sabr-20211102
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 8-K
_____________________

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 2, 2021
_____________________
SABRE CORPORATION
(Exact name of registrant as specified in its charter)
 _____________________
Delaware 001-36422 20-8647322
(State or other jurisdiction of
incorporation or organization)
 (Commission
File Number)
 (IRS Employer
Identification No.)
3150 Sabre Drive76092
Southlake,TX
(Address of principal executive offices)(Zip Code)
(682) 605-1000
(Registrant’s telephone number, including area code)
____________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $.01 par valueSABRThe NASDAQ Stock Market LLC
6.50% Series A Mandatory Convertible Preferred StockSABRPThe NASDAQ Stock Market LLC







Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.








Item 2.02Results of Operations and Financial Condition.
On November 2, 2021, Sabre Corporation (“Sabre”) issued a press release and will hold a conference call regarding its financial results for the quarter ended September 30, 2021. A copy of the press release is attached as Exhibit 99.1.
The information in this Item 2.02 of Form 8-K and the attached exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Sabre makes reference to non-GAAP financial measures in the press release. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached press release.
 
Item 9.01.Financial Statements and Exhibits.
(d) Exhibits
 
Exhibit
Number
  Description
 99.1
104
Cover Page Interactive Data File - formatted as Inline XBRL.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 Sabre Corporation
   
Dated:November 2, 2021By:/s/ Douglas E. Barnett
 Name:Douglas E. Barnett
 Title:Chief Financial Officer



Document

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Sabre highlights commercial momentum and focused strategy to capitalize on growth opportunities; reports third quarter 2021 results

Third quarter 2021 business overview:
Entered into agreement to sell AirCentre, Sabre's airline operations portfolio, to narrow strategic focus and strengthen liquidity position
Completed successful migration of GOL Linhas Aéreas, Brazil's largest domestic airline, onto the SabreSonic passenger service system
Announced SabreSonic win with Biman Bangladesh Airlines and three Radixx low cost carrier wins
Increased average booking fee sequentially versus the first and second quarters of 2021 due to more favorable bookings mix
Progressed cloud migration and decommissioned almost 2,000 legacy servers
Ended the quarter with cash balance of $1.0 billion

Third quarter 2021 summary:
Earnings metrics significantly improved versus prior year
Third quarter revenue totaled $441 million
Net loss attributable to common stockholders of $241 million, or $0.75 per share
Adjusted EPS totaled ($0.50)

SOUTHLAKE, Texas – November 2, 2021 – Sabre Corporation ("Sabre" or the "Company") (NASDAQ: SABR) today announced financial results for the quarter ended September 30, 2021.

"Over the course of this year, our executive leadership team has been taking a critical look at Sabre, challenging norms and re-examining the way we do business. Our review focused on industry trends and technology, current and future capabilities, desired growth and returns, ongoing investment requirements and financial health and flexibility," said Sean Menke, President and CEO. "With our strong belief in a broad global travel recovery, we will narrow our product offerings and intensify focus on our core - the customer revenue-generating retailing, distribution and fulfillment aspects of our business - with the goal to accelerate the unlocking of shareholder value. The sale of AirCentre is an illustration of steps we are taking to achieve our

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objectives. We are excited to move forward as a more focused technology company with meaningful growth opportunities."

Q3 2021 Financial Summary

Sabre consolidated third quarter revenue totaled $441 million, a 58% improvement versus revenue of $278 million in the third quarter of 2020. The increase in revenue was driven by an increase in global air, hotel and other travel bookings due to continued recovery from the COVID-19 pandemic.

Operating loss was $157 million, a significant improvement versus an operating loss of $233 million in the third quarter of 2020. The improvement in operating results was driven by increased revenue due to the continued recovery from the COVID-19 pandemic, lower depreciation and amortization and a decrease in the provision for expected credit losses. These impacts were partially offset by increased Travel Solutions incentive expenses, Hospitality Solutions transaction-related costs and technology hosting expenses due to volume recovery trends, increased labor and professional service expenses, including internal investments in risk and security, business systems and consulting to support our business strategy, a $14 million increase in recognized stock-based compensation expense primarily due to previously granted performance-based units and a $9 million increase in litigation costs.

Net loss attributable to common stockholders totaled $241 million, an improvement versus a net loss of $310 million in the third quarter of 2020. Diluted net loss attributable to common stockholders per share totaled $0.75, versus diluted net loss attributable to common stockholders per share of $1.06 in the third quarter of 2020. The improvement in net income attributable to common stockholders was driven by the items impacting operating loss described above and a $12 million reduction in pension-related expense, partially offset by lower benefit for income taxes and an additional $3 million loss on extinguishment of debt.

Adjusted EBITDA was negative $55 million, an improvement versus Adjusted EBITDA of negative $124 million in the third quarter of 2020. The improvement in Adjusted EBITDA was driven by increased revenue due to the continued recovery from the COVID-19 pandemic and a decrease in the provision for expected credit losses. These impacts were partially offset by increased Travel Solutions incentive expenses, Hospitality Solutions transaction-related costs and technology hosting expenses due to volume recovery trends, increased labor and professional service expenses, including internal investments in risk and security, business systems and consulting to support our business strategy and increased litigation costs.


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Adjusted Operating Loss was $103 million, an improvement versus Adjusted Operating Loss of $197 million in the third quarter of 2020. The improvement in operating results was driven by the items impacting Adjusted EBITDA above and lower depreciation and amortization.

Sabre reported Adjusted EPS of ($0.50), an improvement versus ($0.81) in the third quarter of 2020.

