sabr-20200807
0001597033false00015970332020-08-072020-08-07






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): August 7, 2020
_____________________
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







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 August 7, 2020, Sabre Corporation (“Sabre”) issued a press release and will hold a conference call regarding its financial results for the quarter ended June 30, 2020. 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:August 7, 2020By:/s/ Douglas E. Barnett
 Name:Douglas E. Barnett
 Title:Chief Financial Officer



Document

https://cdn.kscope.io/ba2d40e50639d91011409399938ed32f-sabrelogoa7311.jpg

Sabre positions for growth post-COVID-19; reports second quarter 2020 results

Business overview:
Announced business realignment, combining airline and agency-focused businesses to provide a more seamless customer experience and unlock cost efficiencies
Signed new commercial agreements and key renewals despite impact of COVID-19, including new airlines for SabreSonic reservation system, expanded use of Intelligence Exchange and GDS renewals
Completed integration of Sabre infrastructure with Google Cloud platform and delivered first phase of Google Flight Search Availability
Recognized significant technology cost savings related to progress on cloud migration
Expanded and renewed Radixx business with low-cost carriers
Saw commercial strength in Hospitality Solutions as hotel transactions lead the travel industry's recovery and remain committed to Accor partnership

Second quarter 2020 summary:
Second quarter revenue totaled $83 million
Net loss attributable to common stockholders of $444 million and net loss attributable to common stockholders per share of $1.61
Adjusted Net Loss from continuing operations per share of $1.30
All metrics were negatively impacted by COVID-19 pandemic, partially offset by variable cost relief and implementation of cost saving actions

SOUTHLAKE, Texas – August 7, 2020 – Sabre Corporation ("Sabre" or the "Company") (NASDAQ: SABR) today announced financial results for the quarter ended June 30, 2020.

"This remains an extraordinary time of disruption in global travel. As a mission-critical solutions provider to the global travel industry, we responded quickly and effectively to reduce costs and improve liquidity to mitigate the massive challenge the COVID-19 pandemic represents. We took difficult and decisive actions that we believe best position the company on the other side of

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this crisis," said Sean Menke, President and CEO. "Although we exited the quarter with positive net air bookings in June for the first time since early March and stronger improvement in hotel bookings, the overall travel environment remains severely depressed.

"The COVID-19 pandemic has caused major shifts in the travel ecosystem. We have taken this opportunity to right-size our global organization with a reduction in workforce and accelerate the realignment of our airline and agency-focused businesses to provide a stronger, more seamless experience for our customers.

"We are winning new business and signing key renewals even during this challenging time. Because of the progress we've made on our cloud migration, we have successfully scaled down processing capacity during this time of reduced travel volumes, resulting in significantly lower technology costs. We are accelerating our transition to Google Cloud and have completed the necessary integration work to start migrating workloads in the second half of 2020.

"I'd like to thank my Sabre teammates for making great sacrifices and welcome back colleagues that have been on furlough. I'm proud of what we have accomplished and believe we are positioning the company well for growth post-COVID-19."

Q2 2020 Financial Summary

Sabre consolidated second quarter revenue totaled $83 million, compared to $1 billion in the second quarter of 2019. The decline in revenue was driven by unprecedented reductions in global air, hotel and other travel bookings due to the COVID-19 pandemic.

Operating loss was $384 million, versus operating income of $82 million in the second quarter of 2019. The decline in operating results in the quarter was primarily due to the significant decline in revenue driven by COVID-19, as well as $48 million in restructuring charges related to our cost savings actions. These impacts were partially offset by a decline in Travel Network incentive expenses, reduced headcount-related expenses resulting from implementation of cost saving actions and a decline in technology costs due to lower transaction volumes.

Net loss attributable to common stockholders totaled $444 million, versus net income of $28 million in the second quarter of 2019. Diluted net loss attributable to common stockholders per share totaled $1.61, versus diluted net income attributable to common stockholders per share of $0.10 in the second quarter of 2019. The change in net income attributable to common stockholders was driven by the items impacting operating loss described above and increased interest expense, partially offset by a reduction in taxes.

