Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | May 01, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity Registrant Name | Sabre Corp | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 001-36422 | |
Entity Tax Identification Number | 20-8647322 | |
Entity Address, Address Line One | 3150 Sabre Drive | |
Entity Address, City or Town | Southlake | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76092 | |
City Area Code | 682 | |
Local Phone Number | 605-1000 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | SABR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 275,523,228 | |
Entity Central Index Key | 0001597033 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 658,977 | $ 1,049,361 |
Cost of revenue | 611,515 | 787,563 |
Selling, general and administrative | 198,873 | 151,391 |
Operating (loss) income | (151,411) | 110,407 |
Other income (expense): | ||
Interest expense, net | (37,442) | (38,013) |
Equity method (loss) income | (686) | 533 |
Other, net | (47,486) | (1,870) |
Total other expense, net | (85,614) | (39,350) |
(Loss) Income from continuing operations before income taxes | (237,025) | 71,057 |
Provision for income taxes | (27,254) | 11,843 |
(Loss) Income from continuing operations | (209,771) | 59,214 |
Loss from discontinued operations, net of tax | (2,126) | (1,452) |
Net (loss) income | (211,897) | 57,762 |
Net income attributable to noncontrolling interests | 783 | 912 |
Net (loss) income attributable to common stockholders | $ (212,680) | $ 56,850 |
Basic net (loss) income per share attributable to common stockholders: | ||
(Loss) Income from continuing operations (in dollars per share) | $ (0.77) | $ 0.21 |
Loss from discontinued operations (in dollars per share) | (0.01) | (0.01) |
Net (loss) income per common share (in dollars per share) | (0.78) | 0.20 |
Diluted net (loss) income per share attributable to common stockholders: | ||
(Loss) Income from continuing operations (in dollars per share) | (0.77) | 0.21 |
Loss from discontinued operations (in dollars per share) | (0.01) | (0.01) |
Net (loss) income per common share (in dollars per share) | $ (0.78) | $ 0.20 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 274,037 | 275,589 |
Diluted (in shares) | 274,037 | 277,605 |
Dividends per common share (in dollars per share) | $ 0.14 | $ 0.14 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (211,897) | $ 57,762 |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustments ("CTA") | (1,794) | (2,293) |
Retirement-related benefit plans: | ||
Net actuarial gain, net of taxes of $(1,206) | 4,141 | 0 |
Amortization of prior service credits, net of taxes of $80 and $80 | (278) | (278) |
Amortization of actuarial losses, net of taxes of $(365) and $(353) | 1,264 | 1,222 |
Net change in retirement-related benefit plans, net of tax | 5,127 | 944 |
Derivatives: | ||
Unrealized losses, net of taxes of $6,447 and $1,596 | (23,818) | (5,409) |
Reclassification adjustment for realized gains, net of taxes of $(515) and $(555) | 1,835 | 2,202 |
Net change in derivatives, net of tax | (21,983) | (3,207) |
Share of other comprehensive (loss) income of equity method investments | (653) | 28 |
Other comprehensive loss | (19,303) | (4,528) |
Comprehensive (loss) income | (231,200) | 53,234 |
Less: Comprehensive loss attributable to noncontrolling interests | (783) | (912) |
Comprehensive (loss) income attributable to Sabre Corporation | $ (230,417) | $ 52,322 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net actuarial gain, taxes | $ (1,206) | |
Amortization of prior service credits, taxes | (80) | $ (80) |
Amortization of actuarial losses, taxes | (365) | (353) |
Unrealized (losses) gains on derivatives, taxes | 6,447 | 1,596 |
Reclassification adjustment for realized losses, taxes | $ (515) | $ (555) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 684,472 | $ 436,176 |
Accounts receivable, net of allowance for credit losses of $100,245 and $56,367 | 360,677 | 546,533 |
Prepaid expenses and other current assets | 150,470 | 139,211 |
Total current assets | 1,195,619 | 1,121,920 |
Property and equipment, net of accumulated depreciation of $1,875,769 and $1,815,844 | 594,132 | 641,722 |
Equity method investments | 24,503 | 27,494 |
Goodwill | 2,631,077 | 2,633,251 |
Deferred income taxes | 35,958 | 21,812 |
Other assets, net | 671,067 | 670,105 |
Total assets | 5,709,858 | 5,689,957 |
Current liabilities | ||
Accounts payable | 200,564 | 187,187 |
Accrued compensation and related benefits | 72,012 | 94,368 |
Accrued subscriber incentives | 253,019 | 316,254 |
Deferred revenues | 100,146 | 84,661 |
Other accrued liabilities | 262,818 | 189,548 |
Current portion of debt | 79,770 | 81,614 |
Tax Receivable Agreement | 0 | 71,911 |
Total current liabilities | 968,329 | 1,025,543 |
Deferred income taxes | 77,816 | 107,402 |
Other noncurrent liabilities | 361,690 | 347,522 |
Long-term debt | 3,619,312 | 3,261,821 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity | ||
Common Stock: $0.01 par value; 1,000,000 authorized shares; 296,543 and 294,319 shares issued, 275,314 and 273,733 shares outstanding at March 31, 2020 and December 31, 2019, respectively | 2,965 | 2,943 |
Additional paid-in capital | 2,335,171 | 2,317,544 |
Treasury Stock, at cost, 21,229 and 20,587 shares at March 31, 2020 and December 31, 2019, respectively | (473,890) | (468,618) |
Retained deficit | (1,022,297) | (763,482) |
Accumulated other comprehensive loss | (168,609) | (149,306) |
Non-controlling interest | 9,371 | 8,588 |
Total stockholders’ equity | 682,711 | 947,669 |
Total liabilities and stockholders’ equity | 5,709,858 | 5,689,957 |
Customer Relationships | ||
Current assets | ||
Finite lived intangible assets, net | 306,081 | 311,015 |
Other Intangible Assets | ||
Current assets | ||
Finite lived intangible assets, net | $ 251,421 | $ 262,638 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Allowance for credit loss | $ 100,245 | $ 56,367 |
Accumulated depreciation on property and equipment | $ 1,875,769 | $ 1,815,844 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 296,543,000 | 294,319,000 |
Common stock, shares outstanding (in shares) | 275,314,000 | 273,733,000 |
Treasury stock, shares held (in shares) | 21,229,000 | 20,587,000 |
Customer Relationships | ||
Accumulated amortization | $ 741,744 | $ 735,367 |
Other Intangible Assets | ||
Accumulated amortization | $ 684,491 | $ 674,073 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating Activities | ||
Net (loss) income | $ (211,897) | $ 57,762 |
Adjustments to reconcile net (loss) income to cash provided by operating activities: | ||
Depreciation and amortization | 95,861 | 103,443 |
Deferred income taxes | (41,732) | (13,932) |
Allowance for credit losses | 36,359 | 5,370 |
Acquisition termination fee | 24,811 | 0 |
Amortization of upfront incentive consideration | 18,213 | 19,128 |
Stock-based compensation expense | 17,577 | 15,694 |
Other | (4,196) | (1,189) |
Loss from discontinued operations | 2,126 | 1,452 |
Dividends received from equity method investments | 1,652 | 996 |
Amortization of debt issuance costs | 993 | 993 |
Equity method loss (income) | 686 | (533) |
Changes in operating assets and liabilities: | ||
Accounts and other receivables | 120,580 | (95,354) |
Prepaid expenses and other current assets | (10,120) | (24,429) |
Capitalized implementation costs | (1,472) | (7,619) |
Upfront incentive consideration | (22,566) | (22,052) |
Other assets | 16,102 | 26,078 |
Accrued compensation and related benefits | (23,655) | (47,150) |
Accounts payable and other accrued liabilities | (1,197) | 131,753 |
Deferred revenue including upfront solution fees | 22,306 | 1,589 |
Cash provided by operating activities | 40,431 | 152,000 |
Investing Activities | ||
Additions to property and equipment | (28,437) | (37,864) |
Other investing activities | (4,413) | 0 |
Cash used in investing activities | (32,850) | (37,864) |
Financing Activities | ||
Proceeds of borrowings from lenders | 375,000 | 0 |
Payments on Tax Receivable Agreement | (71,958) | (72,790) |
Cash dividends paid to common stockholders | (38,544) | (38,594) |
Payments on borrowings from lenders | (18,953) | (11,828) |
Net payments on the settlement of equity-based awards | (5,200) | (6,842) |
Other financing activities | (2,199) | (2,114) |
Repurchase of common stock | 0 | (32,146) |
Cash provided by (used in) financing activities | 238,146 | (164,314) |
Cash Flows from Discontinued Operations | ||
Cash used in operating activities | (997) | (48) |
Cash used in discontinued operations | (997) | (48) |
Effect of exchange rate changes on cash and cash equivalents | 3,566 | 448 |
Increase (decrease) in cash and cash equivalents | 248,296 | (49,778) |
Cash and cash equivalents at beginning of period | 436,176 | 509,265 |
Cash and cash equivalents at end of period | $ 684,472 | $ 459,487 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid in Capital | Treasury Stock | Retained Earnings (Deficit) | Accumulated Other Comprehensive Loss | Noncontrolling Interest | |
Stockholders' equity, beginning balance at Dec. 31, 2018 | $ 974,271 | $ 2,917 | $ 2,243,419 | $ (377,980) | $ (768,566) | $ (132,724) | $ 7,205 | |
Stockholders' equity, beginning balance (in shares) at Mar. 31, 2019 | 293,909,061 | 18,280,416 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Comprehensive income (loss) | 53,234 | |||||||
Comprehensive income (loss) | 53,216 | 56,850 | (4,528) | 894 | ||||
Common stock dividends | [1] | (38,594) | (38,594) | |||||
Settlement of stock-based awards | (6,842) | $ 22 | 3,311 | $ (10,175) | ||||
Settlement of stock-based awards (in shares) | 2,245,107 | 477,357 | ||||||
Repurchase of common stock | (32,146) | $ (32,146) | ||||||
Repurchase of common stock (in shares) | 1,491,521 | |||||||
Stock-based compensation expense | 15,694 | 15,694 | ||||||
Stockholders' equity, ending balance at Mar. 31, 2019 | $ 965,599 | $ 2,939 | 2,262,424 | $ (420,301) | (750,310) | (137,252) | 8,099 | |
Stockholders' equity, ending balance (in shares) at Dec. 31, 2018 | 291,663,954 | 16,311,538 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock cash dividend paid per share (in dollars per share) | $ 0.14 | |||||||
Stockholders' equity, beginning balance at Dec. 31, 2019 | $ 947,669 | $ 2,943 | 2,317,544 | $ (468,618) | (763,482) | (149,306) | 8,588 | |
Stockholders' equity, beginning balance (in shares) at Mar. 31, 2020 | 296,543,000 | 296,543,470 | 21,228,917 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Comprehensive income (loss) | $ (231,200) | (212,680) | (19,303) | 783 | ||||
Common stock dividends | [2] | (38,544) | (38,544) | |||||
Settlement of stock-based awards | $ (5,200) | $ 22 | 50 | $ (5,272) | ||||
Settlement of stock-based awards (in shares) | 2,224,053 | 642,065 | ||||||
Repurchase of common stock (in shares) | 0 | |||||||
Stock-based compensation expense | $ 17,577 | 17,577 | ||||||
Stockholders' equity, ending balance at Mar. 31, 2020 | $ 682,711 | $ 2,965 | $ 2,335,171 | $ (473,890) | $ (1,022,297) | $ (168,609) | $ 9,371 | |
Stockholders' equity, ending balance (in shares) at Dec. 31, 2019 | 294,319,000 | 294,319,417 | 20,586,852 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock cash dividend paid per share (in dollars per share) | $ 0.14 | |||||||
[1] | A quarterly cash dividend of $0.14 per share on our common stock. | |||||||
[2] | A quarterly cash dividend of $0.14 per share on our common stock. |
General Information
General Information | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
General Information | 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. Recent Events— The travel industry continues to be adversely affected by the global health crisis due to the outbreak of the coronavirus ("COVID-19") in January 2020, as well as by government directives that have been enacted to slow the spread of the virus. As expected, this pandemic has had a material impact to our consolidated financial results in the first quarter of 2020, resulting in a material decrease in transaction-based revenue across all three of our business units. Lower Travel Network volumes resulted in a material decline in incentive consideration costs, as expected. The reduction in revenues as the result of COVID-19 has significantly adversely affected our liquidity. We are responding with measures to increase our cash position, including the suspension of dividends and share repurchases under the Share Repurchase Program, borrowing under our existing revolving credit facility of $375 million, and the completion of debt offerings totaling $1,120 million. See Note 14. Subsequent Events for further information on these debt offerings. We believe that we have resources to sufficiently fund our liquidity requirements over at least the next twelve months; however, given the magnitude of travel decline and the unknown duration of the COVID-19 impact, we will continue to monitor our liquidity levels and take additional steps should we determine they are necessary. Additionally, we have identified and are in the process of removing costs from the business in 2020. In connection with these cost savings measures, we recorded a $25 million charge associated with the announced action to reduce our workforce in the first quarter of 2020. The inputs into our judgments and estimates consider the economic implications of COVID-19 on our critical and significant accounting estimates. Cancellations of airline travel reservations prior to the day of departure are estimated based on the historical level of cancellation rates, adjusted to take into account any recent factors which could cause a change in those rates. In the first quarter of 2020, the airline industry experienced a significantly higher number of airline travel reservation cancellations as a result of COVID-19 than expected as of December 31, 2019. As a result, our cancellation reserve as of March 31, 2020 was adjusted for the significant effect that COVID-19 has had on the travel industry and the resulting volume of airline travel cancellations. Given the unprecedented amount of air booking cancellations in the first quarter of 2020, we expect additional variability in the amount of our cancellation reserve in future periods as estimates of cancellations may differ from historical experience. Our air booking cancellation reserve totaled $44 million at March 31, 2020. See Note 2. Revenue from Contracts with Customers. Additionally, our bad debt expense for the three months ended March 31, 2020 was $36 million, primarily related to fully reserving for balances related to certain customers, an increase in our forecasted credit losses due to the impact of the COVID-19 pandemic on the global economy and other general increases in bad debt from aging balances as applied under the newly adopted credit loss standard. See Note 5. Credit Losses. Given the uncertainties surrounding the duration and effects of COVID-19 on transaction volumes in the global travel industry, particularly air travel transaction volumes, including from airlines’ insolvency or suspension of service or aircraft groundings, we cannot provide assurance that the assumptions used in our estimates will be accurate. We reviewed our goodwill and other long-lived assets including intangible assets, and did not identify any material impairments. See Note 8. Fair Value Measurements for further information about our interim goodwill quantitative assessment. As we cannot predict the duration or scope of the COVID-19 pandemic, future impairments may occur and the negative financial impact to our consolidated financial statements and results of operations cannot be reasonably estimated but could be material. 