With regards to Sabre's third quarter 2021 cash flows (versus prior year):
Cash used in operating activities totaled $70 million (vs. $192 million)
Cash used in investing activities totaled $13 million (vs. $9 million)
Cash provided by financing activities totaled $8 million (vs. $566 million)
Capitalized expenditures totaled $13 million (vs. $9 million)

Free Cash Flow was negative $83 million, an improvement versus Free Cash Flow of negative $201 million in the third quarter of 2020.


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Financial Highlights
(in thousands, except for EPS; unaudited):
Three Months Ended September 30,Nine Months Ended September 30,
20212020% Change (B/W)20212020% Change (B/W)
Total Company:
Revenue$441,086$278,36558 $1,188,238$1,020,38616 
Operating Loss$(156,688)$(233,049)33 $(539,611)$(768,530)30 
Net loss attributable to common stockholders(2)
$(240,641)$(309,664)22 $(758,029)$(964,914)21 
Diluted net loss attributable to common stockholders per share (EPS)(2)
$(0.75)$(1.06)29 $(2.37)$(3.44)31 
Net Loss Margin(2)
(54.6)%(111.2)%(63.8)%(94.6)%
Adjusted EBITDA(1)
$(54,928)$(123,814)56 $(234,886)$(346,988)32 
Adjusted EBITDA Margin(1)
(12.5)%(44.5)%(19.8)%(34.0)%
Adjusted Operating Loss(1)
$(102,644)$(196,693)48 $(390,898)$(576,372)32 
Adjusted Net Loss(1), (2)
$(161,672)$(237,632)32 $(557,718)$(673,928)17 
Adjusted EPS(1), (2)
$(0.50)$(0.81)38 $(1.74)$(2.40)28 
Cash used in operating activities$(69,692)$(192,033)64 $(408,152)$(587,069)30 
Cash used in investing activities$(13,169)$(8,888)(48)$(5,535)$(52,634)89 
Cash provided by (used in) financing activities$7,607 $565,611 (99)$(37,013)$1,873,804 NM
Capitalized expenditures$(13,169)$(8,926)(48)$(30,409)$(48,259)37 
Free Cash Flow(1)
$(82,861)$(200,959)59 $(438,561)$(635,328)31 
Net Debt (total debt, less cash and cash equivalents)$3,791,172$3,140,861
Net Debt / LTM Adjusted EBITDA(1)
NMNM
Travel Solutions:
Revenue$390,353$237,01865 $1,052,613$900,86817 
Operating Loss$(38,964)$(145,877)73 $(211,998)$(406,939)48 
Adjusted Operating Loss(1)
$(39,078)$(146,337)73 $(212,393)$(408,584)48 
Distribution Revenue$245,421$104,594135 $615,448$451,18336 
Total Bookings53,51419,920169 149,28998,37152 
Air Bookings46,75216,539183 133,12580,43965 
Lodging, Ground and Sea Bookings6,7623,381100 16,16417,932(10)
IT Solutions Revenue$144,932$132,424$437,165$449,685(3)
Passengers Boarded115,57656,970103 294,415244,14421 
Hospitality Solutions:
Revenue$55,179$44,92423 $148,145$133,16311 
Operating Loss$(8,868)$(12,609)30 $(30,976)$(48,475)36 
Adjusted Operating Loss(1)
$(8,868)$(12,609)30 $(30,976)$(48,475)36 
Central Reservation System Transactions26,73519,26839 68,33451,38133 
(1)Indicates non-GAAP financial measure; see descriptions and reconciliations below.
(2)In January 2021, a new accounting standard was retroactively adopted which resulted in recast interest expense, income taxes and net loss for the three and nine months ended September 30, 2020.

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Travel Solutions

Third quarter 2021 results (versus prior year):
Travel Solutions revenue totaled $390 million, a 65% improvement versus $237 million in the third quarter of 2020. The increase in revenue versus the prior year quarter was driven by an increase in global air and other travel bookings due to the continued recovery from the COVID-19 pandemic.
Operating loss totaled $39 million, a significant improvement versus operating loss of $146 million in the third quarter of 2020. The improvement in operating results was driven by increased revenue, lower depreciation and amortization and a decrease in the provision for expected credit losses. These impacts were partially offset by increased incentive expenses and technology hosting expenses due to volume recovery trends and increased professional service expenses.
Distribution revenue totaled $245 million, a significant improvement versus revenue of $105 million in the third quarter of 2020 due to gradual recovery in bookings.
Global bookings, net of cancellations, totaled 54 million, representing a decline of 62% vs. 2019.
Net air bookings declined 60%, 65% and 62% in July, August and September versus the same months in 2019, respectively.
Average booking fee totaled $4.59, a sequential improvement versus $3.90 and $3.84 in the first and second quarters of 2021, respectively, due to improvement in bookings mix.
IT Solutions revenue totaled $145 million, an improvement versus revenue of $132 million in the third quarter of 2020. Reservations revenue increased due to ongoing recovery in passengers boarded, partially offset by a dilution in rate due to revenue that does not fluctuate with volumes. Commercial and Operations revenue decreased primarily due to license fee revenue from new implementations recognized upon delivery to the customers in the prior year and certain product divestitures. Recognition of license fees upon delivery has previously resulted and will continue to result in periodic fluctuations in revenue recognized.
Airline passengers boarded totaled 116 million, representing a decline of 38% vs. 2019.

