|
|
x
|
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
|
|
|
Delaware
|
|
20-8647322
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
Large accelerated filer
|
|
x
|
|
Accelerated filer
|
|
¨
|
Non-accelerated filer
|
|
¨
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Smaller reporting company
|
|
¨
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|
|
|
|
Emerging growth company
|
|
¨
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Page No.
|
||
Item 1.
|
|
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||
|
||
|
||
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||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
$
|
970,283
|
|
|
$
|
900,606
|
|
|
$
|
2,943,028
|
|
|
$
|
2,716,622
|
|
Cost of revenue
|
703,368
|
|
|
631,970
|
|
|
2,117,984
|
|
|
1,882,623
|
|
||||
Selling, general and administrative
|
130,152
|
|
|
91,840
|
|
|
384,047
|
|
|
383,137
|
|
||||
Impairment and related charges
|
—
|
|
|
—
|
|
|
—
|
|
|
92,022
|
|
||||
Operating income
|
136,763
|
|
|
176,796
|
|
|
440,997
|
|
|
358,840
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||
Interest expense, net
|
(39,291
|
)
|
|
(38,919
|
)
|
|
(116,809
|
)
|
|
(116,577
|
)
|
||||
Loss on extinguishment of debt
|
—
|
|
|
(1,012
|
)
|
|
(633
|
)
|
|
(1,012
|
)
|
||||
Joint venture equity income
|
333
|
|
|
357
|
|
|
2,455
|
|
|
1,768
|
|
||||
Other, net
|
(1,905
|
)
|
|
(3,802
|
)
|
|
(10,746
|
)
|
|
(19,788
|
)
|
||||
Total other expense, net
|
(40,863
|
)
|
|
(43,376
|
)
|
|
(125,733
|
)
|
|
(135,609
|
)
|
||||
Income from continuing operations before income taxes
|
95,900
|
|
|
133,420
|
|
|
315,264
|
|
|
223,231
|
|
||||
Provision for income taxes
|
25,021
|
|
|
40,595
|
|
|
61,371
|
|
|
56,836
|
|
||||
Income from continuing operations
|
70,879
|
|
|
92,825
|
|
|
253,893
|
|
|
166,395
|
|
||||
Income (loss) from discontinued operations, net of tax
|
3,664
|
|
|
(529
|
)
|
|
3,217
|
|
|
(2,228
|
)
|
||||
Net income
|
74,543
|
|
|
92,296
|
|
|
257,110
|
|
|
164,167
|
|
||||
Net income attributable to noncontrolling interests
|
1,538
|
|
|
1,307
|
|
|
3,979
|
|
|
3,726
|
|
||||
Net income attributable to common stockholders
|
$
|
73,005
|
|
|
$
|
90,989
|
|
|
$
|
253,131
|
|
|
$
|
160,441
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
0.25
|
|
|
$
|
0.33
|
|
|
$
|
0.91
|
|
|
$
|
0.59
|
|
Income (loss) from discontinued operations
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
(0.01
|
)
|
||||
Net income per common share
|
$
|
0.26
|
|
|
$
|
0.33
|
|
|
$
|
0.92
|
|
|
$
|
0.58
|
|
Diluted net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
0.25
|
|
|
$
|
0.33
|
|
|
$
|
0.90
|
|
|
$
|
0.58
|
|
Income (loss) from discontinued operations
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
(0.01
|
)
|
||||
Net income per common share
|
$
|
0.26
|
|
|
$
|
0.33
|
|
|
$
|
0.91
|
|
|
$
|
0.57
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
275,175
|
|
|
277,477
|
|
|
275,205
|
|
|
277,754
|
|
||||
Diluted
|
277,528
|
|
|
278,369
|
|
|
276,819
|
|
|
279,648
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends per common share
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
$
|
0.42
|
|
|
$
|
0.42
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
74,543
|
|
|
$
|
92,296
|
|
|
$
|
257,110
|
|
|
$
|
164,167
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments ("CTA"), net of tax
|
|
|
|
|
|
|
|
||||||||
Foreign CTA (losses) gains, net of tax
|
(728
|
)
|
|
2,781
|
|
|
(4,052
|
)
|
|
10,450
|
|
||||
Net change in foreign CTA (losses) gains, net of tax
|
(728
|
)
|
|
2,781
|
|
|
(4,052
|
)
|
|
10,450
|
|
||||
Retirement-related benefit plans:
|
|
|
|
|
|
|
|
|
|
||||||
Amortization of prior service credits
|
(278
|
)
|
|
(229
|
)
|
|
(865
|
)
|
|
(686
|
)
|
||||
Amortization of actuarial losses
|
1,516
|
|
|
745
|
|
|
4,311
|
|
|
3,141
|
|
||||
Net change in retirement-related benefit plans, net of tax
|
1,238
|
|
|
516
|
|
|
3,446
|
|
|
2,455
|
|
||||
Derivatives and securities:
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized gains, net of taxes of $(442), $(1,045), $(1,351) and $(2,693)
|
1,436
|
|
|
2,561
|
|
|
3,621
|
|
|
9,561
|
|
||||
Reclassification adjustment for realized gains (losses), net of taxes of $(661), $67, $(441) and $(1,531)
|
2,406
|
|
|
(216
|
)
|
|
727
|
|
|
3,461
|
|
||||
Net change in derivatives and securities, net of tax
|
3,842
|
|
|
2,345
|
|
|
4,348
|
|
|
13,022
|
|
||||
Share of other comprehensive (loss) income of joint venture
|
(374
|
)
|
|
323
|
|
|
(105
|
)
|
|
372
|
|
||||
Other comprehensive income
|
3,978
|
|
|
5,965
|
|
|
3,637
|
|
|
26,299
|
|
||||
Comprehensive income
|
78,521
|
|
|
98,261
|
|
|
260,747
|
|
|
190,466
|
|
||||
Less: Comprehensive income attributable to noncontrolling interests
|
(1,538
|
)
|
|
(1,307
|
)
|
|
(3,979
|
)
|
|
(3,726
|
)
|
||||
Comprehensive income attributable to Sabre Corporation
|
$
|
76,983
|
|
|
$
|
96,954
|
|
|
$
|
256,768
|
|
|
$
|
186,740
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
444,321
|
|
|
$
|
361,381
|
|
Accounts receivable, net
|
589,858
|
|
|
490,558
|
|
||
Prepaid expenses and other current assets
|
170,110
|
|
|
108,753
|
|
||
Total current assets
|
1,204,289
|
|
|
960,692
|
|
||
Property and equipment, net of accumulated depreciation of $1,452,558 and $1,236,523
|
788,030
|
|
|
799,194
|
|
||
Investments in joint ventures
|
28,683
|
|
|
27,527
|
|
||
Goodwill
|
2,552,572
|
|
|
2,554,987
|
|
||
Acquired customer relationships, net of accumulated amortization of $706,049 and $687,072
|
330,528
|
|
|
351,034
|
|
||
Other intangible assets, net of accumulated amortization of $626,713 and $594,015
|
299,611
|
|
|
332,171
|
|
||
Deferred income taxes
|
30,347
|
|
|
31,817
|
|
||
Other assets, net
|
634,422
|
|
|
591,942
|
|
||
Total assets
|
$
|
5,868,482
|
|
|
$
|
5,649,364
|
|
|
|
|
|
||||
Liabilities and stockholders’ equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
158,788
|
|
|
$
|
162,755
|
|
Accrued compensation and related benefits
|
95,625
|
|
|
112,343
|
|
||
Accrued subscriber incentives
|
327,371
|
|
|
271,200
|
|
||
Deferred revenues
|
104,366
|
|
|
110,532
|
|
||
Other accrued liabilities
|
207,694
|
|
|
198,353
|
|
||
Current portion of debt
|
64,225
|
|
|
57,138
|
|
||
Tax Receivable Agreement
|
94,113
|
|
|
59,826
|
|
||
Total current liabilities
|
1,052,182
|
|
|
972,147
|
|
||
Deferred income taxes
|
200,767
|
|
|
99,801
|
|
||
Other noncurrent liabilities
|
322,002
|
|
|
480,185
|
|
||
Long-term debt
|
3,355,596
|
|
|
3,398,731
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
|
|
||
Stockholders’ equity
|
|
|
|
|
|
||
Common Stock: $0.01 par value; 450,000 authorized shares; 291,579 and 289,138 shares issued, 275,294 and 274,342 shares outstanding at September 30, 2018 and December 31, 2017, respectively
|
2,916
|
|
|
2,891
|
|
||
Additional paid-in capital
|
2,227,682
|
|
|
2,174,187
|
|
||
Treasury Stock, at cost, 16,285 and 14,796 shares at September 30, 2018 and December 31, 2017, respectively
|
(377,341
|
)
|
|
(341,846
|
)
|
||
Retained deficit
|
(814,446
|
)
|
|
(1,053,446
|
)
|
||
Accumulated other comprehensive loss
|
(107,146
|
)
|
|
(88,484
|
)
|
||
Noncontrolling interest
|
6,270
|
|