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 months ended March 31, 2020 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2020. 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 26, 2020 . 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 that utilize significant estimates and assumptions include: (i) estimation for revenue recognition and multiple performance obligation arrangements, (ii) determination of the fair value of assets and liabilities acquired in a business combination, (iii) the evaluation of the recoverability of the carrying value of long-lived assets and goodwill, (iv) assumptions utilized to test recoverability of capitalized implementation costs and customer and subscriber advances, (v) judgments in capitalization of software developed for internal use, (vi) the evaluation of uncertainties surrounding the calculation of our tax assets and liabilities, (vii) estimation of the air booking cancellation reserve, and (viii) the evaluation of the allowance for credit losses. 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 26, 2020. Additionally, see Note 2. Revenue from Contracts with Customers for additional information on the use of significant estimates and assumptions in recognizing revenue and Note 5. Credit Losses for additional information regarding the use of significant estimates and assumptions related to the allowance for credit losses. Given the uncertainties surrounding the duration and effects of COVID-19, we cannot provide assurance that the assumptions used in our estimates will be accurate. Share Repurchase Program— In February 2017, we announced the approval of a multi-year share repurchase program (the "Share Repurchase Program") to purchase up to $500 million of Sabre's common stock outstanding. Repurchases under the Share Repurchase Program may take place in the open market or privately negotiated transactions. For the three months ended March 31, 2020, we did not repurchase any shares pursuant to the Share Repurchase Program. On March 16, 2020, we announced the suspension of share repurchases under the Share Repurchase Program in conjunction with certain cash management measures we are undertaking as a result of the market conditions caused by COVID-19. Approximately $287 million remains authorized for repurchases under the Share Repurchase Program as of March 31, 2020. Adoption of New Accounting Standards In March 2020, the FASB issued updated guidance which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued, if certain criteria are met. The updated standard is effective for all entities upon issuance and we will apply the amendments prospectively through December 31, 2022. There was no impact to our consolidated financial statements for the three months ended March 31, 2020 as a result of adopting this standard. Our current hedging contracts do not extend past December 31, 2021. In October 2018, the Financial Accounting Standards Board ("FASB") issued updated guidance that eliminates the requirement that entities consider indirect interests held through related parties under common control in their entirety when assessing whether a decision-making fee is a variable interest and instead requires entities to consider these indirect interests on a proportional basis. We adopted this standard in the first quarter of 2020, which did not have a material impact on our consolidated financial statements. 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, a customer in a cloud-computing arrangement that is a service contract is required to follow guidance on software developed for internal use to determine which implementation costs to capitalize as assets or expense as incurred. This standard aligns the accounting for implementation costs for hosting arrangements, regardless of whether they convey a license to the hosted software. The standard requires that capitalized implementation costs related to a hosting arrangement that is a service contract be amortized over the term of the hosting arrangement, beginning when the component of the hosting arrangement is ready for its intended use, similar to requirements in guidance on software developed for internal use. In addition, costs incurred during the preliminary project and post-implementation phases are expensed as they are incurred. We adopted this standard prospectively in the first quarter of 2020, which did not have a material impact on 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. We adopted this standard in the first quarter of 2020, resulting in a $10 million increase in the allowance for credit losses, partially offset by a $1 million decrease in deferred tax liabilities and a $1 million increase in accounts receivable with a corresponding increase of approximately $8 million in our opening retained deficit as of January 1, 2020. See Note 5. Credit Losses for more information on the impacts from adoption and ongoing considerations. Recent Accounting Pronouncements In December 2019, the FASB issued updated guidance which simplifies the accounting for income taxes, eliminates certain exceptions within existing income tax guidance, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We do not expect the adoption of this standard will have a material impact to our consolidated financial statements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers 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 contract assets or contract liabilities. The following table presents our assets and liabilities with customers as of March 31, 2020 and December 31, 2019 (in thousands): Account Consolidated Balance Sheet Location March 31, 2020 December 31, 2019 Contract assets and customer advances and discounts (1) Prepaid expenses and other current assets / other assets, net $ 102,945 $ 105,499 Trade and unbilled receivables, net Accounts receivable, net 350,537 539,806 Long-term trade unbilled receivables, net Other assets, net 37,450 38,250 Contract liabilities Deferred revenues / other noncurrent liabilities 189,134 167,832 ________________________________ (1) Includes contract assets of $6 million for March 31, 2020 and December 31, 2019. During the three months ended March 31, 2020, we recognized revenue of approximately $16 million from contract liabilities that existed as of January 1, 2020. Our long-term trade unbilled receivables, net relate to license fees billed ratably over the contractual period and recognized when the customer gains control of the software. We evaluate collectability of our accounts receivable based on a combination of factors and record reserves as described further in Note 5. Credit Losses. Revenue The following table presents our revenues disaggregated by business (in thousands): Three Months Ended March 31 2020 2019 Air $ 315,317 $ 640,478 Lodging, Ground and Sea 72,431 90,287 Other 39,955 43,203 Total Travel Network 427,703 773,968 Reservation Systems 105,131 127,228 Commercial and Operations Solutions 73,530 83,558 Other 1,224 2,141 Total Airline Solutions 179,885 212,927 SynXis Software and Services 50,731 64,214 Other 8,506 8,617 Total Hospitality Solutions 59,237 72,831 Eliminations (7,848) (10,365) Total Sabre Revenue $ 658,977 $ 1,049,361 Transaction revenue for airline travel reservations is recognized by Travel Network at the time of booking of the reservation, net of estimated future cancellations. Cancellations of airline travel reservations prior to the day of departure were estimated based on the historical level of cancellation rates, adjusted to take into account the significant effect that COVID-19 has had on the travel industry and the resulting volume of airline travel cancellations. 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 three months ended March 31, 2020, the impact on revenue recognized in the current period, from performance obligations partially or fully satisfied in the previous period, is immaterial. 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. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Farelogix On August 20, 2019, the U.S. Department of Justice ("DOJ") filed a complaint in federal court in the District of Delaware, seeking a permanent injunction to prevent Sabre from acquiring Farelogix, Inc. ("Farelogix"), alleging that the proposed acquisition is likely to substantially lessen competition in violation of federal antitrust law. On April 7, 2020, the trial court ruled in favor of Sabre, denying the DOJ's request for an injunction. On April 8, 2020 the DOJ filed a notice of appeal. On April 9, 2020, the U.K. Competition and Markets Authority ("CMA") blocked the acquisition following its Phase 2 investigation. We intend to appeal the CMA's decision to the U.K. Competition Appeal Tribunal. Under the acquisition agreement, as amended, we agreed to advance certain attorneys’ fees incurred by Farelogix in responding to certain governmental reviews of the acquisition and in defending against certain antitrust proceedings, which totaled $25 million as of March 31, 2020. Given the CMA's decision, we recorded a charge of $46 million during the three months ended March 31, 2020 included in other, net in our consolidated statements of operations which is comprised of the $25 million in advances mentioned above and additional termination fees of $21 million. Sabre and Farelogix agreed to terminate the acquisition agreement on May 1, 2020 and we have paid Farelogix aggregate termination fees of $21 million in the second quarter of 2020 pursuant to the acquisition agreement. Radixx In October 2019, we completed the acquisition of Radixx, a provider of retailing and customer service solutions to airlines in the low-cost carrier ("LCC") market, for $107 million, net of cash acquired and funded by cash on hand. Radixx is managed as a part of our Airline Solutions segment. The accounting related to intangible assets and the associated deferred taxes remains subject to finalization due to ongoing analysis as of March 31, 2020. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rates for the three months ended March 31, 2020 and 2019 were 11% and 17%, respectively. The decrease in the effective tax rate for the three months ended March 31, 2020 as compared to the same period in 2019 was primarily due to tax losses related to the impact of COVID-19 on our results of operations, and various discrete items recorded in each of the respective three month periods including a decrease in the India withholding tax rate resulting from legislation enacted on March 27, 2020. The decrease in the India withholding tax rate resulted in a $4 million income tax benefit, which includes the impact for the three-month period ended March 31, 2020 and the application of the newly enacted rates to existing deferred balances. The difference between our effective tax rates and the U.S. federal statutory income tax rate primarily results from our geographic mix of taxable income in various tax jurisdictions, tax permanent differences and tax credits. We recognize liabilities when we believe that an uncertain tax position may not be fully sustained upon examination by the tax authorities. This evaluation 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. Our net unrecognized tax benefits, excluding interest and penalties, included in our consolidated balance sheets, were $63 million and $65 million as of March 31, 2020 and December 31, 2019, respectively. Tax Receivable Agreement Immediately prior to the closing of our initial public offering in April 2014, we entered into the Tax Receivable Agreement (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”). We made payments on the TRA, including interest, of $72 million and $74 million during the three months ended March 31, 2020 and 2019, respectively. In December 2019, we exercised our right under the terms of the TRA to accelerate our remaining payments under the TRA and make an early termination payment of $1 million, to the Pre-IPO Existing Shareholders, which was included in the January 2020 payment of $72 million described above. As a result, no future payments are required to be made to the Pre-IPO Existing Stockholders under the TRA. |
Credit Losses
Credit Losses | 3 Months Ended |
Mar. 31, 2020 | |
Credit Loss [Abstract] | |
