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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Sabre Corporation
(Exact name of registrant as specified in its charter)
  
Delaware001-3642220-8647322
(State or other jurisdiction of
incorporation or organization)
(Commission File Number)(I.R.S. Employer
Identification No.)
3150 Sabre Drive
Southlake, TX 76092
(Address, including zip code, of principal executive offices)
(682)-605-1000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $0.01 par valueSABRThe NASDAQ Stock Market LLC
6.50% Series A Mandatory Convertible Preferred StockSABRPThe NASDAQ Stock Market LLC
(Title of each class)(Trading Symbol)(Name of each exchange on which registered)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:    Yes      No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    Yes     No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an 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. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes    No 
As of April 29, 2021, 319,463,499 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.




SABRE CORPORATION
TABLE OF CONTENTS
 
  
Page No.
    Item 1. 
 
 
 
 
 
     Item 2.
     Item 3.
     Item 4.
 
 
     Item 1.
     Item 1A.
     Item 2.
     Item 6.
We may use our website, our Twitter account (@Sabre_Corp) and other social media channels as additional means of disclosing information to the public. The information disclosed through those channels may be considered to be material and may not be otherwise disseminated by us, so we encourage investors to review our website, Twitter account and other social media channels. The contents of our website or social media channels referenced herein are not incorporated by reference into this Quarterly Report on Form 10-Q.



PART I. FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS

SABRE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited) 
 Three Months Ended March 31,
 20212020
Revenue $327,484 $658,977 
Cost of revenue, excluding technology costs146,761 281,415 
Technology costs252,663 325,372 
Selling, general and administrative130,613 203,601 
Operating loss(202,553)(151,411)
Other income (expense):  
Interest expense, net(64,101)(37,442)
Equity method loss(911)(686)
Other, net11,631 (47,486)
Total other expense, net(53,381)(85,614)
Loss from continuing operations before income taxes(255,934)(237,025)
Provision for income taxes3,997 (27,254)
Loss from continuing operations(259,931)(209,771)
Loss from discontinued operations, net of tax(263)(2,126)
Net loss(260,194)(211,897)
Net income attributable to noncontrolling interests484 783 
Net loss attributable to Sabre Corporation(260,678)(212,680)
Preferred stock dividends5,428  
Net loss attributable to common stockholders$(266,106)$(212,680)
Basic net loss per share attributable to common stockholders:
Loss from continuing operations$(0.84)$(0.77)
Loss from discontinued operations (0.01)
Net loss per common share$(0.84)$(0.78)
Diluted net loss per share attributable to common stockholders:  
Loss from continuing operations$(0.84)$(0.77)
Loss from discontinued operations (0.01)
Net loss per common share$(0.84)$(0.78)
Weighted-average common shares outstanding:  
Basic317,634 274,037 
Diluted317,634 274,037 
See Notes to Consolidated Financial Statements.
1


SABRE CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
 
 Three Months Ended March 31,
 20212020
Net loss$(260,194)$(211,897)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments ("CTA")(4,840)(1,794)
Retirement-related benefit plans:
Net actuarial gain, net of taxes of $, $(1,206)
 4,141 
Amortization of prior service credits, net of taxes of $80, and $80
(278)(278)
Amortization of actuarial losses, net of taxes of $(481), and $(365)
1,674 1,264 
Net change in retirement-related benefit plans, net of tax1,396 5,127 
Derivatives:
Unrealized losses, net of taxes of $1, and $6,447
(3)(23,818)
Reclassification adjustment for realized losses, net of taxes of $(899), and $(515)
3,128 1,835 
Net change in derivatives, net of tax3,125 (21,983)
Share of other comprehensive income (loss) of equity method investments534 (653)
Other comprehensive income (loss)215 (19,303)
Comprehensive loss(259,979)(231,200)
Less: Comprehensive income attributable to noncontrolling interests(484)(783)
Comprehensive loss attributable to Sabre Corporation$(260,463)$(230,417)
 