|
5,198
|
|
||
Total stockholders’ equity
|
937,935
|
|
|
698,500
|
|
||
Total liabilities and stockholders’ equity
|
$
|
5,868,482
|
|
|
$
|
5,649,364
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
257,110
|
|
|
$
|
164,167
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
307,551
|
|
|
295,729
|
|
||
Deferred income taxes
|
74,263
|
|
|
8,340
|
|
||
Amortization of upfront incentive consideration
|
57,324
|
|
|
50,298
|
|
||
Stock-based compensation expense
|
41,445
|
|
|
34,413
|
|
||
Allowance for doubtful accounts
|
7,433
|
|
|
7,879
|
|
||
(Income) loss from discontinued operations
|
(3,217
|
)
|
|
2,228
|
|
||
Amortization of debt issuance costs
|
2,988
|
|
|
4,916
|
|
||
Joint venture equity income
|
(2,455
|
)
|
|
(1,768
|
)
|
||
Debt modification costs
|
1,558
|
|
|
14,758
|
|
||
Dividends received from joint venture investments
|
1,193
|
|
|
1,088
|
|
||
Loss on extinguishment of debt
|
633
|
|
|
1,012
|
|
||
Impairment and related charges
|
—
|
|
|
92,022
|
|
||
Other
|
5,146
|
|
|
10,680
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts and other receivables
|
(114,043
|
)
|
|
(188,021
|
)
|
||
Prepaid expenses and other current assets
|
3,417
|
|
|
518
|
|
||
Capitalized implementation costs
|
(29,781
|
)
|
|
(47,968
|
)
|
||
Upfront incentive consideration
|
(67,697
|
)
|
|
(61,087
|
)
|
||
Other assets
|
(18,989
|
)
|
|
(20,957
|
)
|
||
Accrued compensation and related benefits
|
(31,308
|
)
|
|
2,161
|
|
||
Accounts payable and other accrued liabilities
|
234
|
|
|
53,444
|
|
||
Deferred revenue including upfront solution fees
|
43,388
|
|
|
32,054
|
|
||
Cash provided by operating activities
|
536,193
|
|
|
455,906
|
|
||
Investing Activities
|
|
|
|
|
|
||
Additions to property and equipment
|
(205,664
|
)
|
|
(242,811
|
)
|
||
Other investing activities
|
—
|
|
|
(141
|
)
|
||
Cash used in investing activities
|
(205,664
|
)
|
|
(242,952
|
)
|
||
Financing Activities
|
|
|
|
|
|
||
Cash dividends paid to common stockholders
|
(115,557
|
)
|
|
(116,474
|
)
|
||
Payments on Tax Receivable Agreement
|
(58,908
|
)
|
|
(99,241
|
)
|
||
Payments on borrowings from lenders
|
(35,483
|
)
|
|
(1,868,655
|
)
|
||
Repurchase of common stock
|
(26,281
|
)
|
|
(97,671
|
)
|
||
Net receipts on the settlement of equity-based awards
|
2,758
|
|
|
11,466
|
|
||
Debt issuance and modification costs
|
(1,567
|
)
|
|
(19,052
|
)
|
||
Proceeds of borrowings from lenders
|
—
|
|
|
1,897,625
|
|
||
Other financing activities
|
(17,371
|
)
|
|
(8,934
|
)
|
||
Cash used in financing activities
|
(252,409
|
)
|
|
(300,936
|
)
|
||
Cash Flows from Discontinued Operations
|
|
|
|
|
|
||
Cash provided by (used in) operating activities
|
633
|
|
|
(3,636
|
)
|
||
Cash provided by (used in) discontinued operations
|
633
|
|
|
(3,636
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
4,187
|
|
|
(4,228
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
82,940
|
|
|
(95,846
|
)
|
||
Cash and cash equivalents at beginning of period
|
361,381
|
|
|
364,114
|
|
||
Cash and cash equivalents at end of period
|
$
|
444,321
|
|
|
$
|
268,268
|
|
–
|
Under ASC 605, we recognized revenue related to license fee and maintenance agreements ratably over the life of the contract. Under ASC 606, revenue for license fees is recognized upon delivery of the license and ongoing maintenance services are to be recognized ratably over the life of the contract. For existing open agreements, this change resulted in a beginning balance sheet adjustment and reduced revenue in subsequent years from these agreements.
|
–
|
Allocation of contract revenues among various products and solutions, and the timing of the recognition of those revenues, are 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 resulted in a beginning balance sheet adjustment and reduced revenue in subsequent years from these agreements.
|
|
Nine Months Ended September 30, 2018
|
||||||||
|
As reported
ASC 606
|
Adjustments
|
As adjusted
ASC 605
|
||||||
Revenue
|
$
|
2,943,028
|
|
$
|
23,555
|
|
$
|
2,966,583
|
|
Cost of Revenue
|
2,117,984
|
|
6,275
|
|
2,124,259
|
|
|||
Selling, general and administrative
|
384,047
|
|
(543
|
)
|
383,504
|
|
|||
Operating income
|
440,997
|
|
17,823
|
|
458,820
|
|
|||
Income from continuing operations before income taxes
|
315,264
|
|
17,823
|
|
333,087
|
|
|||
Provision for income taxes
|
61,371
|
|
4,354
|
|
65,725
|
|
|||
Income from continuing operations
|
253,893
|
|
13,469
|
|
267,362
|
|
|||
Net income
|
257,110
|
|
13,469
|
|
270,579
|
|
|||
Net income attributable to common stockholders
|
253,131
|
|
13,469
|
|
266,600
|
|
|
September 30, 2018
|
||||||||
|
As reported
ASC 606
|
Adjustments
|
As adjusted
ASC 605
|
||||||
Accounts receivable, net
|
$
|
589,858
|
|
$
|
(56,189
|
)
|
$
|
533,669
|
|
Prepaid expenses and other current assets
|
170,110
|
|
(13,147
|
)
|
156,963
|
|
|||
Total current assets
|
1,204,289
|
|
(69,336
|
)
|
1,134,953
|
|
|||
Other assets, net
|
634,422
|
|
(4,945
|
)
|
629,477
|
|
|||
Total assets
|
5,868,482
|
|
(74,281
|
)
|
5,794,201
|
|
|||
Accrued subscriber incentives
|
327,371
|
|
4,988
|
|
332,359
|
|
|||
Deferred revenues
|
104,366
|
|
30,805
|
|
135,171
|
|
|||
Other accrued liabilities
|
207,694
|
|
(25,901
|
)
|
181,793
|
|
|||
Total current liabilities
|
1,052,182
|
|
9,892
|
|
1,062,074
|
|
|||
Deferred income taxes
|
200,767
|
|
(18,745
|
)
|
182,022
|
|
|||
Other noncurrent liabilities
|
322,002
|
|
(253
|
)
|
321,749
|
|
|||
Retained deficit
|
(814,446
|
)
|
(65,175
|
)
|
(879,621
|
)
|
|||
Total stockholders' equity
|
937,935
|
|
(65,175
|
)
|
872,760
|
|
|||
Total liabilities and stockholders' equity
|
5,868,482
|
|
(74,281
|
)
|
5,794,201
|
|
Contract assets as of January 1, 2018
|
$
|
75,624
|
|
Additions
|
10,579
|
|
|
Deductions
|
(26,414
|
)
|
|
Other
|
(31
|
)
|
|
Contract assets as of September 30, 2018
|
$
|
59,758
|
|
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2018
|
||||
Air
|
$
|
566,887
|
|
|
$
|
1,747,518
|
|
Lodging, Ground and Sea
|
88,467
|
|
|
264,498
|
|
||
Other
|
44,842
|
|
|
129,001
|
|
||
Total Travel Network
|
700,196
|
|
|
2,141,017
|
|
||
SabreSonic Passenger Reservation System
|
127,298
|
|
|
377,476
|
|
||
Commercial and Operations Solutions
(1)
|
81,253
|
|
|
239,813
|
|
||
Other
|
837
|
|
|
3,524
|
|
||
Total Airline Solutions
|
209,388
|
|
|
620,813
|
|
||
SynXis Software and Services
|
62,036
|
|
|
182,251
|
|
||
Other
|
7,875
|
|
|
24,102
|
|
||
Total Hospitality Solutions
|
69,911
|
|
|
206,353
|
|
||
Eliminations
|
(9,212
|
)
|
|
(25,155
|
)
|
||
Total Sabre Revenue
|
$
|
970,283
|
|
|
$
|
2,943,028
|
|
|
|
|
|
|
September 30, 2018
|
||
Contract acquisition costs:
|
|
||
Beginning balance (1/1/2018)
|
$
|
19,353
|
|
Additions
|
5,533
|
|
|
Amortization
|
(4,745
|
)
|
|
Other
|
425
|
|
|
Ending balance
|
$
|
20,566
|
|
|
|
||
Capitalized implementation costs:
|
|
||
Beginning balance (1/1/2018)
|
$
|
194,501
|
|
Additions
|
29,781
|
|
|
Amortization
|
(30,511
|
)
|
|
Other
|
(1,733
|
)
|
|
Ending balance
|
$
|
192,038
|
|
•
|
When we have a right to receive consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, we recognize revenue in the amount to which we have a right to invoice.