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Adjusted Operating Loss was $307 million, versus $127 million Adjusted Operating Income in the second quarter of 2019. The decline in operating results in the quarter was primarily due to the significant decline in revenue driven by COVID-19, partially offset by a decline in Travel Network incentive expenses, reduced headcount-related expenses resulting from implementation of cost saving actions and a decline in technology costs due to lower transaction volumes.

For the quarter, Sabre reported Adjusted Net Loss from continuing operations per share of $1.30, versus Adjusted Net Income from continuing operations per share of $0.24 in the second quarter of 2019.

With regards to Sabre's second quarter 2020 cash flows (versus prior year):
Cash used in operating activities totaled $435 million (vs. $106 million provided by)
Cash used in investing activities totaled $11 million (vs. $38 million)
Cash provided by financing activities totaled $1,070 million (vs. $129 million used in)
Capitalized expenditures totaled $11 million (vs. $29 million)

The second quarter presented negative Free Cash Flow of $446 million, versus Free Cash Flow generation of $76 million in the second quarter of 2019.


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Financial Highlights
(in thousands, except for EPS; unaudited):
Three Months Ended June 30,Six Months Ended June 30,
20202019% Change20202019% Change
Total Company:
Revenue$83,044  $1,000,006  (91.7)$742,021  $2,049,367  (63.8)
Operating (loss) income$(384,070) $81,913  (568.9)$(535,481) $192,320  (378.4)
Net (loss) income attributable to common stockholders$(444,131) $27,838  (1,695.4)$(656,811) $84,688  (875.6)
Diluted net (loss) income attributable to common stockholders per share (EPS)$(1.61) $0.10  (1,710.0)$(2.39) $0.31  (871.0)
Adjusted Gross Profit*$(129,000) $350,438  (136.8)$38,100  $723,528  (94.7)
Adjusted EBITDA*$(210,288) $235,635  (189.2)$(185,885) $497,984  (137.3)
Adjusted EBITDA Margin*NM23.6 %NM24.3 %
Adjusted Operating (Loss) Income*$(306,809) $126,953  (341.7)$(379,679) $282,715  (234.3)
Adjusted Net (Loss) Income*$(358,003) $67,454  (630.7)$(437,979) $161,653  (370.9)
Adjusted EPS*$(1.30) $0.24  (641.7)$(1.59) $0.58  (374.1)
Cash (used in) provided by operating activities$(435,467) $105,661  (512.1)$(395,036) $257,661  (253.3)
Cash used in investing activities$(10,896) $(38,299) (71.6)$(43,746) $(76,163) (42.6)
Cash provided by (used in) financing activities$1,070,047  $(128,661) NM$1,308,193  $(292,975) NM
Capitalized expenditures$10,896  $29,332  (62.9)$39,333  $67,196  (41.5)
Free Cash Flow*$(446,363) $76,329  (684.8)$(434,369) $190,465  (328.1)
Net Debt (total debt, less cash)$3,510,798  $3,007,906  
Net Debt / LTM Adjusted EBITDA*13.4x2.9x  
Travel Network:
Revenue$(33,262) $724,632  (104.6)$394,441  $1,498,600  (73.7)
Transaction Revenue$(59,650) $681,394  (108.8)$328,097  $1,412,159  (76.8)
Subscriber / Other Revenue$26,388  $43,238  (39.0)$66,344  $86,441  (23.2)
Operating (Loss) Income$(182,832) $159,384  (214.7)$(160,174) $352,023  (145.5)
Adjusted Operating (Loss) Income*$(183,331) $159,797  (214.7)$(161,359) $352,969  (145.7)
Total Bookings(7,302) 142,125  (105.1)78,451  297,062  (73.6)
Air Bookings(8,923) 124,605  (107.2)63,900  263,166  (75.7)
Lodging, Ground and Sea Bookings1,621  17,520  (90.7)14,551  33,896  (57.1)
Airline Solutions:
Revenue$89,524  $211,833  (57.7)$269,409  $424,760  (36.6)
Operating (Loss) Income$(68,309) $22,660  (401.5)$(100,888) $38,084  (364.9)
Adjusted Operating (Loss) Income*$(68,309) $22,660  (401.5)$(100,888) $38,084  (364.9)
Passengers Boarded19,799  180,386  (89.0)187,174  366,563  (48.9)
Hospitality Solutions:
Revenue$29,002  $73,876  (60.7)$88,239  $146,707  (39.9)
Operating Loss$(19,409) $(5,746) 237.8$(35,866) $(11,463) 212.9
Adjusted Operating Loss*$(19,409) $(5,746) 237.8$(35,866) $(11,463) 212.9
Central Reservation System Transactions11,094  28,890  (61.6)32,113  51,914  (38.1)
*Indicates non-GAAP financial measure; see descriptions and reconciliations below