Credit Losses | Credit Losses In the first quarter of 2020, we adopted the updated guidance within Accounting Standards Codification ("ASC") 326, Credit Impairment 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 previous "incurred loss" approach is replaced with an "expected loss" model for instruments measured at amortized cost. The adoption of this standard in the first quarter of 2020 resulted in a $10 million increase in the allowance for credit losses, partially offset by a $1 million decrease in deferred tax liabilities and a $1 million increase in accounts receivable with a corresponding increase of approximately $8 million in our opening retained deficit as of January 1, 2020. We are exposed to credit losses primarily through our sales of services provided to participants in the travel and transportation industry which we consider to be our singular portfolio segment. We develop and document our methodology used in determining the allowance for credit losses at the portfolio segment level. Within the travel portfolio segment, we identify airlines, hoteliers and travel agencies as each presenting unique risk characteristics associated with historical credit loss patterns unique to each and we determine the adequacy of our allowance for credit loss by assessing the risks and losses inherent in our receivables related to each. The majority of our receivables are trade receivables due in less than one year. In addition to our short-term trade and unbilled receivables, our receivables also include contract assets and long-term trade unbilled receivables. See Note 2. Revenue from Contracts with Customers for more information about these financial assets. Contract assets and long-term receivables are reviewed for recoverability on a periodic basis based on a review of subjective factors and trends in collection data including the aging of our trade receivable balances with these customers and expectations of future global economic growth. We believe our credit risk is mitigated with carriers who use the Airline Clearing House (“ACH”) and other similar clearing houses, as ACH requires participants to deposit certain balances into their demand deposit accounts by certain deadlines, which facilitates a timely settlement process. For those carriers from which we do not collect payments through the ACH or other similar clearing houses, our credit risk is higher. We monitor our ongoing credit exposure for these carriers through active review of customer balances against contract terms and due dates with account management. Our activities include established collection processes, account reconciliations, dispute resolution and payment confirmations. We may employ collection agencies and legal counsel to pursue recovery of defaulted receivables. We generally do not require security or collateral from our customers as a condition of sale. We evaluate the collectability of our receivables based on a combination of factors. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations to us, such as bankruptcy filings or failure to pay amounts due to us or others, we specifically reserve for bad debts against amounts due to reduce the recorded receivable to the amount we reasonably believe will be collected. For all other customers, we record reserves for receivables, including unbilled receivables and contract assets, based on historical experience and the length of time the receivables are past due. The estimate of credit losses is developed by analyzing historical twelve Receivables are considered to be delinquent when contractual payment terms are exceeded. All receivables aged over twelve months are fully reserved. Receivables are written off against the allowance when it is probable that all remaining contractual payments will not be collected as evidenced by factors such as the extended age of the balance, the exhaustion of collection efforts, and the lack of ongoing contact or billing with the customer. Our allowance for credit losses relates to all financial assets, primarily trade receivables due in less than one year recorded in Accounts Receivable, net on our consolidated balance sheets. Our allowance for credit losses for the three months ended March 31, 2020 for our portfolio segment is summarized as follows (in thousands): Three Months Ended Balance at December 31, 2019 $ 57,730 Cumulative-effect adjustment upon adoption 9,868 Provision for expected credit losses 36,359 Write-offs (3,945) Other 2,743 Balance at March 31, 2020 $ 102,755 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of March 31, 2020 and December 31, 2019, our outstanding debt included in our consolidated balance sheets totaled $3,699 million and $3,343 million, respectively, which are net of debt issuance costs of $14 million and $15 million, respectively, and unamortized discounts of $5 million and $6 million, respectively. The following table sets forth the face values of our outstanding debt as of March 31, 2020 and December 31, 2019 (in thousands): Rate Maturity March 31, 2020 December 31, 2019 Senior secured credit facilities: Term Loan A L + 2.25% July 2022 $ 470,250 $ 484,500 Term Loan B L + 2.00% February 2024 1,838,724 1,843,427 Revolver, $400 million L + 2.00% July 2022 375,000 — 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 Finance lease obligations 4,087 5,882 Face value of total debt outstanding 3,718,061 3,363,809 Less current portion of debt outstanding (79,770) (81,614) Face value of long-term debt outstanding $ 3,638,291 $ 3,282,195 On April 17, 2020, Sabre GLBL entered into two new debt agreements consisting of the following: (1) $775 million aggregate principal amount of 9.250% senior secured notes due 2025 (the “Secured Notes”) and (2) $345 million aggregate principal amount of 4.000% senior exchangeable notes due 2025 (the “Exchangeable Notes” and together with the Secured Notes, the “Notes”). See Note 14. Subsequent Events for further information. Senior Secured Credit Facilities 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 our Amended and Restated Credit Agreement, and Second Revolving Facility Refinancing Amendment to our Amended and Restated Credit Agreement (the “2017 Refinancing”). The 2017 Refinancing included a $400 million revolving credit facility ("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”). The Revolver and the Term Loan A mature on July 1, 2022. 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. Term Loan B matures on February 22, 2024. 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. 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. Under the Amended and Restated Credit Agreement, the loan parties are subject to certain customary non-financial covenants, including certain restrictions on incurring certain types of indebtedness, creation of liens on certain assets, making of certain investments, and payment of dividends, as well as a maximum leverage ratio. Pursuant to Credit Agreement Amendments, effective July 18, 2016, the maximum leverage ratio has been adjusted to be based on the Total Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement) and we are required, at all times (no longer solely when a threshold amount of revolving loans or letters of credit were outstanding), to maintain a Total Net Leverage Ratio of less than 4.5 to 1.0. As of March 31, 2020, we are in compliance with all covenants under the Amended and Restated Credit Agreement. Under the terms of the Amended and Restated Credit Agreement, our Total Net Leverage Ratio requirement may be suspended for a limited time if a “Material Travel Event Disruption” has occurred. As defined in the Amended and Restated Credit Agreement, a “Material Travel Event Disruption” means, in any given calendar month, a decrease of 10% or more in the number of “domestic revenue passenger enplanements” (determined by reference to the monthly “Air Traffic Statistics” published by the Bureau of Transportation Statistics) has occurred as a result of or in connection with a Travel Event (as defined in the Amended and Restated Credit Agreement) as compared to the number of “domestic revenue passenger enplanements” (determined by reference to the monthly “Air Traffic Statistics” published by the Bureau of Transportation Statistics) occurring in the corresponding month during the prior year or, if a Material Travel Event Disruption existed during such month, the most recent corresponding month in which no Material Travel Event Disruption occurred/existed. We had $375 million outstanding under the Revolver as of March 31, 2020 and no balance outstanding as of December 31, 2019. We had outstanding letters of credit totaling $11 million and $12 million as of March 31, 2020 and December 31, 2019, respectively, which reduced our overall credit capacity under the Revolver. |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | 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 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 portions and ineffective portions of the gain or loss on the derivative instruments, and the hedge components excluded from the assessment of effectiveness, are reported as a component of other comprehensive income (“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 statement 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 December 2020. We have designated these instruments as cash flow hedges. No hedging ineffectiveness was recorded in earnings relating to the forward contracts during the three months ended March 31, 2020 and 2019. As of March 31, 2020, we estimate that $9 million in losses will be reclassified from other comprehensive (loss) income to earnings over the next 12 months. As of March 31, 2020 and December 31, 2019, 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 March 31, 2020 Buy Currency Sell Currency Foreign Amount USD Amount Average Polish Zloty US Dollar 186,000 48,267 0.2595 Indian Rupee US Dollar 3,000,000 41,318 0.0137 Singapore Dollar US Dollar 45,000 33,120 0.7360 British Pound Sterling US Dollar 13,200 17,197 1.3028 Australian Dollar US Dollar 10,950 7,597 0.6938 Swedish Krona US Dollar 24,500 2,646 0.1062 Outstanding Notional Amounts as of December 31, 2019 Buy Currency Sell Currency Foreign Amount USD Amount Average Polish Zloty US Dollar 265,000 68,971 0.2603 Indian Rupee US Dollar 4,485,000 61,708 0.0138 Singapore Dollar US Dollar 63,500 46,759 0.7364 British Pound Sterling US Dollar 18,400 24,109 1.3103 Australian Dollar US Dollar 16,500 11,521 0.6982 Swedish Krona US Dollar 38,100 4,106 0.1075 Interest Rate Swap Contracts —Interest rate swaps outstanding during the three months ended March 31, 2020 and 2019 are as follows: Notional Amount Interest Rate Interest Rate Paid Effective Date Maturity Date Designated as Hedging Instrument $1,350 million 1 month LIBOR (1) 2.27% December 31, 2018 December 31, 2019 $1,200 million 1 month LIBOR (1) 2.19% December 31, 2019 December 31, 2020 $600 million 1 month LIBOR (1) 2.81% December 31, 2020 December 31, 2021 ______________________ (1) Subject to a 0% floor. In connection with the 2017 Term Facility Amendment, we entered into 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 of $750 million became effective December 31, 2018 and extended through the full year 2019. In September 2017, we entered into forward starting interest rate swaps to hedge the interest payments associated with $750 million of the floating-rate Term Loan B. The total notional outstanding of $750 million became effective December 31, 2019 and extends through the full year 2020. In April 2018, we entered into 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 years 2019, 2020 and 2021, respectively. In December 2018, we entered into forward starting interest rate swaps to hedge the interest payments associated with $150 million of the floating-rate Term Loan B for the years 2020 and 2021. We have designated these swaps as cash flow hedges. The estimated fair values of our derivatives designated as hedging instruments as of March 31, 2020 and December 31, 2019 are as follows (in thousands): Derivative Assets (Liabilities) Fair Value as of Derivatives Designated as Hedging Instruments Consolidated Balance Sheet Location March 31, 2020 December 31, 2019 Foreign exchange contracts Other accrued liabilities $ (8,988) $ — Foreign exchange contracts Prepaid expenses and other current assets — 1,953 Interest rate swaps Other accrued liabilities (20,202) (7,020) Interest rate swaps Other noncurrent liabilities (9,988) (7,918) $ (39,178) $ (12,985) The effects of derivative instruments, net of taxes, on OCI for the three months ended March 31, 2020 and 2019 are as follows (in thousands): Amount of (Loss) Gain Recognized in OCI on Derivative, Effective Portion Three Months Ended March 31, Derivatives in Cash Flow Hedging Relationships 2020 2019 Foreign exchange contracts $ (9,459) $ (255) Interest rate swaps (14,359) (5,154) Total $ (23,818) $ (5,409) Amount of Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion Derivatives in Cash Flow Hedging Relationships Income Statement Location Three Months Ended March 31, 2020 2019 Foreign exchange contracts Cost of revenue $ 621 $ 2,722 Interest rate swaps Interest expense, net 1,214 (520) Total $ 1,835 $ 2,202 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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 (liabilities) assets that are required to be measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 (in thousands): Fair Value at Reporting Date Using March 31, 2020 Level 1 Level 2 Level 3 Derivatives (1) Foreign currency forward contracts $ (8,988) $ — $ (8,988) $ — Interest rate swap contracts (30,190) — (30,190) — Total $ (39,178) $ — $ (39,178) $ — Fair Value at Reporting Date Using December 31, 2019 Level 1 Level 2 Level 3 Derivatives (1) Foreign currency forward contracts $ 1,953 $ — $ 1,953 $ — Interest rate swap contracts (14,938) — (14,938) — Total $ (12,985) $ — $ (12,985) $ — (1) See Note 7. Derivatives for further detail. There were no transfers between Levels 1 and 2 within the fair value hierarchy for the three months ended March 31, 2020. 