SOUTHLAKE, Texas, Feb. 18, 2015 /PRNewswire/ -- Sabre
Corporation (NASDAQ: SABR) today announced financial results for
the quarter and year ended December 31,
2014.
"2014 was a year of significant strategic progress," said
Tom Klein, Sabre President and
CEO. "Both our Airline Solutions and Hospitality Solutions
businesses had record years for revenue, Adjusted EBITDA and new
sales. In Travel Network, we continued to build our share in EMEA,
while navigating headwinds and positioning the global business for
stronger growth going forward. We have also made significant
progress toward divesting non-core online travel agency assets,
which will generate significant value that we will reinvest to
further strengthen our core businesses."
Q4 2014 Financial Summary
Continued strong revenue growth in Airline and Hospitality
Solutions, and a modest decline in Travel Network, resulted in
Sabre consolidated fourth quarter revenue of $646 million, an increase of 3.1% compared to
$627 million for the prior year
quarter. Sabre has reclassified and is reporting all of the
businesses associated with the Travelocity segment as discontinued
operations.
Consolidated net income from continuing operations for the
fourth quarter of 2014 totaled $41
million, compared to a loss of $9
million in the previous year quarter. Fourth quarter
consolidated Adjusted EBITDA was $199
million, a 2.4% increase from $194
million in the prior year period. The increase in Adjusted
EBITDA is the result of 25.7% growth in Adjusted EBITDA for Airline
and Hospitality Solutions and lower corporate expenses, combined
with a decline of 9.4% in fourth quarter Travel Network Adjusted
EBITDA.
For the fourth quarter of 2014, Sabre reported income from
continuing operations of $0.15 per
share and Adjusted Net Income from Continuing Operations (Adjusted
EPS) of $0.22 per share.
Cash Flow from Operations totaled $101
million for the fourth quarter of 2014, compared to a loss
of $29 million in the fourth quarter
of 2013. Adjusted Free Cash Flow totaled $40
million in the fourth quarter of 2014, compared to
$40 million in the fourth quarter of
2013. Adjusted Free Cash Flow excludes the impacts of dispositions,
litigation and other costs (see reconciliation below). Adjusted
Capital Expenditures, which includes capitalized implementation
costs, totaled $83 million for the
fourth quarter of 2014, compared to $65
million in the prior year period.
|
Three Months
Ended
December
31,
|
|
|
Twelve Months
Ended
December
31,
|
|
Financial Highlights
(Unaudited, in thousands):
|
2014
|
|
|
2013
|
|
%
Change
|
|
|
2014
|
|
|
2013
|
|
%
Change
|
|
Total Company
(Continuing Operations):
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
646,142
|
|
|
$
|
626,921
|
|
|
3.1
|
|
|
$
|
2,631,417
|
|
|
$
|
2,523,546
|
|
|
4.3
|
|
Income (loss) from
continuing operations
|
$
|
41,230
|
|
|
$
|
(8,550)
|
|
|
582.2
|
|
|
$
|
110,873
|
|
|
|
52,066
|
|
|
112.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA*
|
$
|
198,674
|
|
|
$
|
194,017
|
|
|
2.4
|
|
|
$
|
840,028
|
|
|
$
|
778,754
|
|
|
7.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow from
Operations
|
$
|
100,855
|
|
|
$
|
(28,642)
|
|
|
452.1
|
|
|
$
|
387,659
|
|
|
$
|
228,232
|
|
|
69.9
|
|
Capital
Expenditures
|
$
|
73,015
|
|
|
$
|
54,833
|
|
|
33.2
|
|
|
$
|
227,227
|
|
|
$
|
209,523
|
|
|
8.4
|
|
Adjusted Capital
Expenditures*
|
$
|
83,224
|
|
|
$
|
64,961
|
|
|
28.1
|
|
|
$
|
265,038
|
|
|
$
|
268,337
|
|
|
(1.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow*
|
$
|
27,840
|
|
|
$
|
(83,475)
|
|
|
133.4
|
|
|
$
|
160,432
|
|
|
$
|
18,709
|
|
|
757.5
|
|
Adjusted Free Cash
Flow*
|
$
|
39,903
|
|
|
$
|
39,897
|
|
|
0.0
|
|
|
$
|
293,375
|
|
|
$
|
181,715
|
|
|
61.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt (total
debt, less cash)
|
$
|
2,940,927
|
|
|
$
|
3,442,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt / LTM
Adjusted EBITDA
|
|
3.5
|
x
|
|
|
4.4
|
x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Airline and
Hospitality Solutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
214,502
|
|
|
$
|
188,952
|
|
|
13.5
|
|
|
$
|
786,478
|
|
|
$
|
711,745
|
|
|
10.5
|
|
Passengers
Boarded
|
|
125,102
|
|
|
|
119,660
|
|
|
4.5
|
|
|
|
510,713
|
|
|
|
478,088
|
|
|
6.8
|
|
Operating
Income
|
$
|
58,773
|
|
|
$
|
47,495
|
|
|
23.7
|
|
|
$
|
176,730
|
|
|
$
|
135,755
|
|
|
30.2
|
|
Adjusted
EBITDA*
|
$
|
84,961
|
|
|
$
|
67,590
|
|
|
25.7
|
|
|
$
|
282,648
|
|
|
$
|
213,075
|
|
|
32.7
|
|
Travel
Network:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
434,444
|
|
|
$
|
440,393
|
|
|
(1.4)
|
|
|
$
|
1,854,785
|
|
|
$
|
1,821,498
|
|
|
1.8
|
|
Air
Bookings
|
|
70,817
|
|
|
|
70,008
|
|
|
1.2
|
|
|
|
321,962
|
|
|
|
314,275
|
|
|
2.4
|
|
Non-air
Bookings
|
|
12,848
|
|
|
|
12,769
|
|
|
0.6
|
|
|
|
54,122
|
|
|
|
53,503
|
|
|
1.2
|
|
Total
Bookings
|
|
83,665
|
|
|
|
82,777
|
|
|
1.1