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Travel Network

Second quarter 2020 results (versus prior year):
Travel Network revenue decreased 105% to ($33 million) due to net negative bookings in the quarter, as cancellations exceeded new bookings.
The unprecedented disruption in travel driven by the COVID-19 pandemic continued to represent a massive challenge to the GDS industry. Global bookings, net of cancellations, declined 105% in the quarter.
The end of the second quarter demonstrated modest indications of recovery. Gross air bookings declined 95% year-over-year in April and 91% in May, while net bookings were negative due to cancellations. In June, gross air bookings declined 86% year-over-year, and net bookings were positive for the first time since early March 2020.
In the quarter:
North America bookings declined 102%
EMEA bookings declined 107%
Latin America bookings declined 108%
Asia Pacific bookings declined 111%
Operating loss totaled $183 million, versus operating income of $159 million in the second quarter of 2019.
The decline in operating income was driven by the significant reduction in revenue due to COVID-19, partially offset by a decrease in incentive expense, reduced headcount-related expenses resulting from implementation of cost saving actions and a decline in technology costs due to lower transaction volumes.

Airline Solutions

Second quarter 2020 results (versus prior year):
Airline Solutions revenue decreased 58% to $90 million. Reservations revenue decreased 75%, and commercial and operations revenue decreased 32%. The decline in revenue was primary driven by the impact of COVID-19 on the existing customer base, as well as the demigration of Philippine Airlines and Bangkok Airlines in 2019, partially offset by the acquisition of Radixx.
Airline passengers boarded declined 89% in the quarter. Excluding Radixx, passengers boarded declined 90%.
Operating loss totaled $68 million, versus operating income of $23 million in the second quarter of 2019.
The decline in operating income was driven by the reduction in revenue due to COVID-19, partially offset by reduced headcount-related expenses resulting from

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implementation of cost saving actions and a decline in technology costs due to lower transaction volumes.

Hospitality Solutions

Second quarter 2020 results (versus prior year):
Hospitality Solutions revenue decreased 61% to $29 million.
Central reservation system transactions declined 62% to 11 million.
Operating loss was $19 million, versus operating loss of $6 million in the second quarter of 2019.
The increase in operating loss was primarily due to the reduction in CRS transactions driven by COVID-19, partially offset by a decline in transaction-based costs and reduced headcount-related expenses resulting from implementation of cost saving actions.

Business Outlook

"Our thoughts continue to be with those around the world impacted by the COVID-19 pandemic," said Doug Barnett, CFO. "We continue to take the cost actions necessary in this difficult environment, including a recently signed contract extension with DXC that provides significant savings over its multi-year term. We remain committed to our expectation for approximately $275 million in 2020 cost savings and are working aggressively to position ourselves for growth post-COVID-19."

Given the magnitude and the uncertainty related to the COVID-19 pandemic and its economic effects, on March 20, 2020, Sabre withdrew its February 26, 2020 guidance and has not given further guidance at this time.

Conference Call

Sabre will conduct its second quarter 2020 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 the leading software and technology company that powers the global travel industry, serving a wide range of travel companies including airlines, hoteliers, travel agencies

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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

We routinely post important information for investors on the Investor Relations section of our website, investors.sabre.com. We intend to use this website as a 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, 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 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 Gross Profit, Adjusted Operating (Loss) Income, Adjusted Net (Loss) Income from continuing

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operations ("Adjusted Net (Loss) Income"), Adjusted EBITDA, Adjusted Net (Loss) Income from continuing operations per share ("Adjusted EPS"), Free Cash Flow, 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 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," "believe," "confident," "position," "guidance," "outlook," estimate," "project," "anticipate," "will," "continue," "commit," "may,” “should,” “would,” “intend," “potential,” "long-term," "growth," "results" 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 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, 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 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 Network business, changes affecting travel supplier customers, maintenance of the integrity of our systems and infrastructure and the effect of any security breaches, failure to

