CONFERMA/PAYMENTS $14B (gross spend volume in $) Faster GDS industry bookings growth vs. broader industry • Trailing twelve months ended December 31, 2023. Recurring revenue is defined as all revenue associated with products/services that are governed by multi-year agreements and otherwise do not have a finite/discreet service period or deliverable. ©2024 Sabre GLBL Inc. All rights reserved. 9 Technology transformation remains on track Q4 and FY23 Accomplishments • Exceeded mainframe and cloud cost reductio ...

PART I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Sabre Corporation is a global technology partner in the travel industry, connecting suppliers and buyers through its Travel Solutions and Hospitality Solutions segments - Sabre Corporation operates through two main business segments: Travel Solutions (global travel marketplace and airline software) and Hospitality Solutions (hotel software)[16](index=16&type=chunk)[17](index=17&type=chunk)[20](index=20&type=chunk) - The company's growth strategy centers on generating positive free cash flow, sustainable long-term growth, innovation, enhancing value propositions, and continued technology modernization, including integrating New Distribution Capability (NDC) and expanding product lines[21](index=21&type=chunk) - Sabre's technology strategy emphasizes operational stability, reliability, security, and performance, with significant investment in a unified, cloud-based architecture and AI-powered systems[22](index=22&type=chunk)[23](index=23&type=chunk) - Revenue is primarily generated from transaction fees for GDS bookings (Travel Solutions), recurring usage-based fees for SaaS/hosted software (Travel Solutions IT Solutions and Hospitality Solutions), software licensing, professional services, and media/retailing[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - The travel industry is seasonal, with bookings and revenue typically stronger in the first and third quarters and declining significantly in the fourth quarter, particularly in December[38](index=38&type=chunk) Employee Distribution as of December 31, 2023 | Region | No. of Employees | % of Total | | :------------- | :--------------- | :--------- | | United States | 1,736 | 28 % | | APAC | 1,765 | 28 % | | Europe | 1,629 | 26 % | | All Other | 1,102 | 18 % | | **Total** | **6,232** | **100 %** | [Item 1A. Risk Factors](index=8&type=section&id=Item%201A.%20Risk%20Factors) Sabre faces significant risks tied to global travel transaction volumes, intense competition, and pricing pressures from travel suppliers, alongside operational and financial challenges - Revenue is highly dependent on global travel industry transaction volumes, especially air travel, making the company susceptible to disruptions from economic conditions, disease outbreaks, geopolitical events, and climate change[47](index=47&type=chunk)[48](index=48&type=chunk) - The company operates in highly competitive and evolving markets, requiring continuous innovation and substantial expenditures to adapt to new technologies (e.g., NDC) and maintain competitiveness against direct distribution channels and new entrants[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - Sabre is exposed to pricing pressure from travel suppliers, particularly airlines, which can negotiate for lower fees and withhold content, potentially impacting revenue and margins[55](index=55&type=chunk)[56](index=56&type=chunk) - The collection, processing, storage, and transmission of personal data expose the company to liabilities from governmental regulations (like GDPR), conflicting legal requirements, and security incidents[59](index=59&type=chunk) - Dependence on third-party IT service providers (network, cloud, mainframe, SaaS) creates risks of service interruptions, increased costs, and business disruption if these providers fail or contracts are terminated[85](index=85&type=chunk)[86](index=86&type=chunk) - Cybersecurity incidents, including physical/electronic break-ins, malware, ransomware, and AI-related vulnerabilities, pose significant risks of liability, reputational damage, and operational disruption[92](index=92&type=chunk)[93](index=93&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) - The company has a significant amount of indebtedness (**$4.8 billion** as of December 31, 2023), which could adversely affect cash flow, limit operational flexibility, and increase vulnerability to adverse economic conditions[113](index=113&type=chunk) [Item 1B. Unresolved Staff Comments](index=22&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This item is not applicable to the company - The company has no unresolved staff comments to report[134](index=134&type=chunk) [Item 1C. Cybersecurity](index=22&type=section&id=Item%201C.%20Cybersecurity) Sabre manages cybersecurity risks through a dedicated function led by the CISO, with Board oversight, employing various controls and technologies to protect its environment - Sabre's cybersecurity risk management function, led by the CISO, is integrated into its enterprise risk management program, addressing operational risks, intellectual property theft, fraud, extortion, and reputational risks[135](index=135&type=chunk) - The company employs various cybersecurity technologies (e.g., cloud security posture management, endpoint detection and response, firewalls, identity management) and processes (e.g., training, vulnerability assessments, penetration testing) to protect its environment[137](index=137&type=chunk) - The Audit Committee of the Board of Directors has oversight of cybersecurity risk mitigation plans, receiving quarterly updates from management on threat management, strategy, and incident response[141](index=141&type=chunk)[143](index=143&type=chunk) - As of the report date, the company does not believe any cybersecurity threats or incidents have materially affected or are reasonably likely to materially affect its business strategy, results of operations, or financial condition[140](index=140&type=chunk) [Item 2. Properties](index=23&type=section&id=Item%202.%20Properties) Sabre Corporation operates globally with 61 leased offices across 38 countries, including corporate headquarters in Southlake, Texas, and regional headquarters in the UK and Singapore - Sabre operates **61** leased offices in **38** countries globally, including corporate headquarters in Southlake, Texas[144](index=144&type=chunk)[145](index=145&type=chunk) - Regional headquarters are located in Richmond, United Kingdom for EMEA and Singapore for APAC[146](index=146&type=chunk)[147](index=147&type=chunk) [Item 3. Legal Proceedings](index=23&type=section&id=Item%203.%20Legal%20Proceedings) Sabre is involved in routine legal proceedings and material litigation, including antitrust and tax disputes, with uncertain outcomes and potential for significant defense costs - The company is engaged in routine legal proceedings and material litigation, including antitrust and tax matters[148](index=148&type=chunk)[149](index=149&type=chunk) - The ultimate outcome of these legal matters cannot be predicted, and the amount of possible loss is not always reasonably estimable, except where an aggregate litigation accrual has been recorded[149](index=149&type=chunk) [Item 4. Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - The company has no mine safety disclosures to report[150](index=150&type=chunk) [Information About Our Executive Officers](index=25&type=section&id=Information%20About%20Our%20Executive%20Officers) This section provides biographical information for Sabre Corporation's executive officers as of February 15, 2024, detailing their positions and professional backgrounds Executive Officers as of February 15, 2024 | Name | Age | Position | | :------------ | :-- | :----------------------------------------------------------------- | | Kurt Ekert | 53 | Chief Executive Officer and President | | Sean Menke | 55 | Executive Chair of the Board | | Ann Bruder | 58 | Executive Vice President and Chief Legal Officer | | Joe DiFonzo | 58 | Executive Vice President and Chief Information Officer | | Roshan Mendis | 51 | Executive Vice President and Chief Commercial Officer, Travel Solutions | | Michael Randolfi | 51 | Executive Vice President and Chief Financial Officer | | Shawn Williams | 51 | Executive Vice President and Chief People Officer | | Scott Wilson | 56 | Executive Vice President, Sabre and President, Hospitality Solutions | | Garry Wiseman | 47 | Executive Vice President and Chief Product and Technology Officer, Travel Solutions | - Kurt Ekert became CEO and President in April 2023, previously serving as President since January 2022, and has a background with Carlson Worldwide Travel and Travelport[152](index=152&type=chunk) - Sean Menke transitioned from CEO to Executive Chair of the Board in April 2023, having served as CEO since December 2016[153](index=153&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=27&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Sabre's common stock trades on NASDAQ under "SABR," with a suspended share repurchase program having approximately **$287 million** remaining authorized - Sabre's common stock is traded on the NASDAQ Global Select Market under the symbol "SABR"[162](index=162&type=chunk) - As of February 8, 2024, there were **379,480,874** shares of common stock outstanding[5](index=5&type=chunk) - The share repurchase program, approved in February 2017 for up to **$500 million**, has been suspended since March 2020 due to market conditions, with approximately **$287 million** remaining authorized[287](index=287&type=chunk) [Item 6. [Reserved]](index=27&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - Item 6 is reserved and contains no information[165](index=165&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Sabre Corporation's financial condition and operating results, covering revenue, expenses, key metrics, non-GAAP measures, liquidity, and critical accounting estimates for recent fiscal years - Sabre operates through two business segments: Travel Solutions (global B2B travel marketplace and airline software) and Hospitality Solutions (hotel software)[167](index=167&type=chunk) - A significant portion of revenue is generated through transaction-based fees, recurring usage-based fees for SaaS/hosted systems, and upfront/professional services fees[168](index=168&type=chunk) - The company implemented a cost reduction plan in Q2 2023, incurring **$72 million** in restructuring costs, with an estimated annual operating expense reduction of **$200 million**[170](index=170&type=chunk) - Refinancing debt in 2022 and 2023 resulted in higher interest rates, increasing current and future interest expense[171](index=171&type=chunk) - Russian legislation effective October 30, 2022, prohibited Sabre from providing domestic air transportation processing services in Russia, negatively impacting revenue and results[172](index=172&type=chunk) [Recent Developments Affecting our Results of Operations](index=28&type=section&id=Recent%20Developments%20Affecting%20our%20Results%20of%20Operations) Recent developments include a **$72 million** restructuring cost for a **$200 million** annual expense reduction, debt refinancing, Russian service prohibitions, and the acquisition of Conferma - Implemented a cost reduction plan in Q2 2023, incurring **$72 million** in restructuring costs, expected to reduce annual operating expenses by approximately **$200 million**[170](index=170&type=chunk) - Refinanced portions of debt in 2022 and 2023, leading to higher interest rates and increased interest expense[171](index=171&type=chunk) - Russian legislation effective October 30, 2022, prohibited Sabre from providing domestic air transportation processing services in Russia, negatively impacting revenue[172](index=172&type=chunk) - Acquired Conferma, a virtual payments technology company, in August 2022 for **$62 million** net cash, consolidating its results into the Travel Solutions segment[173](index=173&type=chunk) - Sold **19%** of Conferma's direct parent company to a third party in February 2023 for **$16 million**[173](index=173&type=chunk) - Sold the AirCentre airline operations portfolio on February 28, 2022, for **$392 million**, resulting in a pre-tax gain of approximately **$180 million**[175](index=175&type=chunk)[176](index=176&type=chunk) [Factors Affecting our Results](index=29&type=section&id=Factors%20Affecting%20our%20Results) Sabre's results are influenced by travel supplier strategies, technology transformation benefits, geographic booking mix, rising interest rates, and increasing travel agency incentive consideration - Travel suppliers' focus on cost-cutting and alternative distribution methods (e.g., NDC, direct channels) creates pricing pressure on Travel Solutions but also opportunities for IT solutions outsourcing[178](index=178&type=chunk) - Technology transformation efforts are yielding benefits in Technology costs, with re-platforming to open source and cloud-based solutions expected to finalize in 2024, aiming for a more secure, stable, and cost-efficient architecture[179](index=179&type=chunk)[180](index=180&type=chunk) - Geographic mix of travel bookings impacts Travel Solutions revenue, with North America traditionally having lower booking fees and APAC showing strong recovery in 2023[181](index=181&type=chunk) Direct Billable Bookings Geographic Mix | Region | 2023 | 2022 | | :------------- | :--- | :--- | | North America | 55 % | 56 % | | EMEA | 17 % | 18 % | | APAC | 19 % | 15 % | | Latin America | 9 % | 11 % | | **Total** | **100 %** | **100 %** | - Higher interest rates from debt refinancing in 2022 and 2023 have increased interest expense; approximately **45%** of debt (net of cash and hedging) is variable[182](index=182&type=chunk) - Travel agency incentive consideration, a large portion of Travel Solutions expenses, increased in 2022 and 2023 due to higher transaction volumes exceeding thresholds, a trend expected to continue in 2024[183](index=183&type=chunk)[184](index=184&type=chunk) - LCC/hybrids are increasingly distributing through indirect channels, presenting growth opportunities, while the shift to SaaS and hosted solutions by airlines and hotels offers significant revenue potential due to outsourcing trends[185](index=185&type=chunk)[186](index=186&type=chunk) - Growing demand for technology improvements in the fragmented hotel industry is expected to drive continued growth for Hospitality Solutions[189](index=189&type=chunk) [Components of Revenues and Expenses](index=31&type=section&id=Components%20of%20Revenues%20and%20Expenses) This section details Sabre's revenue