Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 25, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | SABRE CORP | |
Entity Central Index Key | 1,597,033 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 275,312,795 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue | $ 970,283,000 | $ 900,606,000 | $ 2,943,028,000 | $ 2,716,622,000 |
Cost of revenue | 703,368,000 | 631,970,000 | 2,117,984,000 | 1,882,623,000 |
Selling, general and administrative | 130,152,000 | 91,840,000 | 384,047,000 | 383,137,000 |
Impairment and related charges | 0 | 0 | 0 | 92,022,000 |
Operating income | 136,763,000 | 176,796,000 | 440,997,000 | 358,840,000 |
Other income (expense): | ||||
Interest expense, net | (39,291,000) | (38,919,000) | (116,809,000) | (116,577,000) |
Loss on extinguishment of debt | 0 | (1,012,000) | (633,000) | (1,012,000) |
Joint venture equity income | 333,000 | 357,000 | 2,455,000 | 1,768,000 |
Other, net | (1,905,000) | (3,802,000) | (10,746,000) | (19,788,000) |
Total other expense, net | (40,863,000) | (43,376,000) | (125,733,000) | (135,609,000) |
Income from continuing operations before income taxes | 95,900,000 | 133,420,000 | 315,264,000 | 223,231,000 |
Provision for income taxes | 25,021,000 | 40,595,000 | 61,371,000 | 56,836,000 |
Income from continuing operations | 70,879,000 | 92,825,000 | 253,893,000 | 166,395,000 |
Income (loss) from discontinued operations, net of tax | 3,664,000 | (529,000) | 3,217,000 | (2,228,000) |
Net income | 74,543,000 | 92,296,000 | 257,110,000 | 164,167,000 |
Net income attributable to noncontrolling interests | 1,538,000 | 1,307,000 | 3,979,000 | 3,726,000 |
Net income attributable to common stockholders | $ 73,005,000 | $ 90,989,000 | $ 253,131,000 | $ 160,441,000 |
Basic net income per share attributable to common stockholders: | ||||
Income from continuing operations (in dollars per share) | $ 0.25 | $ 0.33 | $ 0.91 | $ 0.59 |
Income (loss) from discontinued operations (in dollars per share) | 0.01 | 0 | 0.01 | (0.01) |
Net income per common share (in dollars per share) | 0.26 | 0.33 | 0.92 | 0.58 |
Diluted net income per share attributable to common stockholders: | ||||
Income from continuing operations (in dollars per share) | 0.25 | 0.33 | 0.90 | 0.58 |
Income (loss) from discontinued operations (in dollars per share) | 0.01 | 0 | 0.01 | (0.01) |
Net income per common share (in dollars per share) | $ 0.26 | $ 0.33 | $ 0.91 | $ 0.57 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 275,175 | 277,477 | 275,205 | 277,754 |
Diluted (in shares) | 277,528 | 278,369 | 276,819 | 279,648 |
Cash dividend (in dollars per share) | $ 0.14 | $ 0.14 | ||
Dividends per common share (in dollars per share) | $ 0.14 | $ 0.42 | $ 0.42 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 74,543 | $ 92,296 | $ 257,110 | $ 164,167 |
Foreign currency translation adjustments (CTA), net of tax | ||||
Foreign CTA (losses) gains, net of tax | (728) | 2,781 | (4,052) | 10,450 |
Net change in foreign CTA (losses) gains, net of tax | (728) | 2,781 | (4,052) | 10,450 |
Retirement-related benefit plans: | ||||
Amortization of prior service credits | (278) | (229) | (865) | (686) |
Amortization of actuarial losses | 1,516 | 745 | 4,311 | 3,141 |
Net change in retirement-related benefit plans, net of tax | 1,238 | 516 | 3,446 | 2,455 |
Derivatives and securities: | ||||
Unrealized gains, net of taxes of $(442), $(1,045), $(1,351) and $(2,693) | 1,436 | 2,561 | 3,621 | 9,561 |
Reclassification adjustment for realized gains (losses), net of taxes of $(661), $67, $(441) and $(1,531) | 2,406 | (216) | 727 | 3,461 |
Net change in derivatives and securities, net of tax | 3,842 | 2,345 | 4,348 | 13,022 |
Share of other comprehensive (loss) income of joint venture | (374) | 323 | (105) | 372 |
Other comprehensive income | 3,978 | 5,965 | 3,637 | 26,299 |
Comprehensive income | 78,521 | 98,261 | 260,747 | 190,466 |
Less: Comprehensive income attributable to noncontrolling interests | (1,538) | (1,307) | (3,979) | (3,726) |
Comprehensive income attributable to Sabre Corporation | $ 76,983 | $ 96,954 | $ 256,768 | $ 186,740 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized gains on derivatives, taxes | $ (442) | $ (1,045) | $ (1,351) | $ (2,693) |
Reclassification adjustment for realized (gains) losses, taxes | $ (661) | $ 67 | $ (441) | $ (1,531) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 444,321 | $ 361,381 |
Accounts receivable, net | 589,858 | 490,558 |
Prepaid expenses and other current assets | 170,110 | 108,753 |
Total current assets | 1,204,289 | 960,692 |
Property and equipment, net of accumulated depreciation of $1,452,558 and $1,236,523 | 788,030 | 799,194 |
Investments in joint ventures | 28,683 | 27,527 |
Goodwill | 2,552,572 | 2,554,987 |
Deferred income taxes | 30,347 | 31,817 |
Other assets, net | 634,422 | 591,942 |
Total assets | 5,868,482 | 5,649,364 |
Current liabilities | ||
Accounts payable | 158,788 | 162,755 |
Accrued compensation and related benefits | 95,625 | 112,343 |
Accrued subscriber incentives | 327,371 | 271,200 |
Deferred revenues | 104,366 | 110,532 |
Other accrued liabilities | 207,694 | 198,353 |
Current portion of debt | 64,225 | 57,138 |
Tax Receivable Agreement | 94,113 | 59,826 |
Total current liabilities | 1,052,182 | 972,147 |
Deferred income taxes | 200,767 | 99,801 |
Other noncurrent liabilities | 322,002 | 480,185 |
Long-term debt | 3,355,596 | 3,398,731 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity | ||
Common Stock: $0.01 par value; 450,000 authorized shares; 291,579 and 289,138 shares issued, 275,294 and 274,342 shares outstanding at September 30, 2018 and December 31, 2017, respectively | 2,916 | 2,891 |
Additional paid-in capital | 2,227,682 | 2,174,187 |
Treasury Stock, at cost, 16,285 and 14,796 shares at September 30, 2018 and December 31, 2017, respectively | (377,341) | (341,846) |
Retained deficit | (814,446) | (1,053,446) |
Accumulated other comprehensive loss | (107,146) | (88,484) |
Noncontrolling interest | 6,270 | 5,198 |
Total stockholders’ equity | 937,935 | 698,500 |
Total liabilities and stockholders’ equity | 5,868,482 | 5,649,364 |
Customer relationships | ||
Current assets | ||
Finite lived intangible assets, net | 330,528 | 351,034 |
Other intangible assets | ||
Current assets | ||
Finite lived intangible assets, net | $ 299,611 | $ 332,171 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Accumulated depreciation on property and equipment | $ 1,452,558 | $ 1,236,523 |
Common Stock, Par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, Shares authorized (in shares) | 450,000,000 | 450,000,000 |
Common Stock, Shares issued (in shares) | 291,579,000 | 289,138,000 |
Common Stock, Shares outstanding (in shares) | 275,924,000 | 274,342,000 |
Treasury Stock, Shares held (in shares) | 16,285,000 | 14,796,000 |
Customer relationships | ||
Accumulated Amortization | $ 706,049 | $ 687,072 |
Other intangible assets | ||
Accumulated Amortization | $ 626,713 | $ 594,015 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Activities | ||
Net income | $ 257,110,000 | $ 164,167,000 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 307,551,000 | 295,729,000 |
Deferred income taxes | 74,263,000 | 8,340,000 |
Amortization of upfront incentive consideration | 57,324,000 | 50,298,000 |
Stock-based compensation expense | 41,445,000 | 34,413,000 |
Allowance for doubtful accounts | 7,433,000 | 7,879,000 |
(Income) loss from discontinued operations | (3,217,000) | 2,228,000 |
Amortization of debt issuance costs | 2,988,000 | 4,916,000 |
Joint venture equity income | (2,455,000) | (1,768,000) |
Debt modification costs | 1,558,000 | 14,758,000 |
Dividends received from joint venture investments | 1,193,000 | 1,088,000 |
Loss on extinguishment of debt | 633,000 | 1,012,000 |
Impairment and related charges | 0 | 92,022,000 |
Other | 5,146,000 | 10,680,000 |
Changes in operating assets and liabilities: | ||
Accounts and other receivables | (114,043,000) | (188,021,000) |
Prepaid expenses and other current assets | 3,417,000 | 518,000 |
Capitalized implementation costs | (29,781,000) | (47,968,000) |
Upfront incentive consideration | (67,697,000) | (61,087,000) |
Other assets | (18,989,000) | (20,957,000) |
Accrued compensation and related benefits | (31,308,000) | 2,161,000 |
Accounts payable and other accrued liabilities | 234,000 | 53,444,000 |
Deferred revenue including upfront solution fees | 43,388,000 | 32,054,000 |
Cash provided by operating activities | 536,193,000 | 455,906,000 |
Investing Activities | ||
Additions to property and equipment | (205,664,000) | (242,811,000) |
Other investing activities | 0 | (141,000) |
Cash used in investing activities | (205,664,000) | (242,952,000) |
Financing Activities | ||
Cash dividends paid to common stockholders | (115,557,000) | (116,474,000) |
Payments on Tax Receivable Agreement | (58,908,000) | (99,241,000) |
Payments on borrowings from lenders | (35,483,000) | (1,868,655,000) |
Repurchase of common stock | (26,281,000) | (97,671,000) |
Net receipts on the settlement of equity-based awards | 2,758,000 | 11,466,000 |
Debt issuance and modification costs | (1,567,000) | (19,052,000) |
Proceeds of borrowings from lenders | 0 | 1,897,625,000 |
Other financing activities | (17,371,000) | (8,934,000) |
Cash used in financing activities | (252,409,000) | (300,936,000) |
Cash Flows from Discontinued Operations | ||
Cash provided by (used in) operating activities | 633,000 | (3,636,000) |
Cash provided by (used in) discontinued operations | 633,000 | (3,636,000) |
Effect of exchange rate changes on cash and cash equivalents | 4,187,000 | (4,228,000) |
Increase (decrease) in cash and cash equivalents | 82,940,000 | (95,846,000) |
Cash and cash equivalents at beginning of period | 361,381,000 | 364,114,000 |
Cash and cash equivalents at end of period | $ 444,321,000 | $ 268,268,000 |
General Information
General Information | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
General Information | 1. General Information Sabre Corporation is a Delaware corporation formed in December 2006. On March 30, 2007, Sabre Corporation acquired Sabre Holdings Corporation (“Sabre Holdings”). Sabre Holdings is the sole subsidiary of Sabre Corporation. Sabre GLBL Inc. ("Sabre GLBL") is the principal operating subsidiary and sole direct subsidiary of Sabre Holdings. Sabre GLBL or its direct or indirect subsidiaries conduct all of our businesses. In these consolidated financial statements, references to “Sabre,” the “Company,” “we,” “our,” “ours” and “us” refer to Sabre Corporation and its consolidated subsidiaries unless otherwise stated or the context otherwise requires. We connect people and places with technology that reimagines the business of travel. We operate our business and present our results through three business segments: (i) Travel Network, our global travel marketplace for travel suppliers and travel buyers, (ii) Airline Solutions, a broad portfolio of software technology products and solutions primarily for airlines, and (iii) Hospitality Solutions, an extensive suite of leading software solutions for hoteliers. Basis of Presentation— The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2018 . The accompanying interim financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 16, 2018 , as updated by our Current Report on Form 8-K/A filed with the SEC on May 3, 2018. Effective the first quarter of 2018, our business has three reportable segments and each segment now reflects a portion of our shared corporate costs that historically were not allocated to a business unit, based on relative consumption of shared technology infrastructure costs and defined revenue metrics. These changes have no impact on our consolidated results of operations, but result in a decrease of segment profitability only. Prior year amounts have been recast for the disaggregation of our segments and the modification of our allocation of shared corporate costs where applicable. We consolidate all majority-owned subsidiaries and companies over which we exercise control through majority voting rights. No entities are consolidated due to control through operating agreements, financing agreements or as the primary beneficiary of a variable interest entity. The consolidated financial statements include our accounts after elimination of all significant intercompany balances and transactions. All dollar amounts in the financial statements and the tables in the notes, except per share amounts, are stated in thousands of U.S. dollars unless otherwise indicated. All amounts in the notes reference results from continuing operations unless otherwise indicated. Use of Estimates —The preparation of these interim financial statements in conformity with GAAP requires that certain amounts be recorded based on estimates and assumptions made by management. Actual results could differ from these estimates and assumptions. Our accounting policies, which consist of significant estimates and assumptions, include, among other things, the estimation of the collectability of accounts receivable, estimation of future cancellations of bookings processed through the Sabre global distribution system (“GDS”), revenue recognition for software arrangements, determination of the fair value of assets and liabilities acquired in a business combination, determination of the fair value of derivatives, the evaluation of the recoverability of the carrying value of intangible assets and goodwill, assumptions utilized in the determination of pension and other postretirement benefit liabilities, the evaluation of the recoverability of customer implementation costs, assumptions utilized to evaluate the recoverability of deferred customer advance and discounts, and estimation of uncertainties surrounding the calculation of our tax assets and liabilities. Our use of estimates and the related accounting policies are discussed in the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 16, 2018 , as updated by our Current Report on Form 8-K/A filed with the SEC on May 3, 2018. Additionally, see Note 2. Revenue from Contracts with Customers for additional information on the use of significant estimates and assumptions in recognizing revenue. Stockholders’ Equity— During the nine months ended September 30, 2018 , we issued 2,441,045 shares of our common stock as a result of the exercise and settlement of employee equity-based awards. In addition, we had $3 million in net receipts from the exercise of employee stock-option awards, which includes a $9 million payment of income tax withholdings associated with the settlement of employee restricted-stock awards. We paid quarterly cash dividends on our common stock of $0.14 per share, totaling $116 million , during each of the nine months ended September 30, 2018 and 2017 . During the nine months ended September 30, 2018 , certain of our stockholders sold an aggregate of 46,000,000 shares of our common stock through secondary public offerings. See "—Share Repurchase Program" for information on shares we repurchased in connection with one such offering. We did not offer any shares or receive any proceeds from these secondary public offerings. Share Repurchase Program— In February 2017, we announced the approval of a multi-year share repurchase program to purchase up to $500 million of Sabre's common stock outstanding. Repurchases under the program may take place in the open market or privately negotiated transactions. For the nine months ended September 30, 2018 , we repurchased 1,075,255 shares totaling $26 million pursuant to this share repurchase program, including the repurchase of 1,000,000 shares of our common stock for approximately $24 million in connection with a secondary public offering as described in "—Stockholders' Equity." There were no shares repurchased during the third quarter of 2018. Approximately $365 million remains authorized for repurchases under the Share Repurchase Program as of September 30, 2018 . Adoption of New Accounting Standards In June 2018, the Financial Accounting Standards Board ("FASB") issued updated guidance for share-based payment awards issued to non-employees. The updated standard aligns the accounting for share-based payment awards for non-employees with employees, except for guidance related to the attribution of compensation costs for non-employees. The Accounting Standards Update ("ASU") is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods for public business entities, with early adoption permitted. We early adopted this standard in the second quarter of 2018, which did not have a material impact on our consolidated financial statements. In February 2018, the FASB issued updated guidance to give entities the option to reclassify to retained earnings the tax effects of items within accumulated other comprehensive income ("stranded tax effects") resulting from a reduction of the federal corporate income tax rate from 35% to 21% under the Tax Cuts and Jobs Act (“TCJA”) signed into law in December 2017. The ASU is effective for annual periods beginning after December 15, 2018, with early adoption permitted. See Note 7. Income Taxes in our consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on February 16, 2018, as updated by our Current Report on Form 8-K/A filed with the SEC on May 3, 2018, for additional information on certain impacts related to the enactment of the TCJA. We early adopted the updated standard in the second quarter of 2018 and elected to reclassify the stranded income tax effects related to the enactment of the TCJA to retained earnings. The adoption of this ASU resulted in a decrease in our retained deficit of $22 million with a corresponding increase to accumulated other comprehensive income primarily as a result of reclassifying stranded tax effects for our retirement-related benefit plans. The adoption of this updated standard did not have a material impact on our consolidated results of operations and statement of cash flows. In August 2017, the FASB issued updated guidance to expand and simplify the application of hedge accounting. The updated standard eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. The ASU is effective for annual periods beginning after December 15, 2018, with early adoption permitted. We early adopted this standard in the second quarter of 2018, which did not have a material impact on our consolidated financial statements. In March 2017, the FASB issued updated guidance improving the presentation requirements related to reporting the service cost component of net benefit costs to require that the service cost component be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period, disaggregating the component from other net benefit costs. Net benefit cost is composed of several items, which reflect different aspects of an employer's financial arrangements as well as the cost of benefits earned by employees. The updated guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those annual periods for public business entities. We adopted this standard in the first quarter of 2018, which did not have a material impact on our consolidated financial statements. In February 2017, the FASB issued updated guidance on gains and losses from the derecognition of non-financial assets. The updated guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those annual periods for public business entities. We adopted this standard in the first quarter of 2018, which did not have a material impact on our consolidated financial statements. In January 2016, the FASB issued updated guidance on accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure for financial instruments. Under this updated standard, entities must measure equity investments at fair value and recognize changes in fair value in net income. For equity investments without readily determinable fair values, entities have the option to either measure these investments at fair value or at cost adjusted for changes in observable prices less impairment. The updated guidance does not apply to equity method investments or investments in consolidated subsidiaries. This new standard is effective for public companies for annual periods, including interim periods, beginning after December 15, 2017. We adopted this standard in the first quarter of 2018, which did not have a material impact on our consolidated financial statements. Recent Accounting Pronouncements In August 2018, the FASB issued updated guidance on customer's accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. Under this updated standard, when the arrangement includes a license to software developed for internal use, implementation costs are capitalized and amortized on a straight-line basis over the related contract terms, and a liability is also recognized to the extent the payments attributable to the software license are made over time. When the cloud computing arrangement does not include a software license, implementation costs are to be expensed as incurred. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We do not expect the adoption of this updated standard will have a material impact on our consolidated financial statements. In August 2018, the FASB issued updated guidance that eliminates, modifies and adds certain disclosure requirements related to defined benefit pension and other post-retirement plans. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, ending after December 15, 2020, with early adoption permitted, and is required to be applied retrospectively. We are currently evaluating the impact of this standard on disclosures in our consolidated financial statements. In August 2018, the FASB issued updated guidance that eliminates, modifies and adds certain disclosure requirements related to fair value measurements. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for the eliminated or modified disclosures, while delaying the adoption of the additional disclosures until their effective date. We do not expect the adoption of this updated standard will have a material impact on disclosures in our consolidated financial statements. In June 2016, the FASB issued updated guidance for the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. Under this updated standard, the current "incurred loss" approach is replaced with an "expected loss" model for instruments measured at amortized cost. For available-for-sale debt securities, allowances for losses will now be required rather than reducing the instruments carrying value. