
$
|
821,904
|
|
|
$
|
796,821
|
|
Less adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization of property and equipment
(1a)
|
66,332
|
|
|
58,271
|
|
|
191,442
|
|
|
168,150
|
|
||||
Amortization of capitalized implementation costs
(1b)
|
10,484
|
|
|
11,529
|
|
|
28,621
|
|
|
28,228
|
|
||||
Acquisition-related amortization
(1c)
|
20,226
|
|
|
39,430
|
|
|
75,666
|
|
|
107,578
|
|
||||
Amortization of upfront incentive consideration
(2)
|
18,005
|
|
|
17,139
|
|
|
50,298
|
|
|
43,372
|
|
||||
Impairment and related charges
(7)
|
—
|
|
|
—
|
|
|
92,022
|
|
|
—
|
|
||||
Interest expense, net
|
38,919
|
|
|
38,002
|
|
|
116,577
|
|
|
116,414
|
|
||||
Loss on extinguishment of debt
|
1,012
|
|
|
3,683
|
|
|
1,012
|
|
|
3,683
|
|
||||
Other, net
(3)
|
3,802
|
|
|
(281
|
)
|
|
19,788
|
|
|
(4,517
|
)
|
||||
Restructuring and other costs
(4)
|
—
|
|
|
583
|
|
|
25,304
|
|
|
1,823
|
|
||||
Acquisition-related costs
(5)
|
—
|
|
|
90
|
|
|
—
|
|
|
714
|
|
||||
Litigation costs (reimbursements), net
(6)
|
(40,929
|
)
|
|
7,034
|
|
|
(36,470
|
)
|
|
5,089
|
|
||||
Stock-based compensation
|
11,655
|
|
|
12,913
|
|
|
34,413
|
|
|
36,012
|
|
||||
Provision for income taxes
|
40,595
|
|
|
7,208
|
|
|
56,836
|
|
|
79,905
|
|
||||
Income from continuing operations
|
$
|
92,825
|
|
|
$
|
42,256
|
|
|
$
|
166,395
|
|
|
$
|
210,370
|
|
(1)
|
Depreciation and amortization expenses:
|
a.
|
Depreciation and amortization of property and equipment includes software developed for internal use.
|
b.
|
Amortization of capitalized implementation costs represents amortization of upfront costs to implement new customer contracts under our SaaS and hosted revenue model.
|
c.
|
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 and amortization of the excess basis in our underlying equity in joint ventures.
|
(2)
|
Our Travel Network business at times makes upfront cash payments or other consideration to travel agency subscribers at the inception or modification of a service contract, which are capitalized and amortized over an average expected life of the service contract, generally over
three years
to
five years
. Such consideration is made with the objective of increasing the number of clients or to ensure or improve customer loyalty. Such service contract terms are established such that the supplier and other fees generated over the life of the contract will exceed the cost of the incentive consideration provided up front. Such service contracts with travel agency subscribers require that the customer commit to achieving certain economic objectives and generally have terms requiring repayment of the upfront incentive consideration if those objectives are not met.
|
(3)
|
In the nine months ended 2017, we recognized a
$15 million
loss related to debt modification costs associated with our debt refinancing. In the first quarter of 2016, we recognized a gain of
$6 million
associated with the receipt of an earn-out payment from the sale of a business in 2013. In addition, other, net includes foreign exchange gains and losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into the relevant functional currency.
|
(4)
|
Restructuring and other costs represent charges associated with business restructuring and associated changes implemented which resulted in severance benefits related to employee terminations, integration and facility opening or closing costs and other business reorganization costs. In the second quarter of 2017, we recorded a
$25 million
charge associated with an announced action to reduce our workforce. This reduction aligns our operations with business needs and implements an ongoing cost and organizational structure consistent with our expected growth needs and opportunities.
|
(5)
|
Acquisition-related costs represent fees and expenses incurred associated with the acquisition of the Trust Group and Airpas Aviation (see Note 2, Acquisitions).
|
(6)
|
Litigation costs (reimbursements), net represent charges and legal fee reimbursements associated with antitrust litigation. In the third quarter of 2017, we recorded a
$43 million
reimbursement, net of accrued legal and related expenses, from a settlement with our insurance carriers with respect to the American Airlines litigation (see Note 11, Contingencies).
|
(7)
|
In the three months ended June 30, 2017, we recorded an impairment charge of
$92 million
associated with net capitalized contract costs related to an Airline Solutions' customer based on our analysis of the recoverability of such amounts. A formal contract dispute resolution process was commenced and due to the uncertainty of the ultimate outcome, we recorded this estimated charge. In the third quarter of 2017, the customer entered insolvency proceedings and our assessment of the impairment charge recorded in the second quarter did not change (see Note 4, Impairment and Related Charges).
|
(c)
|
Includes capital expenditures and capitalized implementation costs as summarized below (in thousands):
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Additions to property and equipment
|
$
|
75,401
|
|
|
$
|
89,639
|
|
|
$
|
242,811
|
|
|
$
|
254,232
|
|
Capitalized implementation costs
|
16,524
|
|
|
21,309
|
|
|
47,968
|
|
|
64,577
|
|
||||
Adjusted Capital Expenditures
|
$
|
91,925
|
|
|
$
|
110,948
|
|
|
$
|
290,779
|
|
|
$
|
318,809
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||
Travel Network
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Direct Billable Bookings - Air
|
114,259
|
|
|
110,585
|
|
|
3.3%
|
|
356,478
|
|
|
342,353
|
|
|
4.1%
|
Direct Billable Bookings - Non-Air
|
15,540
|
|
|
15,165
|
|
|
2.5%
|
|
46,934
|
|
|
46,078
|
|
|
1.9%
|
Total Direct Billable Bookings
|
129,799
|
|
|
125,750
|
|
|
3.2%
|
|
403,412
|
|
|
388,431
|
|
|
3.9%
|
Airline Solutions Passengers Boarded
|
186,887
|
|
|
206,332
|
|
|
(9.4)%
|
|
599,097
|
|
|
589,512
|
|
|
1.6%
|
•
|
these non-GAAP financial measures exclude certain recurring, non-cash charges such as stock-based compensation expense and amortization of acquired intangible assets;
|
•
|
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted Gross Profit and Adjusted EBITDA do not reflect cash requirements for such replacements;
|
•
|
Adjusted Net Income and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness;
|
•
|
Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;
|
•
|
Free Cash Flow removes the impact of accrual-basis accounting on asset accounts and non-debt liability accounts, and does not reflect the cash requirements necessary to service the principal payments on our indebtedness; and
|
•
|