sources from Travel and Hospitality Solutions and outlines expense components including cost of revenue, technology costs, and selling, general and administrative expenses - Travel Solutions revenue comes from GDS distribution (direct billable bookings), IT solutions (reservation systems, commercial/operations products, agency solutions, booking data), and software licensing/maintenance[190](index=190&type=chunk) - Hospitality Solutions revenue is derived from upfront solution fees, recurring usage-based fees for SaaS/hosted software, and professional service fees[191](index=191&type=chunk) - Cost of revenue, excluding technology costs, includes delivery/distribution costs, employee-related costs, and significant travel agency incentive consideration (accrued monthly or capitalized and amortized)[192](index=192&type=chunk) - Technology costs encompass third-party providers, employee-related costs for operations, maintenance, minor enhancements, and technology transformation efforts[195](index=195&type=chunk) - Selling, general and administrative expenses include professional service fees, litigation costs, provision for expected credit losses, and personnel-related expenses for sales, support, and administrative functions[198](index=198&type=chunk) - Significant intersegment transactions, such as Hospitality Solutions paying fees to Travel Solutions for GDS hotel bookings, are accounted for at estimated current market prices[201](index=201&type=chunk) [Key Metrics](index=32&type=section&id=Key%20Metrics) Sabre uses Direct Billable Bookings, Passengers Boarded, and Central Reservations System Transactions as key metrics to measure operating performance and monitor industry trends - Key metrics for Travel Solutions are Direct Billable Bookings (Air and LGS) and IT Solutions Passengers Boarded[202](index=202&type=chunk) - The primary metric for Hospitality Solutions is Central Reservations System Transactions[202](index=202&type=chunk) Key Operating Metrics (in thousands) | Metric | 2023 | 2022 | 2021 | YoY % Change (2023) | YoY % Change (2022) | | :-------------------------------- | :----- | :----- | :----- | :------------------ | :------------------ | | **Travel Solutions** | | | | | | | Direct Billable Bookings - Air | 302,656 | 260,804 | 183,629 | **16.0 %** | **42.0 %** | | Direct Billable Bookings - LGS | 52,053 | 41,038 | 23,384 | **26.8 %** | **75.5 %** | | **Distribution Total Direct Billable Bookings** | **354,709** | **301,842** | **207,013** | **17.5 %** | **45.8 %** | | IT Solutions Passengers Boarded | 688,501 | 637,438 | 423,838 | **8.0 %** | **50.4 %** | | **Hospitality Solutions** | | | | | | | Central Reservations System Transactions | 122,142 | 111,459 | 91,802 | **9.6 %** | **21.4 %** | [Definitions of Non-GAAP Financial Measures](index=32&type=section&id=Definitions%20of%20Non-GAAP%20Financial%20Measures) Sabre utilizes Adjusted Operating Income, Adjusted Net Loss, Adjusted EBITDA, and Free Cash Flow as non-GAAP measures to assess core operations, excluding specific non-recurring or non-cash items - Adjusted Operating Income (Loss) is operating income (loss) adjusted for equity method income (loss), impairment and related charges, acquisition-related amortization, restructuring and other costs, acquisition-related costs, litigation costs, net, and stock-based compensation[205](index=205&type=chunk) - Adjusted Net Loss is net loss attributable to common stockholders adjusted for various non-core items and their tax impacts[206](index=206&type=chunk) - Adjusted EBITDA is loss from continuing operations adjusted for depreciation and amortization, interest expense, other net items, and various non-core costs[207](index=207&type=chunk) - Free Cash Flow is cash provided by (used in) operating activities reduced by cash used in additions to property and equipment[208](index=208&type=chunk) - These non-GAAP measures are used by management and investors to monitor core operations and evaluate financial performance, but they have limitations and are not GAAP alternatives[209](index=209&type=chunk)[211](index=211&type=chunk) [Non-GAAP Financial Measures](index=34&type=section&id=Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of GAAP financial measures to their non-GAAP counterparts, including Adjusted Net Loss, Adjusted Operating Income, Adjusted EBITDA, and Free Cash Flow Reconciliation of Net Loss to Adjusted Net Loss from Continuing Operations (in thousands) | Metric | 2023 | 2022 | 2021 | | :------------------------------------------ | :--------- | :--------- | :--------- | | Net loss attributable to common stockholders | **$ (541,865)** | **$ (456,833)** | **$ (950,071)** | | Loss from continuing operations | **$ (528,248)** | **$ (432,099)** | **$ (923,775)** | | Adjustments (total) | **348,551** | **61,007** | **214,385** | | **Adjusted Net Loss from continuing operations** | **$ (179,697)** | **$ (371,092)** | **$ (709,390)** | | Adjusted Net Loss from continuing operations per share | **$ (0.52)** | **$ (1.14)** | **$ (2.21)** | | Diluted weighted-average common shares outstanding | **346,567** | **326,742** | **320,922** | Reconciliation of Operating Income (Loss) to Adjusted Operating Income (Loss) (in thousands) | Metric | 2023 | 2022 | 2021 | | :-------------------------------- | :--------- | :--------- | :--------- | | Operating income (loss) | **$ 47,143** | **$ (261,060)** | **$ (665,487)** | | Add back: Adjustments (total) | **179,564** | **302,968** | **206,494** | | **Adjusted Operating Income (Loss)** | **$ 228,707** | **$ (68,042)** | **$ (459,317)** | Reconciliation of Loss from Continuing Operations to Adjusted EBITDA (in thousands) | Metric | 2023 | 2022 | 2021 | | :-------------------------------- | :--------- | :--------- | :--------- | | Loss from continuing operations | **$ (528,248)** | **$ (432,099)** | **$ (923,775)** | | Adjustments (total) | **865,394** | **497,436** | **662,499** | | **Adjusted EBITDA** | **$ 337,146** | **$ 65,337** | **$ (261,276)** | Reconciliation of Free Cash Flow (in thousands) | Metric | 2023 | 2022 | 2021 | | :-------------------------------- | :--------- | :--------- | :--------- | | Cash provided by (used in) operating activities | **$ 56,239** | **$ (276,458)** | **$ (414,654)** | | Additions to property and equipment | **(87,423)** | **(69,494)** | **(54,302)** | | **Free Cash Flow** | **$ (31,184)** | **$ (345,952)** | **$ (468,956)** | [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Sabre's consolidated revenue increased by **15%** in 2023 to **$2.91 billion**, with improved operating income but a net loss of **$528.2 million** due to higher interest expense and debt extinguishment losses Consolidated Statement of Operations Data (in thousands) | Metric | 2023 | 2022 | 2021 | | :------------------------------------ | :--------- | :--------- | :--------- | | Revenue | **$ 2,907,738** | **$ 2,537,015** | **$ 1,688,875** | | Cost of revenue, excluding technology costs | **1,189,606** | **1,040,819** | **691,451** | | Technology costs | **1,036,596** | **1,096,097** | **1,052,833** | | Selling, general and administrative | **634,393** | **661,159** | **610,078** | | Operating income (loss) | **47,143** | **(261,060)** | **(665,487)** | | Interest expense, net | **(447,878)** | **(295,231)** | **(257,818)** | | Loss on debt extinguishment, net | **(108,577)** | **(4,473)** | **(13,070)** | | Loss from continuing operations | **$ (528,248)** | **$ (432,099)** | **$ (923,775)** | [Years Ended December 31, 2023 and 2022](index=39&type=section&id=Years%20Ended%20December%2031,%202023%20and%202022) In 2023, total revenue grew **15%** to **$2.91 billion**, driven by Travel Solutions and Hospitality, while interest expense surged **52%** due to higher rates and financing activities Revenue by Segment (in thousands) | Segment | 2023 | 2022 | Change | % Change | | :------------------ | :--------- | :--------- | :------- | :--------- | | Travel Solutions | **$ 2,642,077** | **$ 2,311,275** | **$ 330,802** | **14 %** | | Hospitality Solutions | **304,169** | **254,620** | **49,549** | **19 %** | | Eliminations | **(38,508)** | **(28,880)** | **(9,628)** | **33 %** | | **Total revenue** | **$ 2,907,738** | **$ 2,537,015** | **$ 370,723** | **15 %** | - Travel Solutions distribution revenue increased by **$434 million** (**27%**) due to an **18%** increase in direct billable bookings and favorable rate impacts from international and corporate bookings[223](index=223&type=chunk) - Travel Solutions IT solutions revenue decreased by **$104 million** (**15%**) due to de-migrations (Russian law changes) and the AirCentre portfolio sale, partially offset by an **8%** increase in passengers boarded[223](index=223&type=chunk) - Hospitality Solutions revenue increased by **$50 million** (**19%**) driven by a **10%** increase in SynXis transaction volumes[224](index=224&type=chunk) - Cost of revenue, excluding technology costs, increased by **$144 million** (**16%**) for Travel Solutions, primarily due to a **$185 million** increase in incentive consideration[225](index=225&type=chunk) - Technology costs decreased by **$46 million** (**5%**) for Travel Solutions due to mainframe offloads and data migrations, and by **$10 million** (**9%**) for Hospitality Solutions due to labor reductions[229](index=229&type=chunk)[230](index=230&type=chunk) - Interest expense, net, increased by **$153 million** (**52%**) to **$447.9 million**, mainly due to higher interest rates on term loans and additional financing activities[235](index=235&type=chunk) - A loss on extinguishment of debt of **$109 million** was recognized in 2023, primarily from Q3 2023 financing activity[236](index=236&type=chunk) - Other, net increased by **$123 million**, primarily due to the **$180 million** gain on AirCentre sale in the prior year, partially offset by a reduced loss on GBT investment and other non-operating gains in 2023[237](index=237&type=chunk)[238](index=238&type=chunk) [Years Ended December 31, 2022 and 2021](index=42&type=section&id=Years%20Ended%20December%2031,%202022%20and%202021) In 2022, total revenue increased **50%** to **$2.54 billion**, reflecting COVID-19 recovery, with significant growth in Travel Solutions distribution and Hospitality revenue Revenue by Segment (in thousands) | Segment | 2022 | 2021 | Change | % Change | | :------------------ | :--------- | :--------- | :------- | :--------- | | Travel Solutions | **$ 2,311,275** | **$ 1,503,539** | **$ 807,736** | **54 %** | | Hospitality Solutions | **254,620** | **202,628** | **51,992** | **26 %** | | Eliminations | **(28,880)** | **(17,292)** | **(11,588)** | **67 %** | | **Total revenue** | **$ 2,537,015** | **$ 1,688,875** | **$ 848,140** | **50 %** | - Travel Solutions distribution revenue increased by **$721 million** (**80%**) due to a **46%** increase in direct billable bookings and favorable rate impacts from international and corporate bookings, reflecting COVID-19 recovery[242](index=242&type=chunk) - Travel Solutions IT solutions revenue increased by **$87 million** (**14%**) due to a **50%** increase in passengers boarded and recognition of deferred revenue, partially offset by the AirCentre sale[242](index=242&type=chunk) - Hospitality Solutions revenue increased by **$52 million** (**26%**) driven by a **21%** increase in SynXis transaction volumes due to COVID-19 recovery[242](index=242&type=chunk) - Cost of revenue, excluding technology costs, increased by **$330 million** (**59%**) for Travel Solutions, primarily due to a **$337 million** increase in incentive consideration[243](index=243&type=chunk) - Technology costs increased by **$34 million** (**4%**) for Travel Solutions due to higher transaction volumes and cloud migration efforts, and by **$26 million** (**28%**) for Hospitality Solutions[245](index=245&type=chunk)[246](index=246&type=chunk) - Selling, general and administrative expenses increased by **$38 million** (**12%**) for Corporate, driven by litigation reserves, risk/security costs, and restructuring costs, partially offset by lower stock-based compensation[250](index=250&type=chunk) - Interest expense, net, increased by **$37 million** (**15%**) to **$295.2 million**, primarily due to higher interest rates on term loans[251](index=251&type=chunk) - Other, net increased by **$138 million**, primarily due to a **$180 million** gain on the sale of AirCentre, partially offset by a **$26 million** fair value loss on the GBT investment[254](index=254&type=chunk)[255](index=255&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) Sabre's liquidity is supported by **$648.2 million** in cash, with **$7 billion** in total debt, and the company expects positive free cash flow in 2024 following debt refinancing and cost reductions Cash and Liquidity (in thousands) | Metric | December 31, 2023 | December 31, 2022 | | :------------------------------------------ | :------------------ | :------------------ | | Cash and cash equivalents | **$ 648,207** | **$ 794,888** | | Available undrawn balance under the AR Facility | **400** | — | | AR Facility outstanding balance | **110,000** | — | | Available under bilateral letter of credit facility | **8,486** | **8,473** | | Outstanding letters of credit | **11,514** | **11,527** | - The company believes it has sufficient resources to fund liquidity requirements for at least the next twelve months, despite an uncertain economic environment[260](index=260&type=chunk) - Total debt obligation, including interest, was **$7 billion** as of December 31, 2023, with **$501 million** due within the next 12 months[268](index=268&type=chunk) - Other material cash requirements include **$97 million** in lease obligations, **$2.2 billion** in IT agreements, and **$271 million** in purchase obligations[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk) - The company expects positive free cash flow for the full year 2024 and anticipates being a U.S. federal cash taxpayer in 2024[263](index=263&type=chunk)[265](index=265&type=chunk) - In June 2023, Sabre FB entered into a **$700 million** Senior Secured Term Loan Due 2028, with interest potentially payable-in-kind until December 31, 2025[282](index=282&type=chunk)[283](index=283&type=chunk) - In September 2023, Sabre GLBL completed exchange offers, exchanging **$853 million** of senior secured notes due 2025 for **8.625%** senior secured notes due 2027[283](index=283&type=chunk) - Cash provided by operating activities increased by **$333 million** to **$56 million** in 2023, primarily due to increased transaction volumes and working capital initiatives, partially offset by higher interest and severance payments[291](index=291&type=chunk) - Cash