Hospitality Solutions

Third quarter 2021 results (versus prior year):
Hospitality Solutions revenue totaled $55 million, an improvement versus revenue of $45 million in the third quarter of 2020. The increase in revenue was driven by an increase in

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central reservation system transactions due to the continued recovery from the COVID-19 pandemic and increased Digital Experience revenue. These impacts were partially offset by dilution in rate from the prior year due to revenue that does not fluctuate with volumes.
Central reservation system transactions totaled 27 million, representing a decline of 12% vs. 2019.
Operating loss was $9 million, an improvement versus operating loss of $13 million in the third quarter of 2020. The improvement in operating results was primarily driven by increased revenue and lower depreciation and amortization, partially offset by increased transaction-related costs due to volume recovery trends and higher labor and professional service expenses.

Business Outlook

Given the ongoing magnitude and the uncertainty related to the COVID-19 pandemic and its economic effects, Sabre has not given guidance at this time.

Conference Call

Sabre will conduct its third quarter 2021 investor conference call today at 9:00 a.m. ET. The live webcast and accompanying slide presentation can be accessed via the Investor Relations section of our website, investors.sabre.com. A replay of the event will be available on the website for at least 90 days following the event.

About Sabre

Sabre Corporation is a leading software and technology company that powers the global travel industry, serving a wide range of travel companies including airlines, hoteliers, travel agencies and other suppliers. The company provides retailing, distribution and fulfillment solutions that help its customers operate more efficiently, drive revenue and offer personalized traveler experiences. Through its leading travel marketplace, Sabre connects travel suppliers with buyers from around the globe. Sabre’s technology platform manages more than $260B worth of global travel spend annually. Headquartered in Southlake, Texas, USA, Sabre serves customers in more than 160 countries around the world. For more information visit www.sabre.com.

Website Information


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We routinely post important information for investors on the Investor Relations section of our website, investors.sabre.com, and intend to post important information for investors on our Twitter account, @Sabre_Corp. We intend to use the Investor Relations section of our website and our Twitter account as means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website and our Twitter account, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website or our Twitter account is not incorporated by reference into, and is not a part of, this document.

Supplemental Financial Information

In conjunction with today’s earnings report, a file of supplemental financial information will be available on the Investor Relations section of our website, investors.sabre.com.

Industry Data

This release contains industry data, forecasts and other information that we obtained from industry publications and surveys, public filings and internal company sources, and there can be no assurance as to the accuracy or completeness of the included information. Statements as to our ranking, market position, bookings share and market estimates are based on independent industry publications, government publications, third-party forecasts and management’s estimates and assumptions about our markets and our internal research. We have not independently verified this third-party information nor have we ascertained the underlying economic assumptions relied upon in those sources, and we cannot assure you of the accuracy or completeness of this information.

Note on Non-GAAP Financial Measures

This press release includes unaudited non-GAAP financial measures, including Adjusted Operating Loss, Adjusted Net Loss from continuing operations ("Adjusted Net Loss"), Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Loss from continuing operations per share ("Adjusted EPS"), Free Cash Flow, Net Debt / LTM Adjusted EBITDA and the ratios based on these financial measures.

We present non-GAAP measures when our management believes that the additional information provides useful information about our operating performance. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to

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similar measures presented by other companies. The presentation of non-GAAP financial measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP. See “Non-GAAP Financial Measures” below for an explanation of the non-GAAP measures and “Tabular Reconciliations for Non-GAAP Measures” below for a reconciliation of the non-GAAP financial measures to the comparable GAAP measures.

Forward-Looking Statements

Certain statements herein are forward-looking statements about trends, future events, uncertainties and our plans and expectations of what may happen in the future. Any statements that are not historical or current facts are forward-looking statements. In many cases, you can identify forward-looking statements by terms such as "expect," "momentum," "opportunity," "will," "believe," "position," "future," "trend," "pipeline," "plan," "guidance," "outlook," "anticipate," "forecast," "continue," "strategy," "estimate," "project," "may,” “should,” “would,” “intend," “potential,” or the negative of these terms or other comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Sabre’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. The potential risks and uncertainties include, among others, the severity, extent and duration of the global COVID-19 pandemic, including any variants, and its impact on our business and results of operations, financial condition and credit ratings, as well as on the travel industry and consumer spending more broadly, the actions taken to contain the disease or treat its impact, including travel restrictions, the effectiveness and rate of vaccinations, the effect of remote working arrangements on our operations and the speed and extent of the recovery across the broader travel ecosystem, dependency on transaction volumes in the global travel industry, particularly air travel transaction volumes, including the impact of changes in these transaction volumes from airlines' insolvency, suspension of service or aircraft groundings, the effect of cost savings initiatives, the timing, implementation and effects of the technology investment and other strategic initiatives, the completion and effects of travel platforms, travel suppliers' usage of alternative distribution models, exposure to pricing pressure in the Travel Solutions business, changes affecting travel supplier customers, maintenance of the integrity of our systems and infrastructure and the effect of any security breaches, failure to adapt to technological advancements, competition in the travel distribution market and solutions markets, implementation of software solutions, reliance on third parties to provide information technology services and the effects of these services, the execution, implementation and effects of new, amended or renewed agreements and strategic partnerships, including anticipated savings, dependence on establishing, maintaining and renewing contracts with customers and other

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counterparties and collecting amounts due to us under these agreements, dependence on relationships with travel buyers, our collection, processing, storage, use and transmission of personal data and risks associated with PCI compliance, our ability to recruit, train and retain employees, including our key executive officers and technical employees, the financial and business results and effects of acquisitions and divestitures, the effects of any litigation and regulatory reviews and investigations, adverse global and regional economic and political conditions, including, but not limited to, economic conditions in countries or regions with traditionally high levels of exports to China or that have commodities-based economies and the effect of "Brexit", risks arising from global operations, reliance on the value of our brands, failure to comply with regulations, use of third-party distributor partners, the effects of the implementation of new accounting standards and tax-related matters. More information about potential risks and uncertainties that could affect our business and results of operations is included in the "Risk Factors" and “Forward-Looking Statements” sections in our Quarterly Report on Form 10-Q filed with the SEC on August 3, 2021, in our Annual Report on Form 10-K filed with the SEC on February 25, 2021 and in our other filings with the SEC. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, outlook, guidance, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. Unless required by law, Sabre undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date they are made.