other companies, including companies in our industry, may calculate Adjusted Gross Profit, Adjusted Net Income, Adjusted EBITDA, Adjusted Capital Expenditures, or Free Cash Flow differently, which reduces their usefulness as comparative measures.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income attributable to common stockholders
|
$
|
90,989
|
|
|
$
|
40,815
|
|
|
$
|
160,441
|
|
|
$
|
218,001
|
|
Loss (income) from discontinued operations, net of tax
|
529
|
|
|
394
|
|
|
2,228
|
|
|
(10,858
|
)
|
||||
Net income attributable to noncontrolling interests
(1)
|
1,307
|
|
|
1,047
|
|
|
3,726
|
|
|
3,227
|
|
||||
Income from continuing operations
|
92,825
|
|
|
42,256
|
|
|
166,395
|
|
|
210,370
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisition-related amortization
(2a)
|
20,226
|
|
|
39,430
|
|
|
75,666
|
|
|
107,578
|
|
||||
Impairment and related charges
(8)
|
—
|
|
|
—
|
|
|
92,022
|
|
|
—
|
|
||||
Loss on extinguishment of debt
|
1,012
|
|
|
3,683
|
|
|
1,012
|
|
|
3,683
|
|
||||
Other, net
(4)
|
3,802
|
|
|
(281
|
)
|
|
19,788
|
|
|
(4,517
|
)
|
||||
Restructuring and other costs
(5)
|
—
|
|
|
583
|
|
|
25,304
|
|
|
1,823
|
|
||||
Acquisition-related costs
(6)
|
—
|
|
|
90
|
|
|
—
|
|
|
714
|
|
||||
Litigation (reimbursements) costs, net
(7)
|
(40,929
|
)
|
|
7,034
|
|
|
(36,470
|
)
|
|
5,089
|
|
||||
Stock-based compensation
|
11,655
|
|
|
12,913
|
|
|
34,413
|
|
|
36,012
|
|
||||
Tax impact of net income adjustments
|
(1,670
|
)
|
|
(30,349
|
)
|
|
(75,973
|
)
|
|
(66,698
|
)
|
||||
Adjusted Net Income from continuing operations
|
$
|
86,921
|
|
|
$
|
75,359
|
|
|
$
|
302,157
|
|
|
$
|
294,054
|
|
Adjusted Net Income from continuing operations per share
|
$
|
0.31
|
|
|
$
|
0.27
|
|
|
$
|
1.08
|
|
|
$
|
1.04
|
|
Diluted weighted-average common shares outstanding
|
278,369
|
|
|
283,462
|
|
|
279,648
|
|
|
282,919
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Adjusted Net Income from continuing operations
|
$
|
86,921
|
|
|
$
|
75,359
|
|
|
$
|
302,157
|
|
|
$
|
294,054
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization of property and equipment
(2b)
|
66,332
|
|
|
58,271
|
|
|
191,442
|
|
|
168,150
|
|
||||
Amortization of capitalized implementation costs
(2c)
|
10,484
|
|
|
11,529
|
|
|
28,621
|
|
|
28,228
|
|
||||
Amortization of upfront incentive consideration
(3)
|
18,005
|
|
|
17,139
|
|
|
50,298
|
|
|
43,372
|
|
||||
Interest expense, net
|
38,919
|
|
|
38,002
|
|
|
116,577
|
|
|
116,414
|
|
||||
Remaining provision for income taxes
|
42,265
|
|
|
37,557
|
|
|
132,809
|
|
|
146,603
|
|
||||
Adjusted EBITDA
|
$
|
262,926
|
|
|
$
|
237,857
|
|
|
$
|
821,904
|
|
|
$
|
796,821
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||
|
Travel
Network |
|
Airline and
Hospitality Solutions |
|
Corporate
|
|
Total
|
||||||||
Operating income (loss)
|
$
|
198,422
|
|
|
$
|
68,448
|
|
|
$
|
(90,074
|
)
|
|
$
|
176,796
|
|
Add back:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
34,494
|
|
|
21,292
|
|
|
36,054
|
|
|
91,840
|
|
||||
Cost of revenue adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
(2)
|
19,219
|
|
|
42,329
|
|
|
18,428
|
|
|
79,976
|
|
||||
Amortization of upfront incentive consideration
(3)
|
18,005
|
|
|
—
|
|
|
—
|
|
|
18,005
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
4,615
|
|
|
4,615
|
|
||||
Adjusted Gross Profit
|
270,140
|
|
|
132,069
|
|
|
(30,977
|
)
|
|
371,232
|
|
||||
Selling, general and administrative
|
(34,494
|
)
|
|
(21,292
|
)
|
|
(36,054
|
)
|
|
(91,840
|
)
|
||||
Joint venture equity income
|
357
|
|
|
—
|
|
|
—
|
|
|
357
|
|
||||
Selling, general and administrative adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
(2)
|
1,292
|
|
|
876
|
|
|
14,898
|
|
|
17,066
|
|
||||
Litigation reimbursements
(7)
|
—
|
|
|
—
|
|
|
(40,929
|
)
|
|
(40,929
|
)
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
7,040
|
|
|
7,040
|
|
||||
Adjusted EBITDA
|
$
|
237,295
|
|
|
$
|
111,653
|
|
|
$
|
(86,022
|
)
|
|
$
|
262,926
|
|
|
Three Months Ended September 30, 2016
|
||||||||||||||
|
Travel
Network |
|
Airline and
Hospitality Solutions |
|
Corporate
|
|
Total
|
||||||||
Operating income (loss)
|
$
|
182,489
|
|
|
$
|
53,340
|
|
|
$
|
(145,679
|
)
|
|
$
|
90,150
|
|
Add back:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
37,583
|
|
|
19,405
|
|
|
98,194
|
|
|
155,182
|
|
||||
Cost of revenue adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
(2)
|
18,446
|
|
|
41,391
|
|
|
17,560
|
|
|
77,397
|
|
||||
Amortization of upfront incentive consideration
(3)
|
17,139
|
|
|
—
|
|
|
—
|
|
|
17,139
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
5,113
|
|
|
5,113
|
|
||||
Adjusted Gross Profit
|
255,657
|
|
|
114,136
|
|
|
(24,812
|
)
|
|
344,981
|
|
||||
Selling, general and administrative
|
(37,583
|
)
|
|
(19,405
|
)
|
|
(98,194
|
)
|
|
(155,182
|
)
|
||||
Joint venture equity income
|
718
|
|
|
—
|
|
|
—
|
|
|
718
|
|
||||
Selling, general and administrative adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
(2)
|
1,073
|
|
|
341
|
|
|
30,419
|
|
|
31,833
|
|
||||
Restructuring and other costs
(5)
|
—
|
|
|
—
|
|
|
583
|
|
|
583
|
|
||||
Acquisition-related costs
(6)
|
—
|
|
|
—
|
|
|
90
|
|
|
90
|
|
||||
Litigation costs
(7)
|
—
|
|
|
—
|
|
|
7,034
|
|
|
7,034
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
7,800
|
|
|
7,800
|
|
||||
Adjusted EBITDA
|
$
|
219,865
|
|
|
$
|
95,072
|
|
|
$
|
(77,080
|
)
|
|
$
|
237,857
|
|
|
Nine Months Ended September 30, 2017
|
|||||||||||||||
|
Travel
Network |
|
Airline and
Hospitality Solutions |
|
Corporate
|
|
Total
|
|||||||||
Operating income (loss)
|
$
|
659,722
|
|
|
$
|
177,056
|
|
|
$
|
(477,938
|
)
|
|
$
|
358,840
|
|
|
Add back:
|
|
|
|
|
|
|
|
|||||||||
Selling, general and administrative
|
95,676
|
|
|
63,871
|
|
—
|
|
223,590
|
|
|
383,137
|
|
||||
Impairment and related charges
(8)
|
—
|
|
|
—
|
|
|
92,022
|
|
|
92,022
|
|
|||||
Cost of revenue adjustments:
|
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization
(2)
|
57,611
|
|
|
119,332
|
|
|
52,745
|
|
|
229,688
|
|
|||||
Restructuring and other costs
(5)
|
—
|
|
|
—
|
|
|
12,976
|
|
|
12,976
|
|
|||||
Amortization of upfront incentive consideration
(3)
|
50,298
|
|
|
—
|
|
|
—
|
|
|
50,298
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
13,626
|
|
|
13,626
|
|
|||||
Adjusted Gross Profit
|
863,307
|
|
|
360,259
|
|
|
(82,979
|
)
|
|
1,140,587
|
|
|||||
Selling, general and administrative
|
(95,676
|
)
|
|
(63,871
|
)
|
|
(223,590
|
)
|
|
(383,137
|
)
|
|||||
Joint venture equity income
|
1,768
|
|
|
—
|
|
|
—
|
|
|
1,768
|
|
|||||
Selling, general and administrative adjustments:
|
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization
(2)
|
4,009
|
|
|
2,507
|
|
|
59,525
|
|
|
66,041
|
|
|||||
Restructuring and other costs
(5)
|
—
|
|
|
—
|
|
|
12,328
|
|
|
12,328
|
|
|||||
Litigation reimbursements
(7)
|
—
|
|
|
—
|
|
|
(36,470
|
)
|
|
(36,470
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
20,787
|
|
|
20,787
|
|
|||||
Adjusted EBITDA
|
$
|
773,408
|
|
|
$
|
298,895
|
|
|
$
|
(250,399
|
)
|
|
$
|
821,904
|
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||
|
Travel
Network |
|
Airline and
Hospitality Solutions |
|
Corporate
|
|
Total
|
||||||||
Operating income (loss)
|
$
|
641,285
|
|
|
$
|
155,875
|
|
|
$
|
(393,549
|
)
|
|
$
|
403,611
|
|
Add back:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
103,701
|
|
|
54,408
|
|
|
277,815
|
|
|
435,924
|
|
||||
Cost of revenue adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
(2)
|
54,199
|
|
|
113,198
|
|
|
41,879
|
|
|
209,276
|
|
||||
Amortization of upfront incentive consideration
(3)
|
43,372
|
|
|
—
|
|
|
—
|
|
|
43,372
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
14,259
|
|
|
14,259
|
|
||||
Adjusted Gross Profit
|
842,557
|
|
|
323,481
|
|
|
(59,596
|
)
|
|
1,106,442
|
|
||||
Selling, general and administrative
|
(103,701
|
)
|
|
(54,408
|
)
|
|
(277,815
|
)
|
|
(435,924
|
)
|
||||
Joint venture equity income
|
2,244
|
|
|
—
|
|
|
—
|
|
|
2,244
|
|
||||
Selling, general and administrative adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
(2)
|
3,526
|
|
|
882
|
|
|
90,272
|
|
|
94,680
|
|
||||
Restructuring and other costs
(5)
|
—
|
|
|
—
|
|
|
1,823
|
|
|
1,823
|
|
||||
Acquisition-related costs
(6)
|
—
|
|
|
—
|
|
|
714
|
|
|
714
|
|
||||
Litigation costs
(7)
|
—
|
|
|
—
|
|
|
5,089
|
|
|
5,089
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
21,753
|
|
|
21,753
|
|
||||
Adjusted EBITDA
|
$
|
744,626
|
|
|
$
|
269,955
|
|
|
$
|
(217,760
|
)
|
|
$
|
796,821
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Additions to property and equipment
|
$
|
75,401
|
|
|
$
|
89,639
|
|
|
$
|
242,811
|
|
|
$
|
254,232
|
|
Capitalized implementation costs
|
16,524
|
|
|
21,309
|
|
|
47,968
|
|
|
64,577
|
|
||||
Adjusted Capital Expenditures
|
$
|
91,925
|
|
|
$
|
110,948
|
|
|
$
|
290,779
|
|
|
$
|
318,809
|
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash provided by operating activities
|
$
|
455,906
|
|
|
$
|
432,534
|
|
Cash used in investing activities
|
(242,952
|
)
|
|
(418,713
|
)
|
||
Cash used in financing activities
|
(300,936
|
)
|
|
(46,647
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash provided by operating activities
|
$
|
455,906
|
|
|
$
|
432,534
|
|
Additions to property and equipment
|
(242,811
|
)
|
|
(254,232
|
)
|
||
Free Cash Flow
|
$
|
213,095
|
|
|
$
|
178,302
|
|
(1)
|
Net income attributable to noncontrolling interests represents an adjustment to include earnings allocated to noncontrolling interests held in (i) Sabre Travel Network Middle East of 40%, (ii) Sabre Seyahat Dagitim Sistemleri A.S. of 40%, and (iii) Abacus International Lanka Pte Ltd of 40%.
|
(2)
|
Depreciation and amortization expenses:
|
a.
|
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 and amortization of the excess basis in our underlying equity in joint ventures.
|
b.
|
Depreciation and amortization of property and equipment includes software developed for internal use.
|
c.
|
Amortization of capitalized implementation costs represents amortization of upfront costs to implement new customer contracts under our SaaS and hosted revenue model.
|
(3)
|
Our Travel Network business at times provides upfront incentive consideration to travel agency subscribers at the inception or modification of a service contract, which are capitalized and amortized to cost of revenue over an average expected life of the service contract, generally over three to five years. Such consideration is made with the objective of increasing the number of clients or to ensure or improve customer loyalty. Such service contract terms are established such that the supplier and other fees generated over the life of the contract will exceed the cost of the incentive consideration provided upfront. Such service contracts with travel agency subscribers require that the customer commit to achieving certain economic objectives and generally have terms requiring repayment of the upfront incentive consideration if those objectives are not met.
|
(4)
|
In the nine months ended 2017, we recognized a $15 million loss related to debt modification costs associated with our debt refinancing. In the first quarter of 2016, we recognized a gain of
$6 million
associated with the receipt of an earn-out payment from the sale of a business in 2013. In addition, other, net includes foreign exchange gains and losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into the relevant functional currency.
|
(5)
|
Restructuring and other costs represent charges associated with business restructuring and associated changes implemented which resulted in severance benefits related to employee terminations, integration and facility opening or closing costs and other business reorganization costs. In the second quarter of 2017, we recorded $25 million charge associated with an announced action to reduce our workforce. This reduction aligns our operations with business needs and implements an ongoing cost and organizational structure consistent with our expected growth needs and opportunities.
|
(6)
|
Acquisition-related costs represent fees and expenses incurred associated with the acquisition of the Trust Group and Airpas Aviation.
|
(7)
|
Litigation costs (reimbursements), net represent charges and legal fee reimbursements associated with antitrust litigation. In the third quarter of 2017, we recorded a $43 million reimbursement, net of accrued legal and related expenses, from a settlement with our insurance carriers with respect to the American Airlines litigation (see Note 11, Contingencies).
|
(8)
|
In the three months ended June 30, 2017, we recorded an impairment charge of
$92 million
associated with net capitalized contract costs related to an Airline Solutions' customer based on our analysis of the recoverability of such amounts. A formal contract dispute resolution process was commenced and due to the uncertainty of the ultimate outcome, we recorded this estimated charge. In the third quarter of 2017, the customer entered insolvency proceedings and our assessment of the impairment charge recorded in the second quarter did not change. See "—Recent Developments Affecting our Results of Operations."