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the impact of this standard on our consolidated financial statements. In February 2016, the FASB issued updated guidance requiring organizations that lease assets — referred to as "lessees" — to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases, when the lease has a term of more than 12 months. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We plan to adopt the new standard using the cumulative-effect adjustment transition method on its effective date of January 1, 2019, and we expect to elect the package of practical expedients and the hindsight practical expedient upon adoption. We are in the process of cataloging our existing lease contracts and implementing changes to our processes and systems. We preliminarily estimate our other non-current assets and other non-current liabilities may be increased on our consolidated balance sheets by approximately $65 million to $80 million , with an immaterial impact to retained earnings, as a result of recognizing the right of use assets and corresponding lease liabilities in connection with the adoption of the updated standard. Our assessment is ongoing and subject to finalization such that the actual impact of the adoption may differ materially from this estimated range. We do not expect that the adoption of this updated standard will have a material impact on our consolidated results of operations and cash flows. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | 2. Revenue from Contracts with Customers In the first quarter of 2018, we adopted the comprehensive update to revenue recognition guidance for Revenue from Contracts with Customers ("ASC 606"), which replaced the previous standard ("ASC 605"), using the modified retrospective approach, applied to contracts that were not completed as of the adoption date. Under ASC 606, revenue is recognized when a company transfers the promised goods or services to customers in an amount that reflects the consideration that is expected to be received for those goods and services. The key areas of impact on our financials include: • Revenue recognition for our Travel Network and Hospitality Solutions businesses did not change significantly. The definition of a performance obligation for Travel Network under the new guidance impacts the calculation for our booking fee cancellation reserve, which resulted in a beginning balance sheet adjustment. • Our Airline Solutions business is primarily impacted by ASC 606 due to the following: – Under ASC 605, we recognized revenue related to license fee and maintenance agreements ratably over the life of the contract. Under ASC 606, revenue for license fees is recognized upon delivery of the license and ongoing maintenance services are to be recognized ratably over the life of the contract. For existing open agreements, this change resulted in a beginning balance sheet adjustment and reduced revenue in subsequent years from these agreements. – Allocation of contract revenues among various products and solutions, and the timing of the recognition of those revenues, are impacted by agreements with tiered pricing or variable rate structures that do not correspond with the goods or services delivered to the customer. For existing open agreements, this change resulted in a beginning balance sheet adjustment and reduced revenue in subsequent years from these agreements. • Capitalization of incremental contract acquisition costs (such as sales commissions), and recognition of these costs over the customer benefit period resulted in the recognition of an asset on our balance sheet and impacted our Airline Solutions and Hospitality Solutions businesses. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with ASC 605. The impacts described above resulted in a net reduction to our opening retained deficit as of January 1, 2018 of approximately $102 million (net of tax, $78 million ) with a corresponding increase primarily in current and long-term unbilled receivables, contract assets, other assets and other accrued liabilities. The following tables set forth the impact of the adoption of the revenue recognition standard to our reported results on our consolidated statement of operations and consolidated balance sheet, respectively (in thousands): Nine Months Ended September 30, 2018 As reported ASC 606 Adjustments As adjusted ASC 605 Revenue $ 2,943,028 $ 23,555 $ 2,966,583 Cost of Revenue 2,117,984 6,275 2,124,259 Selling, general and administrative 384,047 (543 ) 383,504 Operating income 440,997 17,823 458,820 Income from continuing operations before income taxes 315,264 17,823 333,087 Provision for income taxes 61,371 4,354 65,725 Income from continuing operations 253,893 13,469 267,362 Net income 257,110 13,469 270,579 Net income attributable to common stockholders 253,131 13,469 266,600 September 30, 2018 As reported ASC 606 Adjustments As adjusted ASC 605 Accounts receivable, net $ 589,858 $ (56,189 ) $ 533,669 Prepaid expenses and other current assets 170,110 (13,147 ) 156,963 Total current assets 1,204,289 (69,336 ) 1,134,953 Other assets, net 634,422 (4,945 ) 629,477 Total assets 5,868,482 (74,281 ) 5,794,201 Accrued subscriber incentives 327,371 4,988 332,359 Deferred revenues 104,366 30,805 135,171 Other accrued liabilities 207,694 (25,901 ) 181,793 Total current liabilities 1,052,182 9,892 1,062,074 Deferred income taxes 200,767 (18,745 ) 182,022 Other noncurrent liabilities 322,002 (253 ) 321,749 Retained deficit (814,446 ) (65,175 ) (879,621 ) Total stockholders' equity 937,935 (65,175 ) 872,760 Total liabilities and stockholders' equity 5,868,482 (74,281 ) 5,794,201 Contract Balances Revenue recognition for a significant portion of our revenue coincides with normal billing terms, including Travel Network's transactional revenues, and Airline Solutions' and Hospitality Solutions' Software-as-a-Service ("SaaS") and hosted revenues. Timing differences among revenue recognition, unconditional rights to bill, and receipt of contract consideration may result in a net contract asset or contract liability. Contract liabilities are included within deferred revenues and other noncurrent liabilities on the consolidated balance sheet. Contract liabilities totaled $201 million and $158 million as of September 30, 2018 and January 1, 2018, respectively. During the nine months ended September 30, 2018 , we recognized revenue of approximately $29 million from contract liabilities that existed as of January 1, 2018. Contract assets are included within prepaid expenses and other current assets and other assets, net on the consolidated balance sheet. The following table presents the changes in our contract assets balance (in thousands): Contract assets as of January 1, 2018 $ 75,624 Additions 10,579 Deductions (26,414 ) Other (31 ) Contract assets as of September 30, 2018 $ 59,758 Our contract assets include deferred customer advances and discounts, which are capitalized and amortized in future periods as the related revenue is earned. The contract assets also include revenue recognized for services already transferred to a customer, for which the fulfillment of another contractual performance obligation is required, before we have the unconditional right to bill and collect based on contract terms. These assets are reviewed for recoverability on a periodic basis based on review of impairment indicators. For the nine months ended September 30, 2018 , we did not impair any of our contract assets as a result of the related contract becoming uncollectable, modified or canceled. Our trade accounts receivable, net recorded in accounts receivable, net on the consolidated balance sheet as of September 30, 2018 and January 1, 2018 was $585 million and $506 million , respectively. Our long-term trade unbilled receivables, net recorded in other assets, net on the consolidated balance sheet as of September 30, 2018 and January 1, 2018 was $55 million and $54 million , respectively. We evaluate collectability of our accounts receivable based on a combination of factors and record reserves as reflected in Note 1. Summary of Business and Significant Accounting Policies in our consolidated financial statements in our Annual Report on Form 10-K filed with the SEC on February 16, 2018 , as updated by our Current Report on Form 8-K/A filed with the SEC on May 3, 2018. We may occasionally recognize revenue in the current period for performance obligations partially or fully satisfied in the previous periods resulting from changes in estimates for the transaction price, including any changes to our assessment of whether an estimate of variable consideration is constrained. For the nine months ended September 30, 2018 , the impact on revenue recognized in the current period, from performance obligations partially or fully satisfied in the previous period, is immaterial. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under ASC 606. The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Most of our contracts in the Travel Network and Hospitality Solutions businesses have a single performance obligation. In the Airline Solutions business, many of our contracts may have multiple performance obligations, which generally include software and product solutions through SaaS and hosted delivery, and other service fees. In addition, at times we enter into agreements with customers to provide access to Travel Network’s GDS and, at or near the same time, enter into a separate agreement to provide Airline Solutions' software solutions through SaaS and hosted delivery, resulting in multiple performance obligations within a combined agreement. For contracts with multiple performance obligations where the contracted price differs from the standalone selling price ("SSP") for any distinct good or service, we may be required to allocate the contract’s transaction price to each performance obligation using our best estimate for the SSP. SSP is assessed annually using a historical analysis of contracts with customers executed in the most recently completed calendar year to determine the range of selling prices applicable to distinct good or service. In making these judgments, we analyze various factors, including value differentiators, customer segmentation and overall market and economic conditions. Based on these results, the estimated SSP is set for each distinct product or service delivered to customers. We recognize revenue under long-term contracts that primarily includes variable consideration based on transactions processed. A majority of our consolidated revenue is recognized as a stand-ready performance obligation with the amount recognized based on the invoiced amounts for services performed, known as right to invoice revenue recognition. Certain of our contracts, primarily in the Airlines Solutions business, contain minimum transaction volumes, which in many instances are not considered substantive as the customer is expected to exceed the minimum in the contract. Unearned performance obligations primarily consist of deferred revenue for fixed implementation fees and future product implementations, which are included in deferred revenue and other noncurrent liabilities in our consolidated balance sheet. We have not disclosed the performance obligation related to contracts containing minimum transaction volume, as it represents a subset of our business, and therefore would not be meaningful in understanding the total future revenues expected to be earned from our long-term contracts. See the discussion below regarding revenue recognition of our various revenue streams for more information. Revenue Recognition Travel Network and Hospitality Solutions’ revenue recognition is primarily driven by GDS and central reservation system ("CRS") transactions, respectively. Airline Solutions’ revenue recognition is primarily driven by passengers boarded or other variable metrics relevant to the software service provided. Timing of revenue recognition is based on the consistent provision of services in a stand-ready series SaaS environment and the amount of revenue recognized varies with the volume of transactions processed. Our significant product and services and methods of recognition are as follows: Stand-ready series revenue recognition Travel Network —Travel Network's service offering is a GDS or GDS services linking and engaging transactions between travel agents (those that seek travel on behalf of travelers) and travel suppliers (such as airlines, hotels, car rental companies and cruise lines). Revenue is generated from contracts with the travel suppliers as each booking is made or transaction occurs and represents a stand-ready performance obligation where our systems perform the same service each day for the customer, based on the customer’s level of usage. Variability in the amounts billed to the customer and revenue recognized coincides with the customer’s level of usage or value received by the customer. Travel Network's revenue for air transactions is recognized at the time of booking of the reservation, net of estimated future cancellations. Travel Network's revenue for car rental, hotel transactions and other travel providers is recognized at the time the reservation is used by the customer. Airline Solutions and Hospitality Solutions —Airline Solutions and Hospitality Solutions provide technology solutions and other professional services to airlines, hotels and other business consumers in the travel industry. The technology solutions are primarily provided in a SaaS or hosted environment. Customers are normally charged an upfront solutions fee and a recurring usage-based fee for the use of the software, which represents a stand-ready performance obligation where our systems perform the same service each day for the customer, based on the customer’s level of usage. Upfront solutions fees are recognized primarily on a straight-line basis over the relevant contract term, upon cut-over of the primary SaaS solution. Variability in the usage-based fee that does not align with the value provided to the customer can result in a difference between billings to the customer and the timing of contract performance and revenue recognition. This may result in a requirement to forecast expected usage-based fees and volumes over the contract term in order to determine rate for revenue recognition. This variable consideration is constrained if there is an inability to reliably forecast this revenue. Other revenue recognition patterns Airline Solutions also provides other services including development labor or professional consulting. These services can be sold separately or with other products and services, and Airline Solutions may bundle multiple technology solutions in one arrangement with these other services. Revenue from other services consisting of development services that represent minor configuration or professional consulting is generally recognized over the period the services are performed or upon completed delivery. Airline Solutions also directly licenses certain software to its customers where the customer obtains control of the license. Revenue from software license fees is recognized when the customer gains control of the software enabling them to directly use the software and obtain substantially all of the remaining benefits. Fees for ongoing software maintenance are recognized ratably over the life of the contract. Under these arrangements, often we are entitled to minimum fees which are collected over the term of the agreement, while the revenue from the license is recognized at the point when the customer gains control, which results in current and long-term unbilled receivables for these arrangements. Variability in the amounts billed to the customer and revenue recognized coincides with the customer’s level of usage with the exception of upfront solution fees, variable consideration, license and maintenance agreements and other services including development labor and professional consulting. Contracts with the same customer which are entered into at or around the same period are analyzed for revenue recognition purposes on a combined basis across our businesses which can impact our revenue recognized. Revenue recognition from our Airline Solutions business requires significant judgments such as identifying distinct performance obligations including material rights within an agreement, estimation of SSP, determination of whether variable pricing within a contract meets the allocation objective and forecasting future volumes. For a small subset of our contracts, we are required to forecast volumes as a result of pricing variability within the contract in order to calculate the net effective rate. Any changes in these judgments and estimates could have an impact on the revenue recognized in future periods. We evaluate whether it is appropriate to record the gross amount of our revenues and related costs by considering whether the entity is a principal (gross presentation) or an agent (net presentation) by evaluating the nature of our promise to the customer. We report revenue net of any revenue based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue producing transactions. The following table presents our revenues disaggregated by business (in thousands): Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Air $ 566,887 $ 1,747,518 Lodging, Ground and Sea 88,467 264,498 Other 44,842 129,001 Total Travel Network 700,196 2,141,017 SabreSonic Passenger Reservation System 127,298 377,476 Commercial and Operations Solutions (1) 81,253 239,813 Other 837 3,524 Total Airline Solutions 209,388 620,813 SynXis Software and Services 62,036 182,251 Other 7,875 24,102 Total Hospitality Solutions 69,911 206,353 Eliminations (9,212 ) (25,155 ) Total Sabre Revenue $ 970,283 $ 2,943,028 (1) Includes $12 million and $25 million of license fee revenue recognized upon delivery to the customer for the three and nine months ended September 30, 2018 , respectively. Contract Costs We incur contract acquisition costs related to new contracts with our customers in the form of sales commissions based on estimated contract value for our Airline Solutions and Hospitality Solutions businesses. These costs are capitalized, and our capitalization policy for these costs includes an annual review of the historical costs incurred to specifically obtain a new contract, as a percentage of total costs, to determine the capitalized amount for the annual period. We generally amortize these costs over the average contract term for those businesses, excluding commissions on contracts with a term of one year or less, which are generally expensed in the period earned and recorded within selling, general and administrative expenses. We also capitalize contract fulfillment costs, also referred to as capitalized implementation costs. We periodically assess contract costs for recoverability, and our assessment resulted in impairments of approximately $1 million for the nine months ended September 30, 2018 . See Note 1. Summary of Business and Significant Accounting Policies in our consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on February 16, 2018 , as updated by our Current Report on Form 8-K/A filed with the SEC on May 3, 2018, for an overview of our policy for capitalization of implementation costs. The following table presents the changes in contract acquisition costs and capitalized implementation costs (in thousands): September 30, 2018 Contract acquisition costs: Beginning balance (1/1/2018) $ 19,353 Additions 5,533 Amortization (4,745 ) Other 425 Ending balance $ 20,566 Capitalized implementation costs: Beginning balance (1/1/2018) $ 194,501 Additions 29,781 Amortization (30,511 ) Other (1,733 ) Ending balance $ 192,038 Practical Expedients and Exemptions There are several practical expedients and exemptions allowed under ASC 606 that impact timing of revenue recognition and our disclosures. Below is a list of practical expedients we applied in the adoption and application of ASC 606: Application • When we have a right to receive consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, we recognize revenue in the amount to which we have a right to invoice. • We apply the allocation objective expedient where applicable, which precludes the requirement to allocate revenue across multiple performance obligations based on total transaction price. • We do not evaluate a contract for a significant financing component if payment is expected within one year or less from the transfer of the promised items to the customer. • We generally expense sales commissions when incurred when the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses. We also used the practical expedient to calculate contract acquisition costs based on a portfolio of contracts with similar characteristics instead of a contract by contract analysis. Modified Retrospective Transition Adjustments • For contract modifications, we reflected the aggregate effect of all modifications that occurred prior to the adoption date when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price to satisfied and unsatisfied performance obligations for the modified contract at transition. |
Impairment and Related Charges
Impairment and Related Charges | 9 Months Ended |
Sep. 30, 2018 | |
Asset Impairment Charges [Abstract] | |