|
•
|
We apply the allocation objective expedient where applicable, which precludes the requirement to allocate revenue across multiple performance obligations based on total transaction price.
|
•
|
We do not evaluate a contract for a significant financing component if payment is expected within one year or less from the transfer of the promised items to the customer.
|
•
|
We generally expense sales commissions when incurred when the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses. We also used the practical expedient to calculate contract acquisition costs based on a portfolio of contracts with similar characteristics instead of a contract by contract analysis.
|
•
|
For contract modifications, we reflected the aggregate effect of all modifications that occurred prior to the adoption date when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price to satisfied and unsatisfied performance obligations for the modified contract at transition.
|
|
Rate
|
|
Maturity
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Senior secured credit facilities:
|
|
|
|
|
|
|
|
|
|
||
Term Loan A
|
L + 2.00%
|
|
July 2022
|
|
$
|
534,375
|
|
|
$
|
555,750
|
|
Term Loan B
(1)
|
L + 2.00%
|
|
February 2024
|
|
1,866,940
|
|
|
1,881,048
|
|
||
Revolver, $400 million
|
L + 2.00%
|
|
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
|
|
||
Capital lease obligations
|
|
|
|
|
15,856
|
|
|
21,235
|
|
||
Face value of total debt outstanding
|
|
|
|
|
3,447,171
|
|
|
3,488,033
|
|
||
Less current portion of debt outstanding
|
|
|
|
|
(64,225
|
)
|
|
(57,138
|
)
|
||
Face value of long-term debt outstanding
|
|
|
|
|
$
|
3,382,946
|
|
|
$
|
3,430,895
|
|
(1)
|
Pursuant to the March 2, 2018 refinancing, the interest rate on the Term Loan B was reduced from L+
2.25%
to L+
2.00%
.
|
(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, 2018
|
|
December 31, 2017
|
||||
Foreign exchange contracts
|
|
Prepaid expenses and other current assets
|
|
$
|
—
|
|
|
$
|
6,213
|
|
Foreign exchange contracts
|
|
Other accrued liabilities
|
|
(7,142
|
)
|
|
—
|
|
||
Interest rate swaps
|
|
Prepaid expenses and other current assets
|
|
5,760
|
|
|
856
|
|
||
Interest rate swaps
|
|
Other assets, net
|
|
12,221
|
|
|
3,093
|
|
||
|
|
|
|
$
|
10,839
|
|
|
$
|
10,162
|
|
|
|
Derivative Assets (Liabilities)
|
||||||||
|
|
|
|
Fair Value as of
|
||||||
Derivatives Not Designated as Hedging Instruments
|
|
Consolidated Balance Sheet Location
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Interest rate swaps
|
|
Other accrued liabilities
|
|
$
|
(1,841
|
)
|
|
$
|
(7,119
|
)
|
|
|
|
|
$
|
(1,841
|
)
|
|
$
|
(7,119
|
)
|
|
|
Amount of (Loss) Gain Recognized in OCI on Derivative, Effective Portion
|
||||||||||||||
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Foreign exchange contracts
|
|
$
|
(1,606
|
)
|
|
$
|
1,800
|
|
|
$
|
(7,897
|
)
|
|
$
|
10,378
|
|
Interest rate swaps
|
|
3,042
|
|
|
810
|
|
|
12,018
|
|
|
(1,038
|
)
|
||||
Total
|
|
$
|
1,436
|
|
|
$
|
2,610
|
|
|
$
|
4,121
|
|
|
$
|
9,340
|
|
|
|
|
|
Amount of Loss (Gain) 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,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||
Foreign exchange contracts
|
|
Cost of revenue
|
|
$
|
1,558
|
|
|
$
|
(1,385
|
)
|
|
$
|
(2,769
|
)
|
|
$
|
(502
|
)
|
Interest rate swaps
|
|
Interest expense, net
|
|
848
|
|
|
1,169
|
|
|
3,496
|
|
|
3,963
|
|
||||
Total
|
|
|
|
$
|
2,406
|
|
|
$
|
(216
|
)
|
|
$
|
727
|
|
|
$
|
3,461
|
|
|
|
|
Fair Value at Reporting Date Using
|
||||||||||||
|
September 30, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
$
|
(7,142
|
)
|
|
$
|
—
|
|
|
$
|
(7,142
|
)
|
|
$
|
—
|
|
Interest rate swap contracts
|
16,140
|
|
|
—
|
|
|
16,140
|
|
|
—
|
|
||||
Total
|
$
|
8,998
|
|
|
$
|
—
|
|
|
$
|
8,998
|
|
|
$
|
—
|
|
|
|
|
Fair Value at Reporting Date Using
|
||||||||||||
|
December 31, 2017
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
$
|
6,213
|
|
|
$
|
—
|
|
|
$
|
6,213
|
|
|
$
|
—
|
|
Interest rate swap contracts
|
(3,170
|
)
|
|
—
|
|
|
(3,170
|
)
|
|
—
|
|
||||
Total
|
$
|
3,043
|
|
|
$
|
—
|
|
|
$
|
3,043
|
|
|
$
|
—
|
|
|
|
Fair Value at
|
|
Carrying Value at
(1)
|
||||||||||||
Financial Instrument
|
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||
Term Loan A
|
|
$
|
536,379
|
|
|
$
|
559,223
|
|
|
$
|
532,497
|
|
|
$
|
553,444
|
|
Term Loan B
|
|
1,876,274
|
|
|
1,890,453
|
|
|
1,860,937
|
|
|
1,873,993
|
|
||||
Revolver, $400 million
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
5.375% Senior secured notes due 2023
|
|
533,684
|
|
|
546,563
|
|
|
530,000
|
|
|
530,000
|
|
||||
5.25% Senior secured notes due 2023
|
|
501,265
|
|
|
512,500
|
|
|
500,000
|
|
|
500,000
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Defined benefit pension and other post retirement benefit plans
|
$
|
(121,469
|
)
|
|
$
|
(102,623
|
)
|
Unrealized foreign currency translation gain
|
7,330
|
|
|
11,488
|
|
||
Unrealized gain on foreign currency forward contracts and interest rate swaps
|
6,993
|
|
|
2,651
|
|
||
Total accumulated other comprehensive loss, net of tax
|
$
|
(107,146
|
)
|
|
$
|
(88,484
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
70,879
|
|
|
$
|
92,825
|
|
|
$
|
253,893
|
|
|
$
|
166,395
|
|
Less: Net income attributable to noncontrolling interests
|
1,538
|
|
|
1,307
|
|
|
3,979
|
|
|
3,726
|
|
||||
Net income from continuing operations available to common stockholders, basic and diluted
|
$
|
69,341
|
|
|
$
|
91,518
|
|
|
$
|
249,914
|
|
|
$
|
162,669
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average common shares outstanding
|
275,175
|
|
|
277,477
|
|
|
275,205
|
|
|
277,754
|
|
||||
Add: Dilutive effect of stock options and restricted stock awards
|
2,353
|
|
|
892
|
|
|
1,614
|
|
|
1,894
|
|
||||
Diluted weighted-average common shares outstanding
|
277,528
|
|
|
278,369
|
|
|
276,819
|
|
|
279,648
|
|
||||
Earnings per share from continuing operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.25
|
|
|
$
|
0.33
|
|
|
$
|
0.91
|
|
|
$
|
0.59
|
|
Diluted
|
$
|
0.25
|
|
|
$
|
0.33
|
|
|
$
|
0.90
|
|
|
$
|
0.58
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||
Travel Network
|
$
|
700,196
|
|
|
$
|
632,349
|
|
|
$
|
2,141,017
|
|
|
$
|
1,931,441
|
|
Airline Solutions
|
209,388
|
|
|
207,121
|
|
|
620,813
|
|
|
610,608
|
|
||||
Hospitality Solutions
|
69,911
|
|
|
67,802
|
|
|
206,353
|
|
|
194,071
|
|
||||
Eliminations
|
(9,212
|
)
|
|
(6,666
|
)
|
|
(25,155
|
)
|
|
(19,498
|
)
|
||||
Total revenue
|
$
|
970,283
|
|
|
$
|
900,606
|
|
|
$
|
2,943,028
|
|
|
$
|
2,716,622
|
|
Adjusted Gross Profit
(a)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Travel Network
|
$
|
268,604
|
|
|
$
|
255,429
|
|
|
$
|
842,359
|
|
|
$
|
822,889
|
|
Airline Solutions
|
90,428
|
|
|
98,313
|
|
|
264,450
|
|
|
265,009
|
|
||||
Hospitality Solutions
|
23,069
|
|
|
25,455
|
|
|
61,965
|
|
|
66,052
|
|