Contacts:
Media
Kristin Hays
Kristin.Hays@sabre.com
sabrenews@sabre.com
Investors
Kevin Crissey
Kevin.Crissey@sabre.com
sabre.investorrelations@sabre.com


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SABRE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Revenue $441,086 $278,365 $1,188,238 $1,020,386 
Cost of revenue, excluding technology costs171,429 115,426 498,011 458,068 
Technology costs269,111 276,362 782,991 883,837 
Selling, general and administrative157,234 119,626 446,847 447,011 
Operating loss(156,688)(233,049)(539,611)(768,530)
Other income (expense):  
Interest expense, net(65,461)(64,376)(193,834)(157,749)
Loss on extinguishment of debt(13,070)(10,333)(13,070)(10,333)
Equity method loss(114)(460)(395)(1,645)
Other, net(5,993)(18,431)2,439 (72,015)
Total other expense, net(84,638)(93,600)(204,860)(241,742)
Loss from continuing operations before income taxes(241,326)(326,649)(744,471)(1,010,272)
Benefit for income taxes(6,613)(19,874)(4,513)(51,757)
Loss from continuing operations(234,713)(306,775)(739,958)(958,515)
Income (loss) from discontinued operations, net of tax186 (533)(158)(3,331)
Net loss(234,527)(307,308)(740,116)(961,846)
Net income attributable to noncontrolling interests714 125 1,657 837 
Net loss attributable to Sabre Corporation(235,241)(307,433)(741,773)(962,683)
Preferred stock dividends5,400 2,231 16,256 2,231 
Net loss attributable to common stockholders$(240,641)$(309,664)$(758,029)$(964,914)
Basic net loss per share attributable to common stockholders:  
Loss from continuing operations$(0.75)$(1.06)$(2.37)$(3.43)
Loss from discontinued operations— — — (0.01)
Net loss per common share$(0.75)$(1.06)$(2.37)$(3.44)
Diluted net loss per share attributable to common stockholders:  
Loss from continuing operations$(0.75)$(1.06)$(2.37)$(3.43)
Loss from discontinued operations— — — (0.01)
Net loss per common share$(0.75)$(1.06)$(2.37)$(3.44)
Weighted-average common shares outstanding:  
Basic322,720 292,392 320,055 280,750 
Diluted322,720 292,392 320,055 280,750 

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SABRE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 September 30, 2021December 31, 2020
Assets  
Current assets  
Cash and cash equivalents$1,023,769 $1,499,665 
Restricted cash21,039 — 
Accounts receivable, net of allowance for credit losses of $77,751 and $96,150329,838 255,468 
Prepaid expenses and other current assets137,639 132,972 
Total current assets1,512,285 1,888,105 
Property and equipment, net of accumulated depreciation of $2,035,826 and $1,995,409269,183 363,491 
Equity method investments22,698 24,265 
Goodwill2,624,108 2,636,546 
Acquired customer relationships, net of accumulated amortization of $778,563 and $761,335266,727 289,150 
Other intangible assets, net of accumulated amortization of $742,221 and $714,095193,017 222,216 
Deferred income taxes21,995 24,181 
Other assets, net532,895 629,768 
Total assets$5,442,908 $6,077,722 
Liabilities and stockholders’ (deficit) equity  
Current liabilities  
Accounts payable$99,305 $115,229 
Accrued compensation and related benefits126,621 86,830 
Accrued subscriber incentives133,689 100,963 
Deferred revenues117,856 99,470 
Other accrued liabilities173,824 193,383 
Current portion of debt30,124 26,068 
Total current liabilities681,419 621,943 
Deferred income taxes50,159 72,196 
Other noncurrent liabilities338,572 380,621 
Long-term debt4,727,835 4,717,808 
Stockholders’ (deficit) equity  
Preferred stock, $0.01 par value, 225,000 authorized, 3,340 issued and outstanding as of September 30, 2021 and December 31, 2020; aggregate liquidation value of $334,000 as of September 30, 2021 and December 31, 2020
33 33 
Common Stock: $0.01 par value; 1,000,000 authorized shares; 345,752 and 338,662 shares issued, 322,842 and 317,297 shares outstanding at September 30, 2021 and December 31, 2020, respectively
3,458 3,387 
Additional paid-in capital3,080,949 2,985,077 
Treasury Stock, at cost, 22,910 and 21,365 shares at September 30, 2021 and December 31, 2020, respectively(497,944)(474,790)
Accumulated deficit(2,857,653)(2,099,624)
Accumulated other comprehensive loss(92,605)(135,957)
Non-controlling interest8,685 7,028 
Total stockholders’ (deficit) equity(355,077)285,154 
Total liabilities and stockholders’ (deficit) equity$5,442,908 $6,077,722 