Impairment and Related Charges | 3. Impairment and Related Charges Capitalized implementation costs and deferred customer advances and discounts (now referred to as contract assets) are reviewed for impairment if events and circumstances indicate that their carrying amounts may not be recoverable. See Note 1. Summary of Business and Significant Accounting Policies and Note 4. Impairment and Related Charges in our consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on February 16, 2018 , as updated by our Current Report on Form 8-K/A filed with the SEC on May 3, 2018, for more information. During the year ended December 31, 2017 , we evaluated the recoverability of net capitalized contract costs related to an Airline Solutions' customer and recorded a charge of $92 million in the second quarter of 2017, which was subsequently reduced to $81 million in the fourth quarter of 2017. For the nine months ended September 30, 2018 , there have been no adjustments to amounts previously recorded in 2017. Given the uncertainty associated with the ultimate resolution of the dispute with the customer, there could be further adjustments to our consolidated statement of operations. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 4. Income Taxes On December 22, 2017, the TCJA was signed into law. The TCJA contains significant changes to the U.S. corporate income tax system, including a reduction of the federal corporate income tax rate from 35% to 21% , a limitation of the tax deduction for interest expense to 30% of adjusted taxable income (as defined in the TCJA), base erosion and anti-avoidance tax ("BEAT"), foreign-derived intangible income ("FDII") and global intangible low-taxed income ("GILTI"), one-time taxation of offshore earnings at reduced rates in connection with the transition of U.S. international taxation from a worldwide tax system to a territorial tax system ("transition tax"), elimination of U.S. tax on foreign earnings (subject to certain important exceptions), and modifying or repealing many business deductions and credits. As of September 30, 2018 , we have not completed our December 31, 2017 accounting of the tax effects of the enactment of the TCJA due to complexities of the TCJA, pending clarifications and additional information needed to finalize certain calculations. We recorded a reasonable estimate in our results of operations for the year ended December 31, 2017 of the effects on our existing deferred tax balances, the one-time transition tax and the effect of the TCJA on our liability related to the tax receivable agreement ("TRA"). See Note 7. Income Taxes in our consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on February 16, 2018, as updated by our Current Report on Form 8-K/A filed with the SEC on May 3, 2018, for more information. In the second quarter of 2018, we remeasured certain deferred tax assets based on a change in the estimate of the tax rate at which they are expected to be reversed. This change resulted from our decision during the quarter to elect to utilize our net operating loss carryforwards ("NOLs") to offset the impacts of the transition tax. As a result of this remeasurement, we recorded a decrease in our deferred tax liability of $19 million , which decreased our income tax expense from continuing operations. We expect to finalize the accounting for the effects of the TCJA during the fourth quarter of 2018, in accordance with SEC Staff Accounting Bulletin No. 118 ("SAB 118"), and these adjustments will be reported as a component of income tax expense from continuing operations. Our effective tax rate for the nine months ended September 30, 2018 was 19% due to the deferred tax benefit recognized in the second quarter of 2018 and the favorable impact of our geographic mix of taxable income in various jurisdictions, partially offset by a net increase due to the impacts of TCJA. Our effective tax rate for the nine months ended September 30, 2017 was 25% due to the favorable impact of our geographic mix of taxable income in various jurisdictions and the tax impact from an impairment charge associated with an Airline Solutions’ customer contract, which was recognized as a tax benefit in the second quarter of 2017. See Note 3. Impairment and Related Charges . We recognize liabilities when we believe that an uncertain tax position may not be fully sustained upon examination by the tax authorities. This requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. When facts and circumstances change, we reassess these probabilities and record any changes in the consolidated financial statements as appropriate. In the three and nine months ended September 30, 2018 , we recognized tax benefits of $2 million and $4 million , respectively, associated with the net reversal of income tax reserves across our jurisdictions. Our net unrecognized tax benefits, excluding interest and penalties, included in our consolidated balance sheets, were $67 million and $74 million as of September 30, 2018 and December 31, 2017 , respectively. Other Matters In July 2018, the U.S. Court of Appeals for the Ninth Circuit reversed the decision of the U.S. Tax Court in Altera Corp. v. Commissioner related to the treatment of stock-based compensation in an intercompany cost-sharing arrangement. In August 2018, this ruling was withdrawn leaving the Tax Court decision in effect. Considering the withdrawal, there is no current impact or change to our treatment of stock-based compensation; however, we will continue to monitor this case and evaluate any future impacts if and when those occur. Tax Receivable Agreement Immediately prior to the closing of our initial public offering in April 2014, we entered into the TRA, which provides the right to receive future payments from us to stockholders and equity award holders that were our stockholders and equity award holders, respectively, immediately prior to the closing of our initial public offering (collectively, the “Pre-IPO Existing Stockholders”). The future payments will equal 85% of the amount of cash savings, if any, in U.S. federal income tax that we and our subsidiaries realize as a result of the utilization of certain tax assets attributable to periods prior to our initial public offering, including NOLs, capital losses and the ability to realize tax amortization of certain intangible assets (collectively, the “Pre-IPO Tax Assets”). Consequently, stockholders who are not Pre-IPO Existing Stockholders will only be entitled to the economic benefit of the Pre-IPO Tax Assets to the extent of our continuing 15% interest in those assets. These payment obligations are our obligations and not obligations of any of our subsidiaries. The actual utilization of the Pre-IPO Tax Assets, as well as the timing of any payments under the TRA, will vary depending upon a number of factors, including the amount, character and timing of our and our subsidiaries’ taxable income in the future. Based on current tax laws and assuming that we and our subsidiaries earn sufficient taxable income to realize the full tax benefits subject to the TRA, we estimate that payments under the TRA relating to the Pre-IPO Tax Assets total $328 million , excluding interest. This includes a provisional reduction recorded in the fourth quarter of 2017 of $60 million in the TRA liability primarily resulting from the enactment of TCJA which reduced the U.S. corporate income tax rate. The TRA payments accrue interest in accordance with the terms of the TRA. The estimate of future payments considers the impact of Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), which imposes an annual limit on the ability of a corporation that undergoes an ownership change to use its NOLs to reduce its liability. We do not anticipate any material limitations on our ability to utilize NOLs under Section 382 of the Code. We expect a majority of the future payments under the TRA to be made over the next two years . We made payments of $60 million and $101 million , which included accrued interest of approximately $1 million each year, in January 2018 and 2017, respectively. As of September 30, 2018 , the current portion of our TRA liability totaled $94 million , which includes approximately $2 million of accrued interest, and the remaining portion of $77 million is included in other noncurrent liabilities in our consolidated balance sheet as of September 30, 2018 . Payments under the TRA are not conditioned upon the parties’ continuing ownership of the company. Changes in the utility of the Pre-IPO Tax Assets will impact the amount of the liability recorded in respect of the TRA. Changes in the utility of these Pre-IPO Tax Assets are recorded in income tax expense and any changes in the obligation under the TRA are recorded in other expense. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 5. Debt As of September 30, 2018 and December 31, 2017 , our outstanding debt included in our consolidated balance sheets totaled $3,420 million and $3,456 million , respectively, which are net of debt issuance costs of $19 million and $23 million , respectively, and unamortized discounts of $8 million and $9 million , respectively. The following table sets forth the face values of our outstanding debt as of September 30, 2018 and December 31, 2017 (in thousands): Rate Maturity September 30, 2018 December 31, 2017 Senior secured credit facilities: Term Loan A L + 2.00% July 2022 $ 534,375 $ 555,750 Term Loan B (1) L + 2.00% February 2024 1,866,940 1,881,048 Revolver, $400 million L + 2.00% July 2022 — — 5.375% senior secured notes due 2023 5.375% April 2023 530,000 530,000 5.25% senior secured notes due 2023 5.25% November 2023 500,000 500,000 Capital lease obligations 15,856 21,235 Face value of total debt outstanding 3,447,171 3,488,033 Less current portion of debt outstanding (64,225 ) (57,138 ) Face value of long-term debt outstanding $ 3,382,946 $ 3,430,895 ______________________________ (1) Pursuant to the March 2, 2018 refinancing, the interest rate on the Term Loan B was reduced from L+ 2.25% to L+ 2.00% . Senior Secured Credit Facilities In February 2013, Sabre GLBL entered into the Amended and Restated Credit Agreement. The agreement replaced (i) the existing term loans with new classes of term loans of $1,775 million (the “2013 Term Loan B”) and $425 million (the “2013 Term Loan C”) and (ii) the existing revolving credit facility with a new revolving credit facility of $352 million (the “2013 Revolver”). In September 2013, Sabre GLBL entered into an agreement to amend the Amended and Restated Credit Agreement to add a new class of term loans in the amount of $350 million (the “2013 Incremental Term Loan Facility”). In July 2016, Sabre GLBL entered into a series of amendments (the “Credit Agreement Amendments”) to our Amended and Restated Credit Agreement to provide for an incremental term loan under a new class with an aggregate principal amount of $600 million (the “2016 Term Loan A”) and to replace the 2013 Revolver with a new revolving credit facility totaling $400 million (the “2016 Revolver”). The proceeds of $597 million , net of $3 million discount, from the 2016 Term Loan A, were used to repay $350 million of outstanding principal on our 2013 Term Loan B and 2013 Incremental Term Loan Facility, on a pro rata basis, repay the $120 million then-outstanding balance on the 2016 Revolver, and pay $11 million in associated financing fees. We recognized a $4 million loss on extinguishment of debt in connection with these transactions during the year ended December 31, 2016 . On February 22, 2017, Sabre GLBL entered into a Third Incremental Term Facility Amendment to our Amended and Restated Credit Agreement (the “2017 Term Facility Amendment”). The new agreement replaced the 2013 Term Loan B, 2013 Incremental Term Loan Facility and 2013 Term Loan C with a single class of term loan (the "2017 Term Loan B") with an aggregate principal amount of $1,900 million maturing on February 22, 2024. The proceeds of $1,898 million , net of $2 million discount on the 2017 Term Loan B, were used to pay off approximately $1,761 million of all existing classes of outstanding term loans (other than the 2016 Term Loan A), pay related accrued interest and pay $12 million in associated financing fees, which were recorded as debt modification costs in Other, net in the consolidated statement of operations during the three months ended March 31, 2017. The remaining proceeds of the 2017 Term Loan B were used to pay off approximately $80 million of Sabre’s outstanding mortgage on its corporate headquarters on March 31, 2017, and for other general corporate purposes. Unamortized debt issuance costs and discount related to existing classes of outstanding term loans prior to the 2017 Term Facility Amendment of $9 million and $3 million , respectively, will continue to be amortized over the remaining term of the 2017 Term Loan B along with the Term Loan B discount of $2 million . See Note 6. Derivatives for information regarding the discontinuation of hedge accounting related to our existing interest rate swaps as a result of the 2017 Term Facility Amendment. On August 23, 2017, Sabre GLBL entered into a Fourth Incremental Term Facility Amendment to our Amended and Restated Credit Agreement, Term Loan A Refinancing Amendment to the Credit Agreement, and Second Revolving Facility Refinancing Amendment to the Credit Agreement to refinance and modify the terms of the 2017 Term Loan B, the 2016 Term Loan A, and the 2016 Revolver, resulting in a reduction of the applicable margins for each of these instruments and approximately a one -year extension of the maturity of the 2016 Term Loan A and 2016 Revolver (the “2017 Refinancing”). We incurred no additional indebtedness as a result of the 2017 Refinancing. The 2017 Refinancing included a $400 million revolving credit facility ("Revolver") that replaced the 2016 Revolver, as well as the application of the proceeds of the approximately $1,891 million incremental Term Loan B facility (“Term Loan B”) and $570 million Term Loan A facility (“Term Loan A”) to replace the 2017 Term Loan B and the 2016 Term Loan A. The maturity of the Revolver and the Term Loan A was extended from July 18, 2021 to July 1, 2022. The applicable margins for the Term Loan B were reduced to 2.25% per annum for Eurocurrency rate loans and 1.25% per annum for base rate loans. The applicable margins for the Term Loan A and the Revolver were reduced to (i) between 2.50% and 1.75% per annum for Eurocurrency rate loans and (ii) between 1.50% and 0.75% per annum for base rate loans, in each case with the applicable margin for any quarter reduced by 25 basis points (up to 75 basis points total) if the Senior Secured First-Lien Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement) is less than 3.75 to 1.0, 3.00 to 1.0, or 2.25 to 1.0, respectively. On March 2, 2018 , Sabre GLBL entered into a Fifth Incremental Term Facility Amendment to our Amended and Restated Credit Agreement to refinance and modify the terms of the Term Loan B, resulting in a reduction of the applicable margins for the Term Loan B to 2.00% per annum for Eurocurrency rate loans and 1.00% per annum for base rate loans. We incurred no additional indebtedness as a result of this transaction and incurred $2 million in financing fees recorded within Other, net and a $1 million loss on extinguishment of debt, in our consolidated results of operations during the nine months ended September 30, 2018 . We had no balance outstanding under the Revolver as of September 30, 2018 and as of December 31, 2017 . We had outstanding letters of credit totaling $15 million and $21 million as of September 30, 2018 and December 31, 2017 , respectively, which reduced our overall credit capacity under the Revolver. |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | 6. Derivatives Hedging Objectives —We are exposed to certain risks relating to ongoing business operations. The primary risks managed by using derivative instruments are foreign currency exchange rate risk and interest rate risk. Forward contracts on various foreign currencies are entered into to manage the foreign currency exchange rate risk on operational expenditures' exposure denominated in foreign currencies. Interest rate swaps are entered into to manage interest rate risk associated with our floating-rate borrowings. In accordance with authoritative guidance on accounting for derivatives and hedging, we designate foreign currency forward contracts as cash flow hedges on operational exposure and certain interest rate swaps as cash flow hedges of floating-rate borrowings. Cash Flow Hedging Strategy —To protect against the reduction in value of forecasted foreign currency cash flows, we hedge portions of our revenues and expenses denominated in foreign currencies with forward contracts. For example, when the dollar strengthens significantly against the foreign currencies, the decline in present value of future foreign currency expense is offset by losses in the fair value of the forward contracts designated as hedges. Conversely, when the dollar weakens, the increase in the present value of future foreign currency expense is offset by gains in the fair value of the forward contracts. We enter into interest rate swap agreements to manage interest rate risk exposure. The interest rate swap agreements modify our exposure to interest rate risk by converting floating-rate debt to a fixed rate basis, thus reducing the impact of interest rate changes on future interest expense and net earnings. These agreements involve the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreements without an exchange of the underlying principal amount. For derivative instruments that are designated and qualify as cash flow hedges, the effective and ineffective portions of the gain or loss on the derivative instrument, and the hedge components excluded from the assessment of effectiveness, are reported as a component of other comprehensive income (loss) (“OCI”) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings. Derivatives not designated as hedging instruments are carried at fair value with changes in fair value reflected in Other, net in the consolidated statements of operations. Forward Contracts —In order to hedge our operational expenditures' exposure to foreign currency movements, we are a party to certain foreign currency forward contracts that extend until September 2019. We have designated these instruments as cash flow hedges. No hedging ineffectiveness was recorded in earnings relating to the forward contracts during the three and nine months ended September 30, 2018 and 2017 . As of September 30, 2018 , we estimate that $7 million in losses will be reclassified from other comprehensive income (loss) to earnings over the next 12 months. As of September 30, 2018 and December 31, 2017 , we had the following unsettled purchased foreign currency forward contracts that were entered into to hedge our operational exposure to foreign currency movements (in thousands, except for average contract rates): Outstanding Notional Amounts as of September 30, 2018 Buy Currency Sell Currency Foreign Amount USD Amount Average Polish Zloty US Dollar 238,000 66,666 0.2801 Singapore Dollar US Dollar 65,050 48,595 0.7470 Indian Rupee US Dollar 2,735,000 38,769 0.0141 British Pound Sterling US Dollar 20,700 28,371 1.3706 Australian Dollar US Dollar 26,300 19,751 0.7510 Swedish Krona US Dollar 52,200 6,243 0.1196 Brazilian Real US Dollar 20,850 5,628 0.2668 Outstanding Notional Amounts as of December 31, 2017 Buy Currency Sell Currency Foreign Amount USD Amount Average Polish Zloty US Dollar 225,000 61,016 0.2712 Singapore Dollar US Dollar 70,750 52,065 0.7359 British Pound Sterling US Dollar 25,900 34,307 1.3246 Indian Rupee US Dollar 1,720,000 25,939 0.0151 Australian Dollar US Dollar 20,750 15,932 0.7678 Swedish Krona US Dollar 44,100 5,353 0.1214 Brazilian Real US Dollar 16,800 4,976 0.2962 Interest Rate Swap Contracts —Interest rate swaps outstanding during the nine months ended September 30, 2018 and 2017 are as follows: Notional Amount Interest Rate Interest Rate Paid Effective Date Maturity Date Designated as Hedging Instrument $750 million 1 month LIBOR (2) 1.15% March 31, 2017 December 31, 2017 $750 million 1 month LIBOR (2) 1.65% December 29, 2017 December 31, 2018 $1,350 million 1 month LIBOR (2) 2.27% December 31, 2018 December 31, 2019 $1,050 million 1 month LIBOR (2) 2.11% December 31, 2019 December 31, 2020 $450 million 1 month LIBOR (2) 2.82% December 31, 2020 December 31, 2021 Not Designated as Hedging Instrument (1) $750 million 1 month LIBOR (3) 2.19% December 30, 2016 December 29, 2017 $750 million 1.18% 1 month LIBOR March 31, 2017 December 31, 2017 $750 million 1 month LIBOR (3) 2.61% December 29, 2017 December 31, 2018 $750 million 1.67% 1 month LIBOR December 29, 2017 December 31, 2018 ______________________ (1) Subject to a 1% floor. (2) Subject to a 0% floor. (3) As of February 22, 2017. As a result of the 2017 Term Facility Amendment in the first quarter of 2017 , we discontinued hedge accounting for our existing swap agreements as of February 22, 2017. Accumulated losses of $14 million in other comprehensive income as of the date hedge accounting was discontinued is amortized into interest expense through the maturity date of the respective swap agreements, and interest rate swap payments made are recorded in Other, net in the consolidated statement of operations. Losses reclassified from other comprehensive income to interest expense related to the derivatives that no longer qualified for hedge accounting were $2 million and $6 million for the three and nine months ended September 30, 2018 , respectively, and were $2 million and $5 million for the three and nine months ended September 30, 2017 , respectively. We also entered into new interest rate swaps with offsetting terms that are not designated as hedging instruments. Adjustments to the fair value of interest rate swaps not designated as hedging instruments did not have a material impact to our consolidated results of operations for the three and nine months ended September 30, 2018 and 2017 . In connection with the 2017 Term Facility Amendment, we entered into new forward starting interest rate swaps effective March 31, 2017 to hedge the interest payments associated with $750 million of the floating-rate 2017 Term Loan B. The total notional amount outstanding is $750 million in the remaining nine months of 2018 and the full year 2019. In September 2017 , we entered into new forward starting interest rate swaps to hedge the interest payments associated with $750 million of the floating-rate Term Loan B. The total notional outstanding of $750 million becomes effective December 31, 2019 and extends through the full year 2020. In April 2018, we entered into new forward starting interest rate swaps to hedge the interest payments associated with $600 million , $300 million and $450 million of the floating-rate Term Loan B related to full year 2019, 2020 and 2021, respectively. We have designated these swaps as cash flow hedges. The estimated fair values of our derivatives designated as hedging instruments as of September 30, 2018 and December 31, 2017 are as follows (in thousands): Derivative Assets (Liabilities) Fair Value as of Derivatives Designated as Hedging Instruments Consolidated Balance Sheet Location September 30, 2018 December 31, 2017 Foreign exchange contracts Prepaid expenses and other current assets $ — $ 6,213 Foreign exchange contracts Other accrued liabilities (7,142 ) — Interest rate swaps Prepaid expenses and other current assets 5,760 856 Interest rate swaps Other assets, net 12,221 3,093 $ 10,839 $ 10,162 Derivative Assets (Liabilities) Fair Value as of Derivatives Not Designated as Hedging Instruments Consolidated Balance Sheet Location September 30, 2018 December 31, 2017 Interest rate swaps Other accrued liabilities $ (1,841 ) $ (7,119 ) $ (1,841 ) $ (7,119 ) The effects of derivative instruments, net of taxes, on OCI for the three and nine months ended September 30, 2018 and 2017 are as follows (in thousands): Amount of (Loss) Gain Recognized in OCI on Derivative, Effective Portion Three Months Ended September 30, Nine Months Ended September 30, Derivatives in Cash Flow Hedging Relationships 2018 2017 2018 2017 Foreign exchange contracts $ (1,606 ) $ 1,800 $ (7,897 ) $ 10,378 Interest rate swaps 3,042 810 12,018 (1,038 ) Total $ 1,436 $ 2,610 $ 4,121 $ 9,340 Amount of Loss (Gain) Reclassified from Accumulated OCI into Income, Effective Portion Derivatives in Cash Flow Hedging Relationships Income Statement Location Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Foreign exchange contracts Cost of revenue $ 1,558 $ (1,385 ) $ (2,769 ) $ (502 ) Interest rate swaps Interest expense, net 848 1,169 3,496 3,963 Total $ 2,406 $ (216 ) $ 727 $ 3,461 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 7. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for that asset or liability. Guidance on fair value measurements and disclosures establishes a valuation hierarchy for disclosure of inputs used in measuring fair value defined as follows: Level 1-Inputs are unadjusted quoted prices that are available in active markets for identical assets or liabilities. Level 2-Inputs include quoted prices for similar assets and liabilities in active markets and quoted prices in non-active markets, inputs other than quoted prices that are observable, and inputs that are not directly observable, but are corroborated by observable market data. Level 3-Inputs that are unobservable and are supported by little or no market activity and reflect the use of significant management judgment. The classification of a financial asset or liability within the hierarchy is determined based on the least reliable level of input that is significant to the fair value measurement. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. We also consider the counterparty and our own non-performance risk in our assessment of fair value. Assets and Liabilities that are Measured at Fair Value on a Recurring Basis Foreign Currency Forward Contracts —The fair value of the foreign currency forward contracts is estimated based upon pricing models that utilize Level 2 inputs derived from or corroborated by observable market data such as currency spot and forward rates. Interest Rate Swaps— The fair value of our interest rate swaps is estimated using a combined income and market-based valuation methodology based upon Level 2 inputs, including credit ratings and forward interest rate yield curves obtained from independent pricing services reflecting broker market quotes. The following tables present our assets (liabilities) that are required to be measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 (in thousands): Fair Value at Reporting Date Using September 30, 2018 Level 1 Level 2 Level 3 Derivatives: Foreign currency forward contracts $ (7,142 ) $ — $ (7,142 ) $ — Interest rate swap contracts 16,140 — 16,140 — Total $ 8,998 $ — $ 8,998 $ — Fair Value at Reporting Date Using December 31, 2017 Level 1 Level 2 Level 3 Derivatives: Foreign currency forward contracts $ 6,213 $ — $ 6,213 $ — Interest rate swap contracts (3,170 ) — (3,170 ) — Total $ 3,043 $ — $ 3,043 $ — There were no transfers between Levels 1 and 2 within the fair value hierarchy for the three and nine months ended September 30, 2018 . Other Financial Instruments The carrying value of our financial instruments including cash and cash equivalents, and accounts receivable approximates their fair values. The fair values of our senior secured notes due 2023 and term loans under our Amended and Restated Credit Agreement are determined based on quoted market prices for a similar liability when traded as an asset in an active market, a Level 2 input. The following table presents the fair value and carrying value of our senior notes and borrowings under our senior secured credit facilities as of September 30, 2018 and December 31, 2017 (in thousands): Fair Value at Carrying Value at (1) Financial Instrument September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017 Term Loan A $ 536,379 $ 559,223 $ 532,497 $ 553,444 Term Loan B 1,876,274 1,890,453 1,860,937 1,873,993 Revolver, $400 million — — — — 5.375% Senior secured notes due 2023 533,684 546,563 530,000 530,000 5.25% Senior secured notes due 2023 501,265 512,500 500,000 500,000 ______________________________ (1) Excludes net unamortized debt issuance costs. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 8. Accumulated Other Comprehensive Income (Loss) As of September 30, 2018 and December 31, 2017 , the components of accumulated other comprehensive income (loss), net of related deferred income taxes, are as follows (in thousands): September 30, 2018 December 31, 2017 Defined benefit pension and other post retirement benefit plans $ (121,469 ) $ (102,623 ) Unrealized foreign currency translation gain 7,330 11,488 Unrealized gain on foreign currency forward contracts and interest rate swaps 6,993 2,651 Total accumulated other comprehensive loss, net of tax $ (107,146 ) $ (88,484 ) The amortization of actuarial losses and periodic service credits associated with our retirement-related benefit plans is primarily included in other, net in the consolidated statements of operations. Defined benefit pension plans loss increased approximately $22 million in the second quarter of 2018 upon adoption of the new accounting standard related to the enactment of the TCJA that allows the reclassification of stranded tax effects recorded in accumulated other comprehensive income (loss) to retained earnings. See Note 1. General Information for more information. For information on the income statement line items affected as the result of reclassification adjustments associated with derivatives, see Note 6. Derivatives . |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 9. Earnings Per Share The following table reconciles the numerators and denominators used in the computations of basic and diluted earnings per share from continuing operations (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Income from continuing operations $ 70,879 $ 92,825 $ 253,893 $ 166,395 Less: Net income attributable to noncontrolling interests 1,538 1,307 3,979 3,726 Net income from continuing operations available to common stockholders, basic and diluted $ 69,341 $ 91,518 $ 249,914 $ 162,669 Denominator: Basic weighted-average common shares outstanding 275,175 277,477 275,205 277,754 Add: Dilutive effect of stock options and restricted stock awards 2,353 892 1,614 1,894 Diluted weighted-average common shares outstanding 277,528 278,369 276,819 279,648 Earnings per share from continuing operations: Basic $ 0.25 $ 0.33 $ 0.91 $ 0.59 Diluted $ 0.25 $ 0.33 $ 0.90 $ 0.58 Basic earnings per share are based on the weighted-average number of common shares outstanding during each period. Diluted earnings per share are based on the weighted-average number of common shares outstanding plus the effect of all dilutive common stock equivalents during each period. The calculation of diluted weighted-average shares excludes the impact of 2 million and 3 million of anti-dilutive common stock equivalents for the three and nine months ended September 30, 2018 , respectively. The calculation of diluted weighted-average shares excludes the impact of 8 million and 5 million of anti-dilutive common stock equivalents for the three and nine months ended September 30, 2017 , respectively. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 10. Contingencies Legal Proceedings While certain legal proceedings and related indemnification obligations to which we are a party specify the amounts claimed, these claims may not represent reasonably possible losses. Given the inherent uncertainties of litigation, the ultimate outcome of these matters cannot be predicted at this time, nor can the amount of possible loss or range of loss, if any, be reasonably estimated, except in circumstances where an aggregate litigation accrual has been recorded for probable and reasonably estimable loss contingencies. A determination of the amount of accrual required, if any, for these contingencies is made after careful analysis of each matter. The required accrual may change in the future due to new information or developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters. Antitrust Litigation and DOJ Investigation US Airways Antitrust Litigation In April 2011, US Airways filed suit against us in federal court in the Southern District of New York, alleging violations of the Sherman Act Section 1 (anticompetitive agreements) and Section 2 (monopolization). The complaint was filed fewer than two months after we entered into a new distribution agreement with US Airways. In September 2011, the court dismissed all claims relating to Section 2. The claims that were not dismissed are claims brought under Section 1 of the Sherman Act, relating to our contracts with US Airways, which US Airways claims contain anticompetitive provisions, and an alleged conspiracy with the other GDSs, allegedly to maintain the industry structure and not to compete for content. We strongly deny all of the allegations made by US Airways. Sabre filed summary judgment motions in April 2014. In January 2015, the court issued an order granting Sabre's summary judgment motions in part, eliminating a majority of US Airways' alleged damages and rejecting its request for injunctive relief by which US Airways sought to bar Sabre from enforcing certain provisions in our contracts. In September 2015, the court also dismissed US Airways' claim for declaratory relief. In February 2017, US Airways sought reconsideration of the court's opinion dismissing the claim for declaratory relief, which the court denied in March 2017. The trial on the remaining claims commenced in October 2016. In December 2016, the jury issued a verdict in favor of US Airways with respect to its claim under Section 1 of the Sherman Act regarding Sabre's contract with US Airways and awarded it $5 million in single damages. The jury rejected US Airways' claim alleging a conspiracy with the other GDSs. We continue to believe that our business practices and contract terms are lawful. In January 2017, we filed a motion seeking judgment as a matter of law in favor of Sabre on the one claim on which the jury found for US Airways, which the court denied in March 2017. Based on the jury’s verdict, in March 2017 the court entered final judgment in favor of US Airways in the amount of $15 million , which is three times the jury’s award of $5 million as required by the Sherman Act. In April 2017, we filed an appeal with the United States Court of Appeals for the Second Circuit seeking a reversal of the judgment. US Airways also filed a counter-appeal challenging earlier court orders, including the above-referenced orders dismissing and/or issuing summary judgment as to portions of its claims and damages. In connection with this appeal, we posted an appellate bond equal to the aggregate amount of the $15 million judgment entered plus interest, which stayed the judgment pending the appeal. As a result of the jury's verdict, US Airways is also entitled to receive reasonable attorneys’ fees and costs under the Sherman Act. As such, it filed a motion seeking approximately $125 million in attorneys’ fees and costs, the amount of which we strongly dispute. In January 2018, the court denied US Airways' motion seeking attorneys' fees and costs, based on the fact that the appeal of the underlying judgment remains pending, as discussed above. The court's denial of the motion was without prejudice, and US Airways may refile the motion if it prevails on the appeal. We have accrued a loss of $32 million , which represents the court's final judgment of $15 million , plus our estimate of $17 million for US Airways' reasonable attorneys’ fees, expenses and costs. We are unable to estimate the exact amount of the loss associated with the verdict, but we estimate that there is a range of outcomes between $32 million and $65 million , inclusive of the trebled damage award of approximately $15 million . No amount within the range is considered a better estimate than any other amount within the range and therefore, the minimum within the range was recorded in selling, general and administrative expense in the fourth quarter of 2016. As noted above, the amount of attorneys' fees and costs to be awarded is subject to conclusion of the appellate process and, if US Airways ultimately prevails on the appeal, final decision by the trial court, which may itself be appealed. The ultimate resolution of this matter may be greater or less than the amount recorded and, if greater, could adversely affect our results of operations. We have and will incur significant fees, costs and expenses for as long as the lawsuit, including any appeal, is ongoing. In addition, litigation by its nature is highly uncertain and fraught with risk, and it is therefore difficult to predict the outcome of any particular matter, including any appeal or changes to our business that may be required as a result of the litigation. Depending on the outcome of the litigation, any of these consequences could have a material adverse effect on our business, financial condition and results of operations. Putative Class Action Lawsuit on Antitrust Claims In July 2015, a putative class action lawsuit was filed against us and two other GDSs, in the United States District Court for the Southern District of New York. The plaintiffs, who are asserting claims on behalf of a putative class of consumers in various states, are generally alleging that the GDSs conspired to negotiate for full content from the airlines, resulting in higher ticket prices for consumers, in violation of various federal and state laws. The plaintiffs sought an unspecified amount of damages in connection with their state law claims, and they requested injunctive relief in connection with their federal claim. In July 2016, the court granted, in part, our motion to dismiss the lawsuit, finding that plaintiffs’ state law claims are preempted by federal law, thereby precluding their claims for damages. The court declined to dismiss plaintiffs’ claim seeking an injunction under federal antitrust law. The plaintiffs may appeal the court’s dismissal of their state law claims upon a final judgment. In August 2018, the plaintiffs sought leave from the court to withdraw their motion for class certification. In October 2018, the court denied the plaintiffs’ motion for class certification, with prejudice. We believe that the losses associated with this case are neither probable nor estimable and therefore have not accrued any losses as of September 30, 2018 . We may incur significant fees, costs and expenses for as long as this litigation is ongoing. We intend to vigorously defend against the remaining claims. Department of Justice Investigation On May 19, 2011, we received a civil investigative demand (“CID”) from the U.S. Department of Justice (“DOJ”) investigating alleged anticompetitive acts related to the airline distribution component of our business. We are fully cooperating with the DOJ investigation and are unable to make any prediction regarding its outcome. The DOJ is also investigating other companies that own GDSs, and has sent CIDs to other companies in the travel industry. Based on its findings in the investigation, the DOJ may (i) close the file, (ii) seek a consent decree to remedy issues it believes violate the antitrust laws, or (iii) file suit against us for violating the antitrust laws, seeking injunctive relief. If injunctive relief were granted, depending on its scope, it could affect the manner in which our airline distribution business is operated and potentially force changes to the existing airline distribution business model. Any of these consequences would have a material adverse effect on our business, financial condition and results of operations. We have not received any communications from the DOJ regarding this matter for several years; however, we have not been notified that this matter is closed. Indian Income Tax Litigation We are currently a defendant in income tax litigation brought by the Indian Director of Income Tax (“DIT”) in the Supreme Court of India. The dispute arose in 1999 when the DIT asserted that we have a permanent establishment within the meaning of the Income Tax Treaty between the United States and the Republic of India and accordingly issued tax assessments for assessment years ending March 1998 and March 1999, and later issued further tax assessments for assessment years ending March 2000 through March 2006. The DIT has continued to issue further tax assessments on a similar basis for subsequent years; however, the tax assessments for assessment years ending March 2007 and later are no longer material. We appealed the tax assessments for assessment years ending March 1998 through March 2006 and the Indian Commissioner of Income Tax Appeals returned a mixed verdict. We filed further appeals with the Income Tax Appellate Tribunal (“ITAT”). The ITAT ruled in our favor on June 19, 2009 and July 10, 2009, stating that no income would be chargeable to tax for assessment years ending March 1998 and March 1999, and from March 2000 through March 2006. The DIT appealed those decisions to the Delhi High Court, which found in our favor on July 19, 2010. The DIT has appealed the decision to the Supreme Court of India. Our case has been listed for hearing with the Supreme Court, and it has not yet been presented. We have appealed the tax assessments for the assessment years ended March 2013 and March 2015 with the ITAT and no trial date has been set for these subsequent years. In addition, Sabre Asia Pacific Pte Ltd ("SAPPL") is currently a defendant in similar income tax litigation brought by the DIT. The dispute arose when the DIT asserted that SAPPL has a permanent establishment within the meaning of the Income Tax Treaty between Singapore and India and accordingly issued tax assessments for assessment years ending March 2000 through March 2005. SAPPL appealed the tax assessments, and the Indian Commissioner of Income Tax (Appeals) returned a mixed verdict. SAPPL filed further appeals with the ITAT. The ITAT ruled in SAPPL’s favor, finding that no income would be chargeable to tax for assessment years ending March 2000 through March 2005. The DIT appealed those decisions to the Delhi High Court. No hearing date has been set. The DIT also assessed taxes on a similar basis for assessment years ending March 2006 through March 2014 and appeals for assessment years ending March 2006 through 2014 are pending before the ITAT. If the DIT were to fully prevail on every claim against us, including SAPPL, we could be subject to taxes, interest and penalties of approximately $42 million as of September 30, 2018 . We intend to continue to aggressively defend against each of the foregoing claims. Although we do not believe that the outcome of the proceedings will result in a material impact on our business or financial condition, litigation is by its nature uncertain. We do not believe this outcome is more likely than not and therefore have not made any provisions or recorded any liability for the potential resolution of any of these claims. Indian Service Tax Litigation SAPPL's Indian subsidiary is also subject to litigation by the India Director General (Service Tax) ("DGST"), which has assessed the subsidiary for multiple years related to its alleged failure to pay service tax on marketing fees and reimbursements of expenses. Indian courts have returned verdicts favorable to the Indian subsidiary. The DGST has appealed the verdict to the Indian Supreme Court. We do not believe that an adverse outcome is probable and therefore have not made any provisions or recorded any liability for the potential resolution of any of these claims. Other Tax Matters We pay and collect Value Added Tax (“VAT”) in most countries in which we operate related to the procurement of goods and services or the sale of services within the normal course of our business. We establish VAT receivables for the collection of refunds, which are subject to audit and collection risks in various countries. As of September 30, 2018 , we have approximately $20 million in VAT receivables resulting from claims with the Greek government beginning in 2014, which we have paid and we believe we are entitled to recover as a refund. The Greek tax authorities are currently reviewing our refund claims for 2014 and 2015 totaling $8 million . Their preliminary audit report issued in October 2018 rejected the recoverability of these refund claims and instead claimed additional tax, penalties and interest due of $5 million . If our claims are rejected by the tax authorities in their final audit report, we intend to aggressively defend our positions. In the event of an adverse ruling, claims for years subsequent to 2015 may not be collectible and any prior refunds received may potentially be reversed to the extent the applicable statute of limitations has not expired. We do not believe that an adverse outcome is probable with respect to Greek tax authorities’ claims for the amounts recently assessed and therefore have not accrued any losses for the potential resolution of any of these claims; however we may incur expenses in future periods including litigation costs and pre-payment of a portion of the tax amount in order to defend our position. We operate in a number of jurisdictions in which the taxing authorities may challenge our tax positions. We routinely receive inquires, and may receive tax assessments in these additional foreign jurisdictions and we recognize liabilities when we believe it’s probable that amounts will be owed to the taxing authorities and such amounts are estimable. We continue to defend against any and all such claims as presented and may be required to prepay assessed amounts. As of September 30, 2018, we have accrued $5 million for probable exposure related to such contingencies. If our positions are ultimately rejected it could have a material impact to our results of operations. Litigation Relating to Routine Proceedings We are also engaged from time to time in other routine legal and tax proceedings incidental to our business. We do not believe that any of these routine proceedings will have a material impact on the business or our financial condition. Other Air Berlin In November 