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||||
|
2017
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Amounts in thousands)
|
|||||||||||||
Revenue
|
$
|
900,606
|
|
$
|
838,982
|
|
|
$
|
2,716,622
|
|
|
$
|
2,543,767
|
|
Cost of revenue
|
631,970
|
|
593,650
|
|
|
1,882,623
|
|
|
1,704,232
|
|
||||
Selling, general and administrative
|
91,840
|
|
155,182
|
|
|
383,137
|
|
|
435,924
|
|
||||
Impairment and related charges
|
—
|
|
—
|
|
|
92,022
|
|
|
—
|
|
||||
Operating income
|
176,796
|
|
90,150
|
|
|
358,840
|
|
|
403,611
|
|
||||
Interest expense, net
|
(38,919
|
)
|
(38,002
|
)
|
|
(116,577
|
)
|
|
(116,414
|
)
|
||||
Loss on extinguishment of debt
|
(1,012
|
)
|
(3,683
|
)
|
|
(1,012
|
)
|
|
(3,683
|
)
|
||||
Joint venture equity income
|
357
|
|
718
|
|
|
1,768
|
|
|
2,244
|
|
||||
Other (expense) income, net
|
(3,802
|
)
|
281
|
|
|
(19,788
|
)
|
|
4,517
|
|
||||
Income from continuing operations before income taxes
|
133,420
|
|
49,464
|
|
|
223,231
|
|
|
290,275
|
|
||||
Provision for income taxes
|
40,595
|
|
7,208
|
|
|
56,836
|
|
|
79,905
|
|
||||
Income from continuing operations
|
$
|
92,825
|
|
$
|
42,256
|
|
|
$
|
166,395
|
|
|
$
|
210,370
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Travel Network
|
$
|
632,349
|
|
|
$
|
582,364
|
|
|
$
|
49,985
|
|
|
9
|
%
|
Airline and Hospitality Solutions
|
274,923
|
|
|
262,391
|
|
|
12,532
|
|
|
5
|
%
|
|||
Total segment revenue
|
907,272
|
|
|
844,755
|
|
|
62,517
|
|
|
7
|
%
|
|||
Eliminations
|
(6,666
|
)
|
|
(5,773
|
)
|
|
(893
|
)
|
|
(15
|
)%
|
|||
Total revenue
|
$
|
900,606
|
|
|
$
|
838,982
|
|
|
$
|
61,624
|
|
|
7
|
%
|
•
|
a $1 million decrease in Airline Solutions’ SabreSonic Customer Sales and Service (“SabreSonic CSS”) revenue for the
three months ended September 30, 2017
compared to the same period in the prior year. Passengers Boarded decreased by
9%
to
187 million
for the
three months ended September 30, 2017
driven by the termination of an agreement with Southwest Airlines related to services and processing for their legacy air reservation system in the second quarter of 2017, partially offset by the cut-over of Alitalia Airlines to SabreSonic CSS in the fourth quarter of 2016 and consistent carrier growth of 8%;
|
•
|
a $5 million increase in Airline Solutions’ commercial and operations solutions revenue driven by growth in multiple products across our portfolio; and
|
•
|
a $8 million increase in Hospitality Solutions revenue for the
three months ended September 30, 2017
compared to the same period in the prior year, driven primarily by an increase in Central Reservation System (“CRS”) revenue from new and existing customers.
|
|
Three Months Ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Travel Network
|
$
|
362,210
|
|
|
$
|
326,707
|
|
|
$
|
35,503
|
|
|
11
|
%
|
Airline and Hospitality Solutions
|
142,854
|
|
|
148,256
|
|
|
(5,402
|
)
|
|
(4
|
)%
|
|||
Eliminations
|
(6,715
|
)
|
|
(5,630
|
)
|
|
(1,085
|
)
|
|
(19
|
)%
|
|||
Total segment cost of revenue
|
498,349
|
|
|
469,333
|
|
|
29,016
|
|
|
6
|
%
|
|||
Corporate
|
35,640
|
|
|
29,781
|
|
|
5,859
|
|
|
20
|
%
|
|||
Depreciation and amortization
|
79,976
|
|
|
77,397
|
|
|
2,579
|
|
|
3
|
%
|
|||
Amortization of upfront incentive consideration
|
18,005
|
|
|
17,139
|
|
|
866
|
|
|
5
|
%
|
|||
Total cost of revenue
|
$
|
631,970
|
|
|
$
|
593,650
|
|
|
$
|
38,320
|
|
|
6
|
%
|
|
Three Months Ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Selling, general and administrative
|
$
|
91,840
|
|
|
$
|
155,182
|
|
|
$
|
(63,342
|
)
|
|
(41
|
)%
|
|
Three Months Ended September 30,
|
|
|
|||||||||||
|
2017
|
|
2016
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Provision for income taxes
|
$
|
40,595
|
|
|
$
|
7,208
|
|
|
$
|
33,387
|
|
|
463
|
%
|
|
Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Travel Network
|
$
|
1,931,441
|
|
|
$
|
1,805,750
|
|
|
$
|
125,691
|
|
|
7
|
%
|
Airline and Hospitality Solutions
|
804,679
|
|
|
752,940
|
|
|
51,739
|
|
|
7
|
%
|
|||
Total segment revenue
|
2,736,120
|
|
|
2,558,690
|
|
|
177,430
|
|
|
7
|
%
|
|||
Eliminations
|
(19,498
|
)
|
|
(14,923
|
)
|
|
(4,575
|
)
|
|
(31
|
)%
|
|||
Total revenue
|
$
|
2,716,622
|
|
|
$
|
2,543,767
|
|
|
$
|
172,855
|
|
|
7
|
%
|
•
|
a $17 million increase in Airline Solutions’ SabreSonic CSS revenue for the
nine months ended September 30, 2017
compared to the same period in the prior year. Passengers Boarded increased by
2%
to
599 million
for the
nine months ended September 30, 2017
, driven by the cut-over of Alitalia Airlines to SabreSonic CSS in the fourth quarter of 2016 and consistent carrier growth of 6% partially offset by the termination of an agreement with Southwest Airlines related to services and processing for their legacy air reservation system;
|
•
|
a $12 million increase in Airline Solutions’ commercial and operations solutions revenue driven by growth in multiple products across our portfolio;
|
•
|
a $26 million increase in Hospitality Solutions revenue for the
nine months ended September 30, 2017
compared to the same period in the prior year driven primarily by an increase in CRS revenue from new and existing customers; and
|
•
|
a $4 million decrease in discrete professional service fees revenue, as a result of reduced sales compared to the prior period.
|
|
Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Travel Network
|
$
|
1,068,134
|
|
|
$
|
963,193
|
|
|
$
|
104,941
|
|
|
11
|
%
|
Airline and Hospitality Solutions
|
444,420
|
|
|
429,460
|
|
|
14,960
|
|
|
3
|
%
|
|||
Eliminations
|
(19,498
|
)
|
|
(14,693
|
)
|
|
(4,805
|
)
|
|
(33
|
)%
|
|||
Total segment cost of revenue
|
1,493,056
|
|
|
1,377,960
|
|
|
115,096
|
|
|
8
|
%
|
|||
Corporate
|
109,581
|
|
|
73,624
|
|
|
35,957
|
|
|
49
|
%
|
|||
Depreciation and amortization
|
229,688
|
|
|
209,276
|
|
|
20,412
|
|
|
10
|
%
|
|||
Amortization of upfront incentive consideration
|
50,298
|
|
|
43,372
|
|
|
6,926
|
|
|
16
|
%
|
|||
Total cost of revenue
|
$
|
1,882,623
|
|
|
$
|
1,704,232
|
|
|
$
|
178,391
|
|
|
10
|
%
|
|
Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Selling, general and administrative
|
$
|
383,137
|
|
|
$
|
435,924
|
|
|
$
|
(52,787
|
)
|
|
(12
|
)%
|
|
Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Impairment and related charges
|
$
|
92,022
|
|
|
$
|
—
|
|
|
$
|
92,022
|
|
|
100
|
%
|
|
Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Other income (expense), net
|
$
|
(19,788
|
)
|
|
$
|
4,517
|
|
|
$
|
(24,305
|
)
|
|
(538
|
)%
|
|
Nine Months Ended September 30,
|
|
|
|||||||||||
|
2017
|
|
2016
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Provision for income taxes
|
$
|
56,836
|
|
|
$
|
79,905
|
|
|
$
|
(23,069
|
)
|
|
(29
|
)%
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Cash and cash equivalents
|
$
|
268,268
|
|
|
$
|
364,114
|
|
Available balance under the Revolver
|
375,794
|
|
|
365,006
|
|
||
Reductions to the Revolver:
|
|
|
|
||||
Revolver outstanding balance
|
—
|
|
|
—
|
|
||
Outstanding letters of credit
|
24,206
|
|
|
34,994
|
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(Amounts in thousands)
|
||||||
Cash provided by operating activities
|
$
|
455,906
|
|
|
$
|
432,534
|
|
Cash used in investing activities
|
(242,952
|
)
|
|
(418,713
|
)
|
||
Cash used in financing activities
|
(300,936
|
)
|
|
(46,647
|
)
|
||
Cash used in discontinued operations
|
(3,636
|
)
|
|
(15,766
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(4,228
|
)
|
|
(536
|
)
|
||
Decrease in cash and cash equivalents
|
$
|
(95,846
|
)
|
|
$
|
(49,128
|
)
|
•
|
In February 2017, we received proceeds of $1,898 million (net of $2 million discount) from the Term Loan B, which were used to pay off approximately $1,753 million of all existing classes of outstanding term loans (other than the Term Loan A) and $12 million in debt issuance costs. The remaining proceeds were used for purposes of repaying approximately $80 million of Sabre's outstanding mortgage on its corporate headquarters, and for other general corporate purposes;
|
•
|
we made quarterly payments totaling $36 million on the principal outstanding on our term loans;
|
•
|
pursuant to the Refinancing in August 2017, we paid $7 million in debt modification costs;
|
•
|
we made our first annual payment on the TRA liability for $99 million, excluding interest;
|
•
|
we paid
$116 million
in dividends on our common stock;
|
•
|
we repurchased 5,153,241 shares of our common stock outstanding totaling $98 million; and
|
•
|
we received proceeds of $22 million from the settlement of employee stock-option awards and paid $11 million in income tax withholdings associated with the settlement of employee restricted-stock awards
.