See Notes to Consolidated Financial Statements.
2




SABRE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 March 31, 2021December 31, 2020
Assets  
Current assets  
Cash and cash equivalents$1,284,918 $1,499,665 
Accounts receivable, net of allowance for credit losses of $91,767 and $96,150
293,953 255,468 
Prepaid expenses and other current assets153,964 132,972 
Total current assets1,732,835 1,888,105 
Property and equipment, net of accumulated depreciation of $2,040,177 and $1,995,409
323,357 363,491 
Equity method investments23,889 24,265 
Goodwill2,630,011 2,636,546 
Acquired customer relationships, net of accumulated amortization of $767,778 and $761,335
281,568 289,150 
Other intangible assets, net of accumulated amortization of $723,876 and $714,095
212,436 222,216 
Deferred income taxes24,278 24,181 
Other assets, net599,464 629,768 
Total assets$5,827,838 $6,077,722 
Liabilities and stockholders’ equity  
Current liabilities  
Accounts payable$104,243 $115,229 
Accrued compensation and related benefits88,495 86,830 
Accrued subscriber incentives120,639 100,963 
Deferred revenues116,487 99,470 
Other accrued liabilities186,060 193,383 
Current portion of debt26,050 26,068 
Total current liabilities641,974 621,943 
Deferred income taxes69,670 72,196 
Other noncurrent liabilities369,465 380,621 
Long-term debt4,714,990 4,717,808 
Commitments and contingencies (Note 13)
Stockholders’ equity  
Preferred stock, $0.01 par value, 225,000 authorized, 3,340 issued and outstanding as of March 31, 2021 and December 31, 2020; aggregate liquidation value of $334,000 as of March 31, 2021 and December 31, 2020
33 33 
Common Stock: $0.01 par value; 1,000,000 authorized shares; 341,563 and 338,662 shares issued, 319,433 and 317,297 shares outstanding at March 31, 2021 and December 31, 2020, respectively
3,416 3,387 
Additional paid-in capital3,009,651 2,985,077 
Treasury Stock, at cost, 22,130 and 21,365 shares at March 31, 2021 and December 31, 2020, respectively
(487,401)(474,790)
Accumulated deficit(2,365,730)(2,099,624)
Accumulated other comprehensive loss(135,742)(135,957)
Non-controlling interest7,512 7,028 
Total stockholders’ equity31,739 285,154 
Total liabilities and stockholders’ equity$5,827,838 $6,077,722 

See Notes to Consolidated Financial Statements.    
3



SABRE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Three Months Ended March 31,
 20212020
Operating Activities
Net loss$(260,194)$(211,897)
Adjustments to reconcile net loss to cash (used in) provided by operating activities:
Depreciation and amortization73,223 95,861 
Stock-based compensation expense24,426 17,577 
Amortization of upfront incentive consideration15,825 18,213 
Gain on sale of investment(14,532) 
Amortization of debt discount and issuance costs2,853 993 
Provision for expected credit losses(2,226)36,359 
Deferred income taxes(2,004)(41,732)
Loss from discontinued operations263 2,126 
Acquisition termination fee 24,811 
Other1,396 (1,858)
Changes in operating assets and liabilities:
Accounts and other receivables(41,144)120,580 
Prepaid expenses and other current assets(18,008)(10,120)
Capitalized implementation costs(5,022)(1,472)
Upfront incentive consideration(2,185)(22,566)
Other assets3,176 16,102 
Accrued compensation and related benefits681 (23,655)
Accounts payable and other accrued liabilities17,433 (1,197)
Deferred revenue including upfront solution fees8,636 22,306 
Cash (used in) provided by operating activities(197,403)40,431 
Investing Activities
Proceeds from sale of investment14,840  
Additions to property and equipment(6,435)(28,437)
Other investing activities (4,413)
Cash provided by (used in) investing activities8,405 (32,850)
Financing Activities
Net payment on the settlement of equity-based awards(12,434)(5,200)
Payments on borrowings from lenders(6,295)(18,953)
Dividends paid on preferred stock(5,428) 
Proceeds of borrowings from lenders 375,000 
Payments on Tax Receivable Agreement (71,958)
Cash dividends paid to common shareholders (38,544)
Other financing activities(64)(2,199)
Cash (used in) provided by financing activities(24,221)238,146 
Cash Flows from Discontinued Operations
Cash used in operating activities(281)(997)
Cash used in discontinued operations(281)(997)
Effect of exchange rate changes on cash and cash equivalents(1,247)3,566 
(Decrease) increase in cash and cash equivalents(214,747)248,296 
Cash and cash equivalents at beginning of period1,499,665 436,176 
Cash and cash equivalents at end of period$1,284,918 $684,472 
See Notes to Consolidated Financial Statements.
4


SABRE CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share data)
 Stockholders’ Equity (Deficit)
 Preferred StockCommon StockAdditional
Paid in
Capital
Treasury StockRetained
Earnings
(Deficit)
Accumulated
Other
Comprehensive Loss
Noncontrolling
Interest
Total
Stockholders'
Equity
 SharesAmountSharesAmountSharesAmount
Balance at December 31, 20203,340,000 $33 338,661,960 $3,387 $2,985,077 21,365,227 $(474,790)$(2,099,624)$(135,957)$7,028 $285,154 
Comprehensive loss— — — — — — — (260,678)215 484 (259,979)
Preferred stock dividends(1)
— — — — — — — (5,428)— — (5,428)
Settlement of stock-based awards— — 2,900,693 29 148 764,947 (12,611)— — — (12,434)
Stock-based compensation expense— — — — 24,426 — — — — — 24,426 
Balance at March 31, 20213,340,000 $33 341,562,653 $3,416 $3,009,651 22,130,174 $(487,401)$(2,365,730)$(135,742)$7,512 $31,739 
(1) Our mandatory convertible preferred stock accumulates cumulative dividends at an annual rate of 6.50%.