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SABRE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Nine Months Ended September 30,
 20212020
Operating Activities  
Net loss$(740,116)$(961,846)
Adjustments to reconcile net loss to cash used in operating activities:  
Depreciation and amortization204,308 279,159 
Stock-based compensation expense86,122 44,905 
Amortization of upfront incentive consideration46,063 56,733 
Gain on sale of investment(14,532)— 
Deferred income taxes(13,489)(65,551)
Loss on extinguishment of debt13,070 10,333 
Amortization of debt discount and issuance costs8,815 6,736 
Pension settlement charge6,544 13,543 
Provision for expected credit losses(3,728)58,375 
Debt modification costs2,435 — 
Other3,141 7,392 
Dividends received from equity method investments698 1,691 
Loss from discontinued operations158 3,331 
Acquisition termination fee— 24,811 
Changes in operating assets and liabilities:  
Accounts and other receivables(76,249)182,449 
Prepaid expenses and other current assets(4,312)(1,967)
Capitalized implementation costs(14,363)(10,680)
Upfront incentive consideration(3,823)(26,468)
Other assets8,368 12,837 
Accrued compensation and related benefits40,604 12,735 
Accounts payable and other accrued liabilities25,410 (263,925)
Deferred revenue including upfront solution fees16,724 28,338 
Cash used in operating activities(408,152)(587,069)
Investing Activities  
Proceeds from disposition of investments and assets24,874 — 
Additions to property and equipment(30,409)(48,259)
Other investing activities— (4,375)
Cash used in investing activities(5,535)(52,634)
Financing Activities  
Proceeds of borrowings from lenders1,070,380 2,345,000 
Payments on borrowings from lenders(1,053,728)(894,613)
Net payment on the settlement of equity-based awards(22,378)(5,298)
Dividends paid on preferred stock(16,283)— 
Debt prepayment fees and issuance costs(12,194)(54,158)
Payment for settlement of exchangeable notes(2,541)— 
Other financing activities(269)(4,513)
Proceeds from issuance of preferred stock, net— 322,885 
Proceeds from issuance of common stock, net— 275,003 
Payments on Tax Receivable Agreement— (71,958)
Cash dividends paid to common shareholders— (38,544)
Cash (used in) provided by financing activities(37,013)1,873,804 
Cash Flows from Discontinued Operations  
Cash used in operating activities(2,376)(3,739)
Cash used in discontinued operations(2,376)(3,739)
Effect of exchange rate changes on cash and cash equivalents(1,781)1,814 
(Decrease) increase in cash, cash equivalents and restricted cash(454,857)1,232,176 
Cash, cash equivalents and restricted cash at beginning of period1,499,665 436,176 
Cash, cash equivalents and restricted cash at end of period$1,044,808 $1,668,352 

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Tabular Reconciliations for Non-GAAP Measures
(In thousands, except per share amounts; unaudited)
Reconciliation of net loss attributable to common stockholders to Adjusted Net Loss from continuing operations, operating loss to Adjusted Operating Loss, and loss from continuing operations to Adjusted EBITDA.
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Net loss attributable to common stockholders$(240,641)$(309,664)$(758,029)$(964,914)
(Income) loss from discontinued operations, net of tax(186)533 158 3,331 
Net income attributable to non-controlling interests(1)
714 125 1,657 837 
Preferred stock dividends5,400 2,231 16,256 2,231 
Loss from continuing operations(234,713)(306,775)(739,958)(958,515)
Adjustments:
Acquisition-related amortization(2a)
15,939 16,465 48,296 49,775 
Restructuring and other costs(4)
269 947 (5,722)74,229 
Loss on extinguishment of debt13,070 10,333 13,070 10,333 
Other, net(3)
5,993 18,431 (2,439)72,015 
Acquisition-related costs(5)
870 591 3,299 22,791 
Litigation costs, net(6)
4,862 247 17,113 2,103 
Stock-based compensation32,218 18,566 86,122 44,905 
Tax impact of adjustments(7)
(180)3,563 22,501 8,436 
Adjusted Net Loss from continuing operations$(161,672)$(237,632)$(557,718)$(673,928)
Adjusted Net Loss from continuing operations per share$(0.50)$(0.81)$(1.74)$(2.40)
Diluted weighted-average common shares outstanding322,720 292,392 320,055 280,750 
Operating loss$(156,688)$(233,049)$(539,611)$(768,530)
Add back:
Equity method loss(114)(460)(395)(1,645)
Acquisition-related amortization(2a)
15,939 16,465 48,296 49,775 
Restructuring and other costs(4)
269 947 (5,722)74,229 
Acquisition-related costs(5)
870 591 3,299 22,791 
Litigation costs, net(6)
4,862 247 17,113 2,103 
Stock-based compensation32,218 18,566 86,122 44,905 
Adjusted Operating Loss$(102,644)$(196,693)$(390,898)$(576,372)
Loss from continuing operations$(234,713)$(306,775)$(739,958)$(958,515)
Adjustments:
Depreciation and amortization of property and equipment(2b)
38,998 63,733 130,506 201,274 
Amortization of capitalized implementation costs(2c)
8,718 9,146 25,506 28,110 
Acquisition-related amortization(2a)
15,939 16,465 48,296 49,775 
Restructuring and other costs(4)
269 947 (5,722)74,229 
Interest expense, net65,461 64,376 193,834 157,749 
Other, net(3)
5,993 18,431 (2,439)72,015 
Loss on extinguishment of debt13,070 10,333 13,070 10,333 
Acquisition-related costs(5)
870 591 3,299 22,791 
Litigation costs, net(6)
4,862 247 17,113 2,103 
Stock-based compensation32,218 18,566 86,122 44,905 
Benefit for income taxes(6,613)(19,874)(4,513)(51,757)
Adjusted EBITDA$(54,928)$(123,814)$(234,886)$(346,988)
Net loss margin(54.6)%(111.2)%(63.8)%(94.6)%
Adjusted EBITDA margin(12.5)%(44.5)%(19.8)%(34.0)%

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Reconciliation of Free Cash Flow:
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Cash used in operating activities $(69,692)$(192,033)$(408,152)$(587,069)
Cash used in investing activities(13,169)(8,888)(5,535)(52,634)
Cash provided by (used in) financing activities 7,607 565,611 (37,013)1,873,804 