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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 finalization of an agreement to implement a full-service property management system, the execution, implementation and effects of new, amended or renewed agreements, including anticipated savings, dependence on establishing, maintaining and renewing contracts with customers and other 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, the effects of any litigation and regulatory reviews and investigations, including with respect to these acquisitions, 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" and uncertainty due to related negotiations, 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, including the effect of the Tax Cuts and Jobs Act. 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 May 8, 2020, in our Annual Report on Form 10-K filed with the SEC on February 26, 2020 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.


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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 June 30,Six Months Ended June 30,
 2020201920202019
Revenue $83,044  $1,000,006  $742,021  $2,049,367  
Cost of revenue350,551  763,388  962,066  1,550,951  
Selling, general and administrative116,563  154,705  315,436  306,096  
Operating (loss) income(384,070) 81,913  (535,481) 192,320  
Other income (expense):  
Interest expense, net(58,581) (39,608) (96,023) (77,621) 
Equity method (loss) income(499) 413  (1,185) 946  
Other, net(6,098) (2,479) (53,584) (4,349) 
Total other expense, net(65,178) (41,674) (150,792) (81,024) 
(Loss) Income from continuing operations before income taxes(449,248) 40,239  (686,273) 111,296  
Provision for income taxes(5,718) 12,145  (32,972) 23,988  
(Loss) Income from continuing operations(443,530) 28,094  (653,301) 87,308  
(Loss) income from discontinued operations, net of tax(672) 1,350  (2,798) (102) 
Net (loss) income(444,202) 29,444  (656,099) 87,206  
Net (loss) income attributable to noncontrolling interests(71) 1,606  712  2,518  
Net (loss) income attributable to common stockholders$(444,131) $27,838  $(656,811) $84,688  
Basic net (loss) income per share attributable to common stockholders:  
(Loss) income from continuing operations$(1.61) $0.10  $(2.38) $0.31  
(Loss) income from discontinued operations—  —  (0.01) —  
Net (loss) income per common share$(1.61) $0.10  $(2.39) $0.31  
Diluted net (loss) income per share attributable to common stockholders:  
(Loss) income from continuing operations$(1.61) $0.10  $(2.38) $0.31  
(Loss) income from discontinued operations—  —  (0.01) —  
Net (loss) income per common share$(1.61) $0.10  $(2.39) $0.31  
Weighted-average common shares outstanding:  
Basic275,693  274,245  274,865  274,911  
Diluted275,693  275,483  274,865  276,596  
Dividends per common share$—  $0.14  $0.14  $0.28  

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SABRE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 June 30, 2020December 31, 2019
Assets  
Current assets  
Cash and cash equivalents$1,306,288  $436,176  
Accounts receivable, net of allowance for credit losses of $101,036 and $56,367291,480  546,533  
Prepaid expenses and other current assets138,691  139,211  
Total current assets1,736,459  1,121,920  
Property and equipment, net of accumulated depreciation of $1,938,427 and $1,815,844540,220  641,722  
Equity method investments23,860  27,494  
Goodwill2,631,900  2,633,251  
Acquired customer relationships, net of accumulated amortization of $748,319 and $735,367299,985  311,015  
Other intangible assets, net of accumulated amortization of $694,427 and $674,073241,486  262,638  
Deferred income taxes27,248  21,812  
Other assets, net628,048  670,105  
Total assets$6,129,206  $5,689,957  
Liabilities and stockholders’ equity  
Current liabilities  
Accounts payable$134,129  $187,187  
Accrued compensation and related benefits110,272  94,368  
Accrued subscriber incentives87,243  316,254  
Deferred revenues105,282  84,661  
Other accrued liabilities249,609  189,548  
Current portion of debt77,876  81,614  
Tax Receivable Agreement—  71,911  
Total current liabilities764,411  1,025,543  
Deferred income taxes78,033  107,402  
Other noncurrent liabilities352,262  347,522  
Long-term debt4,608,478  3,261,821  
Stockholders’ equity  
Common Stock: $0.01 par value; 1,000,000 authorized shares; 297,131 and 294,319 shares issued, 275,872 and 273,733 shares outstanding at June 30, 2020 and December 31, 2019, respectively2,971  2,943  
Additional paid-in capital2,411,716  2,317,544  
Treasury Stock, at cost, 21,259 and 20,587 shares at June 30, 2020 and December 31, 2019, respectively(474,105) (468,618) 
Retained deficit(1,466,428) (763,482) 
Accumulated other comprehensive loss(157,432) (149,306) 
Non-controlling interest9,300  8,588  
Total stockholders’ equity326,022  947,669  
Total liabilities and stockholders’ equity$6,129,206  $5,689,957  