Stockholders’ Equity (Deficit)
 Preferred StockCommon StockAdditional
Paid in
Capital
Treasury StockRetained
Earnings
(Deficit)
Accumulated
Other
Comprehensive
Loss
Noncontrolling
Interest
Total
Stockholders'
Equity
 SharesAmountSharesAmountSharesAmount
Balance at December 31, 2019  294,319,417 $2,943 $2,317,544 20,586,852 $(468,618)$(763,482)$(149,306)$8,588 $947,669 
Comprehensive loss— — — — — — — (212,680)(19,303)783 (231,200)
Common stock dividends(1)
— — — — — — — (38,544)— — (38,544)
Settlement of stock-based awards— — 2,224,053 22 50 642,065 (5,272)— — — (5,200)
Stock-based compensation expense— — — — 17,577 — — — — — 17,577 
Adoption of New Accounting Standards — — — — — — — (7,591)— — (7,591)
Balance at March 31, 2020  296,543,470 $2,965 $2,335,171 21,228,917 $(473,890)$(1,022,297)$(168,609)$9,371 $682,711 
(1) A quarterly cash dividend of $0.14 per share on our common stock.


See Notes to Consolidated Financial Statements.
5


SABRE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
1. General Information
Sabre Corporation is a Delaware corporation formed in December 2006. On March 30, 2007, Sabre Corporation acquired Sabre Holdings Corporation (“Sabre Holdings”). Sabre Holdings is the sole subsidiary of Sabre Corporation. Sabre GLBL Inc. ("Sabre GLBL") is the principal operating subsidiary and sole direct subsidiary of Sabre Holdings. Sabre GLBL or its direct or indirect subsidiaries conduct all of our businesses. In these consolidated financial statements, references to “Sabre,” the “Company,” “we,” “our,” “ours” and “us” refer to Sabre Corporation and its consolidated subsidiaries unless otherwise stated or the context otherwise requires.
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 continued to have a material impact to our consolidated financial results in the first quarter of 2021, resulting in a material decrease in transaction-based revenue across both of our business units compared to the prior year. Lower global distribution system ("GDS") volumes have continued to result in a material decline in incentive consideration costs, as expected. Despite the continued negative impacts of the COVID-19 pandemic on our business and global travel volumes, as COVID-19 vaccines have continued to be administered, we have seen some continued improvement in our key volume metrics during the first quarter of 2021, led by our Hospitality Solutions business. Domestic bookings continue to exceed international bookings, however, which has negatively impacted revenue.
The inputs into our judgments and estimates consider the economic implications of COVID-19 on our critical and significant accounting estimates. Our air booking cancellation reserve totaled $18 million as of March 31, 2021, which is consistent with our reserve as of December 31, 2020. Additionally, our allowance for credit losses at March 31, 2021 was $93 million, a decrease of $5 million from December 31, 2020. The provision for credit losses for the three months ended March 31, 2021 decreased $39 million from the same period in the prior year, primarily related to fully reserving for aged balances of certain customers in the prior year and an overall improvement in our forecasted credit losses in the current year given the start of the global economic recovery from the COVID-19 pandemic. 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 and future cancellation activity, including from airlines’ insolvency or suspension of service or aircraft groundings, we cannot provide assurance that the assumptions used in these estimates will be accurate.
We have not identified any triggering events or changes in circumstances since the performance of our annual goodwill impairment test that would require us to perform another goodwill impairment test and we did not record any goodwill impairment charges for the three months ended March 31, 2021. See Note 8. Fair Value Measurements for further information. 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 of potential future impairments cannot be reasonably estimated but could be material.
Given the liquidity measures we enacted during 2020 and our ending cash balance of $1.3 billion as of March 31, 2021, 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.
Strategic Realignment—We completed a strategic realignment of our airline and agency-focused businesses in the third quarter of 2020 to address the changing travel landscape and respond to the impacts of the COVID-19 pandemic on our business and cost structure. As a result of our strategic realignment, we now operate our business and present our results through two business segments: (i) Travel Solutions, our global travel solutions for travel suppliers and travel buyers, including a broad portfolio of software technology products and solutions for airlines, and (ii) Hospitality Solutions, an extensive suite of leading software solutions for hoteliers. All revenue and expenses previously assigned to the Travel Network and Airline Solutions business segments were consolidated into a unified revenue and expense structure now reported as the Travel Solutions business segment. There were no changes to the historical Hospitality Solutions reporting segment. Additionally, we have reclassified expenses on our statement of operations to provide additional clarification on our costs by separating technology costs from cost of revenue and moving certain expenses previously classified as cost of revenue to selling, general and administrative to align with the current leadership and operational organizational structure. Financial information for all periods presented has been updated to reflect these reclassifications.
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, 2021 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2021. The accompanying interim financial statements should be read in conjunction with the
6


consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K filed with the SEC on February 25, 2021.
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 25, 2021. 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.
Adoption of New Accounting Standards
In March 2020, the Financial Accounting Standards Board ("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. In January 2021, the FASB issued additional clarification related to reference rate reform, permitting entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, computing variation margin settlements, and calculating price alignment interest in connection with reference rate reform activities under way in global financial markets. The standards are 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, 2021 as a result of the adoption of these standards. Our current hedging contracts do not extend past December 31, 2021.
In August 2020, the FASB issued updated guidance limiting the accounting models for convertible instruments, which requires the senior exchangeable notes due 2025 (the "Exchangeable Notes") entered into April 2020 to be accounted for as a single liability measured at amortized cost. We elected to early adopt this standard on January 1, 2021 using the full retrospective method, which requires us to restate each prior reporting period presented. As a result of adoption, the component of the Exchangeable Notes originally bifurcated as equity was derecognized and accounted for as a liability. The net deferred tax liability originally established in connection with the debt discount and issuance costs within equity was also removed and the debt issuance costs which were allocated to equity were reclassified to debt and amortized using an effective interest rate of approximately 5%. As a result of removing the net deferred tax liability related to the debt discount, the valuation allowance increased by $17 million for the year ended December 31, 2020. Because the Exchangeable Notes were entered into during the second quarter of 2020, there was no impact to our consolidated statements of operations or earnings per share for the three months ended March 31, 2020 as a result of the adoption of this standard. The impacts to our consolidated balance sheets as of December 31, 2020 are shown below (in thousands):
December 31, 2020
As ReportedAdjustmentsRecast
Deferred income taxes$72,744 $(548)$72,196 
Long-term debt4,639,782 78,026 4,717,808 
Additional paid-in capital3,052,953 (67,876)2,985,077 
Accumulated deficit(2,090,022)(9,602)(2,099,624)
Total stockholders’ equity362,632 (77,478)285,154 
Total liabilities and stockholders’ equity6,077,722  6,077,722 
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. We adopted this standard prospectively in the first quarter of 2021. There was no material impact to our consolidated financial statements for the three months ended March 31, 2021 as a result of this guidance.

7


2. Revenue from Contracts with Customers
Contract Balances
Revenue recognition for a significant portion of our revenue coincides with normal billing terms, including our transactional revenues, Software-as-a-Service ("SaaS") revenues, 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, 2021 and December 31, 2020 (in thousands):
AccountConsolidated Balance Sheet LocationMarch 31, 2021December 31, 2020
Contract assets and customer advances and discounts(1)
Prepaid expenses and other current assets / other assets, net$88,954 $88,850 
Trade and unbilled receivables, netAccounts receivable, net289,452 253,511 
Long-term trade unbilled receivables, netOther assets, net35,217 38,156 
Contract liabilitiesDeferred revenues / other noncurrent liabilities184,090 176,956 
________________________________

(1) Includes contract assets of $8 million for March 31, 2021 and December 31, 2020.
During the three months ended March 31, 2021, we recognized revenue of approximately $12 million from contract liabilities that existed as of January 1, 2021. 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,
20212020
Distribution$151,781 $394,538 
IT Solutions137,094 213,050 
Total Travel Solutions288,875 607,588 
SynXis Software and Services38,730 50,731 
Other3,485 8,506 
Total Hospitality Solutions42,215 59,237 
Eliminations(3,606)(7,848)
Total Sabre Revenue$327,484 $658,977 
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, 2021, the impact on revenue recognized in the current period, from performance obligations partially or fully satisfied in the previous period, is immaterial.
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.