|
|
|
|
376,084
|
|
|
|
367,778
|
|
|
2.3
|
|
Bookings
Share
|
|
35.5
|
%
|
|
|
35.7
|
%
|
|
|
|
|
|
35.7
|
%
|
|
|
35.8
|
%
|
|
|
|
Operating
Income
|
$
|
142,233
|
|
|
$
|
162,052
|
|
|
(12.2)
|
|
|
$
|
657,326
|
|
|
$
|
667,498
|
|
|
(1.5)
|
|
Adjusted
EBITDA*
|
$
|
172,040
|
|
|
$
|
189,940
|
|
|
(9.4)
|
|
|
$
|
778,677
|
|
|
$
|
772,208
|
|
|
0.8
|
|
*indicates non-GAAP
financial measure; see descriptions and reconciliations
below
|
|
Sabre Airline and Hospitality Solutions
Fourth quarter 2014 Airline and Hospitality Solutions revenue
increased 13.5% to $215 million from
$189 million in the prior year
period. The increase was driven by a combination of growth in
passengers boarded through the SabreSonic® Customer Sales &
Service (CSS) solution, which increased 4.5% in the quarter, solid
performance across the Airline Solutions' AirVision commercial
suite and AirCentre operations suite and continued strong growth at
Sabre Hospitality Solutions.
Sabre Airline and Hospitality Solutions Adjusted EBITDA
increased 25.7% from the prior year period to $85 million for the fourth quarter of 2014. The
growth in profitability is a result of continued strong revenue
growth and Adjusted EBITDA margin expansion to 39.6% for the
quarter compared to 35.8% in the prior year quarter driven by the
continued scale benefits of its Software-as-a-Service (SaaS)
solutions.
In the fourth quarter of 2014, Hospitality Solutions announced
the launch of the SynXis Enterprise Platform. This exciting launch
included the introduction of the SynXis Property Manager, a hotel
property management solution that seamlessly integrates with the
industry leading SynXis Central Reservation System. Wyndham
Hotel Group, the world's largest and most diverse hotel company,
became the first mega-hotel company to leverage the cloud-based
SaaS reservations, revenue management and enhanced security
solutions of the SynXis Enterprise Platform. As part of the
agreement, Wyndham Hotel Group expects to migrate 4,500 of its
North American properties to Sabre's SynXis Property Manager
beginning in mid-2015.
Airline Solutions posted a record sales year in 2014 that
included a long-term agreement to provide the SabreSonic CSS
passenger reservations system to American Airlines, the world's
largest passenger carrier, as well as an agreement to provide a
broad suite of solutions to airberlin, one of Europe's largest carriers. Additionally in the
fourth quarter, Airline Solutions signed long-term agreements with
Alitalia and Copa Airlines, who selected Airline Solutions leading
SaaS platform and broad solutions set for critical airline
operations and commercial activity, including the SabreSonic CSS
passenger reservation system.
Sabre Travel Network
Fourth quarter Travel Network revenue declined 1.4% to
$434 million compared to $440 million for the same period in 2013. The
decline in fourth quarter Travel Network revenue is primarily
attributable to lower joint venture data processing revenue.
Bookings increased 1.1% in the quarter. EMEA performance remained
strong with 7% bookings growth and continued share gains.
Fourth quarter 2014 Travel Network Adjusted EBITDA declined 9.4%
to $172 million. The decline in
Travel Network Adjusted EBITDA was primarily the result of lower
year-over-year joint venture data processing revenue in the quarter
and the timing of recognition of certain cost of revenue expense
items compared to the prior year.
Travelocity
Consistent with Sabre's stated strategy, the Company has made
significant progress toward exiting the online travel agency
business. As a result, Sabre has reclassified and is reporting all
of the businesses associated with the Travelocity segment as
discontinued operations.
On January 22, 2015, Sabre sold
Travelocity.com to Expedia, Inc. for $280
million in cash consideration.
Additionally, on December 16,
2014, Sabre announced that it had received a binding offer
from Bravofly Rumbo Group to acquire lastminute.com for a total
transaction value of approximately $120
million resulting primarily from the transfer of commercial
liabilities and an expanded long-term commercial agreement, in
which Bravofly Rumbo Group's brands and lastminute.com would
continue to use the Sabre global distribution system. The
transaction is expected to be completed in the first quarter of
2015. Sabre cannot provide any assurance that this transaction will
occur on these terms or at all.
FY 2014 Financial Summary
For the full year 2014, Sabre reported total consolidated
revenue of $2.631 billion, compared
to $2.524 billion for the prior year,
a 4.3% increase.
Airline and Hospitality Solutions revenue increased 10.5% to
$786 million from $712 million in 2013, reflecting full year
passenger boarded growth of 6.8%. 2014 revenue was also fueled by
continued strong growth in the AirCentre and AirVision suites and
by Sabre Hospitality Solutions.