||||
Corporate
|
(4,315
|
)
|
|
(7,965
|
)
|
|
(12,732
|
)
|
|
(13,363
|
)
|
||||
Total
|
$
|
377,786
|
|
|
$
|
371,232
|
|
|
$
|
1,156,042
|
|
|
$
|
1,140,587
|
|
Adjusted Operating Income
(b)
|
|
|
|
|
|
|
|
||||||||
Travel Network
|
$
|
182,533
|
|
|
$
|
172,098
|
|
|
590,380
|
|
|
584,420
|
|
||
Airline Solutions
|
28,505
|
|
|
39,574
|
|
|
82,030
|
|
|
94,533
|
|
||||
Hospitality Solutions
|
5,826
|
|
|
5,150
|
|
|
9,927
|
|
|
7,021
|
|
||||
Corporate
|
(42,891
|
)
|
|
(48,717
|
)
|
|
(138,782
|
)
|
|
(134,431
|
)
|
||||
Total
|
$
|
173,973
|
|
|
$
|
168,105
|
|
|
543,555
|
|
|
551,543
|
|
||
Adjusted EBITDA
(c)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Travel Network
|
$
|
229,983
|
|
|
$
|
216,487
|
|
|
$
|
735,669
|
|
|
$
|
713,977
|
|
Airline Solutions
|
74,094
|
|
|
80,361
|
|
|
217,629
|
|
|
210,329
|
|
||||
Hospitality Solutions
|
16,116
|
|
|
13,242
|
|
|
38,830
|
|
|
30,087
|
|
||||
Total segments
|
320,193
|
|
|
310,090
|
|
|
992,128
|
|
|
954,393
|
|
||||
Corporate
|
(41,688
|
)
|
|
(47,164
|
)
|
|
(135,283
|
)
|
|
(132,489
|
)
|
||||
Total
|
$
|
278,505
|
|
|
$
|
262,926
|
|
|
$
|
856,845
|
|
|
$
|
821,904
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
||||
Travel Network
|
$
|
29,243
|
|
|
$
|
26,384
|
|
|
$
|
87,965
|
|
|
$
|
79,259
|
|
Airline Solutions
|
45,589
|
|
|
40,787
|
|
|
135,599
|
|
|
115,796
|
|
||||
Hospitality Solutions
|
10,290
|
|
|
8,092
|
|
|
28,903
|
|
|
23,066
|
|
||||
Total segments
|
85,122
|
|
|
75,263
|
|
|
252,467
|
|
|
218,121
|
|
||||
Corporate
|
17,610
|
|
|
21,779
|
|
|
55,084
|
|
|
77,608
|
|
||||
Total
|
$
|
102,732
|
|
|
$
|
97,042
|
|
|
$
|
307,551
|
|
|
$
|
295,729
|
|
Capital Expenditures
|
|
|
|
|
|
|
|
|
|
|
|
||||
Travel Network
|
$
|
16,963
|
|
|
$
|
19,895
|
|
|
$
|
45,002
|
|
|
$
|
69,151
|
|
Airline Solutions
|
25,315
|
|
|
26,275
|
|
|
72,485
|
|
|
92,193
|
|
||||
Hospitality Solutions
|
9,291
|
|
|
10,235
|
|
|
27,629
|
|
|
31,261
|
|
||||
Total segments
|
51,569
|
|
|
56,405
|
|
|
145,116
|
|
|
192,605
|
|
||||
Corporate
|
22,209
|
|
|
18,996
|
|
|
60,548
|
|
|
50,206
|
|
||||
Total
|
$
|
73,778
|
|
|
$
|
75,401
|
|
|
$
|
205,664
|
|
|
$
|
242,811
|
|
(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,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Adjusted Gross Profit
|
$
|
377,786
|
|
|
$
|
371,232
|
|
|
$
|
1,156,042
|
|
|
$
|
1,140,587
|
|
Less adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative
|
130,152
|
|
|
91,840
|
|
|
384,047
|
|
|
383,137
|
|
||||
Impairment and related charges
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
92,022
|
|
||||
Cost of revenue adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
(1)
|
85,552
|
|
|
79,976
|
|
|
254,490
|
|
|
229,688
|
|
||||
Amortization of upfront incentive consideration
(2)
|
18,207
|
|
|
18,005
|
|
|
57,324
|
|
|
50,298
|
|
||||
Restructuring and other costs
(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
12,976
|
|
||||
Stock-based compensation
|
7,112
|
|
|
4,615
|
|
|
19,184
|
|
|
13,626
|
|
||||
Operating income
|
$
|
136,763
|
|
|
$
|
176,796
|
|
|
$
|
440,997
|
|
|
$
|
358,840
|
|
(b)
|
The following table sets forth the reconciliation of Adjusted Operating Income to operating income in our statement of operations (in thousands):
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Adjusted Operating Income
|
$
|
173,973
|
|
|
$
|
168,105
|
|
|
$
|
543,555
|
|
|
$
|
551,543
|
|
Less adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Joint venture equity income
|
333
|
|
|
357
|
|
|
2,455
|
|
|
1,768
|
|
||||
Impairment and related charges
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
92,022
|
|
||||
Acquisition-related amortization
(1c)
|
16,407
|
|
|
20,226
|
|
|
51,585
|
|
|
75,666
|
|
||||
Restructuring and other costs
(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
25,304
|
|
||||
Litigation costs (reimbursements), net
(5)
|
5,225
|
|
|
(40,929
|
)
|
|
7,073
|
|
|
(36,470
|
)
|
||||
Stock-based compensation
|
15,245
|
|
|
11,655
|
|
|
41,445
|
|
|
34,413
|
|
||||
Operating income
|
$
|
136,763
|
|
|
$
|
176,796
|
|
|
$
|
440,997
|
|
|
$
|
358,840
|
|
(c)
|
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,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Adjusted EBITDA
|
$
|
278,505
|
|
|
$
|
262,926
|
|
|
$
|
856,845
|
|
|
$
|
821,904
|
|
Less adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization of property and equipment
(1a)
|
76,226
|
|
|
66,332
|
|
|
225,649
|
|
|
191,442
|
|
||||
Amortization of capitalized implementation costs
(1b)
|
10,099
|
|
|
10,484
|
|
|
30,317
|
|
|
28,621
|
|
||||
Acquisition-related amortization
(1c)
|
16,407
|
|
|
20,226
|
|
|
51,585
|
|
|
75,666
|
|
||||
Amortization of upfront incentive consideration
(2)
|
18,207
|
|
|
18,005
|
|
|
57,324
|
|
|
50,298
|
|
||||
Impairment and related charges
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
92,022
|
|
||||
Interest expense, net
|
39,291
|
|
|
38,919
|
|
|
116,809
|
|
|
116,577
|
|
||||
Loss on extinguishment of debt
|
—
|
|
|
1,012
|
|
|
633
|
|
|
1,012
|
|
||||
Other, net
(3)
|
1,905
|
|
|
3,802
|
|
|
10,746
|
|
|
19,788
|
|
||||
Restructuring and other costs
(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
25,304
|
|
||||
Litigation costs (reimbursements), net
(5)
|
5,225
|
|
|
(40,929
|
)
|
|
7,073
|
|
|
(36,470
|
)
|
||||
Stock-based compensation
|
15,245
|
|
|
11,655
|
|
|
41,445
|
|
|
34,413
|
|
||||
Provision for income taxes
|
25,021
|
|
|
40,595
|
|
|
61,371
|
|
|
56,836
|
|
||||
Income from continuing operations
|
$
|
70,879
|
|
|
$
|
92,825
|
|
|
$
|
253,893
|
|
|
$
|
166,395
|
|
(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
. This consideration is made with the objective of increasing the number of clients or to ensure or improve customer loyalty. These 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. These 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)
|
During the nine months ended September 30, 2017, we recognized a
$15 million
loss in other, net related to debt modification costs associated with our debt refinancing. 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. During the nine months ended September 30, 2017, we recorded a
$25 million
charge associated with a reduction to our workforce. This reduction aligned our operations with business needs and implemented an ongoing costs and organizational structure consistent with our expected growth needs and opportunities.
|
(5)
|
Litigation costs (reimbursements), net represent charges associated with antitrust and other foreign non-income tax contingency matters. See Note
10. Contingencies
. In the third quarter of 2018, we recorded a
$5 million
accrual related to penalties and interest for certain non-income tax claims for historical periods regarding permanent establishment in a foreign jurisdiction. 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.