2017, in connection with Air Berlin’s insolvency proceedings, we requested that Air Berlin make an election under the German Insolvency Act on whether to perform or terminate its contract with us. In January 2018, Air Berlin notified us by letter that it was exercising its right under the German Insolvency Act to terminate its contract with us. In addition, Air Berlin’s letter alleged various breaches by us of the contract and asserted that it had suffered a significant amount of damages associated with its claims. Air Berlin has not commenced any formal action with respect to its claims. We believe that losses associated with these claims are neither probable nor estimable and therefore have not accrued any losses as of September 30, 2018 . We may incur significant fees, costs and expenses for as long as this matter is ongoing. We intend to vigorously defend against these claims. SynXis Central Reservation System As previously disclosed, we became aware of an incident involving unauthorized access to payment information contained in a subset of hotel reservations processed through the Sabre Hospitality Solutions SynXis Central Reservation System (the “HS Central Reservation System”). Our investigation was supported by third party experts, including a leading cybersecurity firm. Our investigation determined that an unauthorized party: obtained access to account credentials that permitted access to a subset of hotel reservations processed through the HS Central Reservation System; used the account credentials to view a credit card summary page on the HS Central Reservation System and access payment card information (although we use encryption, this credential had the right to see unencrypted card data); and first obtained access to payment card information and some other reservation information on August 10, 2016. The last access to payment card information was on March 9, 2017. The unauthorized party was able to access information for certain hotel reservations, including cardholder name; payment card number; card expiration date; and, for a subset of reservations, card security code. The unauthorized party was also able, in some cases, to access certain information such as guest name(s), email, phone number, address, and other information if provided to the HS Central Reservation System. Information such as Social Security, passport, or driver’s license number was not accessed. The investigation did not uncover forensic evidence that the unauthorized party removed any information from the system, but it is a possibility. We took successful measures to ensure this unauthorized access to the HS Central Reservation System was stopped and is no longer possible. There is no indication that any of our systems beyond the HS Central Reservation System, such as Sabre’s Airline Solutions and Travel Network platforms, were affected or accessed by the unauthorized party. We notified law enforcement and the payment card brands, and engaged a payment card industry data ("PCI") forensic investigator at the payment card brands' request to investigate this incident. We have notified customers and other companies that use or interact with, directly or indirectly, the HS Central Reservation System about the incident. We are also cooperating with various governmental authorities that are investigating this incident. Separately, in November 2017, Sabre Hospitality Solutions observed a pattern of activity that, after further investigation, led it to believe that an unauthorized party improperly obtained access to certain hotel user credentials for purposes of accessing the HS Central Reservation System. We deactivated the compromised accounts and notified law enforcement of this activity. We also notified the payment card brands, and at their request, we have engaged a PCI forensic investigator to investigate this incident. We have not found any evidence of a breach of the network security of the HS Central Reservation System, and we believe that the number of affected reservations represents only a fraction of 1% of the bookings in the HS Central Reservation System. Although the costs related to these incidents, including any associated penalties assessed by any governmental authority or payment card brand or indemnification obligations to our customers, as well as any other impacts or remediation related to this incident, may be material, it is not possible at this time to determine whether we will incur, or to reasonably estimate the amount of, any liabilities in connection with them. We maintain insurance that covers certain aspects of cyber risks, and we continue to work with our insurance carriers in these matters. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 11. Segment Information Our reportable segments are based upon our internal organizational structure; the manner in which our operations are managed; the criteria used by our Chief Executive Officer, who is our Chief Operating Decision Maker ("CODM"), to evaluate segment performance; the availability of separate financial information; and overall materiality considerations. Effective the first quarter of 2018, our business has three reportable segments: (i) Travel Network, (ii) Airline Solutions and (iii) Hospitality Solutions. Each segment now reflects a portion of our shared corporate costs that historically were not allocated to a business unit, based on relative consumption of shared technology infrastructure costs and defined revenue metrics. These changes have no impact on our consolidated results of operations, but result in a decrease of segment profitability only. Our CODM utilizes Adjusted Gross Profit, Adjusted Operating Income and Adjusted EBITDA as the measures of profitability to evaluate performance of our segments and allocate resources. Corporate includes a technology organization that provides development and support activities to our segments. The majority of costs associated with our technology organization are allocated to the segments primarily based on the segments' usage of resources. Benefit expenses, facility costs and depreciation expense on the corporate headquarters building are allocated to the segments based on headcount. Unallocated corporate costs include certain expenses such as accounting, finance, human resources, legal, corporate systems, impairment and related charges, stock-based compensation, restructuring charges, legal reserves and other items not identifiable with one of our segments. We account for significant intersegment transactions as if the transactions were with third parties, that is, at estimated current market prices. The majority of the intersegment revenues and cost of revenues are fees charged by Travel Network to Airline Solutions for airline trips booked through our GDS. Our CODM does not review total assets by segment as operating evaluations and resource allocation decisions are not made on the basis of total assets by segment. The performance of our segments is evaluated primarily on Adjusted Gross Profit, Adjusted Operating Income and Adjusted EBITDA which are not recognized terms under GAAP. Our uses of Adjusted Gross Profit, Adjusted Operating Income and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. We define Adjusted Gross Profit as operating income adjusted for selling, general and administrative expenses, impairment and related charges, the cost of revenue portion of depreciation and amortization, amortization of upfront incentive consideration, restructuring and other costs and stock-based compensation included in cost of revenue. We define Adjusted Operating Income as operating income adjusted for joint venture equity income, impairment and related charges, acquisition-related amortization, restructuring and other costs, litigation costs (reimbursements), net, and stock-based compensation. We define Adjusted EBITDA as income from continuing operations adjusted for depreciation and amortization of property and equipment, amortization of capitalized implementation costs, acquisition-related amortization, amortization of upfront incentive consideration, impairment and related charges, interest expense, net, loss on extinguishment of debt, other, net, restructuring and other costs, litigation costs (reimbursements), net, stock-based compensation and provision for income taxes. Segment information for the three and nine months ended September 30, 2018 and 2017 is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenue Travel Network $ 700,196 $ 632,349 $ 2,141,017 $ 1,931,441 Airline Solutions 209,388 207,121 620,813 610,608 Hospitality Solutions 69,911 67,802 206,353 194,071 Eliminations (9,212 ) (6,666 ) (25,155 ) (19,498 ) Total revenue $ 970,283 $ 900,606 $ 2,943,028 $ 2,716,622 Adjusted Gross Profit (a) Travel Network $ 268,604 $ 255,429 $ 842,359 $ 822,889 Airline Solutions 90,428 98,313 264,450 265,009 Hospitality Solutions 23,069 25,455 61,965 66,052 Corporate (4,315 ) (7,965 ) (12,732 ) (13,363 ) Total $ 377,786 $ 371,232 $ 1,156,042 $ 1,140,587 Adjusted Operating Income (b) Travel Network $ 182,533 $ 172,098 590,380 584,420 Airline Solutions 28,505 39,574 82,030 94,533 Hospitality Solutions 5,826 5,150 9,927 7,021 Corporate (42,891 ) (48,717 ) (138,782 ) (134,431 ) Total $ 173,973 $ 168,105 543,555 551,543 Adjusted EBITDA (c) Travel Network $ 229,983 $ 216,487 $ 735,669 $ 713,977 Airline Solutions 74,094 80,361 217,629 210,329 Hospitality Solutions 16,116 13,242 38,830 30,087 Total segments 320,193 310,090 992,128 954,393 Corporate (41,688 ) (47,164 ) (135,283 ) (132,489 ) Total $ 278,505 $ 262,926 $ 856,845 $ 821,904 Depreciation and amortization Travel Network $ 29,243 $ 26,384 $ 87,965 $ 79,259 Airline Solutions 45,589 40,787 135,599 115,796 Hospitality Solutions 10,290 8,092 28,903 23,066 Total segments 85,122 75,263 252,467 218,121 Corporate 17,610 21,779 55,084 77,608 Total $ 102,732 $ 97,042 $ 307,551 $ 295,729 Capital Expenditures Travel Network $ 16,963 $ 19,895 $ 45,002 $ 69,151 Airline Solutions 25,315 26,275 72,485 92,193 Hospitality Solutions 9,291 10,235 27,629 31,261 Total segments 51,569 56,405 145,116 192,605 Corporate 22,209 18,996 60,548 50,206 Total $ 73,778 $ 75,401 $ 205,664 $ 242,811 ______________________________ (a) The following table sets forth the reconciliation of Adjusted Gross Profit to operating income in our statement of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Adjusted Gross Profit $ 377,786 $ 371,232 $ 1,156,042 $ 1,140,587 Less adjustments: Selling, general and administrative 130,152 91,840 384,047 383,137 Impairment and related charges (6) — — — 92,022 Cost of revenue adjustments: Depreciation and amortization (1) 85,552 79,976 254,490 229,688 Amortization of upfront incentive consideration (2) 18,207 18,005 57,324 50,298 Restructuring and other costs (4) — — — 12,976 Stock-based compensation 7,112 4,615 19,184 13,626 Operating income $ 136,763 $ 176,796 $ 440,997 $ 358,840 (b) The following table sets forth the reconciliation of Adjusted Operating Income to operating income in our statement of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Adjusted Operating Income $ 173,973 $ 168,105 $ 543,555 $ 551,543 Less adjustments: Joint venture equity income 333 357 2,455 1,768 Impairment and related charges (6) — — — 92,022 Acquisition-related amortization (1c) 16,407 20,226 51,585 75,666 Restructuring and other costs (4) — — — 25,304 Litigation costs (reimbursements), net (5) 5,225 (40,929 ) 7,073 (36,470 ) Stock-based compensation 15,245 11,655 41,445 34,413 Operating income $ 136,763 $ 176,796 $ 440,997 $ 358,840 (c) The following table sets forth the reconciliation of Adjusted EBITDA to income from continuing operations in our statement of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Adjusted EBITDA $ 278,505 $ 262,926 $ 856,845 $ 821,904 Less adjustments: Depreciation and amortization of property and equipment (1a) 76,226 66,332 225,649 191,442 Amortization of capitalized implementation costs (1b) 10,099 10,484 30,317 28,621 Acquisition-related amortization (1c) 16,407 20,226 51,585 75,666 Amortization of upfront incentive consideration (2) 18,207 18,005 57,324 50,298 Impairment and related charges (6) — — — 92,022 Interest expense, net 39,291 38,919 116,809 116,577 Loss on extinguishment of debt — 1,012 633 1,012 Other, net (3) 1,905 3,802 10,746 19,788 Restructuring and other costs (4) — — — 25,304 Litigation costs (reimbursements), net (5) 5,225 (40,929 ) 7,073 (36,470 ) Stock-based compensation 15,245 11,655 41,445 34,413 Provision for income taxes 25,021 40,595 61,371 56,836 Income from continuing operations $ 70,879 $ 92,825 $ 253,893 $ 166,395 ______________________________________________________ (1) Depreciation and amortization expenses: a. Depreciation and amortization of property and equipment includes software developed for internal use. b. Amortization of capitalized implementation costs represents amortization of upfront costs to implement new customer contracts under our SaaS and hosted revenue model. c. Acquisition-related amortization represents amortization of intangible assets from the take-private transaction in 2007 as well as intangibles associated with acquisitions since that date and amortization of the excess basis in our underlying equity in joint ventures. (2) Our Travel Network business at times makes upfront cash payments or other consideration to travel agency subscribers at the inception or modification of a service contract, which are capitalized and amortized over an average expected life of the service contract, generally over three years to five years . This consideration is made with the objective of increasing the number of clients or to ensure or improve customer loyalty. These service contract terms are established such that the supplier and other fees generated over the life of the contract will exceed the cost of the incentive consideration provided up front. These service contracts with travel agency subscribers require that the customer commit to achieving certain economic objectives and generally have terms requiring repayment of the upfront incentive consideration if those objectives are not met. (3) During the nine months ended September 30, 2017, we recognized a $15 million loss in other, net related to debt modification costs associated with our debt refinancing. In addition, other, net includes foreign exchange gains and losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into the relevant functional currency. (4) Restructuring and other costs represent charges associated with business restructuring and associated changes implemented which resulted in severance benefits related to employee terminations, integration and facility opening or closing costs and other business reorganization costs. During the nine months ended September 30, 2017, we recorded a $25 million charge associated with a reduction to our workforce. This reduction aligned our operations with business needs and implemented an ongoing costs and organizational structure consistent with our expected growth needs and opportunities. (5) Litigation costs (reimbursements), net represent charges associated with antitrust and other foreign non-income tax contingency matters. See Note 10. Contingencies . In the third quarter of 2018, we recorded a $5 million accrual related to penalties and interest for certain non-income tax claims for historical periods regarding permanent establishment in a foreign jurisdiction. In the third quarter of 2017, we recorded a $43 million reimbursement, net of accrued legal and related expenses, from a settlement with our insurance carriers with respect to the American Airlines litigation. (6) During the nine months ended September 30, 2017, we recorded an impairment charge of $92 million associated with net capitalized contract costs related to an Airline Solutions' customer based on our analysis of the recoverability of such amounts. See Note 3. Impairment and Related Charges . |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events On July 24, 2018, the U.S. Court of Appeals for the Ninth Circuit reversed the decision of the U.S. Tax Court in Altera Corp. v. Commissioner related to the treatment of stock-based compensation in an intercompany cost-sharing arrangement. We are currently evaluating the impact of this decision. |
General Information (Policies)
General Information (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation— The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2018 . The accompanying interim financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 16, 2018 , as updated by our Current Report on Form 8-K/A filed with the SEC on May 3, 2018. Effective the first quarter of 2018, our business has three reportable segments and each segment now reflects a portion of our shared corporate costs that historically were not allocated to a business unit, based on relative consumption of shared technology infrastructure costs and defined revenue metrics. These changes have no impact on our consolidated results of operations, but result in a decrease of segment profitability only. Prior year amounts have been recast for the disaggregation of our segments and the modification of our allocation of shared corporate costs where applicable. We consolidate all majority-owned subsidiaries and companies over which we exercise control through majority voting rights. No entities are consolidated due to control through operating agreements, financing agreements or as the primary beneficiary of a variable interest entity. The consolidated financial statements include our accounts after elimination of all significant intercompany balances and transactions. All dollar amounts in the financial statements and the tables in the notes, except per share amounts, are stated in thousands of U.S. dollars unless otherwise indicated. All amounts in the notes reference results from continuing operations unless otherwise indicated. |
Use of Estimates | Use of Estimates —The preparation of these interim financial statements in conformity with GAAP requires that certain amounts be recorded based on estimates and assumptions made by management. Actual results could differ from these estimates and assumptions. Our accounting policies, which consist of significant estimates and assumptions, include, among other things, the estimation of the collectability of accounts receivable, estimation of future cancellations of bookings processed through the Sabre global distribution system (“GDS”), revenue recognition for software arrangements, determination of the fair value of assets and liabilities acquired in a business combination, determination of the fair value of derivatives, the evaluation of the recoverability of the carrying value of intangible assets and goodwill, assumptions utilized in the determination of pension and other postretirement benefit liabilities, the evaluation of the recoverability of customer implementation costs, assumptions utilized to evaluate the recoverability of deferred customer advance and discounts, and estimation of uncertainties surrounding the calculation of our tax assets and liabilities. Our use of estimates and the related accounting policies are discussed in the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 16, 2018 , as updated by our Current Report on Form 8-K/A filed with the SEC on May 3, 2018. Additionally, see Note 2. Revenue from Contracts with Customers for additional information on the use of significant estimates and assumptions in recognizing revenue. |
Stockholders’ Equity | Stockholders’ Equity— During the nine months ended September 30, 2018 , we issued 2,441,045 shares of our common stock as a result of the exercise and settlement of employee equity-based awards. In addition, we had $3 million in net receipts from the exercise of employee stock-option awards, which includes a $9 million payment of income tax withholdings associated with the settlement of employee restricted-stock awards. We paid quarterly cash dividends on our common stock of $0.14 per share, totaling $116 million , during each of the nine months ended September 30, 2018 and 2017 . During the nine months ended September 30, 2018 , certain of our stockholders sold an aggregate of 46,000,000 shares of our common stock through secondary public offerings. See "—Share Repurchase Program" for information on shares we repurchased in connection with one such offering. We did not offer any shares or receive any proceeds from these secondary public offerings. Share Repurchase Program— In February 2017, we announced the approval of a multi-year share repurchase program to purchase up to $500 million of Sabre's common stock outstanding. Repurchases under the program may take place in the open market or privately negotiated transactions. For the nine months ended September 30, 2018 , we repurchased 1,075,255 shares totaling $26 million pursuant to this share repurchase program, including the repurchase of 1,000,000 shares of our common stock for approximately $24 million in connection with a secondary public offering as described in "—Stockholders' Equity." There were no shares repurchased during the third quarter of 2018. Approximately $365 million remains authorized for repurchases under the Share Repurchase Program as of September 30, 2018 . |