8


3. Restructuring Activities
We completed a strategic realignment of our airline and agency-focused businesses in the third quarter of 2020 to address the changing travel landscape and respond to the impacts of the COVID-19 pandemic on our business and cost structure. As a result of this strategic realignment, we incurred restructuring costs beginning in the first quarter of 2020. The strategic realignment and related actions are substantially complete. We do not expect additional restructuring charges associated with these activities to be significant.
Since the first quarter of 2020, we have incurred $80 million in connection with these restructuring activities, of which $18 million is recorded within cost of revenue, excluding technology costs, $30 million is recorded within technology costs and $32 million is recorded within selling, general and administrative costs in our consolidated statement of operations. For the three months ended March 31, 2021, adjustments to restructuring charges were immaterial.
The following table summarizes the accrued liability related to severance and related benefits costs as recorded within accrued compensation and related benefits within our consolidated balance sheet (in thousands):
Three Months Ended
March 31, 2021
Balance as of December 31, 2020$23,253 
Cash Payments(8,035)
Non-cash adjustments(4,194)
Balance as of March 31, 2021$11,024 

4. Income Taxes
For the three months ended March 31, 2021, we recognized $4 million income tax expense, representing a negative effective tax rate of 2%, compared to an income tax benefit of $27 million, representing an effective tax rate of 11% for the three months ended March 31, 2020. The decrease in the effective tax rate for the three months ended March 31, 2021 as compared to the same period in 2020 was primarily due to an increase in the valuation allowance generated in the current quarter 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. The difference between our effective tax rates and the U.S. federal statutory income tax rate primarily results from valuation allowances, our geographic mix of taxable income in various tax jurisdictions, tax permanent differences and tax credits.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax-planning strategies in making this assessment. We believe it is more likely than not that the results of future operations will not generate sufficient taxable income in the U.S. and in certain foreign jurisdictions to realize the full benefits of its deferred tax assets. On the basis of this evaluation, as of March 31, 2021, a valuation allowance of $311 million has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased.
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 $74 million and $73 million as of March 31, 2021 and December 31, 2020, respectively.
5. Credit Losses
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.
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-month collection rates and adjusting for current customer-specific factors indicating financial instability and other macroeconomic factors that correlate with the expected collectability of our receivables.
9


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, 2021 for our portfolio segment is summarized as follows (in thousands):
Three Months Ended
March 31, 2021
Balance at December 31, 2020$97,568 
Provision for expected credit losses(2,226)
Write-offs(1,639)
Other(1,038)
Balance at March 31, 2021$92,665 