|
(6)
|
During the nine months ended September 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. See Note
3. Impairment and Related Charges
.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
||||
Travel Network
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Direct Billable Bookings - Air
|
123,233
|
|
|
114,259
|
|
|
7.9%
|
|
380,748
|
|
|
356,478
|
|
|
6.8%
|
Direct Billable Bookings - LGS
|
16,618
|
|
|
15,540
|
|
|
6.9%
|
|
50,752
|
|
|
46,934
|
|
|
8.1%
|
Total Direct Billable Bookings
|
139,851
|
|
|
129,799
|
|
|
7.7%
|
|
431,500
|
|
|
403,412
|
|
|
7.0%
|
Airline Solutions Passengers Boarded
|
198,063
|
|
|
186,887
|
|
|
6.0%
|
|
568,405
|
|
|
599,097
|
|
|
(5.1)%
|
•
|
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 Operating Income (Loss), 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 Operating Income (Loss), Adjusted Net Income, Adjusted EBITDA or Free Cash Flow differently, which reduces their usefulness as comparative measures.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income attributable to common stockholders
|
$
|
73,005
|
|
|
$
|
90,989
|
|
|
$
|
253,131
|
|
|
$
|
160,441
|
|
(Income) loss from discontinued operations, net of tax
|
(3,664
|
)
|
|
529
|
|
|
(3,217
|
)
|
|
2,228
|
|
||||
Net income attributable to noncontrolling interests
(1)
|
1,538
|
|
|
1,307
|
|
|
3,979
|
|
|
3,726
|
|
||||
Income from continuing operations
|
70,879
|
|
|
92,825
|
|
|
253,893
|
|
|
166,395
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisition-related amortization
(2a)
|
16,407
|
|
|
20,226
|
|
|
51,585
|
|
|
75,666
|
|
||||
Impairment and related charges
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
92,022
|
|
||||
Loss on extinguishment of debt
|
—
|
|
|
1,012
|
|
|
633
|
|
|
1,012
|
|
||||
Other, net
(4)
|
1,905
|
|
|
3,802
|
|
|
10,746
|
|
|
19,788
|
|
||||
Restructuring and other costs
(7)
|
—
|
|
|
—
|
|
|
—
|
|
|
25,304
|
|
||||
Litigation costs (reimbursements), net
(5)
|
5,225
|
|
|
(40,929
|
)
|
|
7,073
|
|
|
(36,470
|
)
|
||||
Stock-based compensation
|
15,245
|
|
|
11,655
|
|
|
41,445
|
|
|
34,413
|
|
||||
Tax impact of net income adjustments
|
(689
|
)
|
|
(1,670
|
)
|
|
(32,850
|
)
|
|
(75,973
|
)
|
||||
Adjusted Net Income from continuing operations
|
$
|
108,972
|
|
|
$
|
86,921
|
|
|
$
|
332,525
|
|
|
$
|
302,157
|
|
Adjusted Net Income from continuing operations per share
|
$
|
0.39
|
|
|
$
|
0.31
|
|
|
$
|
1.20
|
|
|
$
|
1.08
|
|
Diluted weighted-average common shares outstanding
|
277,528
|
|
|
278,369
|
|
|
276,819
|
|
|
279,648
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Adjusted Net Income from continuing operations
|
$
|
108,972
|
|
|
$
|
86,921
|
|
|
$
|
332,525
|
|
|
$
|
302,157
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization of property and equipment
(2b)
|
76,226
|
|
|
66,332
|
|
|
225,649
|
|
|
191,442
|
|
||||
Amortization of capitalized implementation costs
(2c)
|
10,099
|
|
|
10,484
|
|
|
30,317
|
|
|
28,621
|
|
||||
Amortization of upfront incentive consideration
(3)
|
18,207
|
|
|
18,005
|
|
|
57,324
|
|
|
50,298
|
|
||||
Interest expense, net
|
39,291
|
|
|
38,919
|
|
|
116,809
|
|
|
116,577
|
|
||||
Remaining provision for income taxes
|
25,710
|
|
|
42,265
|
|
|
94,221
|
|
|
132,809
|
|
||||
Adjusted EBITDA
|
$
|
278,505
|
|
|
$
|
262,926
|
|
|
$
|
856,845
|
|
|
$
|
821,904
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
(2)
|
102,732
|
|
|
97,042
|
|
|
307,551
|
|
|
295,729
|
|
||||
Amortization of upfront incentive consideration
(3)
|
18,207
|
|
|
18,005
|
|
|
57,324
|
|
|
50,298
|
|
||||
Acquisition-related amortization
(2a)
|
(16,407
|
)
|
|
(20,226
|
)
|
|
(51,585
|
)
|
|
(75,666
|
)
|
||||
Adjusted Operating Income
|
$
|
173,973
|
|
|
$
|
168,105
|
|
|
$
|
543,555
|
|
|
$
|
551,543
|
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||
|
Travel
Network |
|
Airline
Solutions |
|
Hospitality
Solutions |
|
Corporate
|
|
Total
|
||||||||||
Operating income (loss)
|
$
|
182,200
|
|
|
28,505
|
|
|
$
|
5,826
|
|
|
$
|
(79,768
|
)
|
|
$
|
136,763
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
41,633
|
|
|
18,710
|
|
|
7,844
|
|
|
61,965
|
|
|
130,152
|
|
|||||
Cost of revenue adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(2)
|
26,564
|
|
|
43,213
|
|
|
9,399
|
|
|
6,376
|
|
|
85,552
|
|
|||||
Amortization of upfront incentive consideration
(3)
|
18,207
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,207
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
7,112
|
|
|
7,112
|
|
|||||
Adjusted Gross Profit
|
268,604
|
|
|
90,428
|
|
|
23,069
|
|
|
(4,315
|
)
|
|
377,786
|
|
|||||
Selling, general and administrative
|
(41,633
|
)
|
|
(18,710
|
)
|
|
(7,844
|
)
|
|
(61,965
|
)
|
|
(130,152
|
)
|
|||||
Joint venture equity income
|
333
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
333
|
|
|||||
Selling, general and administrative adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(2)
|
2,679
|
|
|
2,376
|
|
|
891
|
|
|
11,234
|
|
|
17,180
|
|
|||||
Litigation costs
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
5,225
|
|
|
5,225
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
8,133
|
|
|
8,133
|
|
|||||
Adjusted EBITDA
|
229,983
|
|
|
74,094
|
|
|
16,116
|
|
|
(41,688
|
)
|
|
278,505
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(2)
|
29,243
|
|
|
45,589
|
|
|
10,290
|
|
|
17,610
|
|
|
102,732
|
|
|||||
Amortization of upfront incentive consideration
(3)
|
18,207
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,207
|
|
|||||
Acquisition-related amortization
(2a)
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,407
|
)
|
|
(16,407
|
)
|
|||||
Adjusted Operating Income (Loss)
|
$
|
182,533
|
|
|
$
|
28,505
|
|
|
$
|
5,826
|
|
|
$
|
(42,891
|
)
|
|
$
|
173,973
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||||||
|
Travel
Network |
|
Airline
Solutions |
|
Hospitality
Solutions |
|
Corporate
|
|
Total
|
||||||||||
Operating income (loss)
|
$
|
171,741
|
|
|
39,574
|
|
|
$
|
5,150
|
|
|
$
|
(39,669
|
)
|
|
$
|
176,796
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
42,460
|
|
|
20,151
|
|
|
12,596
|
|
|
16,633
|
|
|
91,840
|
|
|||||
Cost of revenue adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(2)
|
23,223
|
|
|
38,588
|
|
|
7,709
|
|
|
10,456
|
|
|
79,976
|
|
|||||
Amortization of upfront incentive consideration
(3)
|
18,005
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,005
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
4,615
|
|
|
4,615
|
|
|||||
Adjusted Gross Profit
|
255,429
|
|
|
98,313
|
|
|
25,455
|
|
|
(7,965
|
)
|
|
371,232
|
|
|||||
Selling, general and administrative
|
(42,460
|
)
|
|
(20,151
|
)
|
|
(12,596
|
)
|
|
(16,633
|
)
|
|
(91,840
|
)
|
|||||
Joint venture equity income
|
357
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
357
|
|
|||||
Selling, general and administrative adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(2)
|
3,161
|
|
|
2,199
|
|
|
383
|
|
|
11,323
|
|
|
17,066
|
|
|||||
Litigation reimbursements
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,929
|
)
|
|
(40,929
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
7,040
|
|
|
7,040
|
|
|||||
Adjusted EBITDA
|
216,487
|
|
|
80,361
|
|
|
13,242
|
|
|
(47,164
|
)
|
|
262,926
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(2)
|
26,384
|
|
|
40,787
|
|
|
8,092
|
|
|
21,779
|
|
|
97,042
|
|
|||||
Amortization of upfront incentive consideration
(3)
|
18,005
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,005
|
|
|||||
Acquisition-related amortization
(2a)
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,226
|
)
|
|
(20,226
|
)
|
|||||
Adjusted Operating Income (Loss)
|
$
|
172,098
|
|
|
$
|
39,574
|
|
|
$
|
5,150
|
|
|
$
|
(48,717
|
)
|
|
$
|
168,105
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||
|
Travel
Network |
|
Airline
Solutions |
|
Hospitality
Solutions |
|
Corporate
|
|
Total
|
||||||||||
Operating income (loss)
|
$
|
587,925
|
|
|
82,030
|
|
|
$
|
9,927
|
|
|
$
|
(238,885
|
)
|
|
$
|
440,997
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
117,604
|
|
|
55,494
|
|
|
25,303
|
|
|
185,646
|
|
|
384,047
|
|
|||||
Cost of revenue adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(2)
|
79,506
|
|
|
126,926
|
|
|
26,735
|
|
|
21,323
|
|
|
254,490
|
|
|||||
Amortization of upfront incentive consideration
(3)
|
57,324
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,324
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
19,184
|
|
|
19,184
|
|
|||||
Adjusted Gross Profit
|
842,359