used in investing activities was **$110 million** in 2023, primarily for capital expenditures (**$87 million**) and investment/acquisition activities (**$23 million**)[294](index=294&type=chunk) - Cash used in financing activities was **$94 million** in 2023, including proceeds from new notes and term loans, payments on existing debt, and debt issuance costs[296](index=296&type=chunk) [Recent Accounting Pronouncements](index=50&type=section&id=Recent%20Accounting%20Pronouncements) Sabre adopted updated FASB guidance on LIBOR discontinuation and derivatives, neither of which had a material impact on its consolidated financial statements - Adopted FASB guidance on LIBOR discontinuation (SOFR Amendment) in Q2 2023, with no material impact on financial statements[412](index=412&type=chunk) - Adopted FASB guidance on derivatives and hedging in Q1 2022, with no material impact on financial statements[413](index=413&type=chunk) [Critical Accounting Estimates](index=51&type=section&id=Critical%20Accounting%20Estimates) Sabre's financial statements rely on critical accounting estimates for revenue recognition, asset recoverability, tax assets/liabilities, and loss contingencies, involving significant management judgment - Critical accounting estimates include revenue recognition for multiple performance obligation arrangements, evaluation of goodwill and long-lived asset recoverability, tax asset/liability calculations, and loss contingencies[298](index=298&type=chunk)[299](index=299&type=chunk) - Revenue recognition for IT Solutions involves significant judgments in identifying distinct performance obligations, estimating total contract consideration, allocating amounts, and forecasting future volumes[301](index=301&type=chunk) - Goodwill is evaluated for impairment annually or when indicators exist, using qualitative and quantitative assessments based on discounted future cash flow projections and market multiples[305](index=305&type=chunk) - Deferred tax assets are regularly reviewed for recoverability, with valuation allowances established based on projected future taxable income and tax planning strategies; as of December 31, 2023, a cumulative valuation allowance of **$486 million** for U.S. federal and **$47 million** for state deferred tax assets was maintained[307](index=307&type=chunk)[445](index=445&type=chunk) - Loss contingencies, including legal and tax claims, require careful analysis and accrual for probable and reasonably estimable losses, with inherent uncertainties in predicting ultimate outcomes[308](index=308&type=chunk)[309](index=309&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Sabre manages market risks related to interest rates, foreign exchange, credit, and inflation, with floating-rate debt partially hedged and credit risk concentrated in commercial air travel - Market risk management focuses on interest rates, foreign exchange rates, credit risk, and inflation, with derivative instruments used to manage interest rate risk[310](index=310&type=chunk) - Interest rate risk primarily relates to floating-rate indebtedness (approximately **45%** of debt, net of cash and hedging) and the Senior Secured Term Loan Due 2028, which bears interest at a floating Reference Rate[311](index=311&type=chunk)[316](index=316&type=chunk) Interest Rate Swaps Outstanding at December 31, 2023 | Notional Amount | Interest Rate Received | Interest Rate Paid | Effective Date | Maturity Date | | :-------------- | :--------------------- | :----------------- | :------------- | :------------ | | **$250 million** | 1 month SOFR | **4.72%** | June 30, 2023 | June 30, 2026 | | **$250 million** | 1 month SOFR | **3.88%** | December 31, 2023 | December 31, 2024 | - Foreign currency risk is associated with international operations (**7%** of revenue, **21%** of operating expenses in 2023), with the Euro being the most significant currency for operating expenses[317](index=317&type=chunk)[318](index=318&type=chunk) - Credit risk is concentrated in the travel industry, particularly commercial air travel, with approximately **76%** of trade accounts receivable from this sector as of December 31, 2023; this risk is mitigated by collections through clearing houses like ACH[321](index=321&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk) - Inflation, especially labor inflation, poses a material adverse impact on operations, results, liquidity, or cash flows[324](index=324&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=56&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Sabre Corporation's audited consolidated financial statements, including statements of operations, balance sheets, cash flows, and comprehensive notes, with an unqualified audit opinion - The section includes the audited consolidated financial statements for the years ended December 31, 2023, 2022, and 2021[328](index=328&type=chunk) - Ernst & Young LLP issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2023[328](index=328&type=chunk)[329](index=329&type=chunk)[340](index=340&type=chunk) [Consolidated Statements of Operations](index=60&type=section&id=Consolidated%20Statements%20of%20Operations) In 2023, Sabre's revenue reached **$2.91 billion**, achieving a positive operating income of **$47.1 million**, despite a net loss of **$541.9 million** due to high interest and debt extinguishment costs Consolidated Statements of Operations (in thousands) | Metric | 2023 | 2022 | 2021 | | :------------------------------------------ | :--------- | :--------- | :--------- | | Revenue | **$ 2,907,738** | **$ 2,537,015** | **$ 1,688,875** | | Operating income (loss) | **47,143** | **(261,060)** | **(665,487)** | | Interest expense, net | **(447,878)** | **(295,231)** | **(257,818)** | | Loss on extinguishment of debt | **(108,577)** | **(4,473)** | **(13,070)** | | Loss from continuing operations | **(528,248)** | **(432,099)** | **(923,775)** | | Net loss attributable to common stockholders | **$ (541,865)** | **$ (456,833)** | **$ (950,071)** | | Basic net loss per common share | **$ (1.56)** | **$ (1.40)** | **$ (2.96)** | | Diluted net loss per common share | **$ (1.56)** | **$ (1.40)** | **$ (2.96)** | [Consolidated Statements of Other Comprehensive Loss](index=61&type=section&id=Consolidated%20Statements%20of%20Other%20Comprehensive%20Loss) Sabre reported a total comprehensive loss of **$536.1 million** in 2023, comprising a net loss of **$527.9 million** and an other comprehensive loss of **$8.2 million** from retirement plans and derivatives Consolidated Statements of Comprehensive Loss (in thousands) | Metric | 2023 | 2022 | 2021 | | :------------------------------------------ | :--------- | :--------- | :--------- | | Net loss | **$ (527,940)** | **$ (432,778)** | **$ (926,307)** | | Other comprehensive (loss) income, net of tax | **(8,191)** | **14,556** | **55,670** | | **Comprehensive loss** | **$ (536,131)** | **$ (418,222)** | **$ (870,637)** | | Comprehensive loss attributable to Sabre Corporation | **$ (535,799)** | **$ (420,892)** | **$ (872,799)** | - Key components of other comprehensive loss in 2023 included a net actuarial loss of **$5.2 million** from retirement-related benefit plans and net unrealized losses of **$7.4 million** on derivatives[352](index=352&type=chunk) [Consolidated Balance Sheets](index=62&type=section&id=Consolidated%20Balance%20Sheets) Sabre's total assets decreased to **$4.67 billion** in 2023, with long-term debt at **$4.83 billion** and total stockholders' deficit increasing to **$1.38 billion** due to accumulated losses Consolidated Balance Sheets (in thousands) | Metric | December 31, 2023 | December 31, 2022 | | :------------------------------------------ | :------------------ | :------------------ | | **Assets** | | | | Total current assets | **$ 1,158,591** | **$ 1,361,489** | | Goodwill | **2,554,039** | **2,542,087** | | Total assets | **$ 4,672,194** | **$ 4,962,875** | | **Liabilities and Stockholders' Deficit** | | | | Total current liabilities | **$ 914,713** | **$ 815,571** | | Long-term debt | **4,829,461** | **4,717,091** | | Total stockholders' deficit | **(1,375,819)** | **(872,827)** | | Total liabilities and stockholders' deficit | **$ 4,672,194** | **$ 4,962,875** | - Cash and cash equivalents decreased from **$794.9 million** in 2022 to **$648.2 million** in 2023[355](index=355&type=chunk) - Goodwill increased slightly to **$2.55 billion** in 2023 from **$2.54 billion** in 2022[355](index=355&type=chunk) [Consolidated Statements of Cash Flows](index=63&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash provided by operating activities significantly improved to **$56.2 million** in 2023, while investing activities used **$110.0 million** and financing activities used **$94.2 million** Consolidated Statements of Cash Flows (in thousands) | Metric | 2023 | 2022 | 2021 | | :------------------------------------------ | :--------- | :--------- | :--------- | | Cash provided by (used in) operating activities | **$ 56,239** | **$ (276,458)** | **$ (414,654)** | | Cash (used in) provided by investing activities | **(109,980)** | **173,977** | **(29,428)** | | Cash used in financing activities | **(94,219)** | **(75,370)** | **(50,558)** | | Decrease in cash, cash equivalents and restricted cash | **(146,679)** | **(183,468)** | **(500,274)** | | Cash, cash equivalents and restricted cash at end of period | **$ 669,244** | **$ 815,923** | **$ 999,391** | - Cash payments for interest increased to **$394.5 million** in 2023 from **$286.1 million** in 2022[358](index=358&type=chunk) - Additions to property and equipment (capital expenditures) were **$87.4 million** in 2023[358](index=358&type=chunk) [Consolidated Statements of Stockholders' Deficit](index=64&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Deficit) Sabre's total stockholders' deficit increased to **$1.38 billion** in 2023, primarily due to net loss and preferred stock dividends, with all preferred stock converted to common stock Consolidated Statements of Stockholders' Deficit (in thousands, except share data) | Metric | December 31, 2023 | December 31, 2022 | December 31, 2021 | | :------------------------------------------ | :------------------ | :------------------ | :------------------ | | Preferred Stock (shares) | — | **3,290,000** | **3,290,000** | | Common Stock (shares issued) | **405,914,663** | **353,436,503** | **346,430,421** | | Total stockholders' deficit | **$ (1,375,819)** | **$ (872,827)** | **$ (499,717)** | | Net loss attributable to Sabre Corporation | **(527,608)** | **(435,448)** | **(928,469)** | | Preferred stock dividends | **14,257** | **21,385** | **21,602** | - On September 1, 2023, all outstanding preferred stock was automatically converted into approximately **47 million** shares of common stock[360](index=360&type=chunk)[510](index=510&type=chunk) [Notes to Consolidated Financial Statements](index=65&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of Sabre Corporation's accounting policies, financial statement components, and specific transactions, crucial for understanding reported financial figures [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=102&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This item is not applicable to the company, indicating no changes in or disagreements with accountants on accounting and financial disclosure - The company has no changes in or disagreements with accountants on accounting and financial disclosure to report[565](index=565&type=chunk) [Item 9A. Controls and Procedures](index=102&type=section&id=Item%209A.%20Controls%20and%20Procedures) Sabre's management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, despite a new billing system impacting revenue controls - Disclosure controls and procedures were deemed effective as of December 31, 2023, by the CEO and CFO[566](index=566&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2023, based on the COSO framework[567](index=567&type=chunk) - Ernst & Young LLP issued an unqualified attestation report on the effectiveness of internal control over financial reporting[568](index=568&type=chunk) - A new billing system implemented in March 2023 affected the control environment over revenue, but no other material changes to internal control over financial reporting occurred[570](index=570&type=chunk) [Item 9B. Other Information](index=103&type=section&id=Item%209B.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements during the three months ended December 31, 2023 - No directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements during Q4 2023[571](index=571&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=103&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - The company has no disclosure regarding foreign jurisdictions that prevent inspections to report[571](index=571&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=104&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) This item incorporates by reference information from the 2024 Proxy Statement regarding directors, corporate governance, and Audit Committee details, with executive officer information in Part I - Information on directors, nominees, Section 16(a) reports, Code of Business Ethics, stockholder nominations, and Audit Committee is incorporated by reference from the 2024 Proxy Statement[574](index=574&type=chunk)[582](index=582&type=chunk) - Information about executive officers is provided in Part I of this Annual Report on Form 10-K[574](index=574&type=chunk) [Item 11. Executive Compensation](index=104&type=section&id=Item%2011.