 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
 Cash used in operating activities $(69,692)$(192,033)$(408,152)$(587,069)
 Additions to property and equipment (13,169)(8,926)(30,409)(48,259)
 Free Cash Flow $(82,861)$(200,959)$(438,561)$(635,328)

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Reconciliation of net loss attributable to common stockholders to Last Twelve Months' (LTM) Adjusted EBITDA (for Net Debt Ratio):
Three Months Ended
Dec 31, 2020Mar 31, 2021Jun 30, 2021Sep 30, 2021LTM
Net loss attributable to common stockholders$(325,091)$(266,106)$(251,282)$(240,641)$(1,083,120)
(Income) loss from discontinued operations, net of tax(6,119)263 81 (186)(5,961)
Net income attributable to noncontrolling interests(1)
363 484 459 714 2,020 
Preferred stock dividends5,428 5,428 5,428 5,400 21,684 
Loss from continuing operations(325,419)(259,931)(245,314)(234,713)(1,065,377)
Adjustments:
Acquisition-related amortization(2a)
16,223 16,221 16,136 15,939 64,519 
Impairment and related charges(8)
8,684 — — — 8,684 
Loss on extinguishment of debt11,293 — — 13,070 24,363 
Restructuring and other costs(4)
11,568 (5,135)(856)269 5,846 
Other, net(3)
(5,054)(11,631)3,199 5,993 (7,493)
Acquisition-related costs(5)
(6,004)720 1,709 870 (2,705)
Litigation costs, net(6)
(4,022)730 11,521 4,862 13,091 
Stock-based compensation25,041 24,426 29,478 32,218 111,163 
Depreciation and amortization of property and equipment(2b)
59,377 48,592 42,916 38,998 189,883 
Amortization of capitalized implementation costs(2c)
8,984 8,410 8,378 8,718 34,490 
Interest expense, net68,043 64,101 64,272 65,461 261,877 
Provision (benefit) for income taxes30,745 3,997 (1,897)(6,613)26,232 
Adjusted EBITDA$(100,541)$(109,500)$(70,458)$(54,928)$(335,427)
Net Debt (total debt, less cash and cash equivalents)$3,791,172 
Net Debt / LTM Adjusted EBITDANM


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Three Months Ended
Dec 31, 2019Mar 31, 2020Jun 30, 2020Sep 30, 2020LTM
Net income (loss) attributable to common stockholders$10,091 $(212,680)$(442,570)$(309,664)$(954,823)
Loss from discontinued operations, net of tax1,068 2,126 672 533 4,399 
Net income (loss) attributable to noncontrolling interests(1)
665 783 (71)125 1,502 
Preferred stock dividends— — — 2,231 $2,231 
Income (loss) from continuing operations11,824 (209,771)(441,969)(306,775)(946,691)
Adjustments:
Acquisition-related amortization(2a)
16,633 16,801 16,509 16,465 66,408 
Restructuring and other costs(4)
— 25,281 48,001 947 74,229 
Other, net(3)
3,314 47,486 6,098 18,431 75,329 
Acquisition-related costs(5)
10,700 17,827 4,373 591 33,491 
Loss on extinguishment of debt— — — 10,333 10,333 
Litigation costs, net(6)
(3,224)1,741 115 247 (1,121)
Stock-based compensation15,802 17,577 8,762 18,566 60,707 
Depreciation and amortization of property and equipment(2b)
77,956 69,513 68,028 63,733 279,230 
Amortization of capitalized implementation costs(2c)
8,127 9,547 9,417 9,146 36,237 
Interest expense, net39,027 37,442 55,931 64,376 196,776 
Provision (benefit) for income taxes3,543 (27,254)(4,629)(19,874)(48,214)
Adjusted EBITDA$183,702 $6,190 $(229,364)$(123,814)$(163,286)
Net Debt (total debt, less cash and cash equivalents)$3,140,861
Net Debt / LTM Adjusted EBITDANM

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Reconciliation of Adjusted Operating Loss to operating loss in our statement of operations and Adjusted EBITDA to loss from continuing operations in our statement of operations by business segment:
Three Months Ended September 30, 2021
Travel SolutionsHospitality SolutionsCorporate Total
Adjusted Operating Loss$(39,078)$(8,868)$(54,698)$(102,644)
Less:
Equity method loss(114)— — (114)
Acquisition-related amortization(2a)
— — 15,939 15,939 
Restructuring and other costs(4)
— — 269 269 
Acquisition-related costs(5)
— — 870 870 
Litigation costs, net(6)
— — 4,862 4,862 
Stock-based compensation— — 32,218 32,218 
Operating loss$(38,964)$(8,868)$(108,856)$(156,688)
Adjusted EBITDA$2,421 $(2,880)$(54,469)$(54,928)
Less:
Depreciation and amortization of property and equipment(2b)
33,866 4,903 229 38,998 
Amortization of capitalized implementation costs(2c)
7,633 1,085 — 8,718 
Acquisition-related amortization(2a)
— — 15,939 15,939 
Restructuring and other costs(4)
— — 269 269 
Acquisition-related costs(5)
— — 870 870 
Litigation costs, net(6)
— — 4,862 4,862 
Stock-based compensation— — 32,218 32,218 
Equity method loss(114)— — (114)
Operating loss$(38,964)$(8,868)$(108,856)$(156,688)
Interest expense, net(65,461)
Other, net(3)
(5,993)
Loss on extinguishment of debt(13,070)
Equity method loss(114)
Benefit for income taxes6,613 
Loss from continuing operations$(234,713)