Travel Network revenue increased 1.8% to $1.855 billion from $1.821
billion in 2013. Full year revenue growth was muted by the
pricing impact of the merger of American Airlines and US Airways
and the decline of travel in Venezuela, which combined, reduced growth by
approximately 2%. Full year bookings increased 2.3%, reflecting
growth in EMEA of more than 9% driven by solid share gains, and a
modest increase in North America.
Latin America saw a slight
decline. Overall bookings share remained relatively stable at
35.7%.
2014 consolidated net income from continuing operations totaled
$111 million, compared to
$52 million in 2013. Adjusted EBITDA
totaled $840 million, a 7.9% increase
from $779 million in 2013. The
increase in Adjusted EBITDA is the result of a 32.7% increase in
Airline and Hospitality Solutions Adjusted EBITDA and a 0.8%
increase in Travel Network Adjusted EBITDA. There was a 7% increase
in corporate expenses primarily due to incremental public company
costs.
Sabre Airline and Hospitality Solutions Adjusted EBITDA
increased 32.7% from 2013 to $283
million for the full year of 2014 driven by strong growth in
profitability in both Airline Solutions and Hospitality Solutions
resulting from the scale benefits of their SaaS software solutions.
Full year Adjusted EBITDA margin at Airline and Hospitality
Solutions increased to 35.9% from 29.9% in 2013.
Full year Travel Network Adjusted EBITDA increased 0.8% to
$779 million. Adjusted EBITDA growth
was a result of 2.3% bookings growth and downward pressure from the
pricing impact of the merger of American Airlines and US Airways
and the decline in travel in Venezuela. Full year Travel Network Adjusted
EBITDA margin declined to 42.0% from 42.4% in 2013.
Sabre reported income from continuing operations of $0.39 per share. Sabre reported full year 2014
Adjusted EPS of $0.94 per share.
Cash Flow from Operations totaled $388
million for the full year of 2014, compared to $228 million in 2013. Adjusted Free Cash Flow
totaled $293 million in 2014, a 61%
increase from $182 million in 2013.
Adjusted Capital Expenditures, totaled $265
million in 2014, compared to $268
million in the prior year.
Business Outlook and Financial Guidance
The Company has provided full-year guidance for 2015 for
continuing operations below.
- In Airline and Hospitality Solutions, Sabre expects 2015
revenue growth of between 9% and 11%. Passengers boarded are
expected to increase approximately 10% in 2015, including
particularly strong growth in the fourth quarter related to
scheduled customer implementations.
- In Travel Network, Sabre expects 2015 revenue growth of 4% or
more, driven by bookings growth of approximately 3%. Bookings
growth is expected be stronger in the back half of the year versus
the first half – as the business anniversaries headwinds in the
first quarter – and new business win implementations are completed
throughout the year.
For the full year 2015, Sabre expects the following results from
continuing operations:
Full Year 2015
Guidance
|
|
($ millions,
except for EPS)
|
Revenue
|
$2,770 -
$2,800
|
|
|
Adjusted
EBITDA
|
$895 -
$910
|
|
|
Adjusted Net
Income
|
$275 -
$290
|
|
|
Adjusted
EPS
|
$1.00 -
$1.06
|
Conference Call
The Company will conduct its fourth quarter and full year 2014
investor conference call today at 9:00 a.m.
Eastern Time. The live webcast, including accompanying
slide presentation, can be accessed via Sabre's Investor Relations
website at http://investors.sabre.com. A recording of the
call will be archived for replay following the conference
call.
Investor Day
The Company plans to hold an investor day at the NASDAQ
MarketSite in New York City on
April 2, 2015. The event will be
webcast and can be accessed via Sabre's Investor Relations website
at http://investors.sabre.com. A recording of the event will
be archived for replay following the event.
About the Company
Sabre® is the leading technology provider to
the global travel and tourism industry. Sabre's software, data,
mobile and distribution solutions are used by hundreds of airlines
and thousands of hotels to manage vital operations, such as
passenger and guest reservations, revenue management, and flight,
network and crew management. Sabre also operates the world's
leading travel marketplace, processing more than $100 billion of annual travel spend.
Headquartered in Southlake, Texas,
USA, Sabre operates in approximately 60 countries around the
world.
Website Information
We routinely post important information for investors on our
website, www.sabre.com in the Investor Relations section. 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, www.sabre.com.
Note on Non-GAAP Financial Measures
This press release includes unaudited non-GAAP financial
measures, including Adjusted Net Income, Adjusted EBITDA, Adjusted
EPS, Adjusted Capital Expenditures, Free Cash Flow, Adjusted 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," "may," "will," "should," "would," "intend," "believe,"
"potential" or the negative of these terms or other comparable
terminology. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause Sabre's
actual results, performance or achievements to be materially
different from any future results, performances or achievements
expressed or implied by the forward-looking statements. The
potential risks and uncertainties include, among others, dependency
on transaction volumes in the global travel industry, particularly
air travel transaction volumes, adverse global and regional
economic and political conditions, including, but not limited to,
conditions in Venezuela and
Russia, dependence on maintaining
and renewing contracts with customers and other counterparties,
exposure to pricing pressure in the Travel Network business,
dependence on relationships with travel buyers, changes affecting
travel supplier customers, travel suppliers' usage of alternative
distribution models, reliance on fourth-party distributor partners
and joint ventures to extend our GDS services to certain regions
and competition in the travel distribution market and solutions
markets. More information about potential risks and
uncertainties that could affect our business and results of
operations is included in the "Risk Factors" and "Cautionary Note
Regarding Forward-Looking Statements" sections included in our
prospectus filed with the SEC pursuant to Rule 424(b) under the
Securities Act of 1933, as amended, on February 5, 2015. Although we believe that the
expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future events, results, actions,
levels of activity, performance or achievements. Readers are
cautioned not to place undue reliance on these forward-looking
statements. Unless required by law, Sabre undertakes no obligation
to publicly update or revise any forward-looking statements to
reflect circumstances or events after the date they are made.