%20Executive%20Compensation) This item incorporates by reference information from the 2024 Proxy Statement concerning executive compensation, including the Compensation Discussion and Analysis and Director Compensation Program - Information on executive compensation, including Compensation Discussion and Analysis and Director Compensation Program, is incorporated by reference from the 2024 Proxy Statement[575](index=575&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=104&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This item incorporates by reference security ownership information from the 2024 Proxy Statement and details the company's equity compensation plans as of December 31, 2023 - Information on security ownership of certain beneficial owners and management is incorporated by reference from the 2024 Proxy Statement[576](index=576&type=chunk) Equity Compensation Plan Information as of December 31, 2023 | Metric | Number of securities to be issued upon exercise of outstanding options (a) | Weighted average exercise price of outstanding options (b) | Number of securities remaining available for future issuance under equity compensation plans (c) | | :------------------------------------------ | :------------------------------------------------------- | :------------------------------------------------------- | :------------------------------------------------------------------------------------------------- | | Equity compensation plans approved by stockholders | **28,388,434** | **$ 12.20** | **9,410,406** | - The 2023 Omnibus Incentive Compensation Plan serves as a successor to previous plans, authorizing **27,791,761** shares of common stock for issuance[578](index=578&type=chunk)[516](index=516&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=105&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) This item incorporates by reference information from the 2024 Proxy Statement regarding related party transactions, Board composition, and director independence - Information on certain relationships, related party transactions, Board composition, and director independence is incorporated by reference from the 2024 Proxy Statement[590](index=590&type=chunk) [Item 14. Principal Accountant Fees and Services](index=105&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This item incorporates by reference information from the 2024 Proxy Statement concerning principal accounting firm fees and the Audit Committee's approval process for services - Information on principal accounting firm fees and Audit Committee approval of audit and non-audit services is incorporated by reference from the 2024 Proxy Statement[591](index=591&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=106&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This item lists all financial statements, schedules, and exhibits filed as part of the Annual Report on Form 10-K, many incorporated by reference from previous SEC filings - Financial statements are set forth under Item 8 of this Annual Report on Form 10-K[595](index=595&type=chunk) - Schedule II – Valuation and Qualifying Accounts is filed as part of this Annual Report[595](index=595&type=chunk) - A comprehensive list of exhibits, including asset purchase agreements, indentures, credit agreements, and equity compensation plans, is provided[596](index=596&type=chunk)[597](index=597&type=chunk)[599](index=599&type=chunk)[600](index=600&type=chunk)[601](index=601&type=chunk)[602](index=602&type=chunk)[603](index=603&type=chunk)[604](index=604&type=chunk)[605](index=605&type=chunk)[606](index=606&type=chunk)[609](index=609&type=chunk) [Item 16. Form 10-K Summary](index=117&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - The company has no Form 10-K Summary to report[608](index=608&type=chunk)

Financial Data and Key Metrics - Q3 revenue was $740 million, a 12% increase YoY, driven by strong performance across Distribution and Hospitality Solutions [74][97][98] - Adjusted EBITDA improved by $76 million YoY to $110 million, with nearly 100% flow-through of incremental revenue to adjusted EBITDA [77][99] - Free cash flow was $39 million in Q3, exceeding prior guidance of $20 million, marking the first positive Q3 free cash flow since 2019 [77] - Distribution bookings totaled 89 million, up 12% YoY, with an average booking fee of $5.87, a 9% increase YoY [97] - Hospitality Solutions revenue grew 16% YoY to $79 million, driven by transaction growth and higher rates per transaction [98] Business Line Performance - Distribution revenue increased 22% YoY to $525 million, supported by higher booking volumes and favorable regional and travel type mix [97] - Hospitality Solutions revenue grew 16% YoY to $79 million, with adjusted EBITDA on track for a $40 million improvement in 2023 versus 2022 [98] - IT Solutions revenue declined by $26 million YoY to $147 million, primarily due to demigrations, largely impacted by changes in Russian law [75] Market Performance - North America is fully recovered to 2019 levels, while Asia is at mid-60s and Europe at 70s recovery levels [65] - Latin America showed a slight recovery trend but has recently trended back [65] - Air India's domestic content agreement highlights Sabre's ability to penetrate one of the largest GDS markets globally [15][111] Strategic Direction and Industry Competition - The company is focused on four strategic priorities: generating positive free cash flow, deleveraging the balance sheet, achieving sustainable growth, and driving innovation [6][25] - Technology transformation to Google Cloud is on track, with a 10% YoY reduction in adjusted technology costs and expected annual cost savings of $200 million by 2024 [12][55] - Strategic partnerships with Google and Hopper have led to innovative solutions like Sabre Upgrade IQ and Lodging AI, enhancing personalized offerings for airlines and hotels [10][11][29] - The company is building a multisource travel ecosystem to integrate NDC and EDIFACT content seamlessly, positioning itself as a leader in next-generation travel technology [33][115] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver on its strategic priorities, citing strong Q3 performance and continued momentum in key financial metrics [6][23][36] - The company expects to achieve $900 million in adjusted EBITDA and $500 million in free cash flow by 2025, supported by cost reductions, technology transformation, and strategic growth initiatives [84][103] - Industry air volume growth assumptions for 2025 include 1-2% sequential quarterly growth, with each point of growth contributing approximately $12 million in adjusted EBITDA annually [103][121] Other Important Information - The company extended the majority of its 2025 debt maturities to 2027 and beyond, improving its financial flexibility [8][78] - Sabre's cash balance at the end of Q3 was $623 million, exceeding cumulative debt maturities through 2026 [78][100] - The company expects full-year 2023 revenue between $2.9 billion and $3 billion, with adjusted EBITDA guidance raised to $345 million [101][102] Q&A Session Summary Questions and Answers - **Question on NDC impact**: NDC represents about 1% of the GDS marketplace, with minimal impact on average booking fees [68][70] - **Question on Air India contract**: The agreement unlocks one of the largest GDS markets globally, previously exclusive to a competitor [111] - **Question on corporate travel recovery**: Corporate travel has recovered to 75% of 2019 levels on a unit basis, with higher dollar recovery due to increased yields [43][44] - **Question on technology cost reductions**: Tech costs decreased by 10% YoY, with further reductions expected as part of the $200 million annual cost savings target by 2024 [106] - **Question on 2025 EBITDA target**: The $900 million target includes $300 million from cost reductions, $150 million from strategic growth initiatives, and $450 million from volume growth [84][108]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Sabre Corporation (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Delaware 001-36422 20-8647322 (Commission File Number) (I.R. ...

Sabre Corporation (NASDAQ:SABR) Q2 2023 Earnings Conference Call August 3, 2023 9:00 AM ET Company Participants Brian Roberts - Senior Director, Investor Relations Kurt Ekert - President and Chief Executive Officer Mike Randolfi - Chief Financial Officer Scott Wilson - Executive Vice President and President, Hospitality Solutions Conference Call Participants Josh Baer - Morgan Stanley Victor Cheng - Bank of America Dan Wasiolek - Morningstar Jeff Harlib - Barclays Operator Good morning, and welcome to the S ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Sabre Corporation (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Delaware 001-36422 20-8647322 (Commission File Number) (I.R.S. Em ...

Sabre Corporation (NASDAQ:SABR) Q1 2023 Earnings Conference Call May 4, 2023 10:00 AM ET Company Participants Brian Roberts - Director-Investor Relations Kurt Ekert - President & Chief Executive Officer Mike Randolfi - Chief Financial Officer Conference Call Participants Josh Baer - Morgan Stanley Jed Kelly - Oppenheimer Dan Wasiolek - Morningstar Victor Cheng - Bank of America Alex Irving - Bernstein Operator Good morning, ladies and gentlemen. Welcome to the Sabre First Quarter 2023 Earnings Conference Ca ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Sabre Corporation (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Indicate by check mark whether the registrant has submitted elec ...

[Documents Incorporated by Reference](index=1&type=section&id=DOCUMENTS%20INCORPORATED%20BY%20REFERENCE) [Documents Incorporated by Reference](index=1&type=section&id=Documents%20Incorporated%20by%20Reference) This section indicates that portions of Sabre Corporation's definitive proxy statement for its 2023 annual meeting of stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K - Portions of the registrant's definitive proxy statement for its 2023 annual meeting of stockholders are incorporated by reference in Part III of this Annual Report on Form 10-K[7](index=7&type=chunk) [Forward-Looking Statements](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section provides a cautionary statement on forward-looking statements, noting they are based on current expectations and subject to risks and uncertainties detailed in "Risk Factors" - Forward-looking statements relate to future financial conditions, operations, growth strategies, and product development, identifiable by terms like "expects," "intends," "believes," and "will"[11](index=11&type=chunk) - These statements are based on current expectations and assumptions but are subject to risks, uncertainties, and changes in circumstances that could cause actual results to differ materially[11](index=11&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements unless required by law[11](index=11&type=chunk) [Part I](index=4&type=section&id=PART%20I) Part I of the Annual Report provides a comprehensive overview of Sabre Corporation's business, including its operational structure, strategic initiatives, and the significant risks and legal proceedings it faces [Business Overview](index=4&type=section&id=Item%201.%20Business) Sabre Corporation is a technology company powering the global travel industry, partnering with airlines, hoteliers, and travel agencies for retail, distribution, and fulfillment - Sabre Corporation is a technology company that powers the global travel industry, connecting travel suppliers with buyers and offering software solutions[15](index=15&type=chunk) - The COVID-19 pandemic has materially impacted consolidated financial results for 2021 and 2022, leading to significant decreases in transaction-based revenue, though gradual improvement in key volume metrics was observed[16](index=16&type=chunk) - In response to COVID-19, the company implemented cost-saving measures, including workforce reduction, and refinanced debt in 2021 and 2022 to manage liquidity[17](index=17&type=chunk)[18](index=18&type=chunk) [Company Overview](index=4&type=section&id=Overview) Sabre Corporation, formed in Delaware in 2006, provides technology solutions to the global travel industry through its principal operating subsidiary, Sabre GLBL Inc - Sabre Corporation, a Delaware corporation formed in December 2006, acquired Sabre Holdings Corporation in 2007, with Sabre GLBL Inc. as its principal operating subsidiary[14](index=14&type=chunk) - The company provides technology solutions to the global travel industry, partnering with airlines, hoteliers, and travel agencies for retailing, distribution, and fulfillment[15](index=15&type=chunk) [Impact of COVID-19 Pandemic](index=4&type=section&id=COVID-19%20Pandemic) The COVID-19 pandemic significantly decreased transaction-based revenue in 2020-2022, prompting liquidity measures and cost savings, despite gradual volume recovery - The COVID-19 pandemic caused significant decreases in transaction-based revenue in Travel Solutions and SynXis Software and Services revenue in Hospitality Solutions in 2020, with continued material impact in 2021 and 2022[16](index=16&type=chunk) - Despite negative impacts, gradual improvement in key volume metrics was observed in 2021 and 2022 as vaccines were administered and travel restrictions eased, leading to increased incentive consideration costs[16](index=16&type=chunk) - Measures taken to address liquidity included suspending common stock dividends and share repurchases, borrowing, and completing debt and equity offerings, along with cost savings[17](index=17&type=chunk) [Business Segments and Product Offerings](index=5&type=section&id=Business%20Segments%20and%20Products) Sabre operates two segments: Travel Solutions, offering global distribution and airline software, and Hospitality Solutions, providing SaaS for hoteliers - Effective Q3 2020, Sabre operates through two segments: Travel Solutions (global travel solutions for suppliers and buyers, including airline software) and Hospitality Solutions (software for hoteliers)[19](index=19&type=chunk) - Travel Solutions includes a global distribution system (GDS) and SaaS/hosted software for airlines (reservations, commercial, operations), and completed the sale of its AirCentre airline operations portfolio in February 2022[20](index=20&type=chunk)[21](index=21&type=chunk) - Hospitality Solutions provides SaaS/hosted software for hoteliers to manage pricing, reservations, and retail across distribution channels, serving over **42,000 properties in 177 countries**[22](index=22&type=chunk) [Growth Strategy](index=5&type=section&id=Growth%20Strategy) Sabre's 2022 strategy focuses on enhancing customer relationships, adapting products, growing the customer base through innovation, and expanding into related travel areas - Sabre's 2022 strategic framework focuses on enhancing customer relationships, adapting products (e.g., NDC integration), growing the customer base through innovation and content, and expanding into related travel areas[23](index=23&type=chunk) [Technology and Operations](index=6&type=section&id=Technology%20and%20Operations) The technology strategy prioritizes operational stability, security, and performance, investing in a centralized PaaS architecture and cloud migration from mainframe systems - The technology strategy emphasizes operational stability, reliability, security, and performance at efficient costs, with significant investment in a centralized Platform as a Service (PaaS) architecture and cloud migration[24](index=24&type=chunk) - The architecture has evolved from mainframe-centric to a secure cloud-based processing platform, supporting high-volume air shopping, real-time data access, and customized