|
•
|
we received proceeds of $597 million (net of $3 million discount) from the issuance of Term Loan A and used a portion of the proceeds to repay $350 million of outstanding principal on our Term Loan B and Incremental Term Loan Facility and $11 million in debt issuance costs;
|
•
|
we made quarterly payments totaling $18 million on the principal outstanding on our term loans;
|
•
|
we paid the remaining principal of $165 million on our senior secured notes due 2016, which matured in March 2016;
|
•
|
we made draws on our Prior Revolver totaling $458 million and payments totaling $458 million resulting in no outstanding balance as of September 30, 2016;
|
•
|
we paid $108 million in dividends on our common stock; and
|
•
|
we received proceeds of $28 million from the settlement of employee stock-option awards and paid $11 million in income tax withholdings associated with the settlement of employee restricted-stock awards
.
|
–
|
Under current revenue recognition guidance, we recognize revenue related to license fee and maintenance agreements ratably over the life of the contract. Under the new guidance, revenue for license fees will be recognized upon delivery of the license and ongoing maintenance services will continue to be recognized ratably over the length of the contract. For existing open agreements, this change will result in a beginning balance sheet adjustment and reduced revenue in subsequent years from these agreements, and before the impact of new sales.
|
–
|
Allocation of contract revenues among various products and solutions, and the timing of the recognition of those revenues, will be impacted by agreements with tiered pricing or variable rate structures that do not correspond with the goods or services delivered to the customer. For existing open agreements, this change will also result in a beginning balance sheet adjustment and reduced revenue in subsequent years from these agreements.
|
•
|
In the year of adoption, as a result of the new revenue recognition standard, the changes detailed above will result in a significant beginning balance sheet adjustment and we preliminarily estimate our consolidated revenue could be reduced by approximately
$40 million
to
$80 million
. Our assessment is ongoing and subject to finalization, such that the actual impact of the adoption may differ materially from this estimated range. This estimate will be updated in our Annual Report on Form 10-K for the year ending December 31, 2017.
|
•
|
Capitalization of incremental costs to obtain a contract (such as sales commissions), and recognition of these costs over the contract period will result in the recognition of an asset on our balance sheet and will impact our Airline and Hospitality Solutions segment. We currently expect that our results of operations will not be significantly impacted from the capitalization of these incremental costs.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
•
|
general and local economic conditions;
|
•
|
financial instability of travel suppliers and the impact of any fundamental corporate changes to such travel suppliers, such as airline bankruptcies or consolidations, on the cost and availability of travel content;
|
•
|
factors that affect demand for travel such as outbreaks of contagious diseases, including Zika, Ebola and the MERS virus, increases in fuel prices, changing attitudes towards the environmental costs of travel and safety concerns;
|
•
|
political events like acts or threats of terrorism, hostilities, and war;
|
•
|
inclement weather, natural or man-made disasters; and
|
•
|
factors that affect supply of travel such as travel restrictions 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.
|
•
|
the features of the implemented software may not meet the expectations or fit the business model of the customer;
|
•
|
our limited pool of trained experts for implementations cannot quickly and easily be augmented for complex implementation projects, such that resources issues, if not planned and managed effectively, could lead to costly project delays;
|
•
|
customer-specific factors, such as the stability, functionality, interconnection and scalability of the customer’s pre-existing information technology infrastructure, as well as financial or other circumstances could destabilize, delay or prevent the completion of the implementation process, which, for airline reservations systems, typically takes 12 to 18 months; and
|
•
|
customers and their partners may not fully or timely perform the actions required to be performed by them to ensure successful implementation, including measures we recommend to safeguard against technical and business risks.
|
•
|
business, political and economic instability in foreign locations, including actual or threatened terrorist activities, and military action;
|
•
|
changes in foreign currency exchange rates and financial risk arising from transactions in multiple currencies;
|
•
|
adverse laws and regulatory requirements, including more comprehensive regulation in the EU and the possible effects of the Brexit vote;
|
•
|
difficulty in developing, managing and staffing international operations because of distance, language and cultural differences;
|
•
|
disruptions to or delays in the development of communication and transportation services and infrastructure;
|
•
|
consumer attitudes, including the preference of customers for local providers;
|
•
|
increasing labor costs due to high wage inflation in foreign locations, differences in general employment conditions and regulations, and the degree of employee unionization and activism;
|
•
|
export or trade restrictions or currency controls;
|
•
|
more restrictive data privacy requirements;
|
•
|
governmental policies or actions, such as consumer, labor and trade protection measures and travel restrictions;
|
•
|
taxes, restrictions on foreign investment and limits on the repatriation of funds;
|
•
|
diminished ability to legally enforce our contractual rights; and
|
•
|
decreased protection for intellectual property.
|
•
|
Any of these providers fail to enable us to provide our customers and suppliers with reliable, real-time access to our systems. For example, in 2013, we experienced a significant outage of the Sabre platform due to a failure on the part of one of our service providers. This outage, which affected both our Travel Network business and our Airline 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.
|
•
|
Our arrangements with such providers are terminated or impaired and we cannot find alternative sources of technology or systems support on commercially reasonable terms or on a timely basis. For example, our substantial dependence on DXC for many of our systems makes it difficult for us to switch vendors and makes us more sensitive to changes in DXC's pricing for its services.
|
•
|
While we take reasonable steps to protect our brands and trademarks, we may not be successful in maintaining or defending our brands or preventing third parties from adopting similar brands. If our competitors infringe our principal trademarks, our brands may become diluted or if our competitors introduce brands or products that cause confusion with our brands or products in the marketplace, the value that our consumers associate with our brands may become diminished, which could negatively impact revenue.
|
•
|
Our patent applications may not be granted, and the patents we own could be challenged, invalidated, narrowed or circumvented by others and may not be of sufficient scope or strength to provide us with any meaningful protection or commercial advantage. Once our patents expire, or if they are invalidated, narrowed or circumvented, our competitors may be able to utilize the technology protected by our patents which may adversely affect our business.