Contacts
|
|
Media
|
Investors
|
Nancy St.
Pierre
|
Barry
Sievert
|
682-605-3864
|
682-605-0214
|
nancy.st.pierre@sabre.com
|
barry.sievert@sabre.com
|
SABRE
CORPORATION
|
CONSOLIDATED
STATEMENT OF OPERATIONS
|
(In thousands,
except share amounts)
|
(Unaudited)
|
|
|
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Revenue
|
|
$
|
646,142
|
|
|
$
|
626,921
|
|
|
$
|
2,631,417
|
|
|
$
|
2,523,546
|
|
Cost of
revenue
|
|
|
426,809
|
|
|
|
436,401
|
|
|
|
1,742,478
|
|
|
|
1,705,163
|
|
Selling, general and
administrative
|
|
|
115,578
|
|
|
|
104,944
|
|
|
|
468,152
|
|
|
|
429,290
|
|
Restructuring charges
(adjustments)
|
|
|
46
|
|
|
|
8,163
|
|
|
|
(558)
|
|
|
|
8,163
|
|
Operating
income
|
|
|
103,709
|
|
|
|
77,413
|
|
|
|
421,345
|
|
|
|
380,930
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(51,545)
|
|
|
|
(65,036)
|
|
|
|
(218,877)
|
|
|
|
(274,689)
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
—
|
|
|
|
(33,538)
|
|
|
|
(12,181)
|
|
Joint venture equity
income
|
|
|
2,715
|
|
|
|
4,476
|
|
|
|
12,082
|
|
|
|
12,350
|
|
Other, net
|
|
|
(63,021)
|
|
|
|
4,038
|
|
|
|
(63,860)
|
|
|
|
(305)
|
|
Total other expense,
net
|
|
|
(111,851)
|
|
|
|
(56,522)
|
|
|
|
(304,193)
|
|
|
|
(274,825)
|
|
(Loss) income from
continuing operations before income taxes
|
|
|
(8,142)
|
|
|
|
20,891
|
|
|
|
117,152
|
|
|
|
106,105
|
|
(Benefit) provision
for income taxes
|
|
|
(49,372)
|
|
|
|
29,441
|
|
|
|
6,279
|
|
|
|
54,039
|
|
Income (loss) from
continuing operations
|
|
|
41,230
|
|
|
|
(8,550)
|
|
|
|
110,873
|
|
|
|
52,066
|
|
Income (loss) from
discontinued operations, net of tax
|
|
|
5,734
|
|
|
|
36,038
|
|
|
|
(38,918)
|
|
|
|
(149,697)
|
|
Net income
(loss)
|
|
|
46,964
|
|
|
|
27,488
|
|
|
|
71,955
|
|
|
|
(97,631)
|
|
Net income
attributable to noncontrolling interests
|
|
|
564
|
|
|
|
728
|
|
|
|
2,732
|
|
|
|
2,863
|
|
Net income (loss)
attributable to Sabre Corporation
|
|
|
46,400
|
|
|
|
26,760
|
|
|
|
69,223
|
|
|
|
(100,494)
|
|
Preferred stock
dividends
|
|
|
—
|
|
|
|
9,485
|
|
|
|
11,381
|
|
|
|
36,704
|
|
Net income (loss)
attributable to common shareholders
|
|
$
|
46,400
|
|
|
$
|
17,275
|
|
|
$
|
57,842
|
|
|
$
|
(137,198)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share attributable to common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
$
|
0.15
|
|
|
$
|
(0.11)
|
|
|
$
|
0.41
|
|
|
$
|
0.07
|
|
Income (loss)
from discontinued operations
|
|
|
0.02
|
|
|
|
0.20
|
|
|
|
(0.16)
|
|
|
|
(0.84)
|
|
Net income (loss) per
common share
|
|
$
|
0.17
|
|
|
$
|
0.10
|
|
|
$
|
0.24
|
|
|
$
|
(0.77)
|
|
Diluted net income
(loss) per share attributable to common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
$
|
0.15
|
|
|
$
|
(0.10)
|
|
|
$
|
0.39
|
|
|
$
|
0.07
|
|
Income (loss) income
from discontinued operations
|
|
|
0.02
|
|
|
|
0.19
|
|
|
|
(0.16)
|
|
|
|
(0.81)
|
|
Net income (loss) per
common share
|
|
$
|
0.17
|
|
|
$
|
0.09
|
|
|
$
|
0.23
|
|
|
$
|
(0.74)
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
266,014
|
|
|
|
178,262
|
|
|
|
238,633
|
|
|
|
178,125
|
|
Diluted
|
|
|
274,064
|
|
|
|
185,436
|
|
|
|
246,747
|
|
|
|
184,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend per common
share
|
|
$
|
0.09
|
|
|
$
|
—
|
|
|
$
|
0.18
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SABRE
CORPORATION
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands,
except share amounts)
|
(Unaudited)
|
|
|
|
December 31,
|
|
|
|
2014
|
|
|
2013
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
155,679
|
|
|
$
|
308,236
|
|
Restricted
cash
|
|
|
720
|
|
|
|
2,359
|
|
Accounts receivable,
net
|
|
|
362,911
|
|
|
|
400,912
|
|
Prepaid expenses and
other current assets
|
|
|
34,121
|
|
|
|
49,269
|
|
Current deferred
income taxes
|
|
|
182,277
|
|
|
|
41,431
|
|
Other receivables,
net
|
|
|
29,893
|
|
|
|
35,157
|
|
Assets held for
sale
|
|
|
112,558
|
|
|
|
43,005
|
|
Total current
assets
|
|
|
878,159
|
|
|
|
880,369
|
|
Property and
equipment, net
|
|
|
551,276
|
|
|
|
496,200
|
|
Investments in joint
ventures
|
|