applications[25](index=25&type=chunk) [Customer Base](index=6&type=section&id=Customers) Travel Solutions serves diverse customers including airlines, hotels, and travel agencies, while Hospitality Solutions serves over 42,000 hotel properties globally - Travel Solutions serves a diverse customer base including airlines, hotels, car rental brands, rail carriers, cruise lines, tour operators, travel agencies (OTAs, offline, TMCs), and corporate travel departments globally[26](index=26&type=chunk) - Hospitality Solutions serves a global customer base of over **42,000 hotel properties** of all sizes[26](index=26&type=chunk) [Revenue Streams](index=6&type=section&id=Sources%20of%20Revenue) Revenue is generated from GDS bookings, SaaS/hosted solutions, software licensing, professional services, and media advertising - Revenue is generated from transactions (GDS bookings, fees from suppliers and agencies), SaaS and hosted solutions (upfront and recurring usage-based fees), software licensing (installation and maintenance), professional service fees (consulting), and media (advertising on digital marketing channels)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [Competitive Landscape](index=6&type=section&id=Competition) Sabre operates in highly competitive markets, with Travel Solutions facing other GDSs and direct distribution, and Hospitality Solutions competing with global players and in-house technology - Sabre operates in highly competitive markets, with Travel Solutions competing against other GDSs, direct distribution by suppliers, metasearch providers, and IT solution providers[32](index=32&type=chunk) - Hospitality Solutions competes with large global players, new entrants, and hotels developing in-house technology[33](index=33&type=chunk) [Intellectual Property](index=7&type=section&id=Intellectual%20Property) The company protects its software and proprietary information through patents, copyrights, trade secrets, trademarks, and confidentiality, without dependence on any single IP item - The company relies on a combination of patent, copyright, trade secret, and trademark laws, confidentiality procedures, and contractual provisions to protect its software, business processes, and proprietary information[34](index=34&type=chunk) - While heavily relying on brands and trademarks, the business is not dependent on any single item of intellectual property[35](index=35&type=chunk) [Government Regulation](index=7&type=section&id=Government%20Regulation) Sabre is subject to international, federal, state, and local laws, including GDS and data protection regulations, and trade sanctions impacting Russian services - Sabre is subject to international, federal, state, and local laws, including GDS regulations in the EU, Canada, and the US, and data protection/privacy regulations like GDPR[36](index=36&type=chunk)[37](index=37&type=chunk) - The company is also subject to OFAC rules and other trade sanctions, with recent Russian legislation (effective Oct 30, 2022) prohibiting certain services in Russia, negatively impacting revenue[37](index=37&type=chunk)[38](index=38&type=chunk) [Seasonality of Business](index=7&type=section&id=Seasonality) The travel industry exhibits seasonality, with strong bookings and revenue in Q1 and Q3, and a notable decline in Q4 due to holiday travel patterns - The travel industry is seasonal, with strong bookings and revenue typically in Q1 and Q3, and a significant decline in Q4, especially December, due to holiday leisure bookings occurring earlier and reduced business travel[39](index=39&type=chunk) [Human Capital Management](index=7&type=section&id=Human%20Capital) The company focuses on talent acquisition, development, and retention through competitive compensation, leadership programs, and promoting diversity, inclusion, and employee well-being Employee Distribution by Region (as of December 31, 2022) | | No of Employees | % of Total | | :--- | :--- | :--- | | United States | 2,365 | 32 % | | APAC | 1,921 | 26 % | | Europe | 1,864 | 24 % | | (1) All Other | 1,311 | 18 % | | Total | 7,461 | 100 % | - The company focuses on talent acquisition, development, and retention through competitive compensation, leadership programs (Lead the Way), and reward systems[42](index=42&type=chunk) - Sabre promotes diversity and inclusion through an Inclusion and Diversity Council and supports employee well-being with health benefits, parental leave, enhanced PTO, and a work-from-anywhere program[43](index=43&type=chunk)[44](index=44&type=chunk) [Available Information](index=8&type=section&id=Available%20Information) Sabre files SEC reports (10-K, 10-Q, 8-K) available on its investor relations website and may use social media for material disclosures - Sabre files reports with the SEC (10-K, 10-Q, 8-K) available free of charge on its investor relations website (investors.sabre.com)[46](index=46&type=chunk) - The company may use its website, Twitter (@Sabre_Corp), and other social media channels for material disclosures, which are not incorporated by reference into the 10-K[47](index=47&type=chunk) [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks that could materially affect Sabre Corporation's business, financial condition, and operating results - The COVID-19 pandemic has had and is expected to continue to have a significant adverse impact on Sabre's business, financial results, and the travel suppliers it relies on[49](index=49&type=chunk) - Sabre operates in highly competitive, evolving markets and must continuously innovate to respond to changing customer needs and technological advancements[56](index=56&type=chunk) - The company has a significant amount of indebtedness (**$4.7 billion** as of Dec 31, 2022), which could adversely affect cash flow and ability to operate[116](index=116&type=chunk) [COVID-19 Pandemic Related Risks](index=9&type=section&id=Risks%20Related%20to%20the%20Effects%20of%20the%20COVID-19%20Pandemic) The COVID-19 pandemic has significantly impacted the travel industry, causing revenue decreases, potential asset impairments, and uncertain long-term changes to travel patterns - The COVID-19 pandemic has caused significant negative impacts on the travel industry, leading to material decreases in consumer spending and transaction volumes, adversely affecting Sabre's financial results (revenue, net income, cash flow, Adjusted EBITDA)[49](index=49&type=chunk) - The pandemic may lead to potential impairments of goodwill and other assets, increased provisions for bad debt, and higher cash outlays for cancelled bookings[50](index=50&type=chunk) - The long-term effects of the pandemic on travel patterns, including business travel, and potential industry consolidation remain highly uncertain and could fundamentally change the travel industry[51](index=51&type=chunk)[53](index=53&type=chunk) [Business and Industry Specific Risks](index=10&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) Sabre faces risks related to talent retention, intense competition, dependence on global travel transaction volumes, and pricing pressure in its Travel Solutions business - Sabre's ability to recruit, train, and retain key employees, especially technical staff, is critical for operations and future growth, facing high demand and competition[55](index=55&type=chunk) - The company operates in highly competitive, rapidly evolving markets, requiring continuous innovation and substantial expenditures to adapt to new technologies and maintain competitiveness[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - Revenue is highly dependent on global travel transaction volumes, particularly air travel, making it susceptible to declines or disruptions from economic conditions, contagious diseases, political events, and natural disasters[62](index=62&type=chunk)[63](index=63&type=chunk) - Sabre's Travel Solutions business faces pricing pressure from travel suppliers and depends on maintaining and renewing contracts with both suppliers and travel buyers, with a meaningful portion of agreements up for renewal annually[61](index=61&type=chunk)[69](index=69&type=chunk)[71](index=71&type=chunk) [Technology and Intellectual Property Risks](index=16&type=section&id=Risks%20Related%20to%20Technology%20and%20Intellectual%20Property) Risks include reliance on third-party IT services, security incidents, intellectual property infringement, and challenges in protecting proprietary information and managing open-source software - Sabre relies on third-party IT services (DXC, cloud/SaaS providers) and its success depends on maintaining effective relationships and system integrity, which are vulnerable to failures, capacity constraints, and external damage[90](index=90&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) - Security incidents, including cyberattacks and data breaches (e.g., payment information, PII), expose Sabre to liability, reputational damage, and significant costs for investigation and remediation[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) - Intellectual property infringement actions against Sabre can be costly and time-consuming, potentially disrupting business, diverting management attention, and requiring redesigns or licensing agreements[101](index=101&type=chunk)[103](index=103&type=chunk) - The company may not effectively protect its intellectual property (patents, copyrights, trademarks, trade secrets), allowing competitors to duplicate products or services, and faces risks from using open-source software[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk)[108](index=108&type=chunk) [Economic, Political, and Global Condition Risks](index=19&type=section&id=Risks%20Related%20to%20Economic,%20Political%20and%20Global%20Conditions) Global and regional economic downturns, political instability, adverse regulatory changes, and foreign currency fluctuations pose risks to Sabre's international operations and demand - Travel expenditures are sensitive to global and regional economic and political conditions, including downturns, inflation, and geopolitical conflicts (e.g., Ukraine), which can adversely affect demand and business results[109](index=109&type=chunk)[110](index=110&type=chunk)[113](index=113&type=chunk) - International operations expose Sabre to risks such as political instability, adverse regulatory requirements (e.g., Russian legislation impacting services), foreign currency fluctuations, and difficulties in managing diverse workforces[114](index=114&type=chunk) - Brexit has created economic uncertainty in the U.K. and EMEA, potentially disrupting markets, changing tax benefits/liabilities, and leading to legal uncertainty[112](index=112&type=chunk) [Indebtedness, Financial Condition, and Common Stock Risks](index=20&type=section&id=Risks%20Related%20to%20Our%20Indebtedness,%20Financial%20Condition%20and%20Common%20Stock) Significant indebtedness, restrictive debt covenants, potential funding shortfalls, interest rate fluctuations, and stock price volatility pose financial risks to the company - Sabre has significant indebtedness (**$4.7 billion** as of Dec 31, 2022), increasing vulnerability to adverse economic conditions, higher interest expenses, and limiting cash flow for operations and growth[116](index=116&type=chunk) - Debt covenants restrict operational flexibility (e.g., incurring debt, paying dividends, making investments), and non-compliance could lead to default and acceleration of debt obligations[118](index=118&type=chunk) - The company may require more cash than generated by operations, and additional funding may not be available on reasonable terms, impacting growth strategies and increasing financing costs[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) - Exposure to interest rate fluctuations, particularly on variable debt, can increase interest expense, and hedging strategies may not fully mitigate these risks[122](index=122&type=chunk)[123](index=123&type=chunk) - The market price of common stock could decline due to a large number of shares eligible for future sale, potential dilution from future equity issuances, or sales by officers/directors[125](index=125&type=chunk) - Sabre may recognize impairments on long-lived assets, including goodwill and other intangible assets, or equity method investments, leading to non-cash charges[126](index=126&type=chunk)[127](index=127&type=chunk) - Maintaining financial controls and public company requirements strains resources, diverts management attention, and affects the ability to attract/retain qualified board members[128](index=128&type=chunk)[129](index=129&type=chunk) - Higher than anticipated tax liabilities may arise from complex global tax laws, audits, and changes in regulations (e.g., Inflation Reduction Act, digital services taxes)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) - Unfunded pension plan obligations (**$83 million** as of Dec 31, 2022) may require significant cash contributions, reducing available cash for business operations[134](index=134&type=chunk) - Insufficient insurance coverage for litigation or product liability claims could expose the company to significant liabilities and reputational damage[135](index=135&type=chunk)[136](index=136&type=chunk) [Unresolved Staff Comments](index=23&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This item indicates that there are no unresolved staff comments from the SEC regarding the company's previous filings - Not applicable, indicating no unresolved staff comments[137](index=137&type=chunk) [Properties](index=23&type=section&id=Item%202.