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 March 31, 2020 and December 31, 2019 (in thousands): Fair Value at Carrying Value at (1) Financial Instrument March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Term Loan A $ 444,974 $ 485,106 $ 469,199 $ 483,317 Term Loan B 1,564,065 1,856,100 1,834,306 1,838,741 Revolver, $400 million 375,000 — 375,000 — 5.375% Senior secured notes due 2023 485,499 543,536 530,000 530,000 5.25% Senior secured notes due 2023 460,358 514,670 500,000 500,000 (1) Excludes net unamortized debt issuance costs. Goodwill Quantitative Assessment Due to the impacts of the COVID-19 pandemic on our current and projected future results of operations, we identified a triggering event requiring an interim quantitative assessment on our goodwill. The quantitative assessment is based on our current projections and is subject to various risks, uncertainties and estimates including: (1) forecasted revenues, expenses and cash flows, including future travel supplier capacity and load factors on those estimates and technology costs, (2) the duration and extent of the impact of the COVID-19 pandemic on our business and our customers, (3) current discount and long-term growth rates, (4) the reduction in our market capitalization, (5) current market transaction trends and (6) changes to the regulatory environment impacting our industry. We consider these to be Level 3 inputs in the fair value hierarchy, as they involve unobservable inputs for which there is little or no market data and thus require management to develop its own assumptions. Based on our interim impairment assessment as of March 31, 2020, we have determined that our goodwill is not impaired; however, we estimate that Airline Solutions has a fair value that approximates its carrying value, subject to the risks noted above. If the factors associated with our estimate of the fair value of Airlines Solutions differ from actual results (for example, the period of time for our cash flows to recover from the COVID-19 pandemic), Airline Solutions goodwill totaling $372 million could be subject to impairment in the future, which would negatively impact our financial results but would not impact our cash flow. The impact of an impairment on our results of operations could be material. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss As of March 31, 2020 and December 31, 2019, the components of accumulated other comprehensive loss, net of related deferred income taxes, are as follows (in thousands): March 31, 2020 December 31, 2019 Defined benefit pension and other post-retirement benefit plans $ (138,263) $ (143,389) Unrealized foreign currency translation gain 1,842 4,289 Unrealized loss on foreign currency forward contracts and interest rate swaps (32,188) (10,206) Total accumulated other comprehensive loss, net of tax $ (168,609) $ (149,306) 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. See Note 7. Derivatives, for information on the income statement line items affected as the result of reclassification adjustments associated with derivatives. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 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 March 31, 2020 2019 Numerator: (Loss) income from continuing operations $ (209,771) $ 59,214 Less: Net income attributable to non-controlling interests 783 912 Net (loss) income from continuing operations available to common stockholders, basic and diluted $ (210,554) $ 58,302 Denominator: Basic weighted-average common shares outstanding 274,037 275,589 Add: Dilutive effect of stock options and restricted stock awards — 2,016 Diluted weighted-average common shares outstanding 274,037 277,605 Earnings per share from continuing operations: Basic $ (0.77) $ 0.21 Diluted $ (0.77) $ 0.21 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases We lease certain facilities under long-term operating leases. Operating lease assets are included in operating lease right-of-use (“ROU”) assets within other noncurrent assets and operating lease liabilities are included in other current liabilities and other noncurrent liabilities in our consolidated balance sheets. During the three months ended March 31, 2020, an operating lease commenced with a lease term of 10 years which is reflected in the information below. Our finance leases are not material to our consolidated financial statements and have been omitted from the information below. The following table presents supplemental cash flow information related to operating leases (in thousands): Three Months Ended March 31, 2020 2019 Supplemental Cash Flow Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 7,475 $ 6,473 Right-of-use assets obtained in exchange for lease obligations: Operating leases 32,184 5,175 The following table presents supplemental balance sheet information related to operating leases (in thousands): March 31, 2020 December 31, 2019 Operating Leases Operating lease right-of-use assets $ 88,860 $ 64,191 Other accrued liabilities 23,662 21,932 Other noncurrent liabilities 71,441 49,970 Total operating lease liabilities $ 95,103 $ 71,902 Our leases have remaining minimum terms that range between one five Year Ending December 31, Operating Leases 2020 $ 18,676 2021 23,506 2022 16,637 2023 13,372 2024 12,089 Thereafter 29,192 Total 113,472 Imputed Interest (18,369) Total $ 95,103 |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 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 Investigations 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. 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. As a result of the jury's verdict, US Airways was 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, without prejudice. In the fourth quarter of 2016, we accrued a loss of $32 million, which represented the court's final judgment of $15 million, plus our estimate of $17 million for US Airways' reasonable attorneys’ fees, expenses and costs. 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. The Second Circuit heard oral arguments on this matter in December 2018. In September 2019, the Second Circuit issued its Order and Opinion. The Second Circuit vacated the judgment with respect to US Airways’ claim under Section 1, reversed the trial court’s dismissal of US Airways’ claims relating to Section 2, and remanded the case to district court for a new trial. In addition, the Second Circuit affirmed the trial court’s ruling limiting US Airways’ damages. The judgment in our favor on US Airways' conspiracy claim remains intact. The lawsuit has been remanded to federal court in the Southern District of New York for further proceedings. Currently, no trial date has been set. As a result of the Second Circuit’s opinion, we believe that the claims associated with this case are not probable; therefore, in the third quarter of 2019, we reversed our previously accrued loss of $32 million and do not have any losses accrued for this matter as of March 31, 2020. We have and will incur significant fees, costs and expenses for as long as the litigation 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 changes to our business that may be required as a result of the litigation. If favorable resolution of the matter is not reached upon remand, any monetary damages are subject to trebling under the antitrust laws and US Airways would be eligible to be reimbursed by us for its reasonable costs and attorneys’ fees. Depending on the amount of any such judgment, if we do not have sufficient cash on hand, we may be required to seek private or public financing. 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. Department of Justice Lawsuit on and Competition and Markets Authority Review of the Farelogix Acquisition On August 20, 2019, the DOJ filed a complaint in federal court in the District of Delaware, seeking a permanent injunction to prevent Sabre from acquiring Farelogix, Inc., alleging that the proposed acquisition is likely to substantially lessen competition in violation of federal antitrust law. On April 7, 2020, the trial court ruled in favor of Sabre, denying the DOJ's request for an injunction. On April 8, 2020, the DOJ filed a notice of appeal. On April 9, 2020, the CMA blocked the acquisition following its Phase 2 investigation. We intend to appeal the CMA's decision to the U.K. Competition Appeal Tribunal. Under the acquisition agreement, as amended, we had agreed to advance certain attorneys’ fees incurred by Farelogix in responding to certain governmental reviews of the acquisition and in defending against certain antitrust proceedings, which totaled $25 million as of March 31, 2020. Given the CMA's decision, we recorded a charge of $46 million during the three months ended March 31, 2020 included in Other, net in our consolidated statements of operations which is comprised of the $25 million in advances mentioned above and additional termination fees of $21 million. Sabre and Farelogix agreed to terminate the acquisition agreement on May 1, 2020 and we have paid Farelogix aggregate termination fees of $21 million in the second quarter of 2020 pursuant to the acquisition agreement. European Commission’s Directorate-General for Competition ("EC") Investigation On November 23, 2018, the EC announced that it has opened an investigation of us and another GDS to assess whether our respective agreements with airlines and travel agents may restrict competition in breach of European Union antitrust rules. We are fully cooperating with the EC’s investigation and are unable to make any prediction regarding its outcome at this time. There is no legal deadline for the EC to bring an antitrust investigation to an end, and the duration of the investigation is uncertain. Depending on the findings of the EC, the outcome of the investigation could have a material adverse effect on our business, financial condition and results of operations. We may incur significant fees, costs and expenses for as long as this investigation is ongoing. We intend to vigorously defend against any allegations of anticompetitive activity by the EC. Department of Justice Investigation On May 19, 2011, we received a civil investigative demand ("CID") from the 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 and our case is currently pending before that court. We have appealed the tax assessments for the assessment years ended March 2013 to March 2016 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 and our case is pending before that court. The DIT also assessed taxes on a similar basis for assessment years ending March 2006 through March 2016 and appeals for assessment years ending March 2006 through 2016 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 $45 million as of March 31, 2020. 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. 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 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 to investigate this incident at the payment card brands' request. 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, with the exception of an immaterial amount recorded to our results of operations associated with the governmental investigation described above. We maintain insurance that covers certain aspects of cyber risks, and we continue to work with our insurance carriers in these matters. Other Tax Matters We operate in numerous jurisdictions in which taxing authorities may challenge our position with respect to income and non-income based taxes. We routinely receive inquiries and may also from time to time receive challenges or assessments from these taxing authorities. With respect to non-income based taxes, we recognize liabilities when we believe it is probable that amounts will be owed to the taxing authorities and such amounts are estimable. For example, in most countries we pay and collect Value Added Tax (“VAT”) when procuring goods and services, or providing services, within the normal course of business. VAT receivables are established in jurisdictions where VAT paid exceeds VAT collected and are recoverable through the filing of refund claims. These receivables have inherent audit and collection risks unique to the specific jurisdictions that evaluate our refund claims. Our most significant VAT receivable is in Greece. As of March 31, 2020, we have approximately $22 million in VAT receivables for which refund claims have been filed with the Greek government. Although we have paid these amounts and believe we are entitled to a refund, the Greek tax authorities have challenged our position. Subsequent to March 31, 2020, we received notice that the tax court has accepted our arguments to dismiss certain claims by the Greek tax authorities; however, this ruling may be subject to appeal. In Greece, as in other jurisdictions, we intend to vigorously defend our positions against any claims that are not insignificant, including through litigation when necessary. As of March 31, 2020, we do not believe that an adverse outcome is probable with respect to the claims of the Greek tax authorities or any other jurisdiction; as a result, we have not accrued any material amounts for exposure related to such contingencies or adverse decisions. Nevertheless, we may incur expenses in future periods related to such matters, including litigation costs and possible pre-payment of a portion of any assessed tax amount to defend our position, and if our positions are ultimately rejected, it could have a material impact to our results of operations. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | 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. Our CODM utilizes Adjusted Gross Profit, Adjusted Operating (Loss) 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 shared expenses such as accounting, finance, human resources, legal, corporate systems, amortization of acquired intangible assets, 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 Hospitality 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 (Loss) Income and Adjusted EBITDA which are not recognized terms under GAAP. Our uses of Adjusted Gross Profit, Adjusted Operating (Loss) 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 (loss) income adjusted for selling, general and administrative expenses, the cost of revenue portion of depreciation and amortization, restructuring and other costs, amortization of upfront incentive compensation and stock-based compensation included in cost of revenue. We define Adjusted Operating (loss) Income as operating (loss) income adjusted for equity method (loss) income, impairment and related charges, acquisition-related amortization, restructuring and other costs, acquisition-related costs, litigation costs, net, and stock-based compensation. We define Adjusted EBITDA as (loss) 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, interest expense, net, loss on extinguishment of debt, other, net, restructuring and other costs, acquisition-related costs, litigation costs, net, stock-based compensation and provision for income taxes. Segment information for the three months ended March 31, 2020 and 2019 is as follows (in thousands): Three Months Ended March 31, 2020 2019 Revenue Travel Network $ 427,703 $ 773,968 Airline Solutions 179,885 212,927 Hospitality Solutions 59,237 72,831 Eliminations (7,848) (10,365) Total revenue $ 658,977 $ 1,049,361 Adjusted Gross Profit (a) Travel Network $ 112,169 $ 282,680 Airline Solutions 52,027 78,131 Hospitality Solutions 5,694 15,710 Corporate (2,790) (3,431) Total $ 167,100 $ 373,090 Adjusted Operating (Loss) Income (b) Travel Network $ 21,972 $ 193,172 Airline Solutions (32,579) 15,424 Hospitality Solutions (16,457) (5,717) Corporate (45,806) (47,117) Total $ (72,870) $ 155,762 Adjusted EBITDA (c) Travel Network $ 65,452 $ 242,855 Airline Solutions 8,369 58,394 Hospitality Solutions (4,855) 7,005 Total segments 68,966 308,254 Corporate (44,563) (45,905) Total $ 24,403 $ 262,349 Depreciation and amortization Travel Network $ 25,267 $ 30,555 Airline Solutions 40,948 42,970 Hospitality Solutions 11,602 12,723 Total segments 77,817 86,248 Corporate 18,044 17,195 Total $ 95,861 $ 103,443 Capital Expenditures Travel Network $ 2,329 $ 4,986 Airline Solutions 6,392 12,490 Hospitality Solutions 1,401 3,496 Total segments 10,122 20,972 Corporate 18,315 16,892 Total $ 28,437 $ 37,864 ______________________________ (a) The following table sets forth the reconciliation of Adjusted Gross Profit to operating (loss) income in our statement of operations (in thousands): Three Months Ended March 31, 2020 2019 Adjusted Gross Profit $ 167,100 $ 373,090 Less adjustments: Selling, general and administrative 198,873 151,391 Cost of revenue adjustments: Depreciation and amortization (1) 77,373 84,920 Amortization of upfront incentive consideration (2) 18,213 19,128 Stock-based compensation 7,357 7,244 Restructuring and other costs (6) 16,695 — Operating (loss) income $ (151,411) $ 110,407 (b) The following table sets forth the reconciliation of Adjusted Operating (Loss) Income to operating (loss) income in our statement of operations (in thousands): Three Months Ended March 31, 2020 2019 Adjusted Operating (Loss) Income $ (72,870) $ 155,762 Less adjustments: Equity method (loss) income (686) 533 Acquisition-related amortization (1c) 16,801 15,984 Acquisition-related costs (5) 17,827 11,706 Litigation costs, net (4) 1,741 1,438 Stock-based compensation 17,577 15,694 Restructuring and other costs (6) 25,281 — Operating (loss) income $ (151,411) $ 110,407 (c) The following table sets forth the reconciliation of Adjusted EBITDA to (loss) income from continuing operations in our statement of operations (in thousands): Three Months Ended March 31, 2020 2019 Adjusted EBITDA $ 24,403 $ 262,349 Less adjustments: Depreciation and amortization of property and equipment (1a) 69,513 75,348 Amortization of capitalized implementation costs (1b) 9,547 12,111 Acquisition-related amortization (1c) 16,801 15,984 Amortization of upfront incentive consideration (2) 18,213 19,128 Interest expense, net 37,442 38,013 Other, net (3) 47,486 1,870 Restructuring and other costs (6) 25,281 — Acquisition-related costs (5) 17,827 11,706 Litigation costs, net (4) 1,741 1,438 Stock-based compensation 17,577 15,694 Provision for income taxes (27,254) 11,843 (Loss) income from continuing operations $ (209,771) $ 59,214 ______________________________________________________ (1) Depreciation and amortization expenses: (a) Depreciation and amortization of property and equipment includes software developed for internal use as well as amortization of contract acquisition costs (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. (2) Our Travel Network business at times provides upfront incentive consideration to travel agency subscribers at the inception or modification of a service contract, which are capitalized and amortized to cost of revenue over an average expected life of the service contract, generally over three (3) Other, net primarily includes a $46 million charge in connection with our proposed acquisition of Farelogix, as well as 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. See Note 3. Acquisitions for further detail regarding the Farelogix acquisition. (4) Litigation costs, net represent charges associated with antitrust and other foreign non-income tax contingency matters. See Note 12. Contingencies. (5) Acquisition-related costs represent fees and expenses incurred associated with the 2018 agreement to acquire Farelogix. (6) Restructuring and other costs represent charges associated with business restructuring and associated changes implemented which resulted in severance benefits related to employee terminations. In the first quarter of 2020, we recorded a $25 million charge associated with an announced action to reduce our workforce in connection with cost savings measures as a result of the market conditions caused by COVID-19. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Debt Offerings On April 17, 2020, Sabre GLBL entered into two new debt agreements consisting of the following: (1) $775 million aggregate principal amount of 9.250% senior secured notes due 2025 (the “Secured Notes”) and (2) $345 million aggregate principal amount of 4.000% senior exchangeable notes due 2025 (the “Exchangeable Notes” and together with the Secured Notes, the “Notes”). The Secured Notes are jointly and severally, irrevocably and unconditionally guaranteed by Sabre Holdings and all of Sabre GLBL’s restricted subsidiaries that guarantee Sabre GLBL’s credit facility. The Secured Notes bear interest at a rate of 9.250% per annum and interest payments are due semi-annually on April 15 and October 15 of each year, beginning with October 15, 2020. The Secured Notes mature on April 15, 2025. The Exchangeable Notes are senior, unsecured obligations of Sabre GLBL, accrue interest payable semi-annually in arrears and mature on April 15, 2025, unless earlier repurchased or exchanged. The Exchangeable Notes are exchangeable at their holders’ election, under specified circumstances, into consideration based on Sabre common stock. This consideration consists of shares of Sabre common stock, cash, or a mixture of the two at Sabre GLBL’s election. Upon any future occurrence of a “fundamental change” (as defined in the indenture governing the Exchangeable Notes), holders may require Sabre GLBL to repurchase their Exchangeable Notes at a price equal to principal amount plus accrued and unpaid interest. The Exchangeable Notes bear interest at a rate of 4.00% per annum and interest payments are due semi-annually on April 15 and October 15 of each year, beginning with October 15, 2020. The Exchangeable Notes are guaranteed on a senior unsecured basis by Sabre and Sabre Holdings. The net proceeds from the sales of the Notes will be used for general corporate purposes. |
General Information (Policies)
General Information (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
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 months ended March 31, 2020 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2020. 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 26, 2020 . 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 that utilize significant estimates and assumptions include: (i) estimation for revenue recognition and multiple performance obligation arrangements, (ii) determination of the fair value of assets and liabilities acquired in a business combination, (iii) the evaluation of the recoverability of the carrying value of long-lived assets and goodwill, (iv) assumptions utilized to test recoverability of capitalized implementation costs and customer and subscriber advances, (v) judgments in capitalization of software developed for internal use, (vi) the evaluation of uncertainties surrounding the calculation of our tax assets and liabilities, (vii) estimation of the air booking cancellation reserve, and (viii) the evaluation of the allowance for credit losses. 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 26, 2020. Additionally, see Note 2. Revenue from Contracts with Customers for additional information on the use of significant estimates and assumptions in recognizing revenue and Note 5. Credit Losses for additional information regarding the use of significant estimates and assumptions related to the allowance for credit losses. Given the uncertainties surrounding the duration and effects of COVID-19, we cannot provide assurance that the assumptions used in our estimates will be accurate. |
Share Repurchase Program | Share Repurchase Program— In February 2017, we announced the approval of a multi-year share repurchase program (the "Share Repurchase Program") to purchase up to $500 million of Sabre's common stock outstanding. Repurchases under the Share Repurchase Program may take place in the open market or privately negotiated transactions. For the three months ended March 31, 2020, we did not repurchase any shares pursuant to the Share Repurchase Program. On March 16, 2020, we announced the suspension of share repurchases under the Share Repurchase Program in conjunction with certain cash management measures we are undertaking as a result of the market conditions caused by COVID-19. Approximately $287 million remains authorized for repurchases under the Share Repurchase Program as of March 31, 2020. |
Adoption of New Accounting Standards/Recent Accounting Pronouncements | Adoption of New Accounting Standards In March 2020, the FASB issued updated guidance which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued, if certain criteria are met. The updated standard is effective for all entities upon issuance and we will apply the amendments prospectively through December 31, 2022. There was no impact to our consolidated financial statements for the three months ended March 31, 2020 as a result of adopting this standard. Our current hedging contracts do not extend past December 31, 2021. In October 2018, the Financial Accounting Standards Board ("FASB") issued updated guidance that eliminates the requirement that entities consider indirect interests held through related parties under common control in their entirety when assessing whether a decision-making fee is a variable interest and instead requires entities to consider these indirect interests on a proportional basis. We adopted this standard in the first quarter of 2020, which did not have a material impact on our consolidated financial statements. 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, a customer in a cloud-computing arrangement that is a service contract is required to follow guidance on software developed for internal use to determine which implementation costs to capitalize as assets or expense as incurred. This standard aligns the accounting for implementation costs for hosting arrangements, regardless of whether they convey a license to the hosted software. The standard requires that capitalized implementation costs related to a hosting arrangement that is a service contract be amortized over the term of the hosting arrangement, beginning when the component of the hosting arrangement is ready for its intended use, similar to requirements in guidance on software developed for internal use. In addition, costs incurred during the preliminary project and post-implementation phases are expensed as they are incurred. We adopted this standard prospectively in the first quarter of 2020, which did not have a material impact on 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. We adopted this standard in the first quarter of 2020, resulting in a $10 million increase in the allowance for credit losses, partially offset by a $1 million decrease in deferred tax liabilities and a $1 million increase in accounts receivable with a corresponding increase of approximately $8 million in our opening retained deficit as of January 1, 2020. See Note 5. Credit Losses for more information on the impacts from adoption and ongoing considerations. Recent Accounting Pronouncements In December 2019, the FASB issued updated guidance which simplifies the accounting for income taxes, eliminates certain exceptions within existing income tax guidance, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We do not expect the adoption of this standard will have a material impact to our consolidated financial statements. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | The following table presents our assets and liabilities with customers as of March 31, 2020 and December 31, 2019 (in thousands): Account Consolidated Balance Sheet Location March 31, 2020 December 31, 2019 Contract assets and customer advances and discounts (1) Prepaid expenses and other current assets / other assets, net $ 102,945 $ 105,499 Trade and unbilled receivables, net Accounts receivable, net 350,537 539,806 Long-term trade unbilled receivables, net Other assets, net 37,450 38,250 Contract liabilities Deferred revenues / other noncurrent liabilities 189,134 167,832 ________________________________ (1) Includes contract assets of $6 million for March 31, 2020 and December 31, 2019. |