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SABRE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Six Months Ended June 30,
 20202019
Operating Activities  
Net (loss) income$(656,099) $87,206  
Adjustments to reconcile net (loss) income to cash (used in) provided by operating activities:  
Depreciation and amortization189,815  208,290  
Allowance for credit losses47,727  13,613  
Deferred income taxes(45,793) (14,140) 
Amortization of upfront incentive consideration37,289  38,974  
Stock-based compensation expense26,339  33,989  
Acquisition termination fee24,811  —  
Amortization of debt discount and debt issuance costs6,445  1,986  
Loss from discontinued operations2,798  102  
Dividends received from equity method investments1,652  1,164  
Equity method loss (income)1,185  (946) 
Other1,223  (803) 
Changes in operating assets and liabilities:  
Accounts and other receivables178,063  (103,861) 
Prepaid expenses and other current assets2,727  (4,000) 
Capitalized implementation costs(5,698) (15,202) 
Upfront incentive consideration(25,198) (35,236) 
Other assets20,096  (2,162) 
Accrued compensation and related benefits16,784  (23,675) 
Accounts payable and other accrued liabilities(240,231) 57,428  
Deferred revenue including upfront solution fees21,029  14,934  
Cash (used in) provided by operating activities(395,036) 257,661  
Investing Activities  
Additions to property and equipment(39,333) (67,196) 
Other investing activities(4,413) (8,967) 
Cash used in investing activities(43,746) (76,163) 
Financing Activities  
Proceeds of borrowings from lenders1,495,000  —  
Payments on Tax Receivable Agreement(71,958) (101,482) 
Cash dividends paid to common stockholders(38,544) (76,875) 
Payments on borrowings from lenders(37,905) (23,655) 
Payments of debt issuance costs(29,473) —  
Net payments on the settlement of equity-based awards(5,241) (7,002) 
Other financing activities(3,686) (6,325) 
Repurchase of common stock—  (77,636) 
Cash provided by (used in) financing activities1,308,193  (292,975) 
Cash Flows from Discontinued Operations  
Cash used in operating activities(1,802) (1,196) 
Cash used in discontinued operations(1,802) (1,196) 
Effect of exchange rate changes on cash and cash equivalents2,503  256  
Increase (decrease) in cash and cash equivalents870,112  (112,417) 
Cash and cash equivalents at beginning of period436,176  509,265  
Cash and cash equivalents at end of period$1,306,288  $396,848  

13


Tabular Reconciliations for Non-GAAP Measures
(In thousands, except per share amounts; unaudited)

Reconciliation of Net (Loss) Income attributable to common stockholders to Adjusted Net (Loss) Income, Adjusted EBITDA and Adjusted Operating (Loss) Income:

 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Net (loss) income attributable to common stockholders$(444,131) $27,838  $(656,811) $84,688  
Loss (income) from discontinued operations, net of tax672  (1,350) 2,798  102  
Net (loss) income attributable to non-controlling interests(1)
(71) 1,606  712  2,518  
(Loss) income from continuing operations(443,530) 28,094  (653,301) 87,308  
Adjustments:  
Acquisition-related amortization(2a)
16,509  16,011  33,310  31,995  
Restructuring and other costs(8)
48,001  —  73,282  —  
Other, net(4)
6,098  2,479  53,584  4,349  
Acquisition-related costs(6)
4,373  8,935  22,200  20,641  
Litigation costs, net(5)
115  1,386  1,856  2,824  
Stock-based compensation8,762  18,295  26,339  33,989  
Tax impact of adjustments(7)
1,669  (7,746) 4,751  (19,453) 
Adjusted Net (Loss) Income from continuing operations$(358,003) $67,454  $(437,979) $161,653  
Adjusted Net (Loss) Income from continuing operations per share$(1.30) $0.24  $(1.59) $0.58  
Diluted weighted-average common shares outstanding275,693  275,483  274,865  276,596  
Adjusted Net (Loss) Income from continuing operations$(358,003) $67,454  $(437,979) $161,653  
Adjustments:  
Depreciation and amortization of property and equipment(2b)
68,028  79,209  137,541  154,557  
Amortization of capitalized implementation costs(2c)
9,417  9,627  18,964  21,738  
Amortization of upfront incentive consideration(3)
19,076  19,846  37,289  38,974  
Interest expense, net58,581  39,608  96,023  77,621  
Remaining provision for income taxes(7,387) 19,891  (37,723) 43,441  
Adjusted EBITDA$(210,288) $235,635  $(185,885) $497,984  
Less:
Depreciation and amortization(2)
93,954  104,847  189,815  208,290  
Amortization of upfront incentive consideration(3)
19,076  19,846  37,289  38,974  
Acquisition-related amortization(2a)
(16,509) (16,011) (33,310) (31,995) 
Adjusted Operating (Loss) Income$(306,809) $126,953  $(379,679) $282,715  










14


Reconciliation of Free Cash Flow:

 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Cash (used in) provided by operating activities$(435,467) $105,661  $(395,036) $257,661  
Cash used in investing activities(10,896) (38,299) (43,746) (76,163) 
Cash provided by (used in) financing activities1,070,047  (128,661) 1,308,193  (292,975) 


 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Cash (used in) provided by operating activities$(435,467) $105,661  $(395,036) $257,661  
Additions to property and equipment(10,896) (29,332) (39,333) (67,196) 
Free Cash Flow$(446,363) $76,329  $(434,369) $190,465  

15


Reconciliation of Net (Loss) Income to LTM Adjusted EBITDA (for Net Debt Ratio):

Three Months Ended
Sep 30, 2019Dec 31, 2019Mar 31, 2020Jun 30, 2020LTM
Net income (loss) attributable to common stockholders$63,813  $10,091  $(212,680) $(444,131) $(582,907) 
Loss from discontinued operations, net of tax596  1,068  2,126  672  4,462  
Net income (loss) attributable to non-controlling interests(1)
771  665  783  (71) 2,148  
Income (loss) from continuing operations65,180  11,824  (209,771) (443,530) (576,297) 
Adjustments: 
Acquisition-related amortization(2a)
15,976  16,633  16,801  16,509  65,919  
Restructuring and other costs(8)
—  —  25,281  48,001  73,282  
Other, net(4)
1,769  3,314  47,486  6,098  58,667  
Acquisition-related costs(6)
9,696  10,700  17,827  4,373  42,596  
Litigation costs, net(5)
(24,179) (3,224) 1,741  115  (25,547) 
Stock-based compensation17,094  15,802  17,577  8,762  59,235  
Depreciation and amortization of property and equipment(2b)
78,060  77,956  69,513  68,028  293,557  
Amortization of capitalized implementation costs(2c)
9,579  8,127  9,547  9,417  36,670  
Amortization of upfront incentive consideration(3)
20,851  23,110  18,213  19,076  81,250  
Interest expense, net39,743  39,027  37,442  58,581  174,793  
Provision for income taxes7,795  3,543  (27,254) (5,718) (21,634) 
Adjusted EBITDA$241,564  $206,812  $24,403  $(210,288) $262,491  
Net Debt (total debt, less cash)$3,510,798  
Net Debt / LTM Adjusted EBITDA13.4x