%20Properties) Sabre Corporation operates globally with approximately 700,000 square feet of leased office space across 59 locations in 42 countries, including corporate headquarters in Southlake, Texas, and regional headquarters in London (EMEA) and Singapore (APAC) - Sabre operates in **59 locations across 42 countries**, with approximately **700,000 square feet** of leased office space[138](index=138&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) - Corporate headquarters are in Southlake, Texas, with regional headquarters in London (EMEA) and Singapore (APAC)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) [Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) Sabre Corporation is involved in routine legal proceedings incidental to its business, with material legal proceedings detailed in Note 16 to the consolidated financial statements - The company is engaged in routine legal proceedings, with material cases detailed in Note 16 of the consolidated financial statements[142](index=142&type=chunk) - The ultimate outcome of litigation is uncertain, and accruals are made for probable and reasonably estimable loss contingencies, which may change with new information[142](index=142&type=chunk) [Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item states that mine safety disclosures are not applicable to Sabre Corporation's business operations - Not applicable, indicating no mine safety disclosures[143](index=143&type=chunk) [Information About Our Executive Officers](index=25&type=section&id=Information%20About%20Our%20Executive%20Officers) This section provides biographical information for Sabre Corporation's executive officers as of February 17, 2023, including their ages and positions, highlighting their extensive experience in the travel, technology, and finance industries Executive Officers as of February 17, 2023 | Name | Age | Position | | :--- | :--- | :--- | | Sean Menke | 54 | Chair of the Board and Chief Executive Officer | | Kurt Ekert | 52 | President | | Chadwick Ho | 50 | Executive Vice President and Chief Legal Officer | | Roshan Mendis | 50 | Executive Vice President and Chief Commercial Officer | | David Moore | 60 | Executive Vice President and Chief Technology Officer | | Michael Randolfi | 50 | Executive Vice President and Chief Financial Officer | | Shawn Williams | 50 | Executive Vice President and Chief People Officer | | Scott Wilson | 55 | Executive Vice President, Sabre and President, Hospitality Solutions | | Garry Wiseman | 46 | Executive Vice President and Chief Product Officer | - Executive officers bring diverse experience from leadership roles in airlines, travel technology, entertainment, and finance[145](index=145&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) [Part II](index=27&type=section&id=PART%20II) Part II of the report covers Sabre Corporation's financial performance, market information for its common equity, management's discussion and analysis of financial condition and results of operations, quantitative and qualitative disclosures about market risk, and the consolidated financial statements [Market for Common Equity and Stockholder Matters](index=27&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Sabre's common stock is listed on NASDAQ under "SABR." As of February 13, 2023, there were 101 stockholders of record and 328,585,965 shares outstanding - Sabre's common stock (SABR) is listed on the NASDAQ Global Select Market[153](index=153&type=chunk) - As of February 13, 2023, there were **101 stockholders of record** and **328,585,965 shares** of common stock outstanding[5](index=5&type=chunk)[153](index=153&type=chunk) - Quarterly cash dividends on common stock were suspended after March 30, 2020, and no shares were repurchased in 2022 under the **$500 million** Share Repurchase Program, which has **$287 million** remaining authorized[153](index=153&type=chunk)[280](index=280&type=chunk) [Reserved](index=27&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed analysis of Sabre Corporation's financial condition and results of operations, highlighting the ongoing impact of the COVID-19 pandemic, recent acquisitions and dispositions, and the effects of the military conflict in Ukraine - The COVID-19 pandemic continued to materially impact financial results in 2021 and 2022, though gradual improvements in key volume metrics were observed[160](index=160&type=chunk) - Sabre completed the acquisition of Conferma in August 2022 and sold its AirCentre portfolio in February 2022 for **$392 million**, recognizing a pre-tax gain of **$180 million**[164](index=164&type=chunk)[166](index=166&type=chunk) - The military conflict in Ukraine and related Russian legislation negatively impacted revenue in 2022, prohibiting certain services in Russia and leading to a **$5 million** asset impairment[167](index=167&type=chunk)[168](index=168&type=chunk) [Overview](index=28&type=section&id=Overview) Sabre connects people and places through travel technology, operating Travel Solutions (global B2B marketplace, airline software) and Hospitality Solutions (hotel software) - Sabre connects people and places with technology for travel, operating through Travel Solutions (global B2B travel marketplace and airline software) and Hospitality Solutions (hotel software)[158](index=158&type=chunk) - Revenue is primarily generated from transaction-based fees, recurring usage-based fees for SaaS/hosted systems, and upfront/professional service fees[159](index=159&type=chunk) [Recent Developments](index=28&type=section&id=Recent%20Developments%20Affecting%20our%20Results%20of%20Operations) Recent developments include the continued impact of COVID-19, the acquisition of Conferma, the sale of AirCentre, and negative revenue impacts from the Ukraine conflict - The COVID-19 pandemic continued to materially impact consolidated financial results in 2021 and 2022, with significant decreases in transaction-based revenue and increased cancellation activity[160](index=160&type=chunk) - Sabre acquired Conferma Limited in August 2022 for **$62 million** cash and converted an **$11 million** loan, consolidating results into Travel Solutions[164](index=164&type=chunk)[440](index=440&type=chunk) - The company sold its AirCentre airline operations portfolio on February 28, 2022, for **$392 million**, recording a pre-tax gain of approximately **$180 million**[166](index=166&type=chunk)[444](index=444&type=chunk) - Military conflict in Ukraine led to termination of a distribution agreement and Russian legislation prohibiting services, negatively impacting 2022 revenue by approximately **$85 million** and resulting in a **$5 million** asset impairment[167](index=167&type=chunk)[168](index=168&type=chunk) [Key Factors Affecting Results](index=29&type=section&id=Factors%20Affecting%20our%20Results) Key factors include technology transformation investments, geographic mix of travel bookings, increasing interest rates, rising travel agency incentive consideration, and industry shifts to SaaS solutions - Sabre is undergoing a technology transformation with incremental operational and capital expenditure investments in 2023 and beyond, focusing on open source, cloud-based solutions, and next-generation retailing capabilities[170](index=170&type=chunk) - Revenue is affected by the geographic mix of travel bookings; domestic bookings increased post-COVID-19, but international bookings showed positive recovery in 2022, particularly in APAC[173](index=173&type=chunk) Direct Billable Bookings by Geographic Mix (2019-2022) | | Year Ended December 31, | | | | :--- | :--- | :--- | :--- | | | 2022 | 2021 | 2020 | | North America | 56 % | 68 % | 64 % | | EMEA | 18 % | 16 % | 17 % | | APAC | 15 % | 10 % | 10 % | | Latin America | 11 % | 6 % | 9 % | | Total | 100 % | 100 % | 100 % | - Increasing interest rates due to global capital market volatility and inflation led to higher interest expense in 2022, with further refinancing expected in 2023-2024[177](index=177&type=chunk) - Travel agency incentive consideration, a large portion of Travel Solutions expenses, increased in 2022 due to higher transaction volumes and rates, expected to continue in 2023[179](index=179&type=chunk)[180](index=180&type=chunk) - The increasing importance of LCC/hybrids and the industry shift to SaaS and hosted solutions by airlines and hotels present growth opportunities, despite potential delays from COVID-19 impacts[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) [Revenue and Expense Components](index=32&type=section&id=Components%20of%20Revenues%20and%20Expenses) Revenues are derived from Travel Solutions and Hospitality Solutions, while expenses include delivery costs, technology investments, and selling, general, and administrative overhead - Revenues are generated from Travel Solutions (GDS distribution, IT solutions, software licensing) and Hospitality Solutions (upfront and recurring SaaS/hosted fees, professional services)[188](index=188&type=chunk) - Cost of revenue (excluding technology) includes delivery/distribution costs, employee-related costs, and travel agency incentive consideration[189](index=189&type=chunk) - Technology costs cover third-party providers, employee-related costs for operations, maintenance, minor enhancements, and technology transformation efforts[191](index=191&type=chunk) - Selling, general, and administrative expenses include credit loss provisions, overhead, personnel costs (including stock-based compensation), professional fees, and legal dispute costs[193](index=193&type=chunk) [Key Operating Metrics](index=33&type=section&id=Key%20Metrics) Key operating metrics include Direct Billable Bookings and Passengers Boarded for Travel Solutions, and Central Reservations System Transactions for Hospitality Solutions - Key metrics for Travel Solutions are "Direct Billable Bookings" (GDS bookings) and "Passengers Boarded" (IT solutions revenue), while Hospitality Solutions uses "Central Reservations System Transactions"[197](index=197&type=chunk) Key Operating Metrics (2020-2022) | | Year Ended December 31, | | Year-over-Year % Change | | | :--- | :--- | :--- | :--- | :--- | | | 2022 | 2021 | 2022 | 2021 | | **Travel Solutions** | | | | | | Direct Billable Bookings - Air | 260,804 | 183,629 | 42.0 % | 77.7 % | | Direct Billable Bookings - LGS | 41,038 | 23,384 | 75.5 % | 9.5 % | | Distribution Total Direct Billable Bookings | 301,842 | 207,013 | 45.8 % | 66.0 % | | IT Solutions Passengers Boarded | 637,438 | 423,838 | 50.4 % | 31.3 % | | **Hospitality Solutions** | | | | | | Central Reservations System Transactions | 111,459 | 91,802 | 21.4 % | 36.9 % | [Non-GAAP Financial Measures Definitions](index=33&type=section&id=Definitions%20of%20Non-GAAP%20Financial%20Measures) Sabre uses non-GAAP measures like Adjusted Operating Income, Adjusted Net Loss, Adjusted EBITDA, and Free Cash Flow to evaluate core operations, acknowledging their analytical limitations - Sabre uses non-GAAP measures like Adjusted Operating Income (Loss), Adjusted Net Loss, Adjusted EBITDA, and Free Cash Flow to monitor core operations and evaluate financial performance[199](index=199&type=chunk)[204](index=204&type=chunk) - These non-GAAP measures have limitations as analytical tools, excluding certain recurring non-cash charges, cash requirements for replacements, and working capital needs[206](index=206&type=chunk)[207](index=207&type=chunk) [Non-GAAP Financial Measures Reconciliation](index=35&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations of GAAP financial measures to non-GAAP measures, including Adjusted Net Loss, Adjusted Operating Loss, Adjusted EBITDA, and Free Cash Flow Net Loss to Adjusted Net Loss from Continuing Operations (2020-2022) (in thousands) | | Year Ended December 31, | | | | :--- | :--- | :--- | :--- | | | 2022 | 2021 | 2020 | | Net loss attributable to common stockholders | $ (456,833) | $ (950,071) | $ (1,289,998) | | Loss from continuing operations | $ (432,099) | $ (923,775) | $ (1,283,927) | | Adjusted Net Loss from continuing operations | $ (371,092) | $ (709,390) | $ (926,774) | | Adjusted Net Loss from continuing operations per share | $ (1.14) | $ (2.21) | $ (3.20) | Operating Loss to Adjusted Operating Loss (2020-2022) (in thousands) | | Year Ended December 31, | | | | :--- | :--- | :--- | :--- | | | 2022 | 2021 | 2020 | | Operating loss | $ (261,060) | $ (665,487) | $ (988,039) | | Adjusted Operating Loss | $ (68,042) | $ (459,317) | $ (745,274) | Loss from Continuing Operations to Adjusted EBITDA (2020-2022) (in thousands) | | Year Ended December 31, | | | | :--- | :--- | :--- | :--- | | | 2022 | 2021 | 2020 | | Loss from continuing operations | $ (432,099) | $ (923,775) | $ (1,283,927) | | Adjusted EBITDA | $ 65,337 | $ (261,276) | $ (447,529) | Cash Flow from Operating Activities to Free Cash Flow (2020-2022) (in thousands) | | Year Ended December 31, | | | | :--- | :--- | :--- | :--- | | | 2022 | 2021 | 2020 | | Cash used in operating activities | $ (276,458) | $ (414,654) | $ (770,245) | | Additions to property and equipment | (69,494) | (54,302) | (65,420) | | Free Cash Flow | $ (345,952) | $ (468,956) | $ (835,665) | [Results of Operations](index=39&type=section&id=Results%20of%20Operations) This section presents the consolidated statements of operations, detailing revenue, cost of revenue, operating loss, interest expense, and net loss for the past three fiscal years Consolidated Statements of Operations (2020-2022) (in thousands) | | Year Ended December 31, | | | | :--- | :--- | :--- | :--- | | | 2022 | 2021 | 2020 | | Revenue | $ 2,537,015 | $ 1,688,875 | $ 1,334,100 | | Cost of revenue, excluding technology costs | 1,040,819 | 691,451 | 579,010 | | Technology costs | 1,096,097 | 1,052,833 | 1,156,723 | | Selling, general and administrative | 661,159 | 610,078 | 586,406 | | Operating loss | (261,060) | (665,487) | (988,039) | | Interest expense, net | (295,231) | (257,818) | (225,785) | | Loss on extinguishment of debt | (4,473) | (13,070) | (21,626) | | Equity method income (loss) | 686 | (264) | (2,528) | | Other, net | 136,645 | (1,748) | (66,961) | | Total other expense, net | (162,373) | (272,900) | (316,900) | | Loss from continuing operations before income taxes | (423,433) | (938,387) | (1,304,939) | | Provision (benefit) for income taxes | 8,666 | (14,612) | (21,012) | | Loss from continuing operations | $ (432,099) | $ (923,775) | $ (1,283,927) | | (Loss) income from discontinued operations, net of tax | (679) | (2,532) | 2,788 | | Net loss | (432,778) | (926,307) | (1,281,139) | | Net income attributable to noncontrolling interests | 2,670 | 2,162 | 1,200 | | Net (loss) income attributable to Sabre Corporation | (435,448) | (928,469) | (1,282,339) | | Preferred stock dividends | 21,385 | 21,602 | 7,659 | | Net loss attributable to common stockholders | $ (456,833) | $ (950,071) | $ (1,289,998) | | Basic net loss per share attributable to common stockholders: | | | | | Loss from continuing operations | $ (1.40) | $ (2.95) | $ (4.46) | | (Loss) income from discontinued operations | — | (0.01) | 0.01 | | Net loss per common share | $ (1.40) | $ (2.96) | $ (4.45) | | Diluted net loss per share attributable to common stockholders: | | | | | Loss from continuing operations | $ (1.40) | $ (2.95) | $ (4.46) | | (Loss) income from discontinued operations | — | (0.01) | 0.01 | | Net loss per common share | $ (1.40) | $ (2.96) | $ (4.45) | | Weighted-average common shares outstanding: | | | | | Basic | 326,742 | 320,922 | 289,855 | | Diluted | 326,742 | 320,922 | 289,855 | | Dividend per common share | $ — | $ — | $ 0.14 | - Total revenue increased by **$848 million (50%)** in 2022 to **$2.54 billion**, driven by a **54% increase** in Travel Solutions revenue and a **26% increase** in