|
|
|
264,450
|
|
|
61,965
|
|
|
(12,732
|
)
|
|
1,156,042
|
|
|||||
Selling, general and administrative
|
(117,604
|
)
|
|
(55,494
|
)
|
|
(25,303
|
)
|
|
(185,646
|
)
|
|
(384,047
|
)
|
|||||
Joint venture equity income
|
2,455
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,455
|
|
|||||
Selling, general and administrative adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(2)
|
8,459
|
|
|
8,673
|
|
|
2,168
|
|
|
33,761
|
|
|
53,061
|
|
|||||
Litigation costs
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
7,073
|
|
|
7,073
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
22,261
|
|
|
22,261
|
|
|||||
Adjusted EBITDA
|
735,669
|
|
|
217,629
|
|
|
38,830
|
|
|
(135,283
|
)
|
|
856,845
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(2)
|
87,965
|
|
|
135,599
|
|
|
28,903
|
|
|
55,084
|
|
|
307,551
|
|
|||||
Amortization of upfront incentive consideration
(3)
|
57,324
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,324
|
|
|||||
Acquisition-related amortization
(2a)
|
—
|
|
|
—
|
|
|
—
|
|
|
(51,585
|
)
|
|
(51,585
|
)
|
|||||
Adjusted Operating Income (Loss)
|
$
|
590,380
|
|
|
$
|
82,030
|
|
|
$
|
9,927
|
|
|
$
|
(138,782
|
)
|
|
$
|
543,555
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||
|
Travel
Network |
|
Airline
Solutions |
|
Hospitality
Solutions |
|
Corporate
|
|
Total
|
||||||||||
Operating income (loss)
|
$
|
582,652
|
|
|
94,533
|
|
|
$
|
7,021
|
|
|
$
|
(325,366
|
)
|
|
$
|
358,840
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
120,297
|
|
|
61,266
|
|
|
37,003
|
|
|
164,571
|
|
|
383,137
|
|
|||||
Impairment and related charges
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|
92,022
|
|
|
92,022
|
|
|||||
Cost of revenue adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(2)
|
69,642
|
|
|
109,210
|
|
|
22,028
|
|
|
28,808
|
|
|
229,688
|
|
|||||
Amortization of upfront incentive consideration
(3)
|
50,298
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,298
|
|
|||||
Restructuring and other costs
(7)
|
—
|
|
|
—
|
|
|
—
|
|
|
12,976
|
|
|
12,976
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
13,626
|
|
|
13,626
|
|
|||||
Adjusted Gross Profit
|
822,889
|
|
|
265,009
|
|
|
66,052
|
|
|
(13,363
|
)
|
|
1,140,587
|
|
|||||
Selling, general and administrative
|
(120,297
|
)
|
|
(61,266
|
)
|
|
(37,003
|
)
|
|
(164,571
|
)
|
|
(383,137
|
)
|
|||||
Joint venture equity income
|
1,768
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,768
|
|
|||||
Selling, general and administrative adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(2)
|
9,617
|
|
|
6,586
|
|
|
1,038
|
|
|
48,800
|
|
|
66,041
|
|
|||||
Restructuring and other costs
(7)
|
—
|
|
|
—
|
|
|
—
|
|
|
12,328
|
|
|
12,328
|
|
|||||
Litigation reimbursements
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,470
|
)
|
|
(36,470
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
20,787
|
|
|
20,787
|
|
|||||
Adjusted EBITDA
|
713,977
|
|
|
210,329
|
|
|
30,087
|
|
|
(132,489
|
)
|
|
821,904
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
(2)
|
79,259
|
|
|
115,796
|
|
|
23,066
|
|
|
77,608
|
|
|
295,729
|
|
|||||
Amortization of upfront incentive consideration
(3)
|
50,298
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,298
|
|
|||||
Acquisition-related amortization
(2a)
|
—
|
|
|
—
|
|
|
—
|
|
|
(75,666
|
)
|
|
(75,666
|
)
|
|||||
Adjusted Operating Income (Loss)
|
$
|
584,420
|
|
|
$
|
94,533
|
|
|
$
|
7,021
|
|
|
$
|
(134,431
|
)
|
|
$
|
551,543
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash provided by operating activities
|
$
|
536,193
|
|
|
$
|
455,906
|
|
Cash used in investing activities
|
(205,664
|
)
|
|
(242,952
|
)
|
||
Cash used in financing activities
|
(252,409
|
)
|
|
(300,936
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash provided by operating activities
|
$
|
536,193
|
|
|
$
|
455,906
|
|
Additions to property and equipment
|
(205,664
|
)
|
|
(242,811
|
)
|
||
Free Cash Flow
|
$
|
330,529
|
|
|
$
|
213,095
|
|
(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%, (iii) Abacus International Lanka Pte Ltd of 40%, and (iv) Sabre Bulgaria of 40% beginning in November 2017.
|
(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. This consideration is made with the objective of increasing the number of clients or to ensure or improve customer loyalty. These 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. These 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)
|
During the nine months ended September 30, 2017, we recognized a $15 million loss in other, net related to debt modification costs associated with our debt refinancing. 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)
|
Litigation costs (reimbursements), net represent charges associated with antitrust and other foreign non-income tax contingency matters. See Note
10. Contingencies
, to our consolidated financial statements. In the third quarter of 2018, we recorded a
$5 million
accrual related to penalties and interest for certain non-income tax claims for historical periods regarding permanent establishment in a foreign jurisdiction. 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.
|
(6)
|
During the nine months ended September 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. See Note
3. Impairment and Related Charges
, to our consolidated financial statements.
|
(7)
|
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. During the nine months ended September 30, 2017, we recorded a $25 million charge associated with an announced action to reduce our workforce. This reduction aligned our operations with business needs and implemented an ongoing costs and organizational structure consistent with our expected growth needs and opportunities.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Amounts in thousands)
|
||||||||||||||
Revenue
|
$
|
970,283
|
|
|
$
|
900,606
|
|
|
$
|
2,943,028
|
|
|
$
|
2,716,622
|
|
Cost of revenue
|
703,368
|
|
|
631,970
|
|
|
2,117,984
|
|
|
1,882,623
|
|
||||
Selling, general and administrative
|
130,152
|
|
|
91,840
|
|
|
384,047
|
|
|
383,137
|
|
||||
Impairment and related charges
|
—
|
|
|
—
|
|
|
—
|
|
|
92,022
|
|
||||
Operating income
|
136,763
|
|
|
176,796
|
|
|
440,997
|
|
|
358,840
|
|
||||
Interest expense, net
|
(39,291
|
)
|
|
(38,919
|
)
|
|
(116,809
|
)
|
|
(116,577
|
)
|
||||
Loss on extinguishment of debt
|
—
|
|
|
(1,012
|
)
|
|
(633
|
)
|
|
(1,012
|
)
|
||||
Joint venture equity income
|
333
|
|
|
357
|
|
|
2,455
|
|
|
1,768
|
|
||||
Other expense, net
|
(1,905
|
)
|
|
(3,802
|
)
|
|
(10,746
|
)
|
|
(19,788
|
)
|
||||
Income from continuing operations before income taxes
|
95,900
|
|
|
133,420
|
|
|
315,264
|
|
|
223,231
|
|
||||
Provision for income taxes
|
25,021
|
|
|
40,595
|
|
|
61,371
|
|
|
56,836
|
|
||||
Income from continuing operations
|
$
|
70,879
|
|
|
$
|
92,825
|
|
|
$
|
253,893
|
|
|
$
|
166,395
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Travel Network
|
$
|
700,196
|
|
|
$
|
632,349
|
|
|
$
|
67,847
|
|
|
11
|
%
|
Airline Solutions
|
209,388
|
|
|
207,121
|
|
|
2,267
|
|
|
1
|
%
|
|||
Hospitality Solutions
|
69,911
|
|
|
67,802
|
|
|
2,109
|
|
|
3
|
%
|
|||
Total segment revenue
|
979,495
|
|
|
907,272
|
|
|
72,223
|
|
|
8
|
%
|
|||
Eliminations
|
(9,212
|
)
|
|
(6,666
|
)
|
|
(2,546
|
)
|
|
(38
|
)%
|
|||
Total revenue
|
$
|
970,283
|
|
|
$
|
900,606
|
|
|
$
|
69,677
|
|
|
8
|
%
|
•
|
SabreSonic Passenger Reservation System revenue remained consistent for the
three months ended September 30, 2018
compared to the same period in the prior year. Passengers Boarded increased by
6%
to
198 million
for the
three months ended September 30, 2018
driven by an increase in volumes from consistent carrier growth of 1%, as well as the full implementation of LATAM Airlines Group S.A. Brasil in the second quarter of 2018. These increases were substantially offset by a reduction in project-based SabreSonic services revenue;
|
•
|
a $5 million increase in AirVision and AirCentre commercial and operations solutions revenue driven by newly implemented SaaS products, as well as upfront license fee revenue from renewals and new implementations recognized upon delivery to the customer of $12 million. This increase was partially offset by other impacts related to the adoption of ASC 606 (see "Recent Developments Affecting our Results of Operations" above); and
|
•
|
a $2 million decrease in discrete professional service fees revenue, as a result of reduced sales compared to the prior period.