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Three Months Ended September 30, 2020
Travel SolutionsHospitality SolutionsCorporate Total
Adjusted Operating Loss$(146,337)$(12,609)$(37,747)$(196,693)
Less:
Equity method loss(460)— — (460)
Acquisition-related amortization(2a)
— — 16,465 16,465 
Restructuring and other costs(4)
— — 947 947 
Acquisition-related costs(5)
— — 591 591 
Litigation costs, net(6)
— — 247 247 
Stock-based compensation— — 18,566 18,566 
Operating loss$(145,877)$(12,609)$(74,563)$(233,049)
Adjusted EBITDA$(84,994)$(2,222)$(36,598)$(123,814)
Less:
Depreciation and amortization of property and equipment(2b)
53,291 9,293 1,149 63,733 
Amortization of capitalized implementation costs(2c)
8,052 1,094 — 9,146 
Acquisition-related amortization(2a)
— — 16,465 16,465 
Restructuring and other costs(4)
— — 947 947 
Acquisition-related costs(5)
— — 591 591 
Litigation costs, net(6)
— — 247 247 
Stock-based compensation— — 18,566 18,566 
Equity method loss(460)— — (460)
Operating loss$(145,877)$(12,609)$(74,563)$(233,049)
Interest expense, net(64,376)
Other, net(3)
(18,431)
Loss on extinguishment of debt(10,333)
Equity method loss(460)
Benefit for income taxes19,874 
Loss from continuing operations$(306,775)
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Nine Months Ended September 30, 2021
Travel SolutionsHospitality SolutionsCorporateTotal
Adjusted Operating Loss$(212,393)$(30,976)$(147,529)$(390,898)
Less:
Equity method loss(395)— — (395)
Acquisition-related amortization(2a)
— — 48,296 48,296 
Restructuring and other costs(4)
— — (5,722)(5,722)
Acquisition-related costs(5)
— — 3,299 3,299 
Litigation costs, net(6)
— — 17,113 17,113 
Stock-based compensation— 86,122 86,122 
Operating loss$(211,998)$(30,976)$(296,637)$(539,611)
Adjusted EBITDA$(77,560)$(10,571)$(146,755)$(234,886)
Less:
Depreciation and amortization of property and equipment(2b)
112,466 17,266 774 130,506 
Amortization of capitalized implementation costs(2c)
22,367 3,139 — 25,506 
Acquisition-related amortization(2a)
— — 48,296 48,296 
Restructuring and other costs(4)
— — (5,722)(5,722)
Acquisition-related costs(5)
— — 3,299 3,299 
Litigation costs, net(6)
— — 17,113 17,113 
Stock-based compensation— — 86,122 86,122 
Equity method loss(395)— — (395)
Operating loss$(211,998)$(30,976)$(296,637)$(539,611)
Interest expense, net(193,834)
Other, net(3)
2,439 
Loss on extinguishment of debt(13,070)
Equity method loss(395)
Benefit for income taxes4,513 
Loss from continuing operations$(739,958)
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Nine Months Ended September 30, 2020
Travel SolutionsHospitality SolutionsCorporateTotal
Adjusted Operating Loss$(408,584)$(48,475)$(119,313)$(576,372)
Less:
Equity method loss(1,645)— — (1,645)
Acquisition-related amortization(2a)
— — 49,775 49,775 
Restructuring and other costs(4)
— — 74,229 74,229 
Acquisition-related costs(5)
— — 22,791 22,791 
Litigation costs, net(6)
— — 2,103 2,103 
Stock-based compensation— 44,905 44,905 
Operating loss$(406,939)$(48,475)$(313,116)$(768,530)
Adjusted EBITDA$(216,500)$(15,128)$(115,360)$(346,988)
Less:
Depreciation and amortization of property and equipment(2b)
167,291 30,030 3,953 201,274 
Amortization of capitalized implementation costs(2c)
24,793 3,317 — 28,110 
Acquisition-related amortization(2a)
— — 49,775 49,775 
Restructuring and other costs(4)
— — 74,229 74,229 
Acquisition-related costs(5)
— — 22,791 22,791 
Litigation costs, net(6)
— — 2,103 2,103 
Stock-based compensation— — 44,905 44,905 
Equity method loss(1,645)— — (1,645)
Operating loss$(406,939)$(48,475)$(313,116)$(768,530)
Interest expense, net(157,749)
Other, net(3)
(72,015)
Loss on extinguishment of debt(10,333)
Equity method loss(1,645)
Benefit for income taxes51,757 
Loss from continuing operations$(958,515)

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Definitions of Non-GAAP Financial Measures

We have included both financial measures compiled in accordance with GAAP and certain non-GAAP financial measures, including Adjusted Operating Loss, Adjusted Net Loss from continuing operations ("Adjusted Net Loss"), Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EPS, Free Cash Flow, Net Debt / LTM Adjusted EBITDA and ratios based on these financial measures. As a result of the strategic realignment in the third quarter of 2020, we have separated our technology costs from cost of revenue and moved certain expenses previously classified as cost of revenue to selling, general and administrative to provide increased visibility to our technology costs for analytical and decision-making purposes and to align costs with the current leadership and operational organizational structure.

We define Adjusted Operating Loss as operating loss adjusted for equity method income (loss), acquisition-related amortization, restructuring and other costs, acquisition-related costs, litigation costs, net, and stock-based compensation.

We define Adjusted Net Loss as net loss attributable to common stockholders adjusted for loss (income) from discontinued operations, net of tax, net income (loss) attributable to noncontrolling interests, preferred stock dividends, impairment and related charges, acquisition-related amortization, loss on extinguishment of debt, other, net, restructuring and other costs, acquisition-related costs, litigation costs, net, stock-based compensation, and the tax impact of adjustments.