Hospitality Solutions revenue, reflecting continued recovery from COVID-19[215](index=215&type=chunk)[216](index=216&type=chunk) - Cost of revenue (excluding technology) increased by **$349 million (51%)** in 2022, primarily due to a **$337 million** increase in incentive consideration from higher transaction volumes in Travel Solutions[217](index=217&type=chunk) - Technology costs increased by **$43 million (4%)** in 2022, driven by higher transaction volumes and cloud migration efforts, partially offset by a **$57 million** decrease in depreciation and amortization[219](index=219&type=chunk)[220](index=220&type=chunk) - Selling, general and administrative expenses increased by **$51 million (8%)** in 2022, mainly due to increased litigation reserves, risk and security costs, and business strategy investments, partially offset by decreased stock-based compensation[223](index=223&type=chunk)[225](index=225&type=chunk)[227](index=227&type=chunk) - Interest expense, net, increased by **$37 million (15%)** in 2022 due to higher interest rates on term loans, partially offset by interest rate swaps[228](index=228&type=chunk) - Other, net, increased by **$138 million** in 2022, primarily due to a **$180 million** gain on the sale of AirCentre, partially offset by a **$26 million** fair value loss on the GBT investment[230](index=230&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) Sabre's liquidity and capital resources are discussed, including cash and cash equivalents, expected free cash flow, material cash requirements, outstanding debt, and cash flow activities Cash and Cash Equivalents (2021-2022) (in thousands) | | As of December 31, | | | :--- | :--- | :--- | | | 2022 | 2021 | | Cash and cash equivalents | $ 794,888 | $ 978,352 | | Restricted cash | 21,035 | 21,039 | | Available under the bilateral letter of credit facility | 8,473 | 10,018 | | Outstanding letters of credit under the bilateral letter of credit facility | 11,527 | 9,982 | - Sabre expects positive free cash flow for the full year 2023, based on anticipated recovery in air travel[255](index=255&type=chunk) - Material cash requirements include debt obligations (**$6.5 billion** total, **$450 million** due in 12 months), lease obligations (**$114 million** total, **$19 million** due in 12 months), IT agreements (**$2.4 billion** total, **$267 million** due in 12 months), and purchase obligations (**$443 million** total, **$343 million** due in 12 months)[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk) - As of December 31, 2022, outstanding debt totaled **$4.7 billion**, with approximately **29% variable rate debt**, and the company is in compliance with all debt covenants[266](index=266&type=chunk)[269](index=269&type=chunk) - Cash used in operating activities improved by **$138 million** in 2022 to **$(276) million**, primarily due to improved results from COVID-19 recovery, partially offset by increased bonus and interest payments[290](index=290&type=chunk) - Investing activities in 2022 included **$392 million** from the AirCentre sale, offset by **$69 million** in capital expenditures, **$80 million** for GBT investment, and **$69 million** for Conferma and other acquisitions[292](index=292&type=chunk) - Financing activities in 2022 included **$1.8 billion** in proceeds from new debt issuances (2022 Term Loan B-1, B-2, December 2027 Notes), offset by **$1.8 billion** in debt payments, **$33 million** in debt costs, and **$21 million** in preferred stock dividends[294](index=294&type=chunk) [Recent Accounting Pronouncements](index=53&type=section&id=Recent%20Accounting%20Pronouncements) Sabre adopted updated FASB guidance on derivatives, hedging, contract assets/liabilities, income tax accounting, and credit losses, with no material impact from most adoptions - Sabre adopted updated FASB guidance on derivatives and hedging in Q1 2022 with no material impact, and guidance on contract assets/liabilities in business combinations in Q4 2021 with no material impact[427](index=427&type=chunk)[428](index=428&type=chunk) - The company adopted simplified income tax accounting guidance in Q1 2021 with no material impact and the "expected loss" model for credit losses in Q1 2020, increasing the allowance for credit losses by **$10 million**[429](index=429&type=chunk)[430](index=430&type=chunk) [Critical Accounting Estimates](index=53&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates involve revenue recognition, air booking cancellation reserves, allowance for credit losses, asset recoverability, capitalized costs, tax assets, and loss contingencies - Critical accounting estimates include revenue recognition for multiple performance obligations, air booking cancellation reserves, allowance for credit losses, recoverability of long-lived assets and goodwill, capitalized implementation costs, tax assets/liabilities, and loss contingencies[297](index=297&type=chunk) - Revenue recognition for IT Solutions involves significant judgments in identifying distinct performance obligations, estimating total contract consideration, and forecasting future volumes, which can impact recognized revenue[300](index=300&type=chunk) - The air booking cancellation reserve (**$11 million** as of Dec 31, 2022) is sensitive to historical and expected cancellation rates, influenced by global events like epidemics and economic conditions[304](index=304&type=chunk) - The allowance for credit losses (**$39 million** as of Dec 31, 2022) is determined by assessing risks in receivables, historical loss data, and current economic conditions, with collectability mitigated by clearing houses like ACH for air carriers[305](index=305&type=chunk)[306](index=306&type=chunk)[402](index=402&type=chunk)[466](index=466&type=chunk) - Goodwill and definite-lived intangible assets are evaluated for impairment annually or when indicators exist, using cash flow projections and market multiples, with no goodwill impairment recorded in 2020-2022[310](index=310&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk) - Capitalized implementation costs are amortized over contract terms (3-10 years) and reviewed for recoverability based on future estimated revenue and direct costs, with immaterial impairments in 2021-2022[313](index=313&type=chunk) - Deferred tax assets are reviewed for recoverability, with a valuation allowance established (**$367 million** U.S. federal, **$26 million** state, **$91 million** non-U.S. as of Dec 31, 2022) when realization is not more likely than not, influenced by projected future taxable income and cumulative losses[314](index=314&type=chunk)[316](index=316&type=chunk) - Loss contingencies for legal and tax matters are accrued when probable and estimable, with inherent uncertainties in litigation and tax claims[318](index=318&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Sabre Corporation manages market risks related to interest rates, foreign currency exchange rates, credit risk, and inflation through established policies and derivative instruments - Sabre manages market risks (interest rates, foreign exchange, credit, inflation) through policies and derivative instruments, avoiding speculative activities[319](index=319&type=chunk) - Interest rate risk on floating-rate debt is partially hedged by interest rate swaps, with **$1.0 billion** of variable debt indexed to LIBOR/SOFR as of Dec 31, 2022[320](index=320&type=chunk)[321](index=321&type=chunk)[324](index=324&type=chunk) - Foreign currency risk, primarily on operating expenses, is managed through forward contracts (paused new contracts due to COVID-19 uncertainty) and natural hedging, with significant operations in APAC, Europe, and Latin America[325](index=325&type=chunk)[326](index=326&type=chunk)[327](index=327&type=chunk) - Credit risk, concentrated in the travel industry (especially commercial air travel), is mitigated by collecting a significant portion of receivables through clearing houses like ACH (**82%** of air transaction revenue in 2022)[329](index=329&type=chunk)[330](index=330&type=chunk)[331](index=331&type=chunk) - Inflation's impact on operating results has been minimized by competitive market conditions, but increased interest rates in 2022 due to inflation have raised current and future interest expense[332](index=332&type=chunk)[333](index=333&type=chunk) [Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Sabre Corporation's audited consolidated financial statements, including the statements of operations, comprehensive loss, balance sheets, cash flows, and stockholders' equity for the years ended December 31, 2022, 2021, and 2020 - The section includes the Reports of Independent Registered Public Accounting Firm, Consolidated Statements of Operations, Comprehensive Loss, Balance Sheets, Cash Flows, Stockholders' Equity (Deficit), and Notes to Consolidated Financial Statements[336](index=336&type=chunk) - Ernst & Young LLP provided an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2022[338](index=338&type=chunk)[339](index=339&type=chunk)[349](index=349&type=chunk) [Reports of Independent Registered Public Accounting Firm](index=60&type=section&id=Reports%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP issued an unqualified opinion on Sabre Corporation's consolidated financial statements and internal control over financial reporting, highlighting critical audit matters for IT Solutions Revenue and Uncertain Tax Positions - Ernst & Young LLP issued an unqualified opinion on Sabre Corporation's consolidated financial statements for the period ended December 31, 2022, and on the effectiveness of internal control over financial reporting[338](index=338&type=chunk)[339](index=339&type=chunk)[349](index=349&type=chunk) - Critical audit matters included the measurement of IT Solutions Revenue due to significant management judgments in identifying distinct performance obligations and estimating variable consideration, and Uncertain Tax Positions due to complex tax laws across multiple jurisdictions[344](index=344&type=chunk)[345](index=345&type=chunk)[346](index=346&type=chunk) [Consolidated Statements of Operations](index=63&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20Years%20Ended%20December%2031,%202022,%202021%20and%202020) This table presents the consolidated statements of operations for 2020-2022, detailing revenue, expenses, operating loss, and net loss attributable to common stockholders Consolidated Statements of Operations (2020-2022) (in thousands) | | Year Ended December 31, | | | | :--- | :--- | :--- | :--- | | | 2022 | 2021 | 2020 | | Revenue | $ 2,537,015 | $ 1,688,875 | $ 1,334,100 | | Cost of revenue, excluding technology costs | 1,040,819 | 691,451 | 579,010 | | Technology costs | 1,096,097 | 1,052,833 | 1,156,723 | | Selling, general and administrative | 661,159 | 610,078 | 586,406 | | Operating loss | (261,060) | (665,487) | (988,039) | | Interest expense, net | (295,231) | (257,818) | (225,785) | | Loss on extinguishment of debt | (4,473) | (13,070) | (21,626) | | Equity method income (loss) | 686 | (264) | (2,528) | | Other, net | 136,645 | (1,748) | (66,961) | | Total other expense, net | (162,373) | (272,900) | (316,900) | | Loss from continuing operations before income taxes | (423,433) | (938,387) | (1,304,939) | | Provision (benefit) for income taxes | 8,666 | (14,612) | (21,012) | | Loss from continuing operations | $ (432,099) | $ (923,775) | $ (1,283,927) | | (Loss) income from discontinued operations, net of tax | (679) | (2,532) | 2,788 | | Net loss | (432,778) | (926,307) | (1,281,139) | | Net income attributable to noncontrolling interests | 2,670 | 2,162 | 1,200 | | Net (loss) income attributable to Sabre Corporation | (435,448) | (928,469) | (1,282,339) | | Preferred stock dividends | 21,385 | 21,602 | 7,659 | | Net loss attributable to common stockholders | $ (456,833) | $ (950,071) | $ (1,289,998) | | Basic net loss per share attributable to common stockholders: | | | | | Loss from continuing operations | $ (1.40) | $ (2.95) | $ (4.46) | | (Loss) income from discontinued operations | — | (0.01) | 0.01 | | Net loss per common share | $ (1.40) | $ (2.96) | $ (4.45) | | Diluted net loss per share attributable to common stockholders: | | | | | Loss from continuing operations | $ (1.40) | $ (2.95) | $ (4.46) | | (Loss) income from discontinued operations | — | (0.01) | 0.01 | | Net loss per common share | $ (1.40) | $ (2.96) | $ (4.45) | | Weighted-average common shares outstanding: | | | | | Basic | 326,742 | 320,922 | 289,855 | | Diluted | 326,742 | 320,922 | 289,855 | | Dividend per common share | $ — | $ — | $ 0.14 | [Consolidated Statements of Other Comprehensive Loss](index=64&type=section&id=Consolidated%20Statements%20of%20Other%20Comprehensive%20Loss%20for%20the%20Years%20Ended%20December%2031,%202022,%202021%20and%202020) This table presents the consolidated statements of other comprehensive loss for 2020-2022, detailing net loss and various components of other comprehensive income, net of tax Consolidated Statements of Other Comprehensive Loss (2020-2022) (in thousands) | | Year Ended December 31, | | | | :--- | :--- | :--- | :--- | | | 2022 | 2021 | 2020 | | Net loss | $ (432,778) | $ (926,307) | $ (1,281,139) | | Other comprehensive income, net of tax: | | | | | Foreign currency translation adjustments ("CTA") | (1,024) | (7,223) | 7,698 | | Retirement-related benefit plans: | | | | | Net actuarial (loss) gain, net of taxes | (136) | 36,742 | (11,778) | | Pension settlement, net of taxes | 6,016 | 7,529 | 14,005 | | Amortization of prior service credits, net of taxes | (1,337) | (1,432) | (1,111) | | Amortization of actuarial losses, net of taxes | 6,484 | 7,985 | 6,677 | | Net change in retirement-related benefit plans, net of tax | 11,027 | 50,824 | 7,793 | | Derivatives: | | | | | Unrealized gains (losses), net of taxes | 5,658 | (134) | (20,521) | | Reclassification adjustment for realized (gains) losses, net of taxes | (1,082) | 12,805 | 17,890 | | Net change in derivatives, net of tax | 4,576 | 12,671 | (2,631) | | Share of other comprehensive (loss) income of equity method investments | (23) | (602) | 489 | | Other comprehensive income | 14,556 | 55,670 | 13,349 | | Comprehensive loss | (418,222) | (870,637) | (1,267,790) | | Less: Comprehensive income attributable to noncontrolling interests | (2,670) | (2,162) | (1,200) | | Comprehensive loss attributable to Sabre Corporation | $ (420,892) | $ (872,799) | $ (1,268,990) | [Consolidated Balance Sheets](index=65&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20December%2031,%202022%20and%202021) This table presents the consolidated balance sheets as of December 31, 2022 