Disaggregation of Revenue | The following table presents our revenues disaggregated by business (in thousands): Three Months Ended March 31 2020 2019 Air $ 315,317 $ 640,478 Lodging, Ground and Sea 72,431 90,287 Other 39,955 43,203 Total Travel Network 427,703 773,968 Reservation Systems 105,131 127,228 Commercial and Operations Solutions 73,530 83,558 Other 1,224 2,141 Total Airline Solutions 179,885 212,927 SynXis Software and Services 50,731 64,214 Other 8,506 8,617 Total Hospitality Solutions 59,237 72,831 Eliminations (7,848) (10,365) Total Sabre Revenue $ 658,977 $ 1,049,361 |
Credit Losses (Tables)
Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Credit Loss [Abstract] | |
Allowance for Credit Loss | Our allowance for credit losses for the three months ended March 31, 2020 for our portfolio segment is summarized as follows (in thousands): Three Months Ended Balance at December 31, 2019 $ 57,730 Cumulative-effect adjustment upon adoption 9,868 Provision for expected credit losses 36,359 Write-offs (3,945) Other 2,743 Balance at March 31, 2020 $ 102,755 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The following table sets forth the face values of our outstanding debt as of March 31, 2020 and December 31, 2019 (in thousands): Rate Maturity March 31, 2020 December 31, 2019 Senior secured credit facilities: Term Loan A L + 2.25% July 2022 $ 470,250 $ 484,500 Term Loan B L + 2.00% February 2024 1,838,724 1,843,427 Revolver, $400 million L + 2.00% July 2022 375,000 — 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 Finance lease obligations 4,087 5,882 Face value of total debt outstanding 3,718,061 3,363,809 Less current portion of debt outstanding (79,770) (81,614) Face value of long-term debt outstanding $ 3,638,291 $ 3,282,195 |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Unsettled Purchased Foreign Currency Forward Contracts | As of March 31, 2020 and December 31, 2019, 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 March 31, 2020 Buy Currency Sell Currency Foreign Amount USD Amount Average Polish Zloty US Dollar 186,000 48,267 0.2595 Indian Rupee US Dollar 3,000,000 41,318 0.0137 Singapore Dollar US Dollar 45,000 33,120 0.7360 British Pound Sterling US Dollar 13,200 17,197 1.3028 Australian Dollar US Dollar 10,950 7,597 0.6938 Swedish Krona US Dollar 24,500 2,646 0.1062 Outstanding Notional Amounts as of December 31, 2019 Buy Currency Sell Currency Foreign Amount USD Amount Average Polish Zloty US Dollar 265,000 68,971 0.2603 Indian Rupee US Dollar 4,485,000 61,708 0.0138 Singapore Dollar US Dollar 63,500 46,759 0.7364 British Pound Sterling US Dollar 18,400 24,109 1.3103 Australian Dollar US Dollar 16,500 11,521 0.6982 Swedish Krona US Dollar 38,100 4,106 0.1075 |
Schedule of Outstanding Interest Rate Swaps | Interest rate swaps outstanding during the three months ended March 31, 2020 and 2019 are as follows: Notional Amount Interest Rate Interest Rate Paid Effective Date Maturity Date Designated as Hedging Instrument $1,350 million 1 month LIBOR (1) 2.27% December 31, 2018 December 31, 2019 $1,200 million 1 month LIBOR (1) 2.19% December 31, 2019 December 31, 2020 $600 million 1 month LIBOR (1) 2.81% December 31, 2020 December 31, 2021 ______________________ (1) Subject to a 0% floor. |
Schedule of Estimated Fair Values of Derivatives Designated as Hedging Instruments | The estimated fair values of our derivatives designated as hedging instruments as of March 31, 2020 and December 31, 2019 are as follows (in thousands): Derivative Assets (Liabilities) Fair Value as of Derivatives Designated as Hedging Instruments Consolidated Balance Sheet Location March 31, 2020 December 31, 2019 Foreign exchange contracts Other accrued liabilities $ (8,988) $ — Foreign exchange contracts Prepaid expenses and other current assets — 1,953 Interest rate swaps Other accrued liabilities (20,202) (7,020) Interest rate swaps Other noncurrent liabilities (9,988) (7,918) $ (39,178) $ (12,985) |
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 months ended March 31, 2020 and 2019 are as follows (in thousands): Amount of (Loss) Gain Recognized in OCI on Derivative, Effective Portion Three Months Ended March 31, Derivatives in Cash Flow Hedging Relationships 2020 2019 Foreign exchange contracts $ (9,459) $ (255) Interest rate swaps (14,359) (5,154) Total $ (23,818) $ (5,409) Amount of Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion Derivatives in Cash Flow Hedging Relationships Income Statement Location Three Months Ended March 31, 2020 2019 Foreign exchange contracts Cost of revenue $ 621 $ 2,722 Interest rate swaps Interest expense, net 1,214 (520) Total $ 1,835 $ 2,202 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present our (liabilities) assets that are required to be measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 (in thousands): Fair Value at Reporting Date Using March 31, 2020 Level 1 Level 2 Level 3 Derivatives (1) Foreign currency forward contracts $ (8,988) $ — $ (8,988) $ — Interest rate swap contracts (30,190) — (30,190) — Total $ (39,178) $ — $ (39,178) $ — Fair Value at Reporting Date Using December 31, 2019 Level 1 Level 2 Level 3 Derivatives (1) Foreign currency forward contracts $ 1,953 $ — $ 1,953 $ — Interest rate swap contracts (14,938) — (14,938) — Total $ (12,985) $ — $ (12,985) $ — (1) See Note 7. Derivatives for further detail. |
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 March 31, 2020 and December 31, 2019 (in thousands): Fair Value at Carrying Value at (1) Financial Instrument March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Term Loan A $ 444,974 $ 485,106 $ 469,199 $ 483,317 Term Loan B 1,564,065 1,856,100 1,834,306 1,838,741 Revolver, $400 million 375,000 — 375,000 — 5.375% Senior secured notes due 2023 485,499 543,536 530,000 530,000 5.25% Senior secured notes due 2023 460,358 514,670 500,000 500,000 (1) Excludes net unamortized debt issuance costs. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Loss, Net of Related Deferred Income Taxes | As of March 31, 2020 and December 31, 2019, the components of accumulated other comprehensive loss, net of related deferred income taxes, are as follows (in thousands): March 31, 2020 December 31, 2019 Defined benefit pension and other post-retirement benefit plans $ (138,263) $ (143,389) Unrealized foreign currency translation gain 1,842 4,289 Unrealized loss on foreign currency forward contracts and interest rate swaps (32,188) (10,206) Total accumulated other comprehensive loss, net of tax $ (168,609) $ (149,306) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 2019 Numerator: (Loss) income from continuing operations $ (209,771) $ 59,214 Less: Net income attributable to non-controlling interests 783 912 Net (loss) income from continuing operations available to common stockholders, basic and diluted $ (210,554) $ 58,302 Denominator: Basic weighted-average common shares outstanding 274,037 275,589 Add: Dilutive effect of stock options and restricted stock awards — 2,016 Diluted weighted-average common shares outstanding 274,037 277,605 Earnings per share from continuing operations: Basic $ (0.77) $ 0.21 Diluted $ (0.77) $ 0.21 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Components of Lease Expense | The following table presents supplemental cash flow information related to operating leases (in thousands): Three Months Ended March 31, 2020 2019 Supplemental Cash Flow Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 7,475 $ 6,473 Right-of-use assets obtained in exchange for lease obligations: Operating leases 32,184 5,175 |
Supplemental Balance Sheet Information | The following table presents supplemental balance sheet information related to operating leases (in thousands): March 31, 2020 December 31, 2019 Operating Leases Operating lease right-of-use assets $ 88,860 $ 64,191 Other accrued liabilities 23,662 21,932 Other noncurrent liabilities 71,441 49,970 Total operating lease liabilities $ 95,103 $ 71,902 |
Future Minimum Lease Payment Obligations Under Operating Leases | Future minimum lease payments under non-cancellable operating leases as of March 31, 2020 are as follows (in thousands): Year Ending December 31, Operating Leases 2020 $ 18,676 2021 23,506 2022 16,637 2023 13,372 2024 12,089 Thereafter 29,192 Total 113,472 Imputed Interest (18,369) Total $ 95,103 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Segment information for the three months ended March 31, 2020 and 2019 is as follows (in thousands): Three Months Ended March 31, 2020 2019 Revenue Travel Network $ 427,703 $ 773,968 Airline Solutions 179,885 212,927 Hospitality Solutions 59,237 72,831 Eliminations (7,848) (10,365) Total revenue $ 658,977 $ 1,049,361 Adjusted Gross Profit (a) Travel Network $ 112,169 $ 282,680 Airline Solutions 52,027 78,131 Hospitality Solutions 5,694 15,710 Corporate (2,790) (3,431) Total $ 167,100 $ 373,090 Adjusted Operating (Loss) Income (b) Travel Network $ 21,972 $ 193,172 Airline Solutions (32,579) 15,424 Hospitality Solutions (16,457) (5,717) Corporate (45,806) (47,117) Total $ (72,870) $ 155,762 Adjusted EBITDA (c) Travel Network $ 65,452 $ 242,855 Airline Solutions 8,369 58,394 Hospitality Solutions (4,855) 7,005 Total segments 68,966 308,254 Corporate (44,563) (45,905) Total $ 24,403 $ 262,349 Depreciation and amortization Travel Network $ 25,267 $ 30,555 Airline Solutions 40,948 42,970 Hospitality Solutions 11,602 12,723 Total segments 77,817 86,248 Corporate 18,044 17,195 Total $ 95,861 $ 103,443 Capital Expenditures Travel Network $ 2,329 $ 4,986 Airline Solutions 6,392 12,490 Hospitality Solutions 1,401 3,496 Total segments 10,122 20,972 Corporate 18,315 16,892 Total $ 28,437 $ 37,864 ______________________________ (a) The following table sets forth the reconciliation of Adjusted Gross Profit to operating (loss) income in our statement of operations (in thousands): Three Months Ended March 31, 2020 2019 Adjusted Gross Profit $ 167,100 $ 373,090 Less adjustments: Selling, general and administrative 198,873 151,391 Cost of revenue adjustments: Depreciation and amortization (1) 77,373 84,920 Amortization of upfront incentive consideration (2) 18,213 19,128 Stock-based compensation 7,357 7,244 Restructuring and other costs (6) 16,695 — Operating (loss) income $ (151,411) $ 110,407 (b) The following table sets forth the reconciliation of Adjusted Operating (Loss) Income to operating (loss) income in our statement of operations (in thousands): Three Months Ended March 31, 2020 2019 Adjusted Operating (Loss) Income $ (72,870) $ 155,762 Less adjustments: Equity method (loss) income (686) 533 Acquisition-related amortization (1c) 16,801 15,984 Acquisition-related costs (5) 17,827 11,706 Litigation costs, net (4) 1,741 1,438 Stock-based compensation 17,577 15,694 Restructuring and other costs (6) 25,281 — Operating (loss) income $ (151,411) $ 110,407 (c) The following table sets forth the reconciliation of Adjusted EBITDA to (loss) income from continuing operations in our statement of operations (in thousands): Three Months Ended March 31, 2020 2019 Adjusted EBITDA $ 24,403 $ 262,349 Less adjustments: Depreciation and amortization of property and equipment (1a) 69,513 75,348 Amortization of capitalized implementation costs (1b) 9,547 12,111 Acquisition-related amortization (1c) 16,801 15,984 Amortization of upfront incentive consideration (2) 18,213 19,128 Interest expense, net 37,442 38,013 Other, net (3) 47,486 1,870 Restructuring and other costs (6) 25,281 — Acquisition-related costs (5) 17,827 11,706 Litigation costs, net (4) 1,741 1,438 Stock-based compensation 17,577 15,694 Provision for income taxes (27,254) 11,843 (Loss) income from continuing operations $ (209,771) $ 59,214 ______________________________________________________ (1) Depreciation and amortization expenses: (a) Depreciation and amortization of property and equipment includes software developed for internal use as well as amortization of contract acquisition costs (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. (2) Our Travel Network business at times provides upfront incentive consideration to travel agency subscribers at the inception or modification of a service contract, which are capitalized and amortized to cost of revenue over an average expected life of the service contract, generally over three (3) Other, net primarily includes a $46 million charge in connection with our proposed acquisition of Farelogix, as well as 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. See Note 3. Acquisitions for further detail regarding the Farelogix acquisition. (4) Litigation costs, net represent charges associated with antitrust and other foreign non-income tax contingency matters. See Note 12. Contingencies. (5) Acquisition-related costs represent fees and expenses incurred associated with the 2018 agreement to acquire Farelogix. (6) Restructuring and other costs represent charges associated with business restructuring and associated changes implemented which resulted in severance benefits related to employee terminations. In the first quarter of 2020, we recorded a $25 million charge associated with an announced action to reduce our workforce in connection with cost savings measures as a result of the market conditions caused by COVID-19. |
General Information - Additiona
General Information - Additional Information (Details) | Jan. 01, 2020USD ($) | Mar. 31, 2020USD ($)segmentshares | Mar. 31, 2019USD ($) | Apr. 17, 2020USD ($) | Dec. 31, 2019USD ($) | Feb. 28, 2017USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Number of business segments | segment | 3 | |||||
Face value of outstanding debt | $ 3,638,291,000 | $ 3,282,195,000 | ||||
Restructuring and other costs | 25,281,000 | $ 0 | ||||
Cancellation reserve | $ 44,000,000 | |||||
Amount authorized to be repurchased | $ 500,000,000 | |||||
Shares repurchased (in shares) | shares | 0 | |||||
Remaining amount authorized to be repurchased | $ 287,000,000 | |||||
Increase in retained deficit | (1,022,297,000) | (763,482,000) | ||||
Cumulative-effect adjustment upon adoption | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Increase in bad debt expense | $ 10,000,000 | |||||