Adoption of New Accounting Standards/Recent Accounting Pronouncements | Adoption of New Accounting Standards In June 2018, the Financial Accounting Standards Board ("FASB") issued updated guidance for share-based payment awards issued to non-employees. The updated standard aligns the accounting for share-based payment awards for non-employees with employees, except for guidance related to the attribution of compensation costs for non-employees. The Accounting Standards Update ("ASU") is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods for public business entities, with early adoption permitted. We early adopted this standard in the second quarter of 2018, which did not have a material impact on our consolidated financial statements. In February 2018, the FASB issued updated guidance to give entities the option to reclassify to retained earnings the tax effects of items within accumulated other comprehensive income ("stranded tax effects") resulting from a reduction of the federal corporate income tax rate from 35% to 21% under the Tax Cuts and Jobs Act (“TCJA”) signed into law in December 2017. The ASU is effective for annual periods beginning after December 15, 2018, with early adoption permitted. See Note 7. Income Taxes in our consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on February 16, 2018, as updated by our Current Report on Form 8-K/A filed with the SEC on May 3, 2018, for additional information on certain impacts related to the enactment of the TCJA. We early adopted the updated standard in the second quarter of 2018 and elected to reclassify the stranded income tax effects related to the enactment of the TCJA to retained earnings. The adoption of this ASU resulted in a decrease in our retained deficit of $22 million with a corresponding increase to accumulated other comprehensive income primarily as a result of reclassifying stranded tax effects for our retirement-related benefit plans. The adoption of this updated standard did not have a material impact on our consolidated results of operations and statement of cash flows. In August 2017, the FASB issued updated guidance to expand and simplify the application of hedge accounting. The updated standard eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. The ASU is effective for annual periods beginning after December 15, 2018, with early adoption permitted. We early adopted this standard in the second quarter of 2018, which did not have a material impact on our consolidated financial statements. In March 2017, the FASB issued updated guidance improving the presentation requirements related to reporting the service cost component of net benefit costs to require that the service cost component be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period, disaggregating the component from other net benefit costs. Net benefit cost is composed of several items, which reflect different aspects of an employer's financial arrangements as well as the cost of benefits earned by employees. The updated guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those annual periods for public business entities. We adopted this standard in the first quarter of 2018, which did not have a material impact on our consolidated financial statements. In February 2017, the FASB issued updated guidance on gains and losses from the derecognition of non-financial assets. The updated guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those annual periods for public business entities. We adopted this standard in the first quarter of 2018, which did not have a material impact on our consolidated financial statements. In January 2016, the FASB issued updated guidance on accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure for financial instruments. Under this updated standard, entities must measure equity investments at fair value and recognize changes in fair value in net income. For equity investments without readily determinable fair values, entities have the option to either measure these investments at fair value or at cost adjusted for changes in observable prices less impairment. The updated guidance does not apply to equity method investments or investments in consolidated subsidiaries. This new standard is effective for public companies for annual periods, including interim periods, beginning after December 15, 2017. We adopted this standard in the first quarter of 2018, which did not have a material impact on our consolidated financial statements. Recent Accounting Pronouncements In August 2018, the FASB issued updated guidance on customer's accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. Under this updated standard, when the arrangement includes a license to software developed for internal use, implementation costs are capitalized and amortized on a straight-line basis over the related contract terms, and a liability is also recognized to the extent the payments attributable to the software license are made over time. When the cloud computing arrangement does not include a software license, implementation costs are to be expensed as incurred. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We do not expect the adoption of this updated standard will have a material impact on our consolidated financial statements. In August 2018, the FASB issued updated guidance that eliminates, modifies and adds certain disclosure requirements related to defined benefit pension and other post-retirement plans. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, ending after December 15, 2020, with early adoption permitted, and is required to be applied retrospectively. We are currently evaluating the impact of this standard on disclosures in our consolidated financial statements. In August 2018, the FASB issued updated guidance that eliminates, modifies and adds certain disclosure requirements related to fair value measurements. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for the eliminated or modified disclosures, while delaying the adoption of the additional disclosures until their effective date. We do not expect the adoption of this updated standard will have a material impact on disclosures in our consolidated financial statements. In June 2016, the FASB issued updated guidance for the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. Under this updated standard, the current "incurred loss" approach is replaced with an "expected loss" model for instruments measured at amortized cost. For available-for-sale debt securities, allowances for losses will now be required rather than reducing the instruments carrying value. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the impact of this standard on our consolidated financial statements. In February 2016, the FASB issued updated guidance requiring organizations that lease assets — referred to as "lessees" — to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases, when the lease has a term of more than 12 months. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We plan to adopt the new standard using the cumulative-effect adjustment transition method on its effective date of January 1, 2019, and we expect to elect the package of practical expedients and the hindsight practical expedient upon adoption. We are in the process of cataloging our existing lease contracts and implementing changes to our processes and systems. We preliminarily estimate our other non-current assets and other non-current liabilities may be increased on our consolidated balance sheets by approximately $65 million to $80 million , with an immaterial impact to retained earnings, as a result of recognizing the right of use assets and corresponding lease liabilities in connection with the adoption of the updated standard. Our assessment is ongoing and subject to finalization such that the actual impact of the adoption may differ materially from this estimated range. We do not expect that the adoption of this updated standard will have a material impact on our consolidated results of operations and cash flows. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following tables set forth the impact of the adoption of the revenue recognition standard to our reported results on our consolidated statement of operations and consolidated balance sheet, respectively (in thousands): Nine Months Ended September 30, 2018 As reported ASC 606 Adjustments As adjusted ASC 605 Revenue $ 2,943,028 $ 23,555 $ 2,966,583 Cost of Revenue 2,117,984 6,275 2,124,259 Selling, general and administrative 384,047 (543 ) 383,504 Operating income 440,997 17,823 458,820 Income from continuing operations before income taxes 315,264 17,823 333,087 Provision for income taxes 61,371 4,354 65,725 Income from continuing operations 253,893 13,469 267,362 Net income 257,110 13,469 270,579 Net income attributable to common stockholders 253,131 13,469 266,600 September 30, 2018 As reported ASC 606 Adjustments As adjusted ASC 605 Accounts receivable, net $ 589,858 $ (56,189 ) $ 533,669 Prepaid expenses and other current assets 170,110 (13,147 ) 156,963 Total current assets 1,204,289 (69,336 ) 1,134,953 Other assets, net 634,422 (4,945 ) 629,477 Total assets 5,868,482 (74,281 ) 5,794,201 Accrued subscriber incentives 327,371 4,988 332,359 Deferred revenues 104,366 30,805 135,171 Other accrued liabilities 207,694 (25,901 ) 181,793 Total current liabilities 1,052,182 9,892 1,062,074 Deferred income taxes 200,767 (18,745 ) 182,022 Other noncurrent liabilities 322,002 (253 ) 321,749 Retained deficit (814,446 ) (65,175 ) (879,621 ) Total stockholders' equity 937,935 (65,175 ) 872,760 Total liabilities and stockholders' equity 5,868,482 (74,281 ) 5,794,201 |
Contract with Customer, Asset and Liability | The following table presents the changes in our contract assets balance (in thousands): Contract assets as of January 1, 2018 $ 75,624 Additions 10,579 Deductions (26,414 ) Other (31 ) Contract assets as of September 30, 2018 $ 59,758 |
Disaggregation of Revenue | The following table presents our revenues disaggregated by business (in thousands): Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Air $ 566,887 $ 1,747,518 Lodging, Ground and Sea 88,467 264,498 Other 44,842 129,001 Total Travel Network 700,196 2,141,017 SabreSonic Passenger Reservation System 127,298 377,476 Commercial and Operations Solutions (1) 81,253 239,813 Other 837 3,524 Total Airline Solutions 209,388 620,813 SynXis Software and Services 62,036 182,251 Other 7,875 24,102 Total Hospitality Solutions 69,911 206,353 Eliminations (9,212 ) (25,155 ) Total Sabre Revenue $ 970,283 $ 2,943,028 (1) Includes $12 million and $25 million of license fee revenue recognized upon delivery to the customer for the three and nine months ended September 30, 2018 , respectively. |
Capitalized Contract Costs | The following table presents the changes in contract acquisition costs and capitalized implementation costs (in thousands): September 30, 2018 Contract acquisition costs: Beginning balance (1/1/2018) $ 19,353 Additions 5,533 Amortization (4,745 ) Other 425 Ending balance $ 20,566 Capitalized implementation costs: Beginning balance (1/1/2018) $ 194,501 Additions 29,781 Amortization (30,511 ) Other (1,733 ) Ending balance $ 192,038 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The following table sets forth the face values of our outstanding debt as of September 30, 2018 and December 31, 2017 (in thousands): Rate Maturity September 30, 2018 December 31, 2017 Senior secured credit facilities: Term Loan A L + 2.00% July 2022 $ 534,375 $ 555,750 Term Loan B (1) L + 2.00% February 2024 1,866,940 1,881,048 Revolver, $400 million L + 2.00% July 2022 — — 5.375% senior secured notes due 2023 5.375% April 2023 530,000 530,000 5.25% senior secured notes due 2023 5.25% November 2023 500,000 500,000 Capital lease obligations 15,856 21,235 Face value of total debt outstanding 3,447,171 3,488,033 Less current portion of debt outstanding (64,225 ) (57,138 ) Face value of long-term debt outstanding $ 3,382,946 $ 3,430,895 ______________________________ (1) Pursuant to the March 2, 2018 refinancing, the interest rate on the Term Loan B was reduced from L+ 2.25% to L+ 2.00% . |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Unsettled Purchased Foreign Currency Forward Contracts | As of September 30, 2018 and December 31, 2017 , we had the following unsettled purchased foreign currency forward contracts that were entered into to hedge our operational exposure to foreign currency movements (in thousands, except for average contract rates): Outstanding Notional Amounts as of September 30, 2018 Buy Currency Sell Currency Foreign Amount USD Amount Average Polish Zloty US Dollar 238,000 66,666 0.2801 Singapore Dollar US Dollar 65,050 48,595 0.7470 Indian Rupee US Dollar 2,735,000 38,769 0.0141 British Pound Sterling US Dollar 20,700 28,371 1.3706 Australian Dollar US Dollar 26,300 19,751 0.7510 Swedish Krona US Dollar 52,200 6,243 0.1196 Brazilian Real US Dollar 20,850 5,628 0.2668 Outstanding Notional Amounts as of December 31, 2017 Buy Currency Sell Currency Foreign Amount USD Amount Average Polish Zloty US Dollar 225,000 61,016 0.2712 Singapore Dollar US Dollar 70,750 52,065 0.7359 British Pound Sterling US Dollar 25,900 34,307 1.3246 Indian Rupee US Dollar 1,720,000 25,939 0.0151 Australian Dollar US Dollar 20,750 15,932 0.7678 Swedish Krona US Dollar 44,100 5,353 0.1214 Brazilian Real US Dollar 16,800 4,976 0.2962 |
Schedule of Outstanding Interest Rate Swaps | Interest Rate Swap Contracts —Interest rate swaps outstanding during the nine months ended September 30, 2018 and 2017 are as follows: Notional Amount Interest Rate Interest Rate Paid Effective Date Maturity Date Designated as Hedging Instrument $750 million 1 month LIBOR (2) 1.15% March 31, 2017 December 31, 2017 $750 million 1 month LIBOR (2) 1.65% December 29, 2017 December 31, 2018 $1,350 million 1 month LIBOR (2) 2.27% December 31, 2018 December 31, 2019 $1,050 million 1 month LIBOR (2) 2.11% December 31, 2019 December 31, 2020 $450 million 1 month LIBOR (2) 2.82% December 31, 2020 December 31, 2021 Not Designated as Hedging Instrument (1) $750 million 1 month LIBOR (3) 2.19% December 30, 2016 December 29, 2017 $750 million 1.18% 1 month LIBOR March 31, 2017 December 31, 2017 $750 million 1 month LIBOR (3) 2.61% December 29, 2017 December 31, 2018 $750 million 1.67% 1 month LIBOR December 29, 2017 December 31, 2018 ______________________ (1) Subject to a 1% floor. (2) Subject to a 0% floor. (3) As of February 22, 2017. |
Schedule of Estimated Fair Values of Derivatives Designated as Hedging Instruments | The estimated fair values of our derivatives designated as hedging instruments as of September 30, 2018 and December 31, 2017 are as follows (in thousands): Derivative Assets (Liabilities) Fair Value as of Derivatives Designated as Hedging Instruments Consolidated Balance Sheet Location September 30, 2018 December 31, 2017 Foreign exchange contracts Prepaid expenses and other current assets $ — $ 6,213 Foreign exchange contracts Other accrued liabilities (7,142 ) — Interest rate swaps Prepaid expenses and other current assets 5,760 856 Interest rate swaps Other assets, net 12,221 3,093 $ 10,839 $ 10,162 Derivative Assets (Liabilities) Fair Value as of Derivatives Not Designated as Hedging Instruments Consolidated Balance Sheet Location September 30, 2018 December 31, 2017 Interest rate swaps Other accrued liabilities $ (1,841 ) $ (7,119 ) $ (1,841 ) $ (7,119 ) |
Schedule of Effects of Derivative Instruments Net of Taxes on Other Comprehensive Income (Loss) | The effects of derivative instruments, net of taxes, on OCI for the three and nine months ended September 30, 2018 and 2017 are as follows (in thousands): Amount of (Loss) Gain Recognized in OCI on Derivative, Effective Portion Three Months Ended September 30, Nine Months Ended September 30, Derivatives in Cash Flow Hedging Relationships 2018 2017 2018 2017 Foreign exchange contracts $ (1,606 ) $ 1,800 $ (7,897 ) $ 10,378 Interest rate swaps 3,042 810 12,018 (1,038 ) Total $ 1,436 $ 2,610 $ 4,121 $ 9,340 Amount of Loss (Gain) Reclassified from Accumulated OCI into Income, Effective Portion Derivatives in Cash Flow Hedging Relationships Income Statement Location Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Foreign exchange contracts Cost of revenue $ 1,558 $ (1,385 ) $ (2,769 ) $ (502 ) Interest rate swaps Interest expense, net 848 1,169 3,496 3,963 Total $ 2,406 $ (216 ) $ 727 $ 3,461 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present our assets (liabilities) that are required to be measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 (in thousands): Fair Value at Reporting Date Using September 30, 2018 Level 1 Level 2 Level 3 Derivatives: Foreign currency forward contracts $ (7,142 ) $ — $ (7,142 ) $ — Interest rate swap contracts 16,140 — 16,140 — Total $ 8,998 $ — $ 8,998 $ — Fair Value at Reporting Date Using December 31, 2017 Level 1 Level 2 Level 3 Derivatives: Foreign currency forward contracts $ 6,213 $ — $ 6,213 $ — Interest rate swap contracts (3,170 ) — (3,170 ) — Total $ 3,043 $ — $ 3,043 $ — |
Schedule of Fair Value and Carrying Value of Debt | The following table presents the fair value and carrying value of our senior notes and borrowings under our senior secured credit facilities as of September 30, 2018 and December 31, 2017 (in thousands): Fair Value at Carrying Value at (1) Financial Instrument September 30, 2018 December 31, 2017 September 30, 2018 December 31, 2017 Term Loan A $ 536,379 $ 559,223 $ 532,497 $ 553,444 Term Loan B 1,876,274 1,890,453 1,860,937 1,873,993 Revolver, $400 million — — — — 5.375% Senior secured notes due 2023 533,684 546,563 530,000 530,000 5.25% Senior secured notes due 2023 501,265 512,500 500,000 500,000 ______________________________ (1) Excludes net unamortized debt issuance costs. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss), Net of Related Deferred Income Taxes | As of September 30, 2018 and December 31, 2017 , the components of accumulated other comprehensive income (loss), net of related deferred income taxes, are as follows (in thousands): September 30, 2018 December 31, 2017 Defined benefit pension and other post retirement benefit plans $ (121,469 ) $ (102,623 ) Unrealized foreign currency translation gain 7,330 11,488 Unrealized gain on foreign currency forward contracts and interest rate swaps 6,993 2,651 Total accumulated other comprehensive loss, net of tax $ (107,146 ) $ (88,484 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerators and Denominators Used in Computations of Basic and Diluted Earnings Per Share from Continuing Operations | The following table reconciles the numerators and denominators used in the computations of basic and diluted earnings per share from continuing operations (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Income from continuing operations $ 70,879 $ 92,825 $ 253,893 $ 166,395 Less: Net income attributable to noncontrolling interests 1,538 1,307 3,979 3,726 Net income from continuing operations available to common stockholders, basic and diluted $ 69,341 $ 91,518 $ 249,914 $ 162,669 Denominator: Basic weighted-average common shares outstanding 275,175 277,477 275,205 277,754 Add: Dilutive effect of stock options and restricted stock awards 2,353 892 1,614 1,894 Diluted weighted-average common shares outstanding 277,528 278,369 276,819 279,648 Earnings per share from continuing operations: Basic $ 0.25 $ 0.33 $ 0.91 $ 0.59 Diluted $ 0.25 $ 0.33 $ 0.90 $ 0.58 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Segment information for the three and nine months ended September 30, 2018 and 2017 is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenue Travel Network $ 700,196 $ 632,349 $ 2,141,017 $ 1,931,441 Airline Solutions 209,388 207,121 620,813 610,608 Hospitality Solutions 69,911 67,802 206,353 194,071 Eliminations (9,212 ) (6,666 ) (25,155 ) (19,498 ) Total revenue $ 970,283 $ 900,606 $ 2,943,028 $ 2,716,622 Adjusted Gross Profit (a) Travel Network $ 268,604 $ 255,429 $ 842,359 $ 822,889 Airline Solutions 90,428 98,313 264,450 265,009 Hospitality Solutions 23,069 25,455 61,965 66,052 Corporate (4,315 ) (7,965 ) (12,732 ) (13,363 ) Total $ 377,786 $ 371,232 $ 1,156,042 $ 1,140,587 Adjusted Operating Income (b) Travel Network $ 182,533 $ 172,098 590,380 584,420 Airline Solutions 28,505 39,574 82,030 94,533 Hospitality Solutions 5,826 5,150 9,927 7,021 Corporate (42,891 ) (48,717 ) (138,782 ) (134,431 ) Total $ 173,973 $ 168,105 543,555 551,543 Adjusted EBITDA (c) Travel Network $ 229,983 $ 216,487 $ 735,669 $ 713,977 Airline Solutions 74,094 80,361 217,629 210,329 Hospitality Solutions 16,116 13,242 38,830 30,087 Total segments 320,193 310,090 992,128 954,393 Corporate (41,688 ) (47,164 ) (135,283 ) (132,489 ) Total $ 278,505 $ 262,926 $ 856,845 $ 821,904 Depreciation and amortization Travel Network $ 29,243 $ 26,384 $ 87,965 $ 79,259 Airline Solutions 45,589 40,787 135,599 115,796 Hospitality Solutions 10,290 8,092 28,903 23,066 Total segments 85,122 75,263 252,467 218,121 Corporate 17,610 21,779 55,084 77,608 Total $ 102,732 $ 97,042 $ 307,551 $ 295,729 Capital Expenditures Travel Network $ 16,963 $ 19,895 $ 45,002 $ 69,151 Airline Solutions 25,315 26,275 72,485 92,193 Hospitality Solutions 9,291 10,235 27,629 31,261 Total segments 51,569 56,405 145,116 192,605 Corporate 22,209 18,996 60,548 50,206 Total $ 73,778 $ 75,401 $ 205,664 $ 242,811 ______________________________ (a) The following table sets forth the reconciliation of Adjusted Gross Profit to operating income in our statement of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Adjusted Gross Profit $ 377,786 $ 371,232 $ 1,156,042 $ 1,140,587 Less adjustments: Selling, general and administrative 130,152 91,840 384,047 383,137 Impairment and related charges (6) — — — 92,022 Cost of revenue adjustments: Depreciation and amortization (1) 85,552 79,976 254,490 229,688 Amortization of upfront incentive consideration (2) 18,207 18,005 57,324 50,298 Restructuring and other costs (4) — — — 12,976 Stock-based compensation 7,112 4,615 19,184 13,626 Operating income $ 136,763 $ 176,796 $ 440,997 $ 358,840 (b) The following table sets forth the reconciliation of Adjusted Operating Income to operating income in our statement of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Adjusted Operating Income $ 173,973 $ 168,105 $ 543,555 $ 551,543 Less adjustments: Joint venture equity income 333 357 2,455 1,768 Impairment and related charges (6) — — — 92,022 Acquisition-related amortization (1c) 16,407 20,226 51,585 75,666 Restructuring and other costs (4) — — — 25,304 Litigation costs (reimbursements), net (5) 5,225 (40,929 ) 7,073 (36,470 ) Stock-based compensation 15,245 11,655 41,445 34,413 Operating income $ 136,763 $ 176,796 $ 440,997 $ 358,840 (c) The following table sets forth the reconciliation of Adjusted EBITDA to income from continuing operations in our statement of operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Adjusted EBITDA $ 278,505 $ 262,926 $ 856,845 $ 821,904 Less adjustments: Depreciation and amortization of property and equipment (1a) 76,226 66,332 225,649 191,442 Amortization of capitalized implementation costs (1b) 10,099 10,484 30,317 28,621 Acquisition-related amortization (1c) 16,407 20,226 51,585 75,666 Amortization of upfront incentive consideration (2) 18,207 18,005 57,324 50,298 Impairment and related charges (6) — — — 92,022 Interest expense, net 39,291 38,919 116,809 116,577 Loss on extinguishment of debt — 1,012 633 1,012 Other, net (3) 1,905 3,802 10,746 19,788 Restructuring and other costs (4) — — — 25,304 Litigation costs (reimbursements), net (5) 5,225 (40,929 ) 7,073 (36,470 ) Stock-based compensation 15,245 11,655 41,445 34,413 Provision for income taxes 25,021 40,595 61,371 56,836 Income from continuing operations $ 70,879 $ 92,825 $ 253,893 $ 166,395 ______________________________________________________ (1) Depreciation and amortization expenses: a. Depreciation and amortization of property and equipment includes software developed for internal use. b. Amortization of capitalized implementation costs represents amortization of upfront costs to implement new customer contracts under our SaaS and hosted revenue model. c. Acquisition-related amortization represents amortization of intangible assets from the take-private transaction in 2007 as well as intangibles associated with acquisitions since that date and amortization of the excess basis in our underlying equity in joint ventures. (2) Our Travel Network business at times makes upfront cash payments or other consideration to travel agency subscribers at the inception or modification of a service contract, which are capitalized and amortized over an average expected life of the service contract, generally over three years to five years . This consideration is made with the objective of increasing the number of clients or to ensure or improve customer loyalty. These service contract terms are established such that the supplier and other fees generated over the life of the contract will exceed the cost of the incentive consideration provided up front. These service contracts with travel agency subscribers require that the customer commit to achieving certain economic objectives and generally have terms requiring repayment of the upfront incentive consideration if those objectives are not met. (3) During the nine months ended September 30, 2017, we recognized a $15 million loss in other, net related to debt modification costs associated with our debt refinancing. In addition, other, net includes foreign exchange gains and losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into the relevant functional currency. (4) Restructuring and other costs represent charges associated with business restructuring and associated changes implemented which resulted in severance benefits related to employee terminations, integration and facility opening or closing costs and other business reorganization costs. During the nine months ended September 30, 2017, we recorded a $25 million charge associated with a reduction to our workforce. This reduction aligned our operations with business needs and implemented an ongoing costs and organizational structure consistent with our expected growth needs and opportunities. (5) Litigation costs (reimbursements), net represent charges associated with antitrust and other foreign non-income tax contingency matters. See Note 10. Contingencies . In the third quarter of 2018, we recorded a $5 million accrual related to penalties and interest for certain non-income tax claims for historical periods regarding permanent establishment in a foreign jurisdiction. In the third quarter of 2017, we recorded a $43 million reimbursement, net of accrued legal and related expenses, from a settlement with our insurance carriers with respect to the American Airlines litigation. (6) During the nine months ended September 30, 2017, we recorded an impairment charge of $92 million associated with net capitalized contract costs related to an Airline Solutions' customer based on our analysis of the recoverability of such amounts. See Note 3. Impairment and Related Charges . |