|
145,320
|
|
|
|
132,137
|
|
Goodwill
|
|
|
2,153,499
|
|
|
|
2,138,175
|
|
Trademarks and
brandnames, net
|
|
|
238,500
|
|
|
|
249,288
|
|
Other intangible
assets, net
|
|
|
241,486
|
|
|
|
311,522
|
|
Other assets,
net
|
|
|
509,764
|
|
|
|
470,529
|
|
Noncurrent assets
held for sale
|
|
|
—
|
|
|
|
77,488
|
|
Total
assets
|
|
$
|
4,718,004
|
|
|
$
|
4,755,708
|
|
|
|
|
|
|
|
|
|
|
Liabilities,
temporary equity and stockholders' equity
(deficit)
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
114,301
|
|
|
$
|
107,623
|
|
Travel supplier
liabilities and related deferred revenue
|
|
|
3,554
|
|
|
|
152,891
|
|
Accrued compensation
and related benefits
|
|
|
83,828
|
|
|
|
109,621
|
|
Accrued subscriber
incentives
|
|
|
145,581
|
|
|
|
142,767
|
|
Deferred
revenues
|
|
|
167,827
|
|
|
|
136,218
|
|
Litigation settlement
liability and related deferred revenue
|
|
|
73,252
|
|
|
|
38,920
|
|
Other accrued
liabilities
|
|
|
189,612
|
|
|
|
264,231
|
|
Current portion of
debt
|
|
|
22,435
|
|
|
|
86,117
|
|
Liabilities held for
sale
|
|
|
96,544
|
|
|
|
110,253
|
|
Total current
liabilities
|
|
|
896,934
|
|
|
|
1,148,641
|
|
Deferred income
taxes
|
|
|
61,577
|
|
|
|
10,253
|
|
Other noncurrent
liabilities
|
|
|
613,710
|
|
|
|
270,959
|
|
Long-term
debt
|
|
|
3,061,400
|
|
|
|
3,643,548
|
|
|
|
|
|
|
|
|
|
|
Series A Redeemable
Preferred Stock
|
|
|
—
|
|
|
|
634,843
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
(deficit)
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
2,682
|
|
|
|
1,786
|
|
Additional paid-in
capital
|
|
|
1,931,796
|
|
|
|
880,619
|
|
Treasury
Stock
|
|
|
(5,297)
|
|
|
|
—
|
|
Retained
deficit
|
|
|
(1,775,616)
|
|
|
|
(1,785,554)
|
|
Accumulated other
comprehensive loss
|
|
|
(69,803)
|
|
|
|
(49,895)
|
|
Noncontrolling
interest
|
|
|
621
|
|
|
|
508
|
|
Total stockholders'
equity (deficit)
|
|
|
84,383
|
|
|
|
(952,536)
|
|
Total liabilities,
temporary equity and stockholders' equity (deficit)
|
|
$
|
4,718,004
|
|
|
$
|
4,755,708
|
|
SABRE
CORPORATION
|
CONSOLIDATED
STATEMENT OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
Year Ended
December 31,
|
|
|
|
|
2014
|
|
|
|
2013
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
71,955
|
|
|
$
|
(97,631)
|
|
Adjustments to
reconcile net income (loss) to cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
289,630
|
|
|
|
287,038
|
|
Amortization of
upfront incentive consideration
|
|
|
45,358
|
|
|
|
36,649
|
|
Litigation related
(credits) charges
|
|
|
(41,672)
|
|
|
|
8,156
|
|
Stock-based
compensation expense
|
|
|
20,094
|
|
|
|
3,387
|
|
Provision for doubtful
accounts
|
|
|
10,356
|
|
|
|
5,178
|
|
Deferred income
taxes
|
|
|
(3,829)
|
|
|
|
13,941
|
|
Joint venture equity
income
|
|
|
(12,082)
|
|
|
|
(12,350)
|
|
Dividends received
from joint venture investments
|
|
|
2,261
|
|
|
|
10,560
|
|
Amortization of debt
issuance costs
|
|
|
6,316
|
|
|
|
7,104
|
|
Debt modification
costs
|
|
|
3,290
|
|
|
|
14,003
|
|
Loss on extinguishment
of debt
|
|
|
33,538
|
|
|
|
12,181
|
|
Other
|
|
|
6,023
|
|
|
|
(4,653)
|
|
Loss from discontinued
operations
|
|
|
38,918
|
|
|
|
149,697
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts and other
receivables
|
|
|
(7,295)
|
|
|
|
(23,169)
|
|
Prepaid expenses and
other current assets
|
|
|
6,948
|
|
|
|
(3,649)
|
|
Capitalized
implementation costs
|
|
|
(37,811)
|
|
|
|
(58,814)
|
|
Upfront incentive
consideration
|
|
|
(50,936)
|
|
|
|
(48,569)
|
|
Other
assets
|
|
|
(78,873)
|
|
|
|
(56,663)
|
|
Accrued compensation
and related benefits
|
|
|
(5,301)
|
|
|
|
9,372
|
|
Accounts payable and
other accrued liabilities
|
|
|
56,328
|
|
|
|
(15,275)
|
|
Deferred revenue
including upfront solution fees
|
|
|
38,643
|
|
|
|
(5,682)
|
|
Pension and other
postretirement benefits
|
|
|
(4,200)
|
|
|
|
(2,579)
|
|
Cash provided by
operating activities
|
|
|
387,659
|
|
|
|
228,232
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
Additions to property
and equipment
|
|
|
(227,227)
|
|
|
|
(209,523)
|
|
Acquisition, net of
cash acquired
|
|