Increase in allowance for credit loss | 10,000,000 | |||||
Decrease in deferred tax liabilities | (1,000,000) | |||||
Increase in accounts receivable | 1,000,000 | |||||
Increase in retained deficit | $ 8,000,000 | |||||
Senior Secured Notes | Senior Secured Notes 9.250% Due 2025 And Senior Secured Notes 4.000% Due 2025 | Subsequent Event | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Aggregate principal amount | $ 1,120,000,000 | |||||
Revolving Credit Facility | Senior secured credit facilities | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Face value of outstanding debt | $ 375,000,000 | $ 0 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Contract Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Revenue from External Customer [Line Items] | |||
Contract liabilities | $ 189,134 | $ 167,832 | |
Prepaid expenses and other current assets / other assets, net | |||
Revenue from External Customer [Line Items] | |||
Contract assets, current | 102,945 | 105,499 | |
Contract assets | 6,000 | $ 6,000 | |
Accounts receivable, net | |||
Revenue from External Customer [Line Items] | |||
Contract assets, current | 350,537 | 539,806 | |
Other assets, net | |||
Revenue from External Customer [Line Items] | |||
Contract assets, noncurrent | $ 37,450 | $ 38,250 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognized | $ 16 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | $ 658,977 | $ 1,049,361 |
Operating Segments | Travel Network | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 427,703 | 773,968 |
Operating Segments | Airline Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 179,885 | 212,927 |
Operating Segments | Hospitality Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 59,237 | 72,831 |
Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | (7,848) | (10,365) |
Air | Operating Segments | Travel Network | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 315,317 | 640,478 |
Lodging, Ground and Sea | Operating Segments | Travel Network | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 72,431 | 90,287 |
Other | Operating Segments | Travel Network | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 39,955 | 43,203 |
Reservation Systems | Operating Segments | Airline Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 105,131 | 127,228 |
Commercial and Operations Solutions | Operating Segments | Airline Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 73,530 | 83,558 |
Other | Operating Segments | Airline Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 1,224 | 2,141 |
SynXis Software and Services | Operating Segments | Hospitality Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | 50,731 | 64,214 |
Other | Operating Segments | Hospitality Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total Sabre Revenue | $ 8,506 | $ 8,617 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Oct. 31, 2019 | Jun. 30, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | |
Business Acquisition [Line Items] | ||||
Litigation Settlement, Attorney Fee Expense | $ 24,811 | $ 0 | ||
Department Of Justice Lawsuit | ||||
Business Acquisition [Line Items] | ||||
Litigation Settlement, Attorney Fee Expense | 25,000 | |||
Litigation charge | 46,000 | |||
Termination fees | $ 21,000 | |||
Department Of Justice Lawsuit | Subsequent Event | ||||
Business Acquisition [Line Items] | ||||
Termination fees | $ 21,000 | |||
Radixx Solutions International, Inc. | ||||
Business Acquisition [Line Items] | ||||
Net cash consideration | $ 107,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Jan. 31, 2020 | Dec. 31, 2019 | Jan. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Contingency [Line Items] | |||||
Effective income tax rate | 11.00% | 17.00% | |||
Income tax benefit | $ 4,000 | ||||
Unrecognized tax benefits | $ 65,000 | 63,000 | |||
Payments on TRA | $ 71,958 | $ 72,790 | |||
Early termination payment | $ 1,000 | ||||
Internal Revenue Service (IRS) | |||||
Income Tax Contingency [Line Items] | |||||
Payments on TRA | $ 72,000 | $ 74,000 |
Credit Losses - Narrative (Deta
Credit Losses - Narrative (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Increase in retained deficit | $ (1,022,297) | $ (763,482) | |
Collection period | 12 months | ||
Cumulative-effect adjustment upon adoption | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Increase in allowance for credit loss | $ 10,000 | ||
Decrease in deferred tax liabilities | (1,000) | ||
Increase in accounts receivable | 1,000 | ||
Increase in retained deficit | $ 8,000 |
Credit Losses - Allowance for C
Credit Losses - Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 57,730 | |
Provision for expected credit losses | 36,359 | $ 5,370 |
Write-offs | (3,945) | |
Other | 2,743 | |
Ending balance | 102,755 | |
Cumulative-effect adjustment upon adoption | ||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 9,868 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Mar. 02, 2018 | Aug. 23, 2017USD ($) | Jul. 18, 2016 | Mar. 31, 2020USD ($) | Apr. 17, 2020USD ($) | Dec. 31, 2019USD ($) |
Line of Credit Facility [Line Items] | ||||||
Outstanding debt | $ 3,699,000,000 | $ 3,343,000,000 | ||||
Debt issuance costs | 14,000,000 | 15,000,000 | ||||
Unamortized discount | 5,000,000 | 6,000,000 | ||||
Face value of outstanding debt | 3,638,291,000 | 3,282,195,000 | ||||
Outstanding letters of credit that will reduce overall credit capacity | $ 11,000,000 | 12,000,000 | ||||
Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Number of debt agreements | 2 | |||||
Senior Secured Notes 9.250% Due 2025 | Senior Secured Notes | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Aggregate principal amount | $ 775,000,000 | |||||
Interest rate | 9.25% | |||||
Senior Secured Notes 4.000% Due 2025 | Senior Secured Notes | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Aggregate principal amount | $ 345,000,000 | |||||
Interest rate | 4.00% | |||||
Amended And Restated Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Percent of domestic revenue passenger enplanements | 10.00% | |||||
Amended And Restated Credit Agreement | Senior secured credit facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Total net leverage ratio | 4.5 | |||||
Revolving Credit Facility | Senior secured credit facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Face value of outstanding debt | $ 375,000,000 | 0 | ||||
Revolving Credit Facility | Fourth Incremental Term Facility Amendment | Senior secured credit facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility amount | $ 400,000,000 | |||||
Senior secured first-lien net leverage ratio | 3.75 | |||||
Revolving Credit Facility | Fourth Incremental Term Facility Amendment | Senior secured credit facilities | Eurocurrency | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable basis spread | 2.50% | |||||
Revolving Credit Facility | Fourth Incremental Term Facility Amendment | Senior secured credit facilities | Eurocurrency | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable basis spread | 1.75% | |||||
Revolving Credit Facility | Fourth Incremental Term Facility Amendment | Senior secured credit facilities | Base Rate | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable basis spread | 1.50% | |||||
Revolving Credit Facility | Fourth Incremental Term Facility Amendment | Senior secured credit facilities | Base Rate | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable basis spread | 0.75% | |||||
New Term Loan B | Senior secured credit facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable basis spread | 2.00% | |||||
Face value of outstanding debt | $ 1,838,724,000 | 1,843,427,000 | ||||
New Term Loan B | Fourth Incremental Term Facility Amendment | Senior secured credit facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility amount | $ 1,891,000,000 | |||||
Senior secured first-lien net leverage ratio | 3 | |||||
New Term Loan B | Fourth Incremental Term Facility Amendment | Senior secured credit facilities | Eurocurrency | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable basis spread | 2.25% | |||||
New Term Loan B | Fourth Incremental Term Facility Amendment | Senior secured credit facilities | Base Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable basis spread | 1.25% | |||||
New Term Loan B | Fifth Incremental Term Facility Amendment | Senior secured credit facilities | Eurocurrency | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable basis spread | 2.00% | |||||
New Term Loan B | Fifth Incremental Term Facility Amendment | Senior secured credit facilities | Base Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable basis spread | 1.00% | |||||
New Term Loan A | Senior secured credit facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable basis spread | 2.25% | |||||
Face value of outstanding debt | $ 470,250,000 | $ 484,500,000 | ||||
New Term Loan A | Fourth Incremental Term Facility Amendment | Senior secured credit facilities | ||||||
Line of Credit Facility [Line Items] | ||||||
Credit facility amount | $ 570,000,000 | |||||
Decrease in variable basis spread, quarterly | 0.25% | |||||
Decrease in variable basis spread, maximum | 0.75% | |||||
Senior secured first-lien net leverage ratio | 2.25 | |||||
New Term Loan A | Fourth Incremental Term Facility Amendment | Senior secured credit facilities | Eurocurrency | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable basis spread | 2.50% | |||||
New Term Loan A | Fourth Incremental Term Facility Amendment | Senior secured credit facilities | Eurocurrency | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable basis spread | 1.75% | |||||
New Term Loan A | Fourth Incremental Term Facility Amendment | Senior secured credit facilities | Base Rate | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable basis spread | 1.50% | |||||
New Term Loan A | Fourth Incremental Term Facility Amendment | Senior secured credit facilities | Base Rate | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable basis spread | 0.75% |
Debt - Face Value of Outstandin
Debt - Face Value of Outstanding Debt (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Debt outstanding | $ 3,638,291,000 | $ 3,282,195,000 |
Finance lease obligations | 4,087,000 | 5,882,000 |
Face value of total debt outstanding | 3,718,061,000 | 3,363,809,000 |
Less current portion of debt outstanding | (79,770,000) | (81,614,000) |
Senior secured credit facilities | Term Loan A | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 470,250,000 | 484,500,000 |
Basis spread on LIBOR | 2.25% | |
Senior secured credit facilities | Term Loan B | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 1,838,724,000 | 1,843,427,000 |
Basis spread on LIBOR | 2.00% | |
Senior secured credit facilities | Revolver, $400 million | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 375,000,000 | 0 |
Credit facility amount | 400,000,000 | |
Senior secured notes | 5.375% senior secured notes due 2023 | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 530,000,000 | 530,000,000 |
Outstanding debt rate | 5.375% | |
Senior secured notes | 5.25% senior secured notes due 2023 | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 500,000,000 | $ 500,000,000 |
Outstanding debt rate | 5.25% | |
Senior Secured Credit | Revolver, $400 million | Eurocurrency | ||
Debt Instrument [Line Items] | ||
Basis spread on LIBOR | 2.00% |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) | 3 Months Ended | ||||||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 30, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | |
Derivative [Line Items] | |||||||
Hedging ineffectiveness recorded in earnings | $ 0 | $ 0 | |||||
Estimated loss reclassified from other comprehensive income (loss) to earnings as contracts settle | $ 9,000,000 | ||||||
Interest rate swaps | |||||||
Derivative [Line Items] | |||||||
Notional amount | $ 750,000,000 | $ 750,000,000 | $ 750,000,000 | ||||
Interest rate swaps, 2019 | Cash Flow Hedging | |||||||
Derivative [Line Items] | |||||||
Notional amount | $ 600,000,000 | ||||||
Interest rate swaps, 2020 | Cash Flow Hedging | |||||||
Derivative [Line Items] | |||||||
Notional amount | 300,000,000 | ||||||
Interest rate swaps, 2021 | Cash Flow Hedging | |||||||
Derivative [Line Items] | |||||||
Notional amount | $ 450,000,000 | ||||||
Interest Rate Swap, Floating Term Loan B, 2020 And 2021 | Cash Flow Hedging | |||||||
Derivative [Line Items] | |||||||
Notional amount | $ 150,000,000 |
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, $ in Thousands, $ in Thousands, $ in Thousands | Mar. 31, 2020SEK (kr) | Mar. 31, 2020SGD ($) | Mar. 31, 2020INR (₨) | Mar. 31, 2020AUD ($) | Mar. 31, 2020PLN (zł) | Mar. 31, 2020GBP (£) | Mar. 31, 2020USD ($) | Dec. 31, 2019SEK (kr) | Dec. 31, 2019SGD ($) | Dec. 31, 2019INR (₨) | Dec. 31, 2019AUD ($) | Dec. 31, 2019PLN (zł) | Dec. 31, 2019GBP (£) | Dec. 31, 2019USD ($) |
Polish Zloty | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Notional Amount | zł 186,000 | $ 48,267 | zł 265,000 | $ 68,971 | ||||||||||
Average Contract Rate | 0.2595 | 0.2595 | 0.2595 | 0.2595 | 0.2595 | 0.2595 | 0.2595 | 0.2603 | 0.2603 | 0.2603 | 0.2603 | 0.2603 | 0.2603 | 0.2603 |
Indian Rupee | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Notional Amount | ₨ 3,000,000 | $ 41,318 | $ 4,485,000 | $ 61,708 | ||||||||||
Average Contract Rate | 0.0137 | 0.0137 | 0.0137 | 0.0137 | 0.0137 | 0.0137 | 0.0137 | 0.0138 | 0.0138 | 0.0138 | 0.0138 | 0.0138 | 0.0138 | 0.0138 |
Singapore Dollar | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Notional Amount | $ 45,000 | $ 33,120 | £ 63,500 | $ 46,759 | ||||||||||
Average Contract Rate | 0.7360 | 0.7360 | 0.7360 | 0.7360 | 0.7360 | 0.7360 | 0.7360 | 0.7364 | 0.7364 | 0.7364 | 0.7364 | 0.7364 | 0.7364 | 0.7364 |
British Pound Sterling | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Notional Amount | £ 13,200 | $ 17,197 | ₨ 18,400 | $ 24,109 | ||||||||||