General Information - Additiona
General Information - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018USD ($)shares | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment$ / sharesshares | Sep. 30, 2017USD ($)$ / shares | Jan. 01, 2019USD ($) | Dec. 31, 2017USD ($) | Feb. 28, 2017USD ($) | |
General Information Disclosures [Line Items] | |||||||
Number of business segments | segment | 3 | ||||||
Number of reportable segments | segment | 3 | ||||||
Decrease in retained deficit | $ (814,446,000) | $ (814,446,000) | $ (1,053,446,000) | ||||
Increase in OCI | $ 3,978,000 | $ 5,965,000 | 3,637,000 | $ 26,299,000 | |||
Net receipts on the settlement of equity-based awards | 2,758,000 | $ 11,466,000 | |||||
Payment of income tax withholdings | $ 9,000,000 | ||||||
Cash dividend (in dollars per share) | $ / shares | $ 0.14 | $ 0.14 | |||||
Cash dividends paid to common stockholders | $ 115,557,000 | $ 116,474,000 | |||||
Authorized amount in repurchase program | $ 500,000,000 | ||||||
Repurchase of common stock (in shares) | shares | 0 | 1,075,255 | |||||
Repurchase of common stock | $ 26,281,000 | $ 97,671,000 | |||||
Remaining amount authorized in repurchase program | $ 365,000,000 | 365,000,000 | |||||
ASU 2018-02 | |||||||
General Information Disclosures [Line Items] | |||||||
Decrease in retained deficit | 22,000,000 | $ 22,000,000 | |||||
Increase in OCI | $ 22,000,000 | ||||||
Common Stock | |||||||
General Information Disclosures [Line Items] | |||||||
Shares issued during period (in shares) | shares | 2,441,045 | ||||||
Secondary Public Offering | |||||||
General Information Disclosures [Line Items] | |||||||
Repurchase of common stock | $ 24,000,000 | ||||||
Secondary Public Offering | Common Stock | |||||||
General Information Disclosures [Line Items] | |||||||
Number of shares issued (in shares) | shares | 46,000,000 | ||||||
Repurchase of common stock (in shares) | shares | 1,000,000 | ||||||
Minimum | Forecast | |||||||
General Information Disclosures [Line Items] | |||||||
Adoption of New Accounting Standards | $ 65,000,000 | ||||||
Maximum | Forecast | |||||||
General Information Disclosures [Line Items] | |||||||
Adoption of New Accounting Standards | $ 80,000,000 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Retained deficit | $ (814,446) | $ (814,446) | $ (1,053,446) | |
Long-term trade unbilled receivables | 55,000 | 55,000 | $ 54,000 | |
Revenue | 970,283 | 2,943,028 | ||
ASU 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Retained deficit | 102,000 | 102,000 | ||
Retained deficit, net of tax | 78,000 | 78,000 | ||
Trade Accounts Receivable | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Accounts receivable, net | 585,000 | 585,000 | $ 506,000 | |
Airline Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | 209,388 | 620,813 | ||
License fee | Airline Solutions | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | $ 12,000 | 25,000 | ||
Costs to Fulfill Contracts | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Contract cost impairment loss | $ 1,000 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Adoption of ASU (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Revenue | $ 970,283 | $ 900,606 | $ 2,943,028 | $ 2,716,622 | |
Cost of revenue | 703,368 | 631,970 | 2,117,984 | 1,882,623 | |
Selling, general and administrative | 130,152 | 91,840 | 384,047 | 383,137 | |
Operating income | 136,763 | 176,796 | 440,997 | 358,840 | |
Income from continuing operations before income taxes | 95,900 | 133,420 | 315,264 | 223,231 | |
Provision for income taxes | 25,021 | 40,595 | 61,371 | 56,836 | |
Income from continuing operations | 70,879 | 92,825 | 253,893 | 166,395 | |
Net income | 74,543 | 92,296 | 257,110 | 164,167 | |
Net income attributable to common stockholders | 73,005 | $ 90,989 | 253,131 | $ 160,441 | |
Accounts receivable, net | 589,858 | 589,858 | $ 490,558 | ||
Prepaid expenses and other current assets | 170,110 | 170,110 | 108,753 | ||
Total current assets | 1,204,289 | 1,204,289 | 960,692 | ||
Other assets, net | 634,422 | 634,422 | 591,942 | ||
Total assets | 5,868,482 | 5,868,482 | 5,649,364 | ||
Accrued subscriber incentives | 327,371 | 327,371 | 271,200 | ||
Deferred revenues | 104,366 | 104,366 | 110,532 | ||
Other accrued liabilities | 207,694 | 207,694 | 198,353 | ||
Total current liabilities | 1,052,182 | 1,052,182 | 972,147 | ||
Deferred income taxes | 200,767 | 200,767 | 99,801 | ||
Other noncurrent liabilities | 322,002 | 322,002 | 480,185 | ||
Retained deficit | (814,446) | (814,446) | (1,053,446) | ||
Total stockholders’ equity | 937,935 | 937,935 | 698,500 | ||
Total liabilities and stockholders’ equity | 5,868,482 | 5,868,482 | $ 5,649,364 | ||
ASU 2014-09 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Retained deficit | 102,000 | 102,000 | |||
Adjustments | ASU 2014-09 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Revenue | 23,555 | ||||
Cost of revenue | 6,275 | ||||
Selling, general and administrative | (543) | ||||
Operating income | 17,823 | ||||
Income from continuing operations before income taxes | 17,823 | ||||
Provision for income taxes | 4,354 | ||||
Income from continuing operations | 13,469 | ||||
Net income | 13,469 | ||||
Net income attributable to common stockholders | 13,469 | ||||
Accounts receivable, net | (56,189) | (56,189) | |||
Prepaid expenses and other current assets | (13,147) | (13,147) | |||
Total current assets | (69,336) | (69,336) | |||
Other assets, net | (4,945) | (4,945) | |||
Total assets | (74,281) | (74,281) | |||
Accrued subscriber incentives | 4,988 | 4,988 | |||
Deferred revenues | 30,805 | 30,805 | |||
Other accrued liabilities | (25,901) | (25,901) | |||
Total current liabilities | 9,892 | 9,892 | |||
Deferred income taxes | (18,745) | (18,745) | |||
Other noncurrent liabilities | (253) | (253) | |||
Retained deficit | (65,175) | (65,175) | |||
Total stockholders’ equity | (65,175) | (65,175) | |||
Total liabilities and stockholders’ equity | (74,281) | (74,281) | |||
As adjusted ASC 605 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Revenue | 2,966,583 | ||||
Cost of revenue | 2,124,259 | ||||
Selling, general and administrative | 383,504 | ||||
Operating income | 458,820 | ||||
Income from continuing operations before income taxes | 333,087 | ||||
Provision for income taxes | 65,725 | ||||
Income from continuing operations | 267,362 | ||||
Net income | 270,579 | ||||
Net income attributable to common stockholders | 266,600 | ||||
Accounts receivable, net | 533,669 | 533,669 | |||
Prepaid expenses and other current assets | 156,963 | 156,963 | |||
Total current assets | 1,134,953 | 1,134,953 | |||
Other assets, net | 629,477 | 629,477 | |||
Total assets | 5,794,201 | 5,794,201 | |||
Accrued subscriber incentives | 332,359 | 332,359 | |||
Deferred revenues | 135,171 | 135,171 | |||
Other accrued liabilities | 181,793 | 181,793 | |||
Total current liabilities | 1,062,074 | 1,062,074 | |||
Deferred income taxes | 182,022 | 182,022 | |||
Other noncurrent liabilities | 321,749 | 321,749 | |||
Retained deficit | (879,621) | (879,621) | |||
Total stockholders’ equity | 872,760 | 872,760 | |||
Total liabilities and stockholders’ equity | $ 5,794,201 | $ 5,794,201 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Contract Balances (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Jan. 01, 2018 | |
Change in Contract with Customer, Asset [Abstract] | ||
Contract liability | $ 201,000 | $ 158,000 |
Revenue recognized | 29,000 | |
Change In Contract With Customer, Asset, Roll Forward [Roll Forward] | ||
Contract assets as of January 1, 2018 | 75,624 | |
Additions | 10,579 | |
Deductions | (26,414) | |
Other | (31) | |
Contract assets as of September 30, 2018 | $ 59,758 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | $ 970,283 | $ 2,943,028 |
Travel Network | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 700,196 | 2,141,017 |
Travel Network | Air | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 566,887 | 1,747,518 |
Travel Network | Lodging, Ground and Sea | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 88,467 | 264,498 |
Travel Network | Other | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 44,842 | 129,001 |
Airline Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 209,388 | 620,813 |
Airline Solutions | SabreSonic Passenger Reservation System | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 127,298 | 377,476 |
Airline Solutions | Commercial and Operations Solutions(1) | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 81,253 | 239,813 |
Airline Solutions | Other | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 837 | 3,524 |
Hospitality Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 69,911 | 206,353 |
Hospitality Solutions | SynXis Software and Services | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 62,036 | 182,251 |
Hospitality Solutions | Other | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 7,875 | 24,102 |
Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | $ (9,212) | $ (25,155) |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Contract Costs (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Costs to Obtain Contracts | |
Capitalized Contract Cost [Roll Forward] | |
Beginning balance (1/1/2018) | $ 19,353 |
Additions | 5,533 |
Amortization | (4,745) |
Other | 425 |
Ending balance | 20,566 |
Costs to Fulfill Contracts | |
Capitalized Contract Cost [Roll Forward] | |
Beginning balance (1/1/2018) | 194,501 |
Additions | 29,781 |
Amortization | (30,511) |
Other | (1,733) |
Ending balance | $ 192,038 |
Impairment and Related Charges
Impairment and Related Charges (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Asset Impairment Charges [Abstract] | ||||||
Impairment and related charges | $ 0 | $ 81,000,000 | $ 0 | $ 0 | $ 92,022,000 | $ 92,000,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jan. 31, 2018 | Jan. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Contingency [Line Items] | ||||||
Remeasurement of deferred tax assets | $ 19,000 | |||||
Effective income tax rate | 19.00% | 25.00% | ||||
Unrecognized tax benefits | 67,000 | $ 74,000 | $ 67,000 | |||
Percentage of future payments to existing shareholders, US federal income tax cash savings | 85.00% | |||||
Percentage of future payments to other shareholders, US federal income tax cash savings | 15.00% | |||||
Decrease in TRA liability due to TCJA | 60,000 | |||||
Payments on TRA | $ 58,908 | $ 99,241 | ||||
Current TRA liability | 94,113 | $ 59,826 | 94,113 | |||
Internal Revenue Service (IRS) [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Estimated future payments under TRA related tax assets | 328,000 | $ 328,000 | ||||
Duration TRA payments are to be made | 2 years | |||||
Payments on TRA | $ 60,000 | $ 101,000 | ||||
Accrued interest of TRA liability | $ 1,000 | 2,000 | $ 2,000 | |||
Current TRA liability | 94,000 | 94,000 | ||||
Internal Revenue Service (IRS) [Member] | Other Noncurrent Liabilities [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
TRA liability | 77,000 | 77,000 | ||||
Travelocity [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
U.S. tax benefit related to discontinued operations | $ 2,000 | $ 4,000 |
Debt - Face Value of Outstandin
Debt - Face Value of Outstanding Debt (Details) - USD ($) | Mar. 02, 2018 | Aug. 23, 2017 | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||
Debt outstanding | $ 3,382,946,000 | $ 3,430,895,000 | ||
Capital lease obligations | 15,856,000 | 21,235,000 | ||
Face value of total debt outstanding | 3,447,171,000 | 3,488,033,000 | ||
Less current portion of debt outstanding | (64,225,000) | (57,138,000) | ||
Term Loan B | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on LIBOR | 2.00% | 2.25% | ||
Senior secured credit facilities | Term Loan A | ||||
Debt Instrument [Line Items] | ||||
Debt outstanding | $ 534,375,000 | 555,750,000 | ||
Senior secured credit facilities | Term Loan A | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on LIBOR | 2.00% | |||
Senior secured credit facilities | Term Loan B | ||||
Debt Instrument [Line Items] | ||||
Debt outstanding | $ 1,866,940,000 | 1,881,048,000 | ||
Senior secured credit facilities | Term Loan B | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on LIBOR | 2.00% | |||
Senior secured credit facilities | Revolver, $400 million | ||||
Debt Instrument [Line Items] | ||||
Credit facility amount | $ 400,000,000 | |||
Debt outstanding | $ 0 | 0 | ||
Senior secured credit facilities | Revolver, $400 million | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on LIBOR | 2.00% | |||
Senior secured notes | 5.375% senior secured notes due 2023 | ||||
Debt Instrument [Line Items] | ||||
Outstanding debt rate | 5.375% | |||
Debt outstanding | $ 530,000,000 | 530,000,000 | ||
Senior secured notes | 5.25% senior secured notes due 2023 | ||||
Debt Instrument [Line Items] | ||||
Outstanding debt rate | 5.25% | |||
Debt outstanding | $ 500,000,000 | $ 500,000,000 |
Debt - Senior Secured Credit Fa
Debt - Senior Secured Credit Facilities (Details) | Mar. 02, 2018 | Aug. 23, 2017USD ($) | Mar. 31, 2017USD ($) | Feb. 22, 2017USD ($) | Jul. 18, 2016USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2013USD ($) | Feb. 28, 2013USD ($) |
Line of Credit Facility [Line Items] | ||||||||||||||
Carrying amount of outstanding debt | $ 3,420,000,000 | $ 3,420,000,000 | $ 3,456,000,000 | |||||||||||
Debt issuance costs | 19,000,000 | 19,000,000 | 23,000,000 | |||||||||||
Unamortized discount | 8,000,000 | 8,000,000 | 9,000,000 | |||||||||||
Repayment of debt | 35,483,000 | $ 1,868,655,000 | ||||||||||||
Loss on extinguishment of debt | 0 | $ 1,012,000 | 633,000 | $ 1,012,000 | ||||||||||
Face value of outstanding debt | 3,382,946,000 | 3,382,946,000 | 3,430,895,000 | |||||||||||
Outstanding letters of credit that will reduce overall credit capacity | 15,000,000 | 15,000,000 | 21,000,000 | |||||||||||
Senior secured credit facilities | Prior Revolver | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Loss on extinguishment of debt | $ 4,000,000 | |||||||||||||
Senior secured credit facilities | Fourth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Extension of maturity date | 1 year | |||||||||||||
Senior secured credit facilities | Term Loan | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Extinguishment of debt | $ 1,761,000,000 | |||||||||||||
Payment of associated financing fees | $ 12,000,000 | |||||||||||||
Senior secured credit facilities | Term Loan | Amended And Restated Credit Agreement, Term Loan B | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Credit facility amount | $ 1,775,000,000 | |||||||||||||
Senior secured credit facilities | Term Loan | Amended And Restated Credit Agreement, Term Loan C | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Credit facility amount | 425,000,000 | |||||||||||||
Senior secured credit facilities | Term Loan | Incremental Term Loan Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Credit facility amount | $ 350,000,000 | |||||||||||||
Senior secured credit facilities | Term Loan | Second Amended and Restated Credit Agreement, Term Loan A | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Credit facility amount | $ 600,000,000 | |||||||||||||
Proceeds from line of credit | 597,000,000 | |||||||||||||
Debt instrument discount | 3,000,000 | |||||||||||||
Senior secured credit facilities | Term Loan | Third Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Unamortized discount | $ 2,000,000 | 2,000,000 | ||||||||||||
Credit facility amount | 1,900,000,000 | |||||||||||||
Proceeds from line of credit | 1,898,000,000 | |||||||||||||
Debt instrument discount | $ 2,000,000 | |||||||||||||
Senior secured credit facilities | Term Loan | Second Amended and Restated Credit Agreement | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Debt issuance costs | 9,000,000 | 9,000,000 | ||||||||||||
Unamortized discount | 3,000,000 | $ 3,000,000 | ||||||||||||
Senior secured credit facilities | Revolving Credit Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Extinguishment of debt | 120,000,000 | |||||||||||||
Payment of associated financing fees | 11,000,000 | |||||||||||||
Senior secured credit facilities | Revolving Credit Facility | Amended And Restated Credit Agreement | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Credit facility amount | $ 352,000,000 | |||||||||||||
Senior secured credit facilities | Revolving Credit Facility | Second Amended and Restated Credit Agreement, New Revolver | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Credit facility amount | 400,000,000 | |||||||||||||
Senior secured credit facilities | Revolving Credit Facility | Fourth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Credit facility amount | $ 400,000,000 | |||||||||||||
Senior secured first-lien net leverage ratio | 3.75 | |||||||||||||
Decrease in variable basis spread, quarterly | 0.25% | |||||||||||||
Decrease in variable basis spread, maximum | 0.75% | |||||||||||||
Senior secured credit facilities | Term Loan B and Incremental Term Loan Facility | Term Loan B and Incremental Term Loan Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Repayment of debt | $ 350,000,000 | |||||||||||||
Senior secured credit facilities | New Term Loan B | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Face value of outstanding debt | 1,866,940,000 | 1,866,940,000 | 1,881,048,000 | |||||||||||
Senior secured credit facilities | New Term Loan B | Fourth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Credit facility amount | $ 1,891,000,000 | |||||||||||||
Senior secured first-lien net leverage ratio | 3 | |||||||||||||
Senior secured credit facilities | New Term Loan B | Fifth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Loss on extinguishment of debt | 1,000,000 | |||||||||||||
Senior secured credit facilities | New Term Loan A | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Face value of outstanding debt | 534,375,000 | 534,375,000 | 555,750,000 | |||||||||||
Senior secured credit facilities | New Term Loan A | Fourth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Credit facility amount | $ 570,000,000 | |||||||||||||
Senior secured first-lien net leverage ratio | 2.25 | |||||||||||||
Decrease in variable basis spread, quarterly | 0.25% | |||||||||||||
Decrease in variable basis spread, maximum | 0.75% | |||||||||||||
Mortgage Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Extinguishment of debt | $ 80,000,000 | |||||||||||||
Senior Secured Credit Facilities | Revolving Credit Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Face value of outstanding debt | $ 0 | 0 | $ 0 | |||||||||||
Eurocurrency | Senior secured credit facilities | New Term Loan B | Fourth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable basis spread | 2.25% | |||||||||||||
Eurocurrency | Senior secured credit facilities | New Term Loan B | Fifth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable basis spread | 2.00% | |||||||||||||
Base Rate | Senior secured credit facilities | New Term Loan B | Fourth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable basis spread | 1.25% | |||||||||||||
Base Rate | Senior secured credit facilities | New Term Loan B | Fifth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable basis spread | 1.00% | |||||||||||||