|
(31,799)
|
|
|
|
(30,200)
|
|
Other investing
activities
|
|
|
235
|
|
|
|
(276)
|
|
Cash used in investing
activities
|
|
|
(258,791)
|
|
|
|
(239,999)
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
Proceeds of borrowings
from lenders
|
|
|
148,307
|
|
|
|
2,540,063
|
|
Payments on borrowings
from lenders
|
|
|
(802,664)
|
|
|
|
(2,261,061)
|
|
Proceeds from issuance
of common stock in initial public offering, net
|
|
|
672,137
|
|
|
|
—
|
|
Prepayment fee and
debt modification and issuance costs
|
|
|
(30,490)
|
|
|
|
(19,116)
|
|
Acquisition-related
contingent consideration paid
|
|
|
(27,000)
|
|
|
|
—
|
|
Cash dividends paid to
common shareholders
|
|
|
(47,904)
|
|
|
|
—
|
|
Other financing
activities
|
|
|
15,669
|
|
|
|
2,286
|
|
Cash (used in)
provided by financing activities
|
|
|
(71,945)
|
|
|
|
262,172
|
|
Cash Flows from
Discontinued Operations
|
|
|
|
|
|
|
|
|
Net cash used by
operating activities
|
|
|
(205,988)
|
|
|
|
(85,140)
|
|
Net cash (used in)
provided by investing activities
|
|
|
(1,965)
|
|
|
|
13,993
|
|
Net cash used in
discontinued operations
|
|
|
(207,953)
|
|
|
|
(71,147)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
(1,527)
|
|
|
|
2,283
|
|
(Decrease) increase
in cash and cash equivalents
|
|
|
(152,557)
|
|
|
|
181,541
|
|
Cash and cash
equivalents at beginning of period
|
|
|
308,236
|
|
|
$
|
126,695
|
|
Cash and cash
equivalents at end of period
|
|
$
|
155,679
|
|
|
$
|
308,236
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
We have included both financial measures compiled in accordance
with GAAP and certain non-GAAP financial measures in this press
release, including Adjusted Net Income, Adjusted EBITDA, Adjusted
Net Income from Continuing Operations per Share (Adjusted EPS),
Adjusted Capital Expenditures, Free Cash Flow, Adjusted Free Cash
Flow and ratios based on these financial measures.
We define Adjusted Net Income as income (loss) from continuing
operations adjusted for impairment, acquisition related
amortization, loss on extinguishment of debt, other, net,
restructuring and other costs, litigation and taxes, including
penalties, stock-based compensation, management fees, and tax
impact of net income adjustments.
We define Adjusted EBITDA as Adjusted Net Income adjusted for
depreciation and amortization of property and equipment,
amortization of capitalized implementation costs, amortization of
upfront incentive consideration, interest expense, net, and
remaining provision (benefit) for income taxes. This Adjusted
EBITDA metric differs from (i) the EBITDA metric referenced in the
section entitled "—Liquidity and Capital Resources—Senior Secured
Credit Facilities" in Part I, Item 2 of our Quarterly Report on
Form 10-Q, which is calculated for the purposes of compliance with
our debt covenants, and (ii) the Pre-VCP EBITDA and EBITDA metrics
referenced in the section entitled "Compensation Discussion and
Analysis" in our prospectus filed with the SEC pursuant to Rule
424(b) under the Securities Act on February
5, 2015, which are calculated for the purposes of our annual
incentive compensation program and performance-based awards,
respectively.
We define Adjusted EPS as Adjusted Net Income divided by the
applicable share count.
We define Adjusted Capital Expenditures as additions to property
and equipment and capitalized implementation costs during the
periods presented.
We define Free Cash Flow as cash provided by operating
activities less cash used in additions to property and equipment.
We define Adjusted Free Cash Flow as Free Cash Flow plus the cash
flow effect of restructuring and other costs, litigation settlement
and tax payments for certain items, other litigation costs, and
management fees.
These non-GAAP financial measures are key metrics used by
management and our board of directors to monitor our ongoing core
operations because historical results have been significantly
impacted by events that are unrelated to our core operations as a
result of changes to our business and the regulatory environment.