|
•
|
Although we rely on copyright laws to protect the works of authorship created by us, we do not generally register the copyrights in our copyrightable works where such registration is permitted. Copyrights of U.S. origin must be registered before the copyright owner may bring an infringement suit in the United States. Accordingly, if one of our unregistered copyrights of U.S. origin is infringed by a third party, we will need to register the copyright before we can file an infringement suit in the United States, and our remedies in any such infringement suit may be limited.
|
•
|
We use reasonable efforts to protect our trade secrets. However, protecting trade secrets can be difficult and our efforts may provide inadequate protection to prevent unauthorized use, misappropriation, or disclosure of our trade secrets, know how, or other proprietary information.
|
•
|
We also rely on our domain names to conduct our online businesses. While we use reasonable efforts to protect and maintain our domain names, if we fail to do so the domain names may become available to others. Further, the regulatory bodies that oversee domain name registration may change their regulations in a way that adversely affects our ability to register and use certain domain names.
|
•
|
general economic and capital market conditions;
|
•
|
the availability of credit from banks or other lenders;
|
•
|
investor confidence in us; and
|
•
|
our results of operations.
|
•
|
increased vulnerability to general adverse economic and industry conditions;
|
•
|
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;
|
•
|
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;
|
•
|
limited ability 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;
|
•
|
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; and
|
•
|
a competitive disadvantage compared to our competitors that have less debt.
|
•
|
re-measurement gains and losses from changes in the value of foreign denominated assets and liabilities;
|
•
|
translation gains and losses on foreign subsidiary financial results that are translated into U.S. dollars, our functional currency, upon consolidation;
|
•
|
planning risk related to changes in exchange rates between the time we prepare our annual and quarterly forecasts and when actual results occur; and
|
•
|
the impact of relative exchange rate movements on cross-border travel, principally travel between Europe and the United States.
|
•
|
incur liens on our property, assets and revenue;
|
•
|
borrow money, and guarantee or provide other support for the indebtedness of third parties;
|
•
|
pay dividends or make other distributions on, redeem or repurchase our capital stock;
|
•
|
prepay, redeem or repurchase certain of our indebtedness;
|
•
|
enter into certain change of control transactions;
|
•
|
make investments in entities that we do not control, including joint ventures;
|
•
|
enter into certain asset sale transactions, including divestiture of certain company assets and divestiture of capital stock of wholly-owned subsidiaries;
|
•
|
enter into certain transactions with affiliates;
|
•
|
enter into secured financing arrangements;
|
•
|
enter into sale and leaseback transactions;
|
•
|
change our fiscal year; and
|
•
|
enter into substantially different lines of business.
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period 2017
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(2)
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||||
July 1 to July 31
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
477,785,853
|
|
August 1 to August 31
|
|
1,901,342
|
|
|
18.36
|
|
|
1,901,342
|
|
|
442,910,293
|
|
||
September 1 to September 30
|
|
2,236,341
|
|
|
18.15
|
|
|
2,236,341
|
|
|
402,328,209
|
|
||
Total
|
|
4,137,683
|
|
|
|
|
|
4,137,683
|
|
|
|
(1)
|
Represents shares repurchased in open market transactions pursuant to the Share Repurchase Program (as defined below).
|
(2)
|
Share repurchases were made pursuant to a multi-year share repurchase program (the "Share Repurchase Program") authorized by our board of directors on February 6, 2017. This program was announced on February 7, 2017 and allows for the purchase of up to $500 million of outstanding shares of our common stock in privately negotiated transactions or in the open market, or otherwise.
|
ITEM 6.
|
EXHIBITS
|
Exhibit
Number
|
|
Description of Exhibit
|
|
Fourth Incremental Term Facility Amendment to Amended and Restated Credit Agreement, dated August 23, 2017, among Sabre GLBL Inc., Sabre Holdings Corporation, each of the other Loan Parties party thereto, Bank of America, N.A., as Administrative Agent and the 2017 B-1 Incremental Term Lenders party thereto (incorporated by reference to Exhibit 10.1 of Sabre Corporation's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 23, 2017).
|
|
|
Term Loan A Refinancing Amendment to Amended and Restated Credit Agreement, dated August 23, 2017, among Sabre GLBL Inc., Sabre Holdings Corporation, each of the other Loan Parties party thereto, Bank of America, N.A., as Administrative Agent and the 2017 Other Term A Lenders party thereto (incorporated by reference to Exhibit 10.2 of Sabre Corporation's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 23, 2017).
|
|
|
Second Revolving Facility Refinancing Amendment to Amended and Restated Credit Agreement, dated August 23, 2017, among Sabre GLBL Inc., Sabre Holdings Corporation, each of the other Loan Parties party thereto, Bank of America, N.A., as Administrative Agent and Lenders party thereto (incorporated by reference to Exhibit 10.3 of Sabre Corporation's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 23, 2017).
|
|
|
Employment Agreement by and between Sabre Corporation and Clinton Anderson, dated July 25, 2017.
|
|
|
Rule 13a-14(a) Certification of Principal Executive Officer
|
|
|
Rule 13a-14(a) Certification of Principal Financial Officer
|
|
|
Section 1350 Certification of Principal Executive Officer
|
|
|
Section 1350 Certification of Principal Financial Officer
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
SABRE CORPORATION
|
|
|
|
|
(Registrant)
|
Date:
|
October 31, 2017
|
By:
|
|
/s/ Richard A. Simonson
|
|
|
|
|
Richard A. Simonson
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(principal financial officer of the registrant)
|
|
EXHIBIT 10.66
|
(a)
|
You will serve as Executive Vice President of the Company, and President of Sabre Hospitality Solutions. You shall have all of the authority and perform all of the functions that are consistent with such position, as determined by the Company and generally described as the top executive responsible for overseeing all operations for Sabre Hospitality Solutions. You shall perform all such duties faithfully, industriously, and to the best of your experience and talent. Except as otherwise expressly provided in this Agreement, you shall abide in all material respects by all Company policies and directives applicable to you. You will report directly to the Chief Executive Officer of the Company or his designee.
|
(b)
|
During the Employment Period (as defined below), excluding any periods of vacation and sick leave to which you are entitled, you shall devote your full working time, energy and attention to the performance of your duties and responsibilities hereunder and shall faithfully and diligently endeavor to promote the business and best interests of the Company. During the Employment Period, you may not, without the prior written consent of the Company, directly or indirectly, operate, participate in the management, operations or control of, or act as an executive, officer, consultant, agent or representative of, any type of business or service (other than as an executive of the Company or any of its subsidiaries or affiliates). It shall not, however, be a violation of the foregoing provisions of this
Section 1(b)
for you to (i) subject to the approval of the Chief Executive Officer of the Company, serve as an officer or director or otherwise participate in educational, welfare, social, religious and civic organizations, or (ii) manage your or your family’s personal, financial and legal affairs, so long as, in the case of clause (i) or (ii), any such activities do not interfere with the performance of your duties and responsibilities to the Company as provided hereunder.
|
(a)
|
Termination without Cause or by You for Good Reason
. The Company may terminate your employment at any time without Cause (as defined below) upon 60 days’ notice, or you may terminate your employment for Good Reason (as defined below), upon compliance with the notice and cure period described below. Notwithstanding anything herein to the contrary, in the event that your employment is terminated by the Company as a result of the giving of a notice of non-renewal of the Initial Term or any Additional Term by the Company, such termination shall be deemed for all purposes to be a termination by the Company without Cause at the end of the then-current Term. In the event your employment is terminated by the Company without Cause or by you for Good Reason, the Company shall pay to you: within 30 days of the Date of Termination: (A) your Base Salary through the date of your termination, (B) reimbursement for any unreimbursed business expenses incurred by you in accordance with Company policy prior to the date of your termination that are subject to reimbursement and (C) payment for vacation time accrued as of the date of your termination but unused (such amounts under clauses (A), (B) and (C) above, collectively the “
Accrued Obligations
”). In addition, on the date the annual bonuses are otherwise paid to executives who remain employed with the Company, you shall receive, in the year of your termination, an amount equal to any accrued but unpaid annual bonus for the immediately preceding year that you
would have been paid had you remained employed on the date such bonuses are paid.