Our provision for expected credit losses for the three months ended March 31, 2021 decreased $39 million from $36 million in the same period in the prior year, primarily related to fully reserving for aged balances of certain customers in the prior year and an overall improvement in our forecasted credit losses in the current year given the start of the global economic recovery from the COVID-19 pandemic. For the three months ended March 31, 2020, we made a decision to fully reserve for certain aged balances related to particular customers due to heightened uncertainty regarding collectability, including uncertainty related to bankruptcy filings by several of our customers during the three months ended March 31, 2020. Additionally, the impact of the COVID-19 pandemic on the global economy and other general increases in aging balances affected our estimate of expected credit losses in the prior year. Macro-economic factors, including the economic downturn, lack of liquidity in the capital markets resulting from the COVID-19 pandemic and lack of additional government funding, can have a significant effect on additions to the allowance as the pandemic may continue to result in restructuring or bankruptcy of additional customers. 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 and actual write-offs may vary from our estimates.
6. Debt
As of March 31, 2021 and December 31, 2020, our outstanding debt included in our consolidated balance sheets totaled $4,741 million and $4,744 million, respectively, which are net of debt issuance costs of $51 million and $54 million, respectively, and unamortized discounts of $9 million and $10 million, respectively. The following table sets forth the face values of our outstanding debt as of March 31, 2021 and December 31, 2020 (in thousands):
 RateMaturityMarch 31, 2021December 31, 2020
Senior secured credit facilities:    
Term Loan B
L + 2.00%
February 2024$1,819,913 $1,824,616 
Other Term Loan B
L + 4.00%
December 2027635,408 637,000 
Revolver, $400 million(1)
L + 2.75%
November 2023375,000 375,000 
9.25% senior secured notes due 2025
9.250%April 2025775,000 775,000 
7.375% senior secured notes due 2025
7.375%September 2025850,000 850,000 
4.00% senior exchangeable notes due 2025
4.000%April 2025345,000 345,000 
Finance lease obligations870 889 
Face value of total debt outstanding  4,801,191 4,807,505 
Less current portion of debt outstanding(26,050)(26,068)
Face value of long-term debt outstanding  $4,775,141 $4,781,437 
______________________
(1) Pursuant to the August 27, 2020 refinancing, subject to certain "springing" maturity conditions, the maturity may extend to February 2024 at the latest.
We had $375 million outstanding under the Revolver as of March 31, 2021 and December 31, 2020. We had outstanding letters of credit totaling $10 million as of March 31, 2021 and December 31, 2020, which reduced our overall credit capacity under the Revolver.
Senior Secured Credit Facilities
Refinancing Transactions
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
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approximately $1,891 million incremental Term Loan B facility (“Term Loan B”) and $570 million Term Loan A facility (“Term Loan A”).
On August 27, 2020, Sabre GLBL entered into a Third Revolving Facility Refinancing Amendment to the Amended and Restated Credit Agreement (the "Third Revolving Refinancing Amendment") and the First Term A Loan Extension Amendment to the Amended and Restated Credit Agreement (the "Term A Loan Extension Amendment" and, together with the Third Revolving Refinancing Amendment, the "2020 Refinancing"), which extended the maturity of the Revolver from July 1, 2022 to November 23, 2023 at the earliest and February 22, 2024 at the latest, depending on certain "springing" maturity conditions as described in the Third Revolving Refinancing Amendment. In the event that, as of November 23, 2023, the maturity date of the Term Loan B has not been extended or refinanced to a date after August 20, 2024, the extension is subject to an earlier "springing" maturity date of November 23, 2023. In addition to extending the maturity date of the Revolver, the 2020 Refinancing also provides that, during any covenant suspension resulting from a "Material Travel Event Disruption" (as defined in the Amended and Restated Credit Agreement and discussed further below), including during the current covenant suspension period, we must maintain liquidity of at least $300 million on a monthly basis, which was lowered in December 2020 from $450 million. In addition, during this covenant suspension, the 2020 Refinancing limits certain payments to equity holders, certain investments, certain prepayments of unsecured debt and the ability of certain subsidiaries to incur additional debt. The applicable margins for the Revolver are between 2.50% and 1.75% per annum for Eurocurrency rate loans and between 1.50% and 0.75% per annum for base rate loans, 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. These interest rate spreads for the Revolver were increased by 0.25%, during covenant suspension, in connection with the 2020 Refinancing.
On December 17, 2020, Sabre GLBL entered into a Sixth Term A Loan Refinancing and Incremental Amendment to our Amended and Restated Credit Agreement, resulting in additional Term Loan B borrowings of $637 million ("Other Term B Loans") due December 17, 2027. The applicable interest rate margins for the Other Term B Loans are 4.00% per annum for Eurocurrency rate loans and 3.00% per annum for base rate loans, with a floor of 0.75% for the Eurocurrency rate, and 1.75% for the base rate, respectively. The net proceeds of $623 million from the issuance, net of underwriting fees and commissions, were used to fully redeem both the $500 million outstanding 5.25% senior secured notes due November 2023 and the $134 million outstanding Term Loan A. Additionally, on December 17, 2020, Sabre GLBL entered into a Pro Rata Amendment and the Refinancing Amendment which reduced the minimum liquidity requirement to $300 million. We incurred no material additional indebtedness as a result of these transactions, other than amounts for certain interest, fees and expenses. We recognized a loss on extinguishment of debt of $11 million during the year ended December 31, 2020 in connection with these transactions, which consisted of a redemption premium of $6 million and the write-off of unamortized debt issuance costs of $5 million.
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. However, 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.
“Material Travel Event Disruption,” as defined in the Amended and Restated Credit Agreement, means a decrease of 10% or more has occurred in any given calendar month in the number of “domestic revenue passenger enplanements” as a result of, or in connection with, a Travel Event (as defined in the Amended and Restated Credit Agreement) when compared to the number of “domestic revenue passenger enplanements” 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. The number of “domestic revenue passenger enplanements” is determined by reference to the monthly “Air Traffic Statistics,” which terms are published by the Bureau of Transportation Statistics.
The capacity reductions by domestic airlines in response to the COVID-19 outbreak and related decreases in domestic passenger enplanements, and a recent sharp decline in GDS bookings, has led to a finding that a Material Travel Event Disruption occurred in the first quarter of 2021. As such, the leverage ratio covenant has been suspended for the first and second quarters of 2021. As of March 31, 2021, we are in compliance with all covenants not suspended under the terms of the Amended and Restated Credit Agreement and with the additional covenants of the 2020 Refinancing.
Exchangeable Notes
On April 17, 2020, Sabre GLBL entered into a new debt agreement consisting of $345 million aggregate principal amount of 4.000% senior exchangeable notes due 2025 (the “Exchangeable Notes”). 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 in accordance with specified circumstances and terms of the indenture governing the Exchangeable Notes.
Under the terms of indenture, the notes are exchangeable into common stock of Sabre Corporation (referred to as "our common stock" herein) at the following times or circumstances:
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during any calendar quarter commencing after the calendar quarter ended June 30, 2020, if the last reported sale price per share of our common stock exceeds 130% of the exchange price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;
during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the "Measurement Period") if the trading price per $1,000 principal amount of Exchangeable Notes, as determined following a request by their holder in accordance with the procedures in the indenture, for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of our common stock on such trading day and the exchange rate on such trading day;
upon the occurrence of certain corporate events or distributions on our common stock, including but not limited to a “Fundamental Change” (as defined in the indenture governing the notes);
upon the occurrence of specified corporate events; or
on or after October 15, 2024, until the close of business on the second scheduled trading day immediately preceding the maturity date, April 15, 2025.
With certain exceptions, upon a Change of Control or other Fundamental Change (both as defined in the indenture governing the Exchangeable Notes), the holders of the Exchangeable Notes may require us to repurchase all or part of the principal amount of the Exchangeable Notes at a repurchase price equal to 100% of the principal amount of the Exchangeable Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date. Due to the price of our common stock during the 30 trading days preceding March 31, 2021, the first condition above has been met as of March 31, 2021 and the Exchangeable Notes are exchangeable by the holders at any time during the second quarter of 2021. As of March 31, 2021, the if-converted value of the Exchangeable Notes exceeds the outstanding principal amount by $304 million.
The Exchangeable Notes are convertible at their holder’s election into shares of our common stock based on an initial conversion rate of 126.9499 shares of common stock per $1,000 principal amount of the Exchangeable Notes, which is equivalent to an initial conversion price of approximately $7.88 per share. The exchange rate is subject to anti-dilution and other adjustments. Upon conversion, Sabre GLBL will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of common stock, at our election. If a “Make-Whole Fundamental Change” (as defined in the Exchangeable Notes Indenture) occurs with respect to any Exchangeable Note and the exchange date for the exchange of such Exchangeable Note occurs during the related “Make-Whole Fundamental Change Exchange Period” (as defined in the Exchangeable Notes Indenture), then, subject to the provisions set forth in the Exchangeable Notes Indenture, the exchange rate applicable to such exchange will be increased by a number of shares set forth in the table contained in the Exchangeable Notes Indenture, based on a function of the time since origination and our stock price on the date of the occurrence of such Make-Whole Fundamental Change. The net proceeds received from the sale of the Exchangeable Notes of $336 million, net of underwriting fees and commissions, are being used for general corporate purposes.
As the result of the adoption of a new accounting standard on January 1, 2021, using the full retrospective method, the Exchangeable Notes are presented as a single liability measured at amortized cost. As presented in Note 1. General Information, the component of the Exchangeable Notes originally bifurcated as equity was derecognized and accounted for as a liability. The net deferred tax liability originally established in connection with the debt discount and issuance costs within equity was also removed and the debt issuance costs which were allocated to equity were reclassified to debt and amortized using an effective interest rate of approximately 5%.
The following table sets forth the carrying value of the Exchangeable Notes as of March 31, 2021 and December 31, 2020, as recast (in thousands):