|
|
Three Months Ended September 30,
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Travel Network
|
$
|
431,592
|
|
|
$
|
376,920
|
|
|
$
|
54,672
|
|
|
15
|
%
|
Airline Solutions
|
118,961
|
|
|
108,807
|
|
|
10,154
|
|
|
9
|
%
|
|||
Hospitality Solutions
|
46,842
|
|
|
42,348
|
|
|
4,494
|
|
|
11
|
%
|
|||
Eliminations
|
(9,212
|
)
|
|
(6,715
|
)
|
|
(2,497
|
)
|
|
(37
|
)%
|
|||
Total segment cost of revenue
|
588,183
|
|
|
521,360
|
|
|
66,823
|
|
|
13
|
%
|
|||
Corporate
|
11,426
|
|
|
12,629
|
|
|
(1,203
|
)
|
|
(10
|
)%
|
|||
Depreciation and amortization
|
85,552
|
|
|
79,976
|
|
|
5,576
|
|
|
7
|
%
|
|||
Amortization of upfront incentive consideration
|
18,207
|
|
|
18,005
|
|
|
202
|
|
|
1
|
%
|
|||
Total cost of revenue
|
$
|
703,368
|
|
|
$
|
631,970
|
|
|
$
|
71,398
|
|
|
11
|
%
|
|
Three Months Ended September 30,
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Selling, general and administrative
|
$
|
130,152
|
|
|
$
|
91,840
|
|
|
$
|
38,312
|
|
|
42
|
%
|
|
Three Months Ended September 30,
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Provision for income taxes
|
$
|
25,021
|
|
|
$
|
40,595
|
|
|
$
|
(15,574
|
)
|
|
(38
|
)%
|
|
Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Travel Network
|
$
|
2,141,017
|
|
|
$
|
1,931,441
|
|
|
$
|
209,576
|
|
|
11
|
%
|
Airline Solutions
|
620,813
|
|
|
610,608
|
|
|
10,205
|
|
|
2
|
%
|
|||
Hospitality Solutions
|
206,353
|
|
|
194,071
|
|
|
12,282
|
|
|
6
|
%
|
|||
Total segment revenue
|
2,968,183
|
|
|
2,736,120
|
|
|
232,063
|
|
|
8
|
%
|
|||
Eliminations
|
(25,155
|
)
|
|
(19,498
|
)
|
|
(5,657
|
)
|
|
(29
|
)%
|
|||
Total revenue
|
$
|
2,943,028
|
|
|
$
|
2,716,622
|
|
|
$
|
226,406
|
|
|
8
|
%
|
•
|
a $2 million decrease in SabreSonic Passenger Reservation System revenue for the
nine months ended September 30, 2018
compared to the same period in the prior year. Passengers Boarded decreased by
5%
to
568 million
for the
nine months ended September 30, 2018
, driven by the termination of an agreement with Southwest Airlines related to services and processing for their legacy air reservation system at the end of the second quarter in 2017, which was at a lower than average passengers boarded rate. This decrease was offset by an increase in volumes from consistent carrier growth of 6%, as well as the full implementation of LATAM Airlines Group S.A. Brasil in the second quarter of 2018;
|
•
|
a $20 million increase in AirVision and AirCentre commercial and operations solutions revenue driven primarily by newly implemented SaaS products and organic growth, as well as upfront license fee revenue from renewals and new implementations recognized upon delivery to the customer of $25 million. This increase was partially offset by other impacts related to the adoption of ASC 606 (see "Recent Developments Affecting our Results of Operations" above); and
|
•
|
a $7 million decrease in discrete professional service fees revenue, as a result of reduced sales compared to the prior period.
|
|
Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Travel Network
|
$
|
1,298,658
|
|
|
$
|
1,108,552
|
|
|
$
|
190,106
|
|
|
17
|
%
|
Airline Solutions
|
356,363
|
|
|
345,598
|
|
|
10,765
|
|
|
3
|
%
|
|||
Hospitality Solutions
|
144,388
|
|
|
128,021
|
|
|
16,367
|
|
|
13
|
%
|
|||
Eliminations
|
(25,156
|
)
|
|
(19,498
|
)
|
|
(5,658
|
)
|
|
(29
|
)%
|
|||
Total segment cost of revenue
|
1,774,253
|
|
|
1,562,673
|
|
|
211,580
|
|
|
14
|
%
|
|||
Corporate
|
31,917
|
|
|
39,964
|
|
|
(8,047
|
)
|
|
(20
|
)%
|
|||
Depreciation and amortization
|
254,490
|
|
|
229,688
|
|
|
24,802
|
|
|
11
|
%
|
|||
Amortization of upfront incentive consideration
|
57,324
|
|
|
50,298
|
|
|
7,026
|
|
|
14
|
%
|
|||
Total cost of revenue
|
$
|
2,117,984
|
|
|
$
|
1,882,623
|
|
|
$
|
235,361
|
|
|
13
|
%
|
|
Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Selling, general and administrative
|
$
|
384,047
|
|
|
$
|
383,137
|
|
|
$
|
910
|
|
|
—
|
%
|
|
Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Impairment and related charges
|
$
|
—
|
|
|
$
|
92,022
|
|
|
$
|
(92,022
|
)
|
|
100
|
%
|
|
Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Other expense, net
|
$
|
(10,746
|
)
|
|
$
|
(19,788
|
)
|
|
$
|
9,042
|
|
|
(46
|
)%
|
|
Nine Months Ended September 30,
|
|
|
|||||||||||
|
2018
|
|
2017
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Provision for income taxes
|
$
|
61,371
|
|
|
$
|
56,836
|
|
|
$
|
4,535
|
|
|
8
|
%
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Cash and cash equivalents
|
$
|
444,321
|
|
|
$
|
361,381
|
|
Available balance under the Revolver
|
384,677
|
|
|
378,542
|
|
||
Reductions to the Revolver:
|
|
|
|
||||
Revolver outstanding balance
|
—
|
|
|
—
|
|
||
Outstanding letters of credit
|
15,323
|
|
|
21,458
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(Amounts in thousands)
|
||||||
Cash provided by operating activities
|
$
|
536,193
|
|
|
$
|
455,906
|
|
Cash used in investing activities
|
(205,664
|
)
|
|
(242,952
|
)
|
||
Cash used in financing activities
|
(252,409
|
)
|
|
(300,936
|
)
|
||
Cash provided by (used in) discontinued operations
|
633
|
|
|
(3,636
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
4,187
|
|
|
(4,228
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
$
|
82,940
|
|
|
$
|
(95,846
|
)
|
•
|
payment of
$116 million
in dividends on our common stock;
|
•
|
second annual payment on the TRA liability for $59 million, excluding interest;
|
•
|
payment of
$35 million
on our Term Loan A and Term Loan B and
$2 million
in debt issuance and modification costs;
|
•
|
repurchase of
1,075,255
shares of our common stock outstanding totaling
$26 million
; and
|
•
|
net receipts of
$3 million
from the settlement of employee stock-option awards, including payments of
$9 million
in income tax withholdings associated with the settlement of employee restricted-stock awards.
|
•
|
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;
|
•
|
payments totaling $36 million on the principal outstanding on our term loans;
|
•
|
pursuant to the Refinancing in August 2017, payments of $7 million in debt modification costs;
|
•
|
first annual payment on the TRA liability for $99 million, excluding interest;
|
•
|
payment of $116 million in dividends on our common stock;
|
•
|
repurchase of 5,153,241 shares of our common stock outstanding totaling $98 million; and
|
•
|
net receipts of $11 million from the settlement of employee stock-option awards, including payments of $11 million in income tax withholdings associated with the settlement of employee restricted-stock awards.
|
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 influenza, 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.
|
•
|
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.
|
•
|
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;
|
•
|
adverse laws and regulatory requirements, including more comprehensive regulation in the E.U. and the possible effects of the Brexit vote;
|
•
|
changes in foreign currency exchange rates and financial risk arising from transactions in multiple currencies;
|
•
|
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;
|
•
|
more restrictive data privacy requirements, including the GDPR;
|
•
|
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;
|
•
|
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.
|
•
|
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.
|
•
|
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
|
ITEM 6.
|
EXHIBITS
|
Exhibit
Number
|
|
Description of Exhibit
|
10.63+
|
|
|
10.64+*
|
|
|
10.65+*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1*
|
|
|
32.2*
|
|
|
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 30, 2018
|
By:
|
|
/s/ Douglas E. Barnett
|
|
|
|
|
Douglas E. Barnett
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(principal financial officer of the registrant)
|
•
|
Base Salary:
Your annual base salary will be $475,000 (“
Base Salary
”), less withholding for taxes and deductions, which under the Company’s current payroll practices will result in a bi-weekly payment of $17,307.69, less withholding for taxes and deductions, based on 26 pay periods in a year. Your Base Salary will be reviewed annually (typically in the first quarter) by the Company’s Board of Directors (the “
Board
”) or a committee of the Board (any revised Base Salary will then be referred to as the “
Base Salary
”).
|
•
|
Annual Bonus:
You will be eligible to participate in the Company’s annual incentive plan, the Executive Incentive Program (or any successor program). Your annual target cash bonus under that program will be equal to 80% (“
Target Bonus
”) of your Base Salary earnings for the calendar year, based on your attainment of pre-established performance goals as approved each calendar year by the Board or a committee of the Board. The annual bonus for a particular calendar year will be paid to you no later than March of the year following the year in which that bonus was earned. Notwithstanding the foregoing, for the Company’s 2018 fiscal year, the Target Bonus will be prorated so that the Target Bonus applies only to the period following the Effective Date.