and 2021, detailing assets, liabilities, and stockholders' equity (deficit) Consolidated Balance Sheets (2021-2022) (in thousands) | | December 31, | | | :--- | :--- | :--- | | | 2022 | 2021 | | **Assets** | | | | Cash and cash equivalents | $ 794,888 | $ 978,352 | | Total current assets | 1,361,489 | 1,402,274 | | Property and equipment, net | 229,419 | 249,812 | | Goodwill | 2,542,087 | 2,470,206 | | Total assets | $ 4,962,875 | $ 5,291,330 | | **Liabilities and stockholders' equity** | | | | Total current liabilities | 815,571 | 716,505 | | Long-term debt | 4,717,091 | 4,723,685 | | Total liabilities and stockholders' deficit | $ 4,962,875 | $ 5,291,330 | [Consolidated Statements of Cash Flows](index=66&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Years%20Ended%20December%2031,%202022,%202021%20and%202020) This table presents the consolidated statements of cash flows for 2020-2022, detailing cash used in operating, investing, and financing activities Consolidated Statements of Cash Flows (2020-2022) (in thousands) | | Year Ended December 31, | | | | :--- | :--- | :--- | :--- | | | 2022 | 2021 | 2020 | | Cash used in operating activities | $ (276,458) | $ (414,654) | $ (770,245) | | Cash provided by (used in) investing activities | 173,977 | (29,428) | (1,291) | | Cash (used in) provided by financing activities | (75,370) | (50,558) | 1,837,741 | | (Decrease) increase in cash, cash equivalents and restricted cash | (183,468) | (500,274) | 1,063,489 | | Cash, cash equivalents and restricted cash at end of period | $ 815,923 | $ 999,391 | $ 1,499,665 | [Consolidated Statements of Stockholders' Equity (Deficit)](index=67&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)%20for%20the%20Years%20Ended%20December%2031,%202022,%202021%20and%202020) This table presents the consolidated statements of stockholders' equity (deficit) from 2019 to 2022, showing total equity (deficit) at each year-end Consolidated Statements of Stockholders' Equity (Deficit) (2019-2022) (in thousands) | | December 31, 2022 | December 31, 2021 | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | :--- | :--- | | Total Stockholders' Equity (Deficit) | $ (872,827) | $ (499,717) | $ 285,154 | $ 947,669 | [Notes to Consolidated Financial Statements](index=68&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed information on business segments, accounting policies, recent events, revenue recognition, acquisitions, goodwill, debt, derivatives, and legal proceedings - Notes provide detailed information on business segments, significant accounting policies, recent events (COVID-19, strategic realignment), revenue recognition, contract balances, acquisitions (Conferma) and dispositions (AirCentre), goodwill and intangible assets, and debt[371](index=371&type=chunk)[372](index=372&type=chunk)[373](index=373&type=chunk)[376](index=376&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk)[431](index=431&type=chunk)[433](index=433&type=chunk)[440](index=440&type=chunk)[444](index=444&type=chunk)[447](index=447&type=chunk)[467](index=467&type=chunk) - Key accounting estimates include revenue recognition, air booking cancellation reserves, allowance for credit losses, and impairment evaluations for long-lived assets and goodwill[378](index=378&type=chunk) - The company's debt structure includes senior secured credit facilities, senior secured notes, and exchangeable notes, with various refinancing activities in 2020-2022[469](index=469&type=chunk)[470](index=470&type=chunk)[471](index=471&type=chunk)[472](index=472&type=chunk)[473](index=473&type=chunk)[474](index=474&type=chunk)[475](index=475&type=chunk)[476](index=476&type=chunk)[485](index=485&type=chunk)[486](index=486&type=chunk)[487](index=487&type=chunk)[488](index=488&type=chunk) - Sabre uses derivative instruments (interest rate swaps, foreign currency forward contracts) to manage market risks, primarily interest rate and foreign currency exchange rate risks[494](index=494&type=chunk)[495](index=495&type=chunk)[496](index=496&type=chunk)[497](index=497&type=chunk) - Legal proceedings include antitrust litigation with US Airways and Indian income/service tax litigation, with the ultimate outcome uncertain[557](index=557&type=chunk)[563](index=563&type=chunk)[564](index=564&type=chunk)[566](index=566&type=chunk)[567](index=567&type=chunk)[568](index=568&type=chunk)[569](index=569&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=106&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This item states that there are no changes in or disagreements with accountants on accounting and financial disclosure - Not applicable, indicating no changes in or disagreements with accountants[585](index=585&type=chunk) [Controls and Procedures](index=106&type=section&id=Item%209A.%20Controls%20and%20Procedures) Sabre's management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of December 31, 2022 - Disclosure controls and procedures were evaluated and deemed effective as of December 31, 2022[586](index=586&type=chunk) - Management maintained effective internal control over financial reporting as of December 31, 2022, based on the COSO framework[587](index=587&type=chunk) - The implementation of Workday (cloud-based HR system) in October 2022 and a new billing system in Q4 2021 are reasonably likely to materially affect internal control over financial reporting[590](index=590&type=chunk) [Other Information](index=107&type=section&id=Item%209B.%20Other%20Information) This item states that there is no other information to report - Not applicable, indicating no other information[591](index=591&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=107&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item states that there are no disclosures regarding foreign jurisdictions that prevent inspections - Not applicable, indicating no disclosures regarding foreign jurisdictions that prevent inspections[592](index=592&type=chunk) [Part III](index=108&type=section&id=PART%20III) Part III of the report incorporates by reference information from Sabre Corporation's 2023 Proxy Statement regarding directors, executive officers, corporate governance, executive compensation, security ownership, related party transactions, and principal accountant fees and services [Directors, Executive Officers and Corporate Governance](index=108&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) This section incorporates by reference information from the 2023 Proxy Statement regarding directors, executive officers, and corporate governance practices, including the Code of Business Ethics and procedures for stockholder nominations - Information on directors, executive officers, and corporate governance is incorporated by reference from the 2023 Proxy Statement[595](index=595&type=chunk) - This includes details on director nominees, Section 16(a) reports, Code of Business Ethics, stockholder nomination procedures, and Audit Committee members[603](index=603&type=chunk) [Executive Compensation](index=108&type=section&id=Item%2011.%20Executive%20Compensation) This section incorporates by reference information from the 2023 Proxy Statement concerning executive compensation, including the Compensation Discussion and Analysis, Executive Compensation details, Director Compensation Program, and Compensation Committee Interlocks and Insider Participation - Information on executive compensation, including Compensation Discussion and Analysis, Director Compensation Program, and Compensation Committee Interlocks, is incorporated by reference from the 2023 Proxy Statement[596](index=596&type=chunk) [Security Ownership and Related Stockholder Matters](index=108&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section incorporates by reference information from the 2023 Proxy Statement regarding security ownership of certain beneficial owners and management - Information on security ownership of beneficial owners and management is incorporated by reference from the 2023 Proxy Statement[597](index=597&type=chunk) Equity Compensation Plan Information as of December 31, 2022 | | Number of securities to be issued upon exercise of outstanding options (a) | Weighted average exercise price of outstanding options (b) | Number of securities remaining available for future issuance under equity compensation plans (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by stockholders | 17,207,035 | $ 13.64 | 12,262,319 | - The company operates several equity compensation plans (e.g., 2022 Director Plan, 2021 Omnibus Plan) which serve as successors to prior plans, providing for the issuance of RSUs, DSUs, and stock options[599](index=599&type=chunk)[600](index=600&type=chunk)[601](index=601&type=chunk)[604](index=604&type=chunk)[606](index=606&type=chunk)[607](index=607&type=chunk)[608](index=608&type=chunk)[609](index=609&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=109&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) This section incorporates by reference information from the 2023 Proxy Statement regarding certain relationships and related party transactions, as well as details on Board composition and director independence - Information on related party transactions and director independence is incorporated by reference from the 2023 Proxy Statement[610](index=610&type=chunk) [Principal Accountant Fees and Services](index=109&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section incorporates by reference information from the 2023 Proxy Statement regarding principal accounting firm fees and the Audit Committee's approval process for audit and non-audit services - Information on principal accounting firm fees and Audit Committee approval of audit and non-audit services is incorporated by reference from the 2023 Proxy Statement[611](index=611&type=chunk) [Part IV](index=110&type=section&id=PART%20IV) Part IV of the report lists the financial statements, financial statement schedules, and exhibits filed as part of the Annual Report on Form 10-K [Exhibits and Financial Statement Schedules](index=110&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This item lists the financial statements, financial statement schedules (Schedule II – Valuation and Qualifying Accounts), and a comprehensive list of exhibits filed with the 10-K, including various agreements, plans, and certifications - The report includes financial statements, Schedule II – Valuation and Qualifying Accounts, and a list of exhibits[615](index=615&type=chunk) - Exhibits include asset purchase agreements, corporate governance documents, debt indentures, equity incentive plans, and employment agreements[616](index=616&type=chunk)[617](index=617&type=chunk)[619](index=619&type=chunk)[620](index=620&type=chunk)[621](index=621&type=chunk)[622](index=622&type=chunk)[623](index=623&type=chunk)[624](index=624&type=chunk) - Certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are filed as exhibits[627](index=627&type=chunk) [Form 10-K Summary](index=120&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item states that the Form 10-K Summary is not applicable - Not applicable, indicating no Form 10-K Summary[626](index=626&type=chunk)

Financial Data and Key Metrics Changes - The company reported total revenue of $2.5 billion for 2022, marking a recovery and a return to positive adjusted EBITDA [26] - Free cash flow was $22 million in Q4 2022, benefiting from strong working capital inflows [46] - The average booking fee increased to $5.49 in Q4 2022, up from $4.96 in Q4 2021, indicating a favorable mix towards more profitable regions and travel types [54] Business Line Data and Key Metrics Changes - Distribution revenue totaled $417 million in Q4 2022, a 46% increase compared to $286 million in Q4 2021 [44] - IT Solutions revenue was $157 million in Q4 2022, a decline from $165 million in the same quarter last year, impacted by the loss of revenue from the Russian market [54] - Hospitality Solutions revenue improved to $65 million in Q4 2022, up from $54 million in Q4 2021, with central reservation system transactions totaling 27 million, a 16% increase year-over-year [55] Market Data and Key Metrics Changes - The company experienced a 90% recovery in passengers boarded in Q4 2022 compared to the same period in 2019 [9] - Distribution bookings recovery in Q4 was 59% versus the same period in 2019, with a 65% revenue recovery due to higher booking rates achieved [7][30] - Year-to-date air distribution bookings improved to 62% compared to the same period in 2019 as of early February 2023 [33] Company Strategy and Development Direction - The company is focused on a technology transformation, migrating to Google Cloud, which is expected to enhance scalability and reduce costs [3][35] - Partnerships with travel management leaders like BCD and AMEX GBT are expected to drive meaningful volume growth [27] - The company aims to achieve positive free cash flow in 2023 while managing costs effectively to support long-term strategic opportunities [23][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the travel recovery based on historical booking trends and improvements in corporate travel [5] - The company anticipates a $100 million headwind in IT Solutions revenue due to changes in Russian law affecting their operations [45] - Management remains confident in the long-term recovery of the travel industry, despite short-term fluctuations [60] Other Important Information - The company processed over one billion total transactions in 2022, highlighting its central role in the global travel recovery [41] - The company expects revenue for 2023 to be between $2.8 billion and $3 billion, with adjusted EBITDA between $300 million and $320 million [58] - Capital expenditures for 2023 are projected to be between $50 million and $60 million [70] Q&A Session Summary Question: What impacted the recovery in November and December? - Management indicated that the interruption was primarily in corporate travel and Asia Pacific travel due to various factors [78] Question: Can you provide more context on IT Solutions revenue? - Management clarified that the decline was largely due to the loss of revenue from the Russian market and the sale of the Air Center business [85][87] Question: What are the expectations for bookings recovery? - Management stated that the guidance assumes a steady incremental recovery from the current levels, with a focus on addressing airline capacity constraints [93] Question: How should we think about the revenue per booking trend going forward? - Management believes there is room for inflation-related uplift and positive mix opportunities as the Asia Pacific region reopens [100]