We believe that these non-GAAP financial measures and ratios based
on these financial measures are used by investors, analysts and
other interested parties as measures of financial performance and
to evaluate our ability to service debt obligations, fund capital
expenditures and meet working capital requirements. Adjusted
Capital Expenditures includes cash flows used in investing
activities, for property and equipment, and cash flows used in
operating activities, for capitalized implementation costs. Our
management uses this combined metric in making product investment
decisions and determining development resource requirements. We
also believe that Adjusted Net Income, Adjusted EBITDA, Adjusted
EPS, Adjusted Capital Expenditures, Free Cash Flow and Adjusted
Free Cash Flow assist investors in company-to-company and
period-to-period comparisons by excluding differences caused by
variations in capital structures (affecting interest expense), tax
positions and the impact of depreciation and amortization expense.
In addition, amounts derived from Adjusted EBITDA are a primary
component of certain covenants under our senior secured credit
facilities.
Adjusted Net Income, Adjusted EBITDA, Adjusted EPS, Adjusted
Capital Expenditures, Free Cash Flow, Adjusted Free Cash Flow and
ratios based on these financial measures are not recognized terms
under GAAP. These non-GAAP financial measures and ratios based on
them have important limitations as analytical tools, and should not
be viewed in isolation and do not purport to be alternatives to net
income as indicators of operating performance or cash flows from
operating activities as measures of liquidity. These non-GAAP
financial measures and ratios based on them exclude some, but not
all, items that affect net income or cash flows from operating
activities and these measures may vary among companies. Our use of
these measures has limitations as an analytical tool, and you
should not consider them in isolation or as substitutes for
analysis of our results as reported under GAAP. Some of these
limitations are:
- Although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and Adjusted EBITDA does not reflect cash
requirements for such replacements;
- Adjusted Net Income and Adjusted EBITDA do not reflect changes
in, or cash requirements for, our working capital needs;
- Adjusted EBITDA does not reflect the interest expense or the
cash requirements necessary to service interest or principal
payments on our indebtedness;
- Adjusted EBITDA does not reflect tax payments that may
represent a reduction in cash available to us;
- Free Cash Flow and Adjusted Free Cash Flow do not reflect the
cash requirements necessary to service the principal payments on
our indebtedness;
- Free Cash Flow and Adjusted Free Cash Flow do not reflect
payments related to restructuring, litigation and management fees
which reduced the cash available to us;
- Free Cash Flow and Adjusted Free Cash Flow remove the impact of
accrual-basis accounting on asset accounts and non-debt liability
accounts; and
- Other companies, including companies in our industry, may
calculate these non-GAAP financial measures differently, which
reduces their usefulness as comparative measures.
Tabular
Reconciliations for Non-GAAP Measures
|
(In thousands,
except share amounts; Unaudited)
|
|
Reconciliation of
Net Income (loss) to Adjusted Net Income, Adjusted Net Income from
Continuing Operations per Share, and to Adjusted
EBITDA
|
|
|
|
Three Months
Ended
December
31,
|
|
|
Year Ended
December 31,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Net income (loss)
attributable to common shareholders
|
|
$
|
46,400
|
|
|
$
|
17,275
|
|
|
$
|
57,842
|
|
|
$
|
(137,198)
|
|
Net loss from
discontinued operations, net of tax
|
|
|
(5,734)
|
|
|
|
(36,038)
|
|
|
|
38,918
|
|
|
|
149,697
|
|
Net income
attributable to noncontrolling interests(1)
|
|
|
564
|
|
|
|
728
|
|
|
|
2,732
|
|
|
|
2,863
|
|
Preferred stock
dividends
|
|
|
—
|
|
|
|
9,485
|
|
|
|
11,381
|
|
|
|
36,704
|
|
Income from
continuing operations
|
|
|
41,230
|
|
|
|
(8,550)
|
|
|
|
110,873
|
|
|
|
52,066
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition related
amortization(3a)
|
|
|
22,639
|
|
|
|
33,016
|
|
|
|
99,383
|
|
|
|
132,685
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
—
|
|
|
|
33,538
|
|
|
|
12,181
|
|
Other, net
(5)
|
|
|
63,021
|
|
|
|
(4,038)
|
|
|
|
63,860
|
|
|
|
305
|
|
Restructuring and
other costs (6)
|
|
|
1,636
|
|
|
|
19,231
|
|
|
|
10,470
|
|
|
|
27,921
|
|
Litigation and taxes,
including penalties(7)
|
|
|
2,775
|
|
|
|
6,835
|
|
|
|
14,144
|
|
|
|
18,514
|
|
Stock-based
compensation
|
|
|
6,245
|
|
|
|
2,049
|
|
|
|
20,094
|
|
|
|
3,387
|
|
Management
fees(8)
|
|
|
—
|
|
|
|
1,414
|
|
|