|
•
|
Participation in the Company’s Equity Incentive Plan:
You will receive an initial equity grant valued at $2,250,000 on the date specified in the Company’s Policy on Grant of Equity-Based Compensation (which is typically the 15
th
of the calendar month following the Effective Date). The grant value will be provided in an equal number of stock options and restricted stock units. The grant is expected to be made under the Sabre Corporation 2016 Omnibus Incentive Compensation Plan (the “
Plan
”) and will be subject to the terms and conditions of the Plan and the applicable award agreements issued in connection with the grant. While employed by the Company, you will be eligible to participate in the long-term equity incentive plan maintained by the Company. The amount and terms and conditions of any awards to be granted to you will be approved by the Board, the Compensation Committee of the Board or a sub-committee of the Compensation Committee, as applicable. The amount of any future long-term incentive grants beginning in March 2019 will have a target value of $1,500,000 and will determined in the Company’s sole discretion and may vary (higher or lower) due to individual performance or company performance.
|
•
|
Other Benefit Plans and Programs:
You will be eligible to participate in the Company’s employee benefit plans, policies and other compensation and perquisite programs, including financial planning benefits and an annual physical program, subject to the terms, conditions and eligibility requirements of each of those benefit plans, policies or other compensation programs, including amendments or modifications. While employed by the Company, you will be entitled to paid vacation and sick leave in accordance with the Company’s vacation, holiday and other pay for time not worked policies as in effect from time to time. You will be eligible for 15 days paid time off (PTO), two floating holidays and eight company-scheduled holidays under the Company’s current policy. Additionally, Sabre will supplement your PTO with an additional 10 days PTO per year up until Company policy dictates an equal or greater number of days. This supplemental PTO may not be exchanged for monetary compensation if you leave the Company or at any other time. For 2018, the amount of PTO and floating holidays will be prorated based on your hire date. These benefit plans, policies or other compensation and perquisite programs may be discontinued or changed from time to time in the Company’s sole discretion.
|
•
|
Termination Provisions:
You will be eligible to participate in the Company’s Executive Severance Plan as a Level 2 Employee, as approved by the Compensation Committee of the Board, which will provide you with certain severance benefits in the event of your termination of employment by the Company other than for Cause or your resignation for Good Reason (each as defined in the Executive Severance Plan, a copy of which is enclosed with this letter) and which otherwise addresses the treatment of your termination of employment.
|
Executive Name:
Kimberly Warmbier
|
Executive Title: Executive Vice President and Chief Human Resources Officer
|
A.
|
Assignment and Severability
|
B.
|
Governing Law and Dispute Resolution
|
C.
|
Entire Agreement and Waiver
|
D.
|
Duty to Read
|
E.
|
Definitions
|
•
|
Base Salary:
Your annual base salary will be $500,000 (“
Base Salary
”), less withholding for taxes and deductions, which under the Company’s current payroll practices will result in a bi-weekly payment of $19,230.77, less withholding for taxes and deductions, based on 26 pay periods in a year. Your Base Salary will be reviewed annually (typically in the first quarter) by the Company’s Board of Directors (the “
Board
”) or a committee of the Board (any revised Base Salary will then be referred to as the “
Base Salary
”).
|
•
|
Sign-on Bonus:
You will receive a one-time “sign-on” bonus of $75,000 (“Sign-on Bonus”). This Sign-on Bonus will be paid to you within 45 days of your start date with the Company, contingent upon your signing of a bonus repayment agreement in the form attached to this letter as Exhibit A.
|
•
|
Annual Bonus:
You will be eligible to participate in the Company’s annual incentive plan, the Executive Incentive Program (or any successor program). Your annual target cash bonus under that program will be equal to 80% (“
Target Bonus
”) of your Base Salary earnings for the calendar year, based on your attainment of pre-established performance goals as approved each calendar year by the Board or a committee of the Board. The annual bonus for a particular calendar year will be paid to you no later than March of the year following the year in which that bonus was earned. Notwithstanding the foregoing, for the Company’s 2018 fiscal year, the Target Bonus will be prorated so that the Target Bonus applies only to the period following the Effective Date.
|
•
|
Participation in the Company’s Equity Incentive Plan:
You will receive an initial equity grant valued at $2,000,000 on the date specified in the Company’s Policy on Grant of Equity-Based Compensation (which is typically the 15
th
of the calendar month following the Effective Date). The grant value will be provided as follows: $1,500,000 value will be delivered in an equal number of stock options and restricted stock units. $500,000 value will be delivered in performance restricted stock units. The grant is expected to be made under the Sabre Corporation 2016 Omnibus Incentive Compensation Plan (the “
Plan
”) and will be subject to the terms and conditions of the Plan and the applicable award agreements issued in connection with the grant. While employed by the Company, you will be eligible to participate in the long-term equity incentive plan maintained by the Company. The amount of any future long-term incentive grants beginning in March 2019 will have a target value ranging from $1,500,000 to $2,000,000, and will be determined in the Company’s sole discretion and may vary (higher or lower) due to individual performance or company performance. The amount, terms and conditions of any awards to be granted to you will be approved by the Board, the Compensation Committee of the Board or a sub-committee of the Compensation Committee, as applicable.
|
•
|
Other Benefit Plans and Programs:
You will be eligible to participate in the Company’s employee benefit plans, policies and other compensation and perquisite programs, including financial planning benefits and an annual physical program, subject to the terms, conditions and eligibility requirements of each of those benefit plans, policies or other compensation programs, including amendments or modifications. While employed by the Company, you will be entitled to paid vacation and sick leave in accordance with the Company’s vacation, holiday and other pay for time not worked policies as in effect from time to time. You will be eligible for 15 days paid time off (PTO), two floating holidays and eight company-scheduled holidays under the Company’s current policy. Additionally, Sabre will supplement your PTO with an additional five (5) days PTO per year up until Company policy dictates an equal or greater number of days. This supplemental PTO may not be exchanged for monetary compensation if you leave the Company or at any other time. For 2018, the amount of PTO and floating holidays will be prorated based on your hire date. These benefit plans, policies or other compensation and perquisite programs may be discontinued or changed from time to time in the Company’s sole discretion.
|
•
|
Termination Provisions:
You will be eligible to participate in the Company’s Executive Severance Plan as a Level 2 Employee, as approved by the Compensation Committee of the Board, which will provide you with certain severance benefits in the event of your termination of employment by the Company other than for Cause or your resignation for Good Reason (each as defined in the Executive Severance Plan, a copy of which is enclosed with this letter) and which otherwise addresses the treatment of your termination of employment.
|
1.
|
If, within one year of payout of any bonus outlined in your offer letter, not including our VCP program, you leave Sabre for any reason other than due to a reduction in force, you will reimburse Sabre for a pro-rata share of your bonus. That pro-rata share will be the full amount of your signing bonus, reduced by one twelfth (1/12) for each full month of your employment with Sabre. No reduction in the reimbursement shall be made for partial months of employment.
|
2.
|
This Agreement is independent of any other agreement (if any) you have or may have with Sabre. The existence of any claim you may have against Sabre shall not serve as a defense to enforcement of this Agreement.
|
3.
|
If any provision of this Agreement is held by any court to be invalid or unenforceable, the invalid or unenforceable provision shall be fully severable, and the Agreement shall be construed as if the invalid or unenforceable provision never comprised part of this Agreement. Further, in lieu of the invalid or unenforceable provision, there shall be automatically added, a provision as similar in terms to such invalid or unenforceable provision as may be possible and be legal, valid and enforceable.
|
4.
|
You hereby authorize Sabre to deduct from your final paycheck the bonus reimbursement due Sabre under paragraph 1 of this Agreement, and any other amounts due Sabre when your employment terminates, whatever the reason for termination. You further agree to reimburse Sabre for all reasonable expenses it incurs, including costs and attorney fees, to collect such amounts.
|
5.
|
This Agreement shall be interpreted under, and governed by, the laws of the State of Texas and may be enforced in any state or federal court in Tarrant County, Texas.
|
6.
|
Any modifications to this Agreement must be in writing and signed by both parties.
|
Executive Name:
Cem Tanyel
|
Executive Title: Executive Vice President and President, Airline Solutions
|
A.
|
Assignment and Severability
|
B.
|
Governing Law and Dispute Resolution
|
C.
|
Entire Agreement and Waiver
|
D.
|
Duty to Read
|
E.
|
Definitions
|
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 30, 2018
|
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 30, 2018
|
By:
|
|
/s/ Douglas E. Barnett
|
|
|
|
|
Douglas E. Barnett
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(principal financial officer of the registrant)
|
a.
|
The Form 10-Q of Sabre Corporation for the quarter ended
September 30, 2018
(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 30, 2018
|
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, 2018
(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 30, 2018
|
By:
|
|
/s/ Douglas E. Barnett
|
|
|
|
|
Douglas E. Barnett
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(principal financial officer of the registrant)
|