|
(b)
|
Termination on Death/Disability
. In the event your employment is terminated as a result of your death or Disability, the Company will pay to you or your beneficiary the Accrued Obligations and any accrued but unpaid annual bonus for the immediately preceding year that you would have been paid had you remained employed on the date such bonuses are paid in year in which you die or become Disabled.
|
(c)
|
Voluntary Termination
. You may terminate your employment for any reason upon 60 days’ notice to the Company. If you voluntarily terminate your employment (other than for Good Reason), the Company will pay to you the Accrued Obligations within 30 days of such termination of employment.
|
(d)
|
Termination for Cause
. The Company may terminate your employment at any time for Cause. In the event your employment is terminated for Cause, the Company will pay to you the Accrued Obligations no later than 30 days of such termination of employment.
|
(a)
|
Non-solicitation of Company Customers and Suppliers
. During the Employment Period and for 18 months following any Date of Termination, you shall not, directly or indirectly, on behalf of yourself or of anyone other than the Company, solicit or hire or attempt to solicit or hire (or assist any third party in soliciting or hiring or attempting to solicit or hire) any Customer or Supplier in connection with any business activity that then competes with the Company.
|
(b)
|
Non-solicitation of Company Employees
. During the Employment Period and for 18 months following any Date of Termination, you shall not, without the prior written consent of the Chief Executive Officer of the Company, directly or indirectly, on behalf of yourself or any third party, solicit or hire or recruit or, other than in the good faith performance of your duties, induce or encourage (or assist any third party in hiring, soliciting, recruiting, inducing or encouraging) any employees of the Company or any individuals who were employees within the six month period immediately prior thereto to terminate or otherwise alter his or her employment with the Company. Notwithstanding the foregoing, the restrictions contained in this
Section 8(b)
shall not apply to (i) general solicitations that are not specifically directed to employees of the Company or (ii) serving as a reference at the request of an employee.
|
(c)
|
Non-competition with the Company
. During the Employment Period and for 18 months following any Date of Termination, you shall not, directly or indirectly, whether as an employee, director, owner, partner, shareholder (other than the passive ownership of securities in any public enterprise which represent no more than five percent (5%) of the voting power of all securities of such enterprise), consultant, agent, co-venturer, or independent contractor or otherwise, or through any “person” (which, for purposes of this subsection, shall mean an individual, a corporation, a partnership, an association, a joint-stock company, a trust, any unincorporated organization, or a government or political subdivision thereof), perform any services for or on behalf of, any Competitor of the Company. For purposes of this
Section 8
, a Competitor of the Company shall mean (i) any entity or business (x) that competes or (y) engages in a line of business that competes, in each of (x) and (y), with the business of the Company, and (ii) any unit, division, line of business, parent, subsidiary, affiliate (as defined in Rule 144 under the Securities Act of 1933, as amended), successor or assign of Travelport, Amadeus, AMEX, Etihad Airways, American Airlines, United Airlines, Delta Airlines, Lufthansa Group, Expedia, Priceline, TripAdvisor, Alphabet, Amazon, Facebook, Concur/SAP, Oracle, Farelogix, TravelClick, Carlson Wagonlit, BCD Travel, Hewlett Packard Enterprises, DXC Technology, Travelsky, Hogg Robinson Group Travel, Computer Sciences Corporation, SITA, Hewlett Packard, or Jeppesen, it being understood and agreed in the event that any of such entities and their respective affiliates, successors and assigns no longer engages in a line of business that competes with any business of the Company, such entity shall no longer be deemed a Competitor of the Company for purposes of this
Section 8
.
|
(d)
|
Non-disclosure of Confidential Information and Trade Secrets
. During the Employment Period and thereafter, except in the good faith performance of your duties hereunder or where required by law, statute, regulation or rule of any governmental body or agency, or pursuant to a subpoena or court order, you shall not, directly or indirectly, for your own account or for the account of any other person, firm or entity, use or disclose any Confidential Information or proprietary Trade Secrets of the Company to any third person unless such Confidential Information or Trade Secret has been previously disclosed to the public or is in the public domain (other than by reason of your breach of this paragraph).
|
(e)
|
Non-Disparagement.
You agree not to defame or disparage any of the Company or any of their respective officers, directors, members, executives or employees. You agree to reasonably cooperate with the Company (at no expense to you) in refuting any defamatory or disparaging remarks by any third party made in respect of the Company or their respective directors, members, officers, executives or employees.
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(f)
|
Enforceability of Covenants
. You acknowledge that the Company has a present and future expectation of business from and with the Customers and Suppliers. You acknowledge the reasonableness of the term, geographical territory, and scope of the covenants set forth in this
Section 8
, and you agree that you will not, in any action, suit or other proceeding, deny the reasonableness of, or assert the unreasonableness of, the premises, consideration or scope of the covenants set forth herein and you hereby waive any such defense. You further acknowledge that complying with the provisions contained in this Agreement will not preclude you from engaging in a lawful profession, trade or business, or from becoming gainfully employed. You agree that your covenants under this
Section 8
are separate and distinct obligations under this Agreement, and the failure or alleged failure of the Company or the Board to perform obligations under any other provisions of this Agreement shall not constitute a defense to the enforceability of your covenants and obligations under this
Section 8
. You and the Company each agrees that any breach of any covenant under this
Section 8
may result in irreparable damage and injury to the other party and that the other party will be entitled to seek temporary and permanent injunctive relief in any court of competent jurisdiction without the necessity of posting any bond, unless otherwise required by the court.
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(g)
|
Certain Exceptions
. Notwithstanding anything set forth herein or in
Exhibit A
to the contrary, nothing in this Agreement shall (i) prohibit you from making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934, as amended, or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of federal law or regulation, or (ii) require notification or prior approval by the Company of any such report; provided that, you are not authorized to disclose communications with counsel that were made for the purpose of receiving legal advice or that contain legal advice or that are protected by the attorney work product or similar privilege. Furthermore, you shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, in each case, solely for the purpose of reporting or investigating a suspected violation of law or (ii) in a complaint or other document filed in a lawsuit or proceeding, if such filings are made under seal.
|
(a)
|
If, after the Effective Time, none of the Company or any of its consolidated subsidiaries are an entity whose stock is readily tradable on an established securities market (or otherwise) and a “change of control” under Regulation 1.280G of the Internal Revenue Code of 1986, as amended (the “
Code
”) occurs, you and the Company shall cooperate and use commercially reasonable best efforts to take such actions as may be necessary to avoid the imposition of the excise tax imposed by Section 4999 of the Code or a loss of deductibility under Section 280G of the Code, including without limitation
|
(b)
|
If, after the Effective Time, there occurs a transaction that constitutes a “change of control” under Regulation 1.280G of the Code and, immediately prior to the consummation of such change of control, the Company or any of its consolidated subsidiaries are an entity whose equity securities are readily tradable on an established securities market (or otherwise), the following provisions will apply:
|
(1)
|
If any payments or benefits provided or to be provided by the Company or its affiliates to you or for your benefit pursuant to the terms of this Agreement or otherwise (the “
Covered Payments
”) constitute parachute payments within the meaning of Section 280G of the Code (“
Parachute Payments
”) and would, but for this
Section 10(b)
, be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “
Excise Tax
”), then the Covered Payments shall be payable either (A) in full or (B) reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax, whichever of the foregoing results in your receipt on an after-tax basis of the greatest amount of benefits after taking into account the applicable federal, state, local and foreign income, employment and excise taxes (including the Excise Tax). If required to be reduced pursuant to the foregoing, the Covered Payments shall be reduced in a manner consistent with the requirements of Section 409A of the Code, to the extent applicable, and where two or more economically equivalent amounts are subject to reduction but payable at different times, such amounts payable at the later time shall be reduced first but not below zero. If the Covered Payments are paid in full, you will be solely responsible for the payment of any Excise Tax and the Company will have no further obligations with respect thereto.
|
(2)
|
Any determinations required under this
Section 10(b)
shall be made in writing by the Company or by an accounting firm selected and paid for by the Company. You shall provide the Company with such information and documents as the Company may reasonably request in order to make a determination under this
Section 10
.