March 31, 2021December 31, 2020
Principal$345,000 $345,000 
Less: Unamortized debt issuance costs9,892 10,443 
Net Carrying Value$335,108 $334,557 

The following table sets forth interest expense recognized related to the Exchangeable Notes for the three months ended March 31, 2021 and 2020 (in thousands):
Three Months Ended March 31,
20212020
Contractual interest expense$3,450 $ 
Amortization of debt discount and issuance costs$551 $ 

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7. 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. Due to the uncertainty driven by the COVID-19 pandemic on our foreign currency exposures, we have paused entering into new cash flow hedges of forecasted foreign currency cash flows until we have more clarity regarding the recovery trajectory and its impacts on net exposures.
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, 2021 and 2020. As of March 31, 2021, we had no unsettled forward contracts and no material losses are expected to be reclassified from other comprehensive (loss) income to earnings over the next 12 months.
Interest Rate Swap ContractsInterest rate swaps outstanding during the three months ended March 31, 2021 and 2020 are as follows:
Notional AmountInterest Rate
Received
Interest Rate PaidEffective DateMaturity Date
Designated as Hedging Instrument
$1,200 million
1 month LIBOR(1)
2.19%December 31, 2019December 31, 2020
$600 million
1 month LIBOR(1)
2.81%December 31, 2020December 31, 2021
______________________