Average Contract Rate | 1.3028 | 1.3028 | 1.3028 | 1.3028 | 1.3028 | 1.3028 | 1.3028 | 1.3103 | 1.3103 | 1.3103 | 1.3103 | 1.3103 | 1.3103 | 1.3103 |
Australian Dollar | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Notional Amount | $ 10,950 | $ 7,597 | $ 16,500 | $ 11,521 | ||||||||||
Average Contract Rate | 0.6938 | 0.6938 | 0.6938 | 0.6938 | 0.6938 | 0.6938 | 0.6938 | 0.6982 | 0.6982 | 0.6982 | 0.6982 | 0.6982 | 0.6982 | 0.6982 |
Swedish Krona | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Notional Amount | kr 24,500 | $ 2,646 | kr 38,100 | $ 4,106 | ||||||||||
Average Contract Rate | 0.1062 | 0.1062 | 0.1062 | 0.1062 | 0.1062 | 0.1062 | 0.1062 | 0.1075 | 0.1075 | 0.1075 | 0.1075 | 0.1075 | 0.1075 | 0.1075 |
Derivatives - Schedule of Outst
Derivatives - Schedule of Outstanding Interest Rate Swaps (Details) - Designated as Hedging Instrument - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Derivative [Line Items] | ||
Interest rate swap contracts, floor rate | 0.00% | |
2.27% | ||
Derivative [Line Items] | ||
Notional Amount | $ 1,350,000,000 | $ 1,350,000,000 |
Interest Rate Paid | 2.27% | 2.27% |
2.19% | ||
Derivative [Line Items] | ||
Notional Amount | $ 1,200,000,000 | $ 1,200,000,000 |
Interest Rate Paid | 2.19% | 2.19% |
2.81% | ||
Derivative [Line Items] | ||
Notional Amount | $ 600,000,000 | $ 600,000,000 |
Interest Rate Paid | 2.81% | 2.81% |
Derivatives - Schedule of Estim
Derivatives - Schedule of Estimated Fair Values of Derivatives Designated as Hedging Instruments (Details) - Designated as Hedging Instrument - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | ||
Derivative Assets (Liabilities) | $ (39,178) | $ (12,985) |
Other accrued liabilities | Foreign exchange contracts | ||
Derivative [Line Items] | ||
Derivative liability | (8,988) | 0 |
Other accrued liabilities | Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative liability | (20,202) | (7,020) |
Prepaid expenses and other current assets | Foreign exchange contracts | ||
Derivative [Line Items] | ||
Derivative asset | 0 | 1,953 |
Other noncurrent liabilities | Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative liability | $ (9,988) | $ (7,918) |
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 | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative [Line Items] | ||
Amount of (Loss) Gain Recognized in OCI on Derivative, Effective Portion | $ (23,818) | $ (5,409) |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion | 1,835 | 2,202 |
Foreign exchange contracts | ||
Derivative [Line Items] | ||
Amount of (Loss) Gain Recognized in OCI on Derivative, Effective Portion | (9,459) | (255) |
Foreign exchange contracts | Cost of revenue | ||
Derivative [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion | 621 | 2,722 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Amount of (Loss) Gain Recognized in OCI on Derivative, Effective Portion | (14,359) | (5,154) |
Interest rate swaps | Interest expense, net | ||
Derivative [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion | $ 1,214 | $ (520) |
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 | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total | $ (39,178) | $ (12,985) |
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 | (39,178) | (12,985) |
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) | (8,988) | 1,953 |
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) | (8,988) | 1,953 |
Foreign currency forward contracts | Level 3 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative Assets (Liabilities) | 0 | 0 |
Interest rate swap contracts | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative Assets (Liabilities) | (30,190) | (14,938) |
Interest rate swap contracts | Level 1 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative Assets (Liabilities) | 0 | 0 |
Interest rate swap contracts | Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Derivative Assets (Liabilities) | (30,190) | (14,938) |
Interest rate swap contracts | 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 ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Senior secured credit facilities | Revolver, $400 million | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Credit facility amount | $ 400,000,000 | |
Term Loan A | Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | 444,974,000 | $ 485,106,000 |
Term Loan A | Carrying Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | 469,199,000 | 483,317,000 |
Term Loan B | Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | 1,564,065,000 | 1,856,100,000 |
Term Loan B | Carrying Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | 1,834,306,000 | 1,838,741,000 |
Revolver, $400 million | Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | 375,000,000 | 0 |
Revolver, $400 million | Carrying Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | $ 375,000,000 | 0 |
5.375% senior secured notes due 2023 | Senior Secured Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Outstanding debt rate | 5.375% | |
5.375% senior secured notes due 2023 | Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | $ 485,499,000 | 543,536,000 |
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 | Senior Secured Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Outstanding debt rate | 5.25% | |
5.25% senior secured notes due 2023 | Fair Value | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Financial instrument fair value | $ 460,358,000 | 514,670,000 |
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 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Goodwill | $ 2,631,077 | $ 2,633,251 |
Airline Solutions | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Goodwill | $ 372,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Equity [Abstract] | ||
Defined benefit pension and other post-retirement benefit plans | $ (138,263) | $ (143,389) |
Unrealized foreign currency translation gain | 1,842 | 4,289 |
Unrealized loss on foreign currency forward contracts and interest rate swaps | (32,188) | (10,206) |
Total accumulated other comprehensive loss, net of tax | $ (168,609) | $ (149,306) |
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 | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
(Loss) income from continuing operations | $ (209,771) | $ 59,214 |
Less: Net income attributable to non-controlling interests | 783 | 912 |
Net (loss) income from continuing operations available to common stockholders, basic and diluted | $ (210,554) | $ 58,302 |
Denominator: | ||
Basic weighted-average common shares outstanding (in shares) | 274,037 | 275,589 |
Add: Dilutive effect of stock options and restricted stock awards (in shares) | 0 | 2,016 |
Diluted weighted-average common shares outstanding (in shares) | 274,037 | 277,605 |
Earnings per share from continuing operations: | ||
Basic (in dollars per share) | $ (0.77) | $ 0.21 |
Diluted (in dollars per share) | $ (0.77) | $ 0.21 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Common stock equivalents (in shares) | 2 | 1 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Lease term | 10 years |
Optional lease extension term | 5 years |
Option period to terminate lease | 3 years |
Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Remaining minimum lease terms | 1 year |
Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Remaining minimum lease terms | 10 years |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows used in operating leases | $ 7,475 | $ 6,473 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 32,184 | $ 5,175 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Operating Leases | ||
Operating lease right-of-use assets | $ 88,860 | $ 64,191 |
Other accrued liabilities | 23,662 | 21,932 |
Other noncurrent liabilities | 71,441 | 49,970 |
Total operating lease liabilities | $ 95,103 | $ 71,902 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2020 | $ 18,676 | |
2021 | 23,506 | |
2022 | 16,637 | |
2023 | 13,372 | |
2024 | 12,089 | |
Thereafter | 29,192 | |
Total | 113,472 | |
Imputed Interest | (18,369) | |
Total | $ 95,103 | $ 71,902 |
Contingencies - Antitrust Litig
Contingencies - Antitrust Litigation and Investigations (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||||
Apr. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2016 | Nov. 30, 2017 | |
Loss Contingencies [Line Items] | |||||||
Percentage of bookings affected (fraction of) | 1.00% | ||||||
Value added tax receivable | $ 22,000,000 | ||||||
Foreign Tax Authority | Indian Income Tax Litigation | |||||||
Loss Contingencies [Line Items] | |||||||
Termination fee | 45,000,000 | ||||||
US Airways Litigation | |||||||
Loss Contingencies [Line Items] | |||||||
Damages awarded | $ 15,000,000 | $ 15,000,000 | |||||
Loss contingency accrual | $ 32,000,000 | 0 | 32,000,000 | ||||
Reasonable attorneys' fees, expenses and costs | $ 17,000,000 | ||||||
Department Of Justice Lawsuit | |||||||
Loss Contingencies [Line Items] | |||||||
Litigation charge | 46,000,000 | ||||||
Termination fees | $ 21,000,000 | ||||||
Department Of Justice Lawsuit | Subsequent Event | |||||||
Loss Contingencies [Line Items] | |||||||
Termination fees | $ 21,000,000 | ||||||
US Airways | US Airways Litigation | |||||||
Loss Contingencies [Line Items] | |||||||
Damages awarded | $ 15,000,000 | $ 5,000,000 | |||||
Attorneys' fees and costs sought | $ 125,000,000 |
Segment Information - Summary o
Segment Information - Summary of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 658,977 | $ 1,049,361 |
Adjusted Gross Profit | 167,100 | 373,090 |
Adjusted Operating (Loss) Income | (72,870) | 155,762 |
Adjusted EBITDA | 24,403 | 262,349 |
Depreciation and amortization | 95,861 | 103,443 |
Capital Expenditures | 28,437 | 37,864 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Adjusted EBITDA | 68,966 | 308,254 |
Depreciation and amortization | 77,817 | 86,248 |
Capital Expenditures | 10,122 | 20,972 |
Operating Segments | Travel Network | ||
Segment Reporting Information [Line Items] | ||
Revenue | 427,703 | 773,968 |
Adjusted Gross Profit | 112,169 | 282,680 |
Adjusted Operating (Loss) Income | 21,972 | 193,172 |
Adjusted EBITDA | 65,452 | 242,855 |
Depreciation and amortization | 25,267 | 30,555 |
Capital Expenditures | 2,329 | 4,986 |
Operating Segments | Airline Solutions | ||
Segment Reporting Information [Line Items] | ||
Revenue | 179,885 | 212,927 |
Adjusted Gross Profit | 52,027 | 78,131 |
Adjusted Operating (Loss) Income | (32,579) | 15,424 |
Adjusted EBITDA | 8,369 | 58,394 |
Depreciation and amortization | 40,948 | 42,970 |
Capital Expenditures | 6,392 | 12,490 |
Operating Segments | Hospitality Solutions | ||
Segment Reporting Information [Line Items] | ||
Revenue | 59,237 | 72,831 |
Adjusted Gross Profit | 5,694 | 15,710 |
Adjusted Operating (Loss) Income | (16,457) | (5,717) |
Adjusted EBITDA | (4,855) | 7,005 |
Depreciation and amortization | 11,602 | 12,723 |
Capital Expenditures | 1,401 | 3,496 |
Eliminations | ||
Segment Reporting Information [Line Items] | ||
Revenue | (7,848) | (10,365) |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Adjusted Gross Profit | (2,790) | (3,431) |
Adjusted Operating (Loss) Income | (45,806) | (47,117) |
Adjusted EBITDA | (44,563) | (45,905) |
Depreciation and amortization | 18,044 | 17,195 |
Capital Expenditures | $ 18,315 | $ 16,892 |
Segment Information - Adjusted
Segment Information - Adjusted Gross Margin (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting [Abstract] | ||
Adjusted Gross Profit | $ 167,100 | $ 373,090 |
Less adjustments: | ||
Selling, general and administrative | 198,873 | 151,391 |
Cost of revenue adjustments: | ||
Depreciation and amortization | 77,373 | 84,920 |
Amortization of upfront incentive consideration | 18,213 | 19,128 |
Stock-based compensation | 7,357 | 7,244 |
Restructuring and other costs | 16,695 | 0 |
Operating (loss) income | $ (151,411) | $ 110,407 |
Segment Information - Adjustmen
Segment Information - Adjustment Operating (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting [Abstract] | ||
Adjusted Operating (Loss) Income | $ (72,870) | $ 155,762 |
Less adjustments: | ||
Equity method loss | (686) | 533 |
Acquisition-related amortization | 16,801 | 15,984 |
Acquisition-related costs | 17,827 | 11,706 |
Litigation costs, net | 1,741 | 1,438 |
Stock-based compensation | 17,577 | 15,694 |
Restructuring and other costs | 25,281 | 0 |
Operating (loss) income | $ (151,411) | $ 110,407 |
Segment Information - Adjuste_2
Segment Information - Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Adjusted EBITDA | $ 24,403 | $ 262,349 |
Less adjustments: | ||
Depreciation and amortization of property and equipment | 69,513 | 75,348 |
Amortization of capitalized implementation costs | 9,547 | 12,111 |
Acquisition-related amortization | 16,801 | 15,984 |
Amortization of upfront incentive consideration | 18,213 | 19,128 |
Interest expense, net | 37,442 | 38,013 |
Other, net | 47,486 | 1,870 |
Restructuring and other costs | 25,281 | 0 |
Acquisition-related costs | 17,827 | 11,706 |
Litigation costs, net | 1,741 | 1,438 |
Stock-based compensation | 17,577 | 15,694 |
Provision for income taxes | (27,254) | 11,843 |
(Loss) Income from continuing operations | (209,771) | $ 59,214 |
Workforce reduction | ||
Less adjustments: | ||
Restructuring and other costs | 25,000 | |
Department Of Justice Lawsuit | ||
Less adjustments: | ||
Litigation charge | $ 46,000 | |
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 | 10 years |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event | Apr. 17, 2020USD ($) |
Business Acquisition [Line Items] | |
Number of debt agreements | 2 |
Senior Secured Notes 4.000% Due 2025 | Senior Secured Notes | |
Business Acquisition [Line Items] | |
Aggregate principal amount | $ 345,000,000 |
Interest rate | 4.00% |
Senior Secured Notes 9.250% Due 2025 | Senior Secured Notes | |
Business Acquisition [Line Items] | |
Aggregate principal amount | $ 775,000,000 |
Interest rate | 9.25% |
Uncategorized Items - sabr-2020
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (7,591,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (7,591,000) |