|
23,701
|
|
|
|
8,761
|
|
Tax impact of net
income adjustments(9)
|
|
|
(77,626)
|
|
|
|
(21,145)
|
|
|
|
(143,586)
|
|
|
|
(73,633)
|
|
Adjusted Net Income
from continuing operations
|
|
$
|
59,920
|
|
|
$
|
28,812
|
|
|
$
|
232,477
|
|
|
$
|
182,187
|
|
Adjusted Net Income
from continuing operations per
share
|
|
$
|
0.22
|
|
|
$
|
0.16
|
|
|
$
|
0.94
|
|
|
$
|
0.98
|
|
Weighted-average
shares outstanding adjusted for assumed inclusion of common stock
equivalents
|
|
|
274,064
|
|
|
|
185,436
|
|
|
|
246,747
|
|
|
|
184,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
from continuing operations
|
|
|
59,920
|
|
|
|
28,812
|
|
|
|
232,477
|
|
|
|
182,187
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization of property and equipment(3b)
|
|
|
37,983
|
|
|
|
33,238
|
|
|
|
157,592
|
|
|
|
123,414
|
|
Amortization of
capitalized implementation costs(3c)
|
|
|
8,790
|
|
|
|
8,431
|
|
|
|
35,859
|
|
|
|
34,143
|
|
Amortization of
upfront incentive consideration(4)
|
|
|
12,181
|
|
|
|
7,913
|
|
|
|
45,358
|
|
|
|
36,649
|
|
Interest expense,
net
|
|
|
51,545
|
|
|
|
65,036
|
|
|
|
218,877
|
|
|
|
274,689
|
|
Remaining provision
(benefit) for income taxes
|
|
|
28,255
|
|
|
|
50,587
|
|
|
|
149,865
|
|
|
|
127,672
|
|
Adjusted
EBITDA
|
|
$
|
198,674
|
|
|
$
|
194,017
|
|
|
$
|
840,028
|
|
|
$
|
778,754
|
|
Reconciliation of
Adjusted Capital Expenditures:
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Additions to property
and equipment
|
|
$
|
73,015
|
|
|
$
|
54,833
|
|
|
$
|
227,227
|
|
|
$
|
209,523
|
|
Capitalized
implementation costs
|
|
|
10,209
|
|
|
|
10,128
|
|
|
|
37,811
|
|
|
|
58,814
|
|
Adjusted capital
expenditures
|
|
$
|
83,224
|
|
|
$
|
64,961
|
|
|
$
|
265,038
|
|
|
$
|
268,337
|
|
Reconciliation of
Adjusted Free Cash Flow:
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Cash provided by
operating activities
|
|
$
|
100,855
|
|
|
$
|
(28,642)
|
|
|
$
|
387,659
|
|
|
$
|
228,232
|
|
Cash used in
investing activities
|
|
|
(73,015)
|
|
|
|
(54,833)
|
|
|
|
(258,791)
|
|
|
|
(239,999)
|
|
Cash (used in)
provided by financing activities
|
|
|
(12,656)
|
|
|
|
(12,545)
|
|
|
|
(71,945)
|
|
|
|
262,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Cash provided by
operating activities
|
|
$
|
100,855
|
|
|
$
|
(28,642)
|
|
|
$
|
387,659
|
|
|
$
|
228,232
|
|
Additions to property
and equipment
|
|
|
(73,015)
|
|
|
|
(54,833)
|
|
|
|
(227,227)
|
|
|
|
(209,523)
|
|
Free Cash
Flow
|
|
|
27,840
|
|
|
|
(83,475)
|
|
|
|
160,432
|
|
|
|
18,709
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
other costs (6)(10)
|
|
|
1,727
|
|
|
|
11,069
|
|
|
|
18,353
|
|
|
|
19,758
|
|
Litigation settlement
and tax payments for certain items (7)(11)
|
|
|
7,562
|
|
|
|
104,055
|
|
|
|
76,745
|
|
|
|
115,973
|
|
Other litigation costs
(7)(10)
|
|
|
2,774
|
|
|
|
6,835
|
|
|
|
14,144
|
|
|
|
18,514
|
|
Management fees
(8)(10)
|
|
|
—
|
|
|
|
1,413
|
|
|
|
23,701
|
|
|
|
8,761
|
|
Adjusted Free Cash
Flow
|
|
$
|
39,903
|
|
|
$
|
39,897
|
|
|
$
|
293,375
|
|
|
$
|
181,715
|
|
Reconciliation of
Adjusted Gross Margin and Adjusted EBITDA by
Segment:
|
|
|
|
Three Months Ended
December 31, 2014
|
|
|
|
Travel
Network
|
|
|
Airline
and
Hospitality
Solutions
|
|
|
Eliminations
|
|
|
Corporate
|
|
|
Total
|
|
Operating income
(loss)
|
|
$
|
142,233
|
|
|
$
|
58,773
|
|
|
$
|
—
|
|
|
$
|
(97,298)
|
|
|
$
|
103,708
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
|
25,249
|
|
|
|
17,640
|
|
|
|
(8)
|
|
|
|
72,698
|
|
|
|
115,579
|
|
Restructuring
charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46
|
|
|
|
46
|
|
Cost of revenue
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization(3a)
|
|
|
13,590
|
|
|
|
25,892
|
|
|
|
—
|
|
|
|
5,873
|
|
|
|
45,355
|
|
Amortization of
upfront incentive consideration(4)
|
|
|
12,181
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12,181
|
|
Restructuring and
other costs (6)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
769
|
|
|
|
769
|
|
Stock-based
compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,521
|
|
|
|
2,521
|
|
Adjusted Gross
Margin
|
|
|
193,253
|
|
|
|
102,305
|
|
|
|
(8)
|
|
|
|
(15,391)
|
|
|
|
280,159
|
|
Selling, general and
administrative
|
|
|
(25,249)
|
|
|
|
(17,640)
|
|
|
|
8
|
|
|
|
(72,698)
|
|
|
|
(115,579)
|
|
Joint venture equity
income
|
|
|
2,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,715
|
|
Joint venture
intangible amortization(3a)
|
|
|
801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
801
|
|
Selling, general and
administrative adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization(3)
|
|
|
520
|
|
|
|
296
|
|
|
|
—
|
|
|
|
22,442
|
|
|
|
23,258
|
|
Restructuring and
other costs (6)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
821
|