16



Three Months Ended
Sept 30, 2018Dec 31, 2018Mar 31, 2019Jun 30, 2019LTM
Net income attributable to common stockholders$73,005  $84,400  $56,850  $27,838  $242,093  
(Income) loss from discontinued operations, net of tax(3,664) 1,478  1,452  (1,350) (2,084) 
Net income attributable to non-controlling interests(1)
1,538  1,150  912  1,606  5,206  
Income from continuing operations70,879  87,028  59,214  28,094  245,215  
Adjustments:
Acquisition-related amortization(2a)
16,407  16,423  15,984  16,011  64,825  
Other, net(4)
1,905  (2,237) 1,870  2,479  4,017  
Acquisition-related costs(6)
—  3,266  11,706  8,935  23,907  
Litigation costs, net(5)
5,225  1,250  1,438  1,386  9,299  
Stock-based compensation15,245  15,818  15,694  18,295  65,052  
Depreciation and amortization of property and equipment(2b)
76,226  77,963  75,348  79,209  308,746  
Amortization of capitalized implementation costs(2c)
10,099  11,407  12,111  9,627  43,244  
Amortization of upfront incentive consideration(3)
18,207  20,298  19,128  19,846  77,479  
Interest expense, net39,291  40,208  38,013  39,608  157,120  
Provision for income taxes25,021  (3,879) 11,843  12,145  45,130  
Adjusted EBITDA$278,505  $267,545  $262,349  $235,635  $1,044,034  
Net Debt (total debt, less cash)$3,007,906  
Net Debt / LTM Adjusted EBITDA2.9x

17


Reconciliation of Operating (Loss) Income to Adjusted Gross Profit, Adjusted EBITDA and Adjusted Operating (Loss) Income by business segment:
 Three Months Ended June 30, 2020
 Travel
Network
Airline
Solutions

Hospitality
Solutions
CorporateTotal
Operating loss$(182,832) $(68,309) $(19,409) $(113,520) $(384,070) 
Add back:
Selling, general and administrative31,613  20,148  8,407  56,395  116,563  
Cost of revenue adjustments:
Depreciation and amortization(2)
21,269  37,144  10,234  6,346  74,993  
Restructuring and other costs(8)
—  —  —  40,752  40,752  
Amortization of upfront incentive consideration(3)
19,076  —  —  —  19,076  
Stock-based compensation—  —  —  3,686  3,686  
Adjusted Gross Profit(110,874) (11,017) (768) (6,341) (129,000) 
Selling, general and administrative(31,613) (20,148) (8,407) (56,395) (116,563) 
Equity method loss(499) —  —  —  (499) 
Selling, general and administrative adjustments:
Depreciation and amortization(2)
3,365  2,748  1,124  11,724  18,961  
Restructuring and other costs(8)
—  —  —  7,249  7,249  
Acquisition-related costs(6)
—  —  —  4,373  4,373  
Litigation costs, net(5)
—  —  —  115  115  
Stock-based compensation—  —  —  5,076  5,076  
Adjusted EBITDA$(139,621) $(28,417) $(8,051) $(34,199) $(210,288) 
Less:
Depreciation and amortization(2)
24,634  39,892  11,358  18,070  93,954  
Amortization of upfront incentive consideration(3)
19,076  —  —  —  19,076  
Acquisition-related amortization(2a)
—  —  —  (16,509) (16,509) 
Adjusted Operating Loss$(183,331) $(68,309) $(19,409) $(35,760) $(306,809) 
Operating income marginNMNMNMNMNM
Adjusted Operating Income MarginNMNMNMNMNM
  
18



 Three Months Ended June 30, 2019
 Travel
Network
Airline
Solutions

Hospitality
Solutions
CorporateTotal
Operating income (loss)$159,384  $22,660  $(5,746) $(94,385) $81,913  
Add back:
Selling, general and administrative45,482  22,442  10,171  76,610  154,705  
Cost of revenue adjustments:
Depreciation and amortization(2)
27,581  40,699  12,342  5,971  86,593  
Amortization of upfront incentive consideration(3)
19,846  —  —  —  19,846  
Stock-based compensation—  —  —  7,381  7,381  
Adjusted Gross Profit252,293  85,801  16,767  (4,423) 350,438  
Selling, general and administrative(45,482) (22,442) (10,171) (76,610) (154,705) 
Equity method income413  —  —  —  413  
Selling, general and administrative adjustments:
Depreciation and amortization(2)
3,140  2,586  1,278  11,250  18,254  
Acquisition-related costs(6)
—  —  —  8,935  8,935  
Litigation costs, net(5)
—  —  —  1,386  1,386  
Stock-based compensation—