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(a)
|
Dispute Resolution
. The laws of the state of Texas will govern the construction, interpretation and enforcement of this Agreement. The parties agree that any and all claims, disputes, or controversies arising out of or related to this Agreement, or the breach of this Agreement, shall be resolved by binding arbitration, except as otherwise provided in
Section 8
of this Agreement. The parties will submit the dispute, within 30 business days following service of notice of such dispute by one party on the other, to the Judicial Arbitration and Mediation Services (J*A*M*S/Endispute) for prompt resolution in Dallas, Texas, under its rules for labor and employment disputes. There shall be a single arbitrator, chosen in accordance with such rules, who shall be currently licensed to practice law. The decision of the arbitrator will be final and binding upon the parties, and judgment may be entered thereon in accordance with applicable law in any court having jurisdiction. The arbitrator shall have the authority to make an award of monetary damages and interest thereon. The arbitrator shall have no authority to award, and the parties hereby waive any right to seek or receive, specific performance or an injunction, punitive or exemplary damages. The arbitrator will have no authority to order a modification or amendment of this Agreement. The arbitrator shall have the authority to award costs of arbitration, including reasonable attorney’s fees, to the prevailing party, but in the absence of such award the parties shall bear their own attorney fees, and shall bear equally the expenses of the arbitral proceedings, including without limitation the fees of the arbitrator.
|
(b)
|
Code Section 409A
. (i) If any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause you to incur any additional tax or interest under Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder, the Company shall, after consulting with you, reform such provision to comply with Section 409A of the Code;
provided
, that the Company agrees to maintain, to the maximum extent practicable, the original intent and economic benefit to you of the applicable provision without violating the provisions of Section 409A of the Code. (ii) Notwithstanding any provision to the contrary in this Agreement, if the date of any payment or the commencement of any installment payments payable under this Agreement must be delayed for six months in order to meet the requirements of Section 409A(a)(2)(B) of the Code applicable to “specified employees”, then any such payment or payments shall not be made or provided (subject to the last sentence hereof) prior to the earlier of (A) the expiration of the six month period measured from the date of your “separation from service” (as such term is defined in Treasury Regulations issued under Code Section 409A) or (B) the date of your death (the “
Delay Period
”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this
Section 11(b)(ii)
(whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to you in a lump sum, and any remaining payments due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.(iii) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits subject to Code Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” (iv) (a) All expenses or other reimbursements as provided herein shall be payable in accordance with the Company’s policies in effect from time to time, but in any event shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by you (b) no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year and (c) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchanged for another benefit.(v) For purposes of Code Section 409A, your right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.
|
(c)
|
Clawback
. Notwithstanding anything in this Agreement to the contrary, you acknowledge that the Company may be entitled or required by law, the Executive Compensation Recovery Policy (as amended from time to time, the “
Clawback Policy
”) or the requirements of an exchange on which the Company’s shares are listed for trading, to recoup compensation paid to you pursuant to this Agreement or otherwise, and you agree to comply with any Company request or demand for repayment. You further acknowledge that the Clawback Policy may be modified from time to time in the sole discretion of the Company and without your consent, and that such modification will be deemed to amend this Agreement. You further acknowledge and agree that the Clawback Policy as in effect from time to time may apply to any and all payments of compensation and benefits (other than your base salary and benefits under any tax-qualified retirement plan or health and welfare plan) as specified in the Clawback Policy from time to time; provided that the application of the Clawback Policy with respect to any payments or benefits paid or provided to you will be subject to the limitations and restrictions set forth in the Clawback Policy.
|
(d)
|
No Mitigation
. (i) You shall not be required to seek other employment or otherwise mitigate the amount of any payments to be made by the Company pursuant to this Agreement; and (ii) the payments provided pursuant to this Agreement shall not be reduced by any compensation earned by you as the result of employment by another employer after the Date of Termination or otherwise.
|
(e)
|
Entire Agreement; Amendment
. This Agreement represents the entire understanding with respect to the subject matter contained herein. Only a writing that has been signed by both you and the Company may modify this Agreement. Any and all previous employment agreements, severance agreements and executive termination benefits agreements are cancelled as of the Effective Time and the benefits under this Agreement are in lieu of, and in full substitution for, any other severance or post-employment benefits pursuant to any other agreement, arrangement or understanding with the Company or any of its affiliates; provided, however, that any prior equity awards shall remain in full force and effect.
|
(f)
|
Successors
. This Agreement shall be binding upon and inure to the benefit of (i) the heirs, executors and legal representatives of you upon your death and (ii) any successor of the Company. Any such successor of the Company shall be deemed substituted for the Company under the terms of this Agreement for all purposes. As used herein, “
successor
” shall include any person, firm, corporation, or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company.
|
(g)
|
Effectiveness
. Notwithstanding anything to the contrary herein, the parties expressly acknowledge and agree that this Agreement will not become effective until each party has duly executed and delivered its respective signature hereto. Executive acknowledges and agrees that the Company’s decision to execute and deliver this Agreement will be made in its sole discretion. Nothing in this Agreement has created or will create a binding obligation of any party hereto until the due execution hereof.
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EXECUTIVE
|
|
/s/ Clinton Anderson
|
Clinton Anderson
|
|
SABRE CORPORATION
|
|
/s/ Rachel Gonzalez
|
Name: Rachel Gonzalez
|
Title: EVP and Chief Administrative Officer
|
EXECUTIVE
|
|
|
Name
|
|
|
SABRE CORPORATION
|
|
|
Name:
|
Title:
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Sabre Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
October 31, 2017
|
By:
|
|
/s/ Sean Menke
|
|
|
|
|
Sean Menke
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
(principal executive officer of the registrant)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Sabre Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
October 31, 2017
|
By:
|
|
/s/ Richard A. Simonson
|
|
|
|
|
Richard A. Simonson
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(principal financial officer of the registrant)
|
a.
|
The Form 10-Q of Sabre Corporation for the quarter ended
September 30, 2017
(the “Report”), filed on the date hereof with the Securities and Exchange Commission fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
b.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Sabre Corporation.
|
Date:
|
October 31, 2017
|
By:
|
|
/s/ Sean Menke
|
|
|
|
|
Sean Menke
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
(principal executive officer of the registrant)
|
a.
|
The Form 10-Q of Sabre Corporation for the quarter ended
September 30, 2017
(the “Report”), filed on the date hereof with the Securities and Exchange Commission fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
b.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Sabre Corporation.
|
Date:
|
October 31, 2017
|
By:
|
|
/s/ Richard A. Simonson
|
|
|
|
|
Richard A. Simonson
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(principal financial officer of the registrant)
|