(1) Subject to a 0% floor.
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 extended through the full year 2020. In April 2018, we entered into forward starting interest rate swaps to hedge the interest payments associated with $300 million and $450 million of the floating-rate Term Loan B related to years 2020 and 2021, respectively. In December 2018, we entered into forward starting interest rate swaps to hedge the interest payments associated with $150 million of the floating-rate Term Loan B for the years 2020 and 2021. We have designated these swaps as cash flow hedges.
The estimated fair values of our derivatives designated as hedging instruments as of March 31, 2021 and December 31, 2020 are as follows (in thousands):
 Derivative Assets (Liabilities)
  Fair Value as of
Derivatives Designated as Hedging InstrumentsConsolidated Balance Sheet LocationMarch 31, 2021December 31, 2020
Interest rate swapsOther accrued liabilities$(12,121)$(16,038)
Total $(12,121)$(16,038)

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The effects of derivative instruments, net of taxes, on OCI for the three months ended March 31, 2021 and 2020 are as follows (in thousands):
 Amount of Gain (Loss) Recognized in OCI on Derivative,
Effective Portion
 Three Months Ended March 31,
Derivatives in Cash Flow Hedging Relationships20212020
Foreign exchange contracts$ $(9,459)
Interest rate swaps(3)(14,359)
Total$(3)$(23,818)

  Amount of Loss (Gain) Reclassified from Accumulated OCI into Income, Effective Portion
Derivatives in Cash Flow Hedging RelationshipsIncome Statement LocationThree Months Ended March 31,
20212020
Foreign exchange contractsCost of revenue, excluding technology costs$ $621 
Interest rate swapsInterest expense, net3,128 1,214 
Total$3,128 $1,835 

8. 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
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.
The following tables present our (liabilities) assets that are required to be measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 (in thousands):
  Fair Value at Reporting Date Using
 March 31, 2021Level 1Level 2Level 3
Derivatives (1)
    
Interest rate swap contracts$(12,121)$ $(12,121)$ 
Total$(12,121)$ $(12,121)$ 
  Fair Value at Reporting Date Using
 December 31, 2020Level 1Level 2Level 3
Derivatives (1)
    
Interest rate swap contracts$(16,038)$ $(16,038)$ 
Total$(16,038)$ $(16,038)$ 
______________________
(1) See Note 7. Derivatives for further detail.
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There were no transfers between Levels 1 and 2 within the fair value hierarchy for the three months ended March 31, 2021.
Other Financial Instruments
The carrying value of our financial instruments including cash and cash equivalents, and accounts receivable, approximates their fair values due to the short term nature of these instruments. The fair values of our senior exchangeable notes due 2025, senior secured notes due 2025 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, 2021 and December 31, 2020 (in thousands):
 Fair Value at
Carrying Value at (1)
Financial InstrumentMarch 31, 2021December 31, 2020March 31, 2021December 31, 2020
Term Loan B$1,798,302 $1,785,843 $1,816,585 $1,821,016 
Other Term Loan B642,953 639,389 629,270 630,663 
Revolver, $400 million
375,000 375,000 375,000 375,000 
9.25% senior secured notes due 2025
926,381 925,610 775,000 775,000 
7.375% senior secured notes due 2025
928,260 925,030 850,000 850,000 
4.00% senior exchangeable notes due 2025
715,561 610,907 345,000 345,000 
______________________
(1) Excludes net unamortized debt issuance costs.
Assets that are Measured at Fair Value on a Nonrecurring Basis
We assess goodwill and other intangible assets with indefinite lives for impairment annually or more frequently if indicators arise. We continually monitor events and changes in circumstances such as changes in market conditions, near and long-term demand and other relevant factors, that could indicate that the fair value of any one of our reporting units may more likely than not have fallen below its respective carrying amount. We have not identified any triggering events or changes in circumstances since the performance of our annual goodwill impairment test that would require us to perform another goodwill impairment test and we did not record any goodwill impairment charges for the three months ended March 31, 2021. 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 of potential future impairments cannot be reasonably estimated but could be material.
9. Accumulated Other Comprehensive Loss
As of March 31, 2021 and December 31, 2020, the components of accumulated other comprehensive loss, net of related deferred income taxes, are as follows (in thousands):
 March 31, 2021December 31, 2020
Defined benefit pension and other post-retirement benefit plans $(134,200)$(135,596)
Unrealized loss on foreign currency forward contracts and interest rate swaps(9,712)(12,837)
Unrealized foreign currency translation gain8,170 12,476 
Total accumulated other comprehensive loss, net of tax $(135,742)$(135,957)
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. On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which modified funding requirements for single-employer defined benefit pension plans by restarting and extending the amortization of funding shortfalls and extending and enhancing interest rate stabilization percentages. We are examining the short-term impact of these measures on our 2021 pension plan contributions, including the reduction, or potential elimination of, minimum funding requirements, as well as the possible long-term effects of fully funding the plan over a longer period of time if we were to take advantage of the extended amortization relief.
See Note 7. Derivatives, for information on the income statement line items affected as the result of reclassification adjustments associated with derivatives.

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