We define Adjusted EBITDA as Loss from continuing operations adjusted for depreciation and amortization of property and equipment, amortization of capitalized implementation costs, acquisition-related amortization, restructuring and other costs, interest expense, net, other, net, loss on extinguishment of debt, acquisition-related costs, litigation costs, net, stock-based compensation and the remaining (benefit) provision for income taxes. We have revised our calculation of Adjusted EBITDA to no longer exclude the amortization of upfront incentive consideration in all periods presented.

We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue.

We define Adjusted EPS as Adjusted Net Loss divided by diluted weighted-average common shares outstanding.

We define Free Cash Flow as cash (used in) provided by operating activities less cash used in additions to property and equipment.
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We define Net Debt / LTM Adjusted EBITDA as the face value of total debt outstanding less cash and cash equivalents divided by the last twelve months Adjusted EBITDA.

These non-GAAP financial measures are key metrics used by management and our board of directors to monitor our ongoing core operations because historical results have been significantly impacted by events that are unrelated to our core operations as a result of changes to our business and the regulatory environment. We believe that these non-GAAP financial measures are used by investors, analysts and other interested parties as measures of financial performance and to evaluate our ability to service debt obligations, fund capital expenditures, fund our investments in technology transformation, and meet working capital requirements. The Net Debt / LTM Adjusted EBITDA leverage ratio is used to evaluate our ability to service debt obligations as it provides an indication of our ability to pay down current debt levels given recent operational results. We also believe that Adjusted Operating Loss, Adjusted Net Loss, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EPS and Net Debt / LTM Adjusted EBITDA assist investors in company-to-company and period-to-period comparisons by excluding differences caused by variations in capital structures (affecting interest expense), tax positions and the impact of depreciation and amortization expense. In addition, amounts derived from Adjusted EBITDA are a primary component of certain covenants under our senior secured credit facilities.

Adjusted Operating Loss, Adjusted Net Loss, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EPS, Free Cash Flow, Net Debt / LTM Adjusted EBITDA and ratios based on these financial measures are not recognized terms under GAAP. These non-GAAP financial measures and ratios based on them are unaudited and have important limitations as analytical tools, and should not be viewed in isolation and do not purport to be alternatives to net income as indicators of operating performance or cash flows from operating activities as measures of liquidity. These non-GAAP financial measures and ratios based on them exclude some, but not all, items that affect net income or cash flows from operating activities and these measures may vary among companies. Our use of these measures has limitations as an analytical tool, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are:
these non-GAAP financial measures exclude certain recurring, non-cash charges such as stock-based compensation expense and amortization of acquired intangible assets;
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash requirements for such replacements;
22


Adjusted EBITDA does not reflect amortization of capitalized implementation costs associated with our revenue contracts, which may require future working capital or cash needs in the future;
Adjusted Operating Loss, Adjusted Net Loss and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness;
Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;
Free Cash Flow removes the impact of accrual-basis accounting on asset accounts and non-debt liability accounts, and does not reflect the cash requirements necessary to service the principal payments on our indebtedness; and
other companies, including companies in our industry, may calculate Adjusted Operating Loss, Adjusted Net Loss, Adjusted EBITDA, Adjusted EPS or Free Cash Flow differently, which reduces their usefulness as comparative measures.

Non-GAAP Footnotes

(1)Net income attributable to non-controlling interests represents an adjustment to include earnings allocated to non-controlling interests held in (i) Sabre Travel Network Middle East of 40%, (ii) Sabre Seyahat Dagitim Sistemleri A.S. of 40%, (iii) Sabre Travel Network Lanka (Pte) Ltd of 40%, and (iv) Sabre Bulgaria of 40%.

(2)Depreciation and amortization expenses:
(a) Acquisition-related amortization represents amortization of intangible assets from the take-private transaction in 2007 as well as intangibles associated with acquisitions since that date.
(b) Depreciation and amortization of property and equipment includes software developed for internal use as well as amortization of contract acquisition costs.
(c) Amortization of capitalized implementation costs represents amortization of upfront costs to implement new customer contracts under our SaaS and hosted revenue model.

(3)Other, net includes a $15 million gain on sale of equity securities during the first quarter of 2021, a $4 million and $2 million pension settlement charge recorded in the second and third quarters of 2021, respectively, debt modification costs for financing fees of $2 million recorded in the third quarter of 2021, a $46 million charge related to termination payments incurred in the first quarter of 2020 in connection with the now-terminated acquisition of
23


Farelogix Inc. ("Farelogix") and a $14 million pension settlement charge recorded in the third quarter of 2020. In addition, all periods presented include foreign exchange gains and losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into the relevant functional currency.

(4)Restructuring and other costs represents charges, and adjustments to those charges, associated with business restructuring and associated changes as well as other measures to support the new organizational structure and to respond to the impacts of the COVID-19 pandemic on our business, facilities and cost structure.

(5)Acquisition-related costs represent fees and expenses incurred associated with the now-terminated agreement to acquire Farelogix and other acquisition and disposition related activities.

(6)Litigation costs, net represent charges associated with antitrust litigation and other foreign non-income tax contingency matters.

(7)The tax impact of adjustments includes the tax effect of each separate adjustment based on the statutory tax rate for the jurisdiction(s) in which the adjustment was taxable or deductible, the impact of the adjustments on valuation allowance assessments, and the tax effect of items that relate to tax specific financial transactions, tax law changes, uncertain tax positions, and other items.

(8)Impairment and related charges consists of $5 million associated with software developed for internal use and $4 million associated with capitalized implementation costs related to a specific customer based on our analysis of the recoverability of such amounts.
24