Minimum | Eurocurrency | Senior secured credit facilities | Revolving Credit Facility | Fourth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable basis spread | 2.50% | |||||||||||||
Minimum | Eurocurrency | Senior secured credit facilities | New Term Loan A | Fourth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable basis spread | 2.50% | |||||||||||||
Minimum | Base Rate | Senior secured credit facilities | Revolving Credit Facility | Fourth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable basis spread | 1.50% | |||||||||||||
Minimum | Base Rate | Senior secured credit facilities | New Term Loan A | Fourth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable basis spread | 1.50% | |||||||||||||
Maximum | Eurocurrency | Senior secured credit facilities | Revolving Credit Facility | Fourth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable basis spread | 1.75% | |||||||||||||
Maximum | Eurocurrency | Senior secured credit facilities | New Term Loan A | Fourth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable basis spread | 1.75% | |||||||||||||
Maximum | Base Rate | Senior secured credit facilities | Revolving Credit Facility | Fourth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable basis spread | 0.75% | |||||||||||||
Maximum | Base Rate | Senior secured credit facilities | New Term Loan A | Fourth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Variable basis spread | 0.75% | |||||||||||||
Other, net | Senior secured credit facilities | New Term Loan B | Fifth Incremental Term Facility Amendment | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Financing fees | $ 2,000,000 |
Derivatives - Additional Inform
Derivatives - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Apr. 30, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Feb. 22, 2017 | |
Derivative [Line Items] | ||||||||
Hedging ineffectiveness recorded in earnings | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Estimated gain reclassified from other comprehensive income (loss) to earnings as contracts settle | 7,000,000 | |||||||
Accumulated losses in other comprehensive income | (6,993,000) | (6,993,000) | $ (2,651,000) | |||||
Interest expense | 39,291,000 | 38,919,000 | 116,809,000 | 116,577,000 | ||||
Interest rate swaps | ||||||||
Derivative [Line Items] | ||||||||
Notional Amount | 750,000,000 | 750,000,000 | 750,000,000 | 750,000,000 | $ 750,000,000 | |||
Derivatives Designated as Hedging Instruments | Interest rate swaps | ||||||||
Derivative [Line Items] | ||||||||
Accumulated losses in other comprehensive income | $ 14,000,000 | |||||||
Reclassification out of AOCI | Derivatives Not Designated as Hedging Instruments | ||||||||
Derivative [Line Items] | ||||||||
Interest expense | $ 2,000,000 | $ 2,000,000 | $ 6,000,000 | $ 5,000,000 | ||||
Cash Flow Hedging | Interest rate swaps, 2019 | ||||||||
Derivative [Line Items] | ||||||||
Notional Amount | $ 600,000,000 | |||||||
Cash Flow Hedging | Interest rate swaps, 2020 | ||||||||
Derivative [Line Items] | ||||||||
Notional Amount | 300,000,000 | |||||||
Cash Flow Hedging | Interest rate swaps, 2021 | ||||||||
Derivative [Line Items] | ||||||||
Notional Amount | $ 450,000,000 |
Derivatives - Schedule of Unset
Derivatives - Schedule of Unsettled Purchased Foreign Currency Forward Contracts (Details) - Long - Foreign currency forward contracts ₨ in Thousands, £ in Thousands, zł in Thousands, kr in Thousands, R$ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands | Sep. 30, 2018GBP (£) | Sep. 30, 2018AUD ($) | Sep. 30, 2018INR (₨) | Sep. 30, 2018PLN (zł) | Sep. 30, 2018USD ($) | Sep. 30, 2018BRL (R$) | Sep. 30, 2018SEK (kr) | Sep. 30, 2018SGD ($) | Dec. 31, 2017GBP (£) | Dec. 31, 2017AUD ($) | Dec. 31, 2017INR (₨) | Dec. 31, 2017PLN (zł) | Dec. 31, 2017USD ($) | Dec. 31, 2017BRL (R$) | Dec. 31, 2017SEK (kr) | Dec. 31, 2017SGD ($) |
Polish Zloty | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Notional Amount | zł 238,000 | $ 66,666 | zł 225,000 | $ 61,016 | ||||||||||||
Average contract rate | 0.2801 | 0.2801 | 0.2801 | 0.2801 | 0.2801 | 0.2801 | 0.2801 | 0.2801 | 0.2712 | 0.2712 | 0.2712 | 0.2712 | 0.2712 | 0.2712 | 0.2712 | 0.2712 |
Singapore Dollar | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Notional Amount | $ 48,595 | $ 65,050 | $ 52,065 | $ 70,750 | ||||||||||||
Average contract rate | 0.7470 | 0.7470 | 0.7470 | 0.7470 | 0.7470 | 0.7470 | 0.7470 | 0.7470 | 0.7359 | 0.7359 | 0.7359 | 0.7359 | 0.7359 | 0.7359 | 0.7359 | 0.7359 |
Indian Rupee | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Notional Amount | ₨ 2,735,000 | $ 38,769 | ₨ 1,720,000 | $ 25,939 | ||||||||||||
Average contract rate | 0.0141 | 0.0141 | 0.0141 | 0.0141 | 0.0141 | 0.0141 | 0.0141 | 0.0141 | 0.0151 | 0.0151 | 0.0151 | 0.0151 | 0.0151 | 0.0151 | 0.0151 | 0.0151 |
British Pound Sterling | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Notional Amount | £ 20,700 | $ 28,371 | £ 25,900 | $ 34,307 | ||||||||||||
Average contract rate | 1.3706 | 1.3706 | 1.3706 | 1.3706 | 1.3706 | 1.3706 | 1.3706 | 1.3706 | 1.3246 | 1.3246 | 1.3246 | 1.3246 | 1.3246 | 1.3246 | 1.3246 | 1.3246 |
Australian Dollar | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Notional Amount | $ 26,300 | $ 19,751 | $ 20,750 | $ 15,932 | ||||||||||||
Average contract rate | 0.7510 | 0.7510 | 0.7510 | 0.7510 | 0.7510 | 0.7510 | 0.7510 | 0.7510 | 0.7678 | 0.7678 | 0.7678 | 0.7678 | 0.7678 | 0.7678 | 0.7678 | 0.7678 |
Swedish Krona | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Notional Amount | $ 6,243 | kr 52,200 | $ 5,353 | kr 44,100 | ||||||||||||
Average contract rate | 0.1196 | 0.1196 | 0.1196 | 0.1196 | 0.1196 | 0.1196 | 0.1196 | 0.1196 | 0.1214 | 0.1214 | 0.1214 | 0.1214 | 0.1214 | 0.1214 | 0.1214 | 0.1214 |
Brazilian Real | ||||||||||||||||
Derivative [Line Items] | ||||||||||||||||
Notional Amount | $ 5,628 | R$ 20850 | $ 4,976 | R$ 16800 | ||||||||||||
Average contract rate | 0.2668 | 0.2668 | 0.2668 | 0.2668 | 0.2668 | 0.2668 | 0.2668 | 0.2668 | 0.2962 | 0.2962 | 0.2962 | 0.2962 | 0.2962 | 0.2962 | 0.2962 | 0.2962 |
Derivatives - Schedule of Outst
Derivatives - Schedule of Outstanding Interest Rate Swaps (Details) | Sep. 30, 2018USD ($) |
Derivative [Line Items] | |
Interest rate swap contracts, floor rate | 1.00% |
Derivatives Designated as Hedging Instruments | |
Derivative [Line Items] | |
Interest rate swap contracts, floor rate | 0.00% |
Derivatives Designated as Hedging Instruments | 1.15% | |
Derivative [Line Items] | |
Notional Amount | $ 750,000,000 |
Interest Rate Paid | 1.15% |
Derivatives Designated as Hedging Instruments | 1.65% | |
Derivative [Line Items] | |
Notional Amount | $ 750,000,000 |
Interest Rate Paid | 1.65% |
Derivatives Designated as Hedging Instruments | 2.27% | |
Derivative [Line Items] | |
Notional Amount | $ 1,350,000,000 |
Interest Rate Paid | 2.27% |
Derivatives Designated as Hedging Instruments | 2.11% | |
Derivative [Line Items] | |
Notional Amount | $ 1,050,000,000 |
Interest Rate Paid | 2.11% |
Derivatives Designated as Hedging Instruments | 2.82% | |
Derivative [Line Items] | |
Notional Amount | $ 450,000,000 |
Interest Rate Paid | 2.82% |
Derivatives Not Designated as Hedging Instruments | 2.19% | |
Derivative [Line Items] | |
Notional Amount | $ 750,000,000 |
Interest Rate Paid | 2.19% |
Derivatives Not Designated as Hedging Instruments | 1.18% | |
Derivative [Line Items] | |
Notional Amount | $ 750,000,000 |
Interest Rate Received | 1.18% |
Derivatives Not Designated as Hedging Instruments | 2.61% | |
Derivative [Line Items] | |
Notional Amount | $ 750,000,000 |
Interest Rate Paid | 2.61% |
Derivatives Not Designated as Hedging Instruments | 1.67% | |
Derivative [Line Items] | |
Notional Amount | $ 750,000,000 |
Interest Rate Received | 1.67% |
Derivatives - Schedule of Estim
Derivatives - Schedule of Estimated Fair Values of Derivatives Designated as Hedging Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Derivatives Designated as Hedging Instruments | ||
Derivative [Line Items] | ||
Derivative Assets (Liabilities) | $ 10,839 | $ 10,162 |
Derivatives Not Designated as Hedging Instruments | ||
Derivative [Line Items] | ||
Derivative Assets (Liabilities) | (1,841) | (7,119) |
Prepaid expenses and other current assets | Derivatives Designated as Hedging Instruments | Foreign exchange contracts | ||
Derivative [Line Items] | ||
Derivative asset | 0 | 6,213 |
Prepaid expenses and other current assets | Derivatives Designated as Hedging Instruments | Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative asset | 5,760 | 856 |
Other accrued liabilities | Derivatives Designated as Hedging Instruments | Foreign exchange contracts | ||
Derivative [Line Items] | ||
Derivative Liability | (7,142) | 0 |
Other accrued liabilities | Derivatives Not Designated as Hedging Instruments | Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative Liability | (1,841) | (7,119) |
Other assets, net | Derivatives Designated as Hedging Instruments | Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative asset | $ 12,221 | $ 3,093 |
Derivatives - Schedule of Effec
Derivatives - Schedule of Effects of Derivative Instruments Net of Taxes on Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Derivative [Line Items] | ||||
Amount of (Loss) Gain Recognized in OCI on Derivative, Effective Portion | $ 1,436 | $ 2,561 | $ 3,621 | $ 9,561 |
Derivatives Designated as Hedging Instruments | Cash Flow Hedging | ||||
Derivative [Line Items] | ||||
Amount of (Loss) Gain Recognized in OCI on Derivative, Effective Portion | 1,436 | 2,610 | 4,121 | 9,340 |
Amount of Loss (Gain) Reclassified from Accumulated OCI into Income, Effective Portion | 2,406 | (216) | 727 | 3,461 |
Foreign exchange contracts | Derivatives Designated as Hedging Instruments | Cash Flow Hedging | ||||
Derivative [Line Items] | ||||
Amount of (Loss) Gain Recognized in OCI on Derivative, Effective Portion | (1,606) | 1,800 | (7,897) | 10,378 |
Foreign exchange contracts | Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Cost of revenue | ||||
Derivative [Line Items] | ||||
Amount of Loss (Gain) Reclassified from Accumulated OCI into Income, Effective Portion | 1,558 | (1,385) | (2,769) | (502) |
Interest rate swaps | Derivatives Designated as Hedging Instruments | Cash Flow Hedging | ||||
Derivative [Line Items] | ||||
Amount of (Loss) Gain Recognized in OCI on Derivative, Effective Portion | 3,042 | 810 | 12,018 | (1,038) |
Interest rate swaps | Derivatives Designated as Hedging Instruments | Cash Flow Hedging | Interest expense, net | ||||
Derivative [Line Items] | ||||
Amount of Loss (Gain) Reclassified from Accumulated OCI into Income, Effective Portion | $ 848 | $ 1,169 | $ 3,496 | $ 3,963 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total | $ 8,998 | $ 3,043 |
Level 1 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total | 0 | 0 |
Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total | 8,998 | 3,043 |
Level 3 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total | 0 | 0 |
Foreign currency forward contracts | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative Assets (Liabilities) | (7,142) | 6,213 |
Foreign currency forward contracts | Level 1 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative Assets (Liabilities) | 0 | 0 |
Foreign currency forward contracts | Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative Assets (Liabilities) | (7,142) | 6,213 |
Foreign currency forward contracts | Level 3 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative Assets (Liabilities) | 0 | 0 |
Interest rate swaps | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative Assets (Liabilities) | 16,140 | (3,170) |
Interest rate swaps | Level 1 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative Assets (Liabilities) | 0 | 0 |
Interest rate swaps | Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative Assets (Liabilities) | 16,140 | (3,170) |
Interest rate swaps | Level 3 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative Assets (Liabilities) | $ 0 | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Fair Value and Carrying Value of Debt (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Term Loan A | Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | $ 536,379,000 | $ 559,223,000 |
Term Loan A | Carrying Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | 532,497,000 | 553,444,000 |
Term Loan B | Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | 1,876,274,000 | 1,890,453,000 |
Term Loan B | Carrying Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | 1,860,937,000 | 1,873,993,000 |
Revolver, $400 million | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Credit facility amount | 400,000,000 | |
Revolver, $400 million | Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | 0 | 0 |
Revolver, $400 million | Carrying Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | 0 | 0 |
5.375% senior secured notes due 2023 | Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | $ 533,684,000 | 546,563,000 |
Interest rate | 5.375% | |
5.375% senior secured notes due 2023 | Carrying Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | $ 530,000,000 | 530,000,000 |
5.25% senior secured notes due 2023 | Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | $ 501,265,000 | 512,500,000 |
Interest rate | 5.25% | |
5.25% senior secured notes due 2023 | Carrying Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | $ 500,000,000 | $ 500,000,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | ||
Defined benefit pension and other post retirement benefit plans | $ (121,469) | $ (102,623) |
Unrealized foreign currency translation gain | 7,330 | 11,488 |
Unrealized gain on foreign currency forward contracts and interest rate swaps | 6,993 | 2,651 |
Total accumulated other comprehensive loss, net of tax | (107,146) | $ (88,484) |
Loss on adoption new accounting standard (Note 8) | $ 22,000 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Basic and Diluted Earnings Per Share from Continuing Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Income from continuing operations | $ 70,879 | $ 92,825 | $ 253,893 | $ 166,395 |
Less: Net income attributable to noncontrolling interests | 1,538 | 1,307 | 3,979 | 3,726 |
Net income from continuing operations available to common stockholders, basic and diluted | $ 69,341 | $ 91,518 | $ 249,914 | $ 162,669 |
Denominator: | ||||
Basic weighted-average common shares outstanding (in shares) | 275,175 | 277,477 | 275,205 | 277,754 |
Add: Dilutive effect of stock options and restricted stock awards (in shares) | 2,353 | 892 | 1,614 | 1,894 |
Diluted weighted-average common shares outstanding (in shares) | 277,528 | 278,369 | 276,819 | 279,648 |
Earnings per share from continuing operations: | ||||
Basic (in dollars per share) | $ 0.25 | $ 0.33 | $ 0.91 | $ 0.59 |
Diluted (in dollars per share) | $ 0.25 | $ 0.33 | $ 0.90 | $ 0.58 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Common stock equivalents | 2 | 8 | 3 | 5 |
Contingencies - Antitrust Litig
Contingencies - Antitrust Litigation and DOJ Investigation (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | ||
Apr. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | |
Loss Contingencies [Line Items] | ||||
VAT receivables | $ 20 | |||
VAT refundable claims | 8 | |||
Estimation of amount due in adverse ruling | 5 | |||
Indian Income Tax Litigation | Foreign Tax Authority | ||||
Loss Contingencies [Line Items] | ||||
Taxes, interest and penalties | 42 | |||
US Airways Litigation | ||||
Loss Contingencies [Line Items] | ||||
Damages awarded | $ 15 | |||
Loss contingency accrual | 32 | |||
Reasonable attorneys' fees, expenses and costs | 17 | |||
US Airways Litigation | Minimum | ||||
Loss Contingencies [Line Items] | ||||
Estimate of possible loss | 32 | |||
US Airways Litigation | Maximum | ||||
Loss Contingencies [Line Items] | ||||
Estimate of possible loss | $ 65 | |||
US Airways Litigation | US Airways | ||||
Loss Contingencies [Line Items] | ||||
Damages awarded | $ 15 | $ 5 | ||
Damages sought | $ 125 | |||
VAT Claims by Pakistan and Italy | ||||
Loss Contingencies [Line Items] | ||||
Estimate of possible loss | $ 5 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2018segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Information - Summary o
Segment Information - Summary of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 970,283 | $ 900,606 | $ 2,943,028 | $ 2,716,622 |
Adjusted Gross Profit | 377,786 | 371,232 | 1,156,042 | 1,140,587 |
Adjusted Operating Income | 173,973 | 168,105 | 543,555 | 551,543 |
Adjusted EBITDA | 278,505 | 262,926 | 856,845 | 821,904 |
Depreciation and amortization | 102,732 | 97,042 | 307,551 | 295,729 |
Adjusted Capital Expenditures | 73,778 | 75,401 | 205,664 | 242,811 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted EBITDA | 320,193 | 310,090 | 992,128 | 954,393 |
Depreciation and amortization | 85,122 | 75,263 | 252,467 | 218,121 |
Adjusted Capital Expenditures | 51,569 | 56,405 | 145,116 | 192,605 |
Operating Segments | Travel Network | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 700,196 | 632,349 | 2,141,017 | 1,931,441 |
Adjusted Gross Profit | 268,604 | 255,429 | 842,359 | 822,889 |
Adjusted Operating Income | 182,533 | 172,098 | 590,380 | 584,420 |
Adjusted EBITDA | 229,983 | 216,487 | 735,669 | 713,977 |
Depreciation and amortization | 29,243 | 26,384 | 87,965 | 79,259 |
Adjusted Capital Expenditures | 16,963 | 19,895 | 45,002 | 69,151 |
Operating Segments | Airline Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 209,388 | 207,121 | 620,813 | 610,608 |
Adjusted Gross Profit | 90,428 | 98,313 | 264,450 | 265,009 |
Adjusted Operating Income | 28,505 | 39,574 | 82,030 | 94,533 |
Adjusted EBITDA | 74,094 | 80,361 | 217,629 | 210,329 |
Depreciation and amortization | 45,589 | 40,787 | 135,599 | 115,796 |
Adjusted Capital Expenditures | 25,315 | 26,275 | 72,485 | 92,193 |
Operating Segments | Hospitality Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 69,911 | 67,802 | 206,353 | 194,071 |
Adjusted Gross Profit | 23,069 | 25,455 | 61,965 | 66,052 |
Adjusted Operating Income | 5,826 | 5,150 | 9,927 | 7,021 |
Adjusted EBITDA | 16,116 | 13,242 | 38,830 | 30,087 |
Depreciation and amortization | 10,290 | 8,092 | 28,903 | 23,066 |
Adjusted Capital Expenditures | 9,291 | 10,235 | 27,629 | 31,261 |
Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | (9,212) | (6,666) | (25,155) | (19,498) |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted Gross Profit | (4,315) | (7,965) | (12,732) | (13,363) |
Adjusted Operating Income | (42,891) | (48,717) | (138,782) | (134,431) |
Adjusted EBITDA | (41,688) | (47,164) | (135,283) | (132,489) |
Depreciation and amortization | 17,610 | 21,779 | 55,084 | 77,608 |
Adjusted Capital Expenditures | $ 22,209 | $ 18,996 | $ 60,548 | $ 50,206 |
Segment Information - Adjusted
Segment Information - Adjusted Gross Margin (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Segment Reporting [Abstract] | ||||||
Adjusted Gross Profit | $ 377,786,000 | $ 371,232,000 | $ 1,156,042,000 | $ 1,140,587,000 | ||
Less adjustments: | ||||||
Selling, general and administrative | 130,152,000 | 91,840,000 | 384,047,000 | 383,137,000 | ||
Impairment and related charges | 0 | $ 81,000,000 | 0 | 0 | 92,022,000 | $ 92,000,000 |
Cost of revenue adjustments: | ||||||
Depreciation and amortization | 85,552,000 | 79,976,000 | 254,490,000 | 229,688,000 | ||
Amortization of upfront incentive consideration | 18,207,000 | 18,005,000 | 57,324,000 | 50,298,000 | ||
Restructuring and other costs | 0 | 0 | 0 | 12,976,000 | ||
Stock-based compensation | 7,112,000 | 4,615,000 | 19,184,000 | 13,626,000 | ||
Operating income | $ 136,763,000 | $ 176,796,000 | $ 440,997,000 | $ 358,840,000 |
Segment Information - Adjustmen
Segment Information - Adjustment Operating Income (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Segment Reporting [Abstract] | ||||||
Adjusted Operating Income | $ 173,973,000 | $ 168,105,000 | $ 543,555,000 | $ 551,543,000 | ||
Joint venture equity income | 333,000 | 357,000 | 2,455,000 | 1,768,000 | ||
Impairment and related charges | 0 | $ 81,000,000 | 0 | 0 | 92,022,000 | $ 92,000,000 |
Acquisition-related amortization | 16,407,000 | 20,226,000 | 51,585,000 | 75,666,000 | ||
Restructuring and other costs | 0 | 0 | 0 | 25,304,000 | ||
Litigation costs (reimbursements), net | 5,225,000 | (40,929,000) | 7,073,000 | (36,470,000) | ||
Stock-based compensation | 15,245,000 | 11,655,000 | 41,445,000 | 34,413,000 | ||
Operating income | $ 136,763,000 | $ 176,796,000 | $ 440,997,000 | $ 358,840,000 |
Segment Information - Adjuste_2
Segment Information - Adjusted EBITDA (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||||
Adjusted EBITDA | $ 278,505,000 | $ 262,926,000 | $ 856,845,000 | $ 821,904,000 | ||
Less adjustments: | ||||||
Depreciation and amortization of property and equipment | 76,226,000 | 66,332,000 | 225,649,000 | 191,442,000 | ||
Amortization of capitalized implementation costs | 10,099,000 | 10,484,000 | 30,317,000 | 28,621,000 | ||
Acquisition-related amortization | 16,407,000 | 20,226,000 | 51,585,000 | 75,666,000 | ||
Amortization of upfront incentive consideration | 18,207,000 | 18,005,000 | 57,324,000 | 50,298,000 | ||
Impairment and related charges | 0 | $ 81,000,000 | 0 | 0 | 92,022,000 | $ 92,000,000 |
Interest expense, net | 39,291,000 | 38,919,000 | 116,809,000 | 116,577,000 | ||
Loss on extinguishment of debt | 0 | 1,012,000 | 633,000 | 1,012,000 | ||
Other, net | 1,905,000 | 3,802,000 | 10,746,000 | 19,788,000 | ||
Restructuring and other costs | 0 | 0 | 0 | 25,304,000 | ||
Litigation costs (reimbursements), net | 5,225,000 | (40,929,000) | 7,073,000 | (36,470,000) | ||
Stock-based compensation | 15,245,000 | 11,655,000 | 41,445,000 | 34,413,000 | ||
Provision for income taxes | 25,021,000 | 40,595,000 | 61,371,000 | 56,836,000 | ||
Income from continuing operations | $ 70,879,000 | 92,825,000 | 253,893,000 | 166,395,000 | ||
Debt modification costs | 1,558,000 | 14,758,000 | ||||
Minimum | ||||||
Less adjustments: | ||||||
Average expected life of the service contract to cost of revenue | 3 years | |||||
Maximum | ||||||
Less adjustments: | ||||||
Average expected life of the service contract to cost of revenue | 5 years | |||||
Workforce reduction | ||||||
Less adjustments: | ||||||
Restructuring and other costs | $ 25,000,000 | |||||
American Airlines Litigation | ||||||
Less adjustments: | ||||||
Litigation costs (reimbursements), net | $ (43,000,000) | |||||
Unasserted Claim | ||||||
Less adjustments: | ||||||
Loss contingency accrual | $ 5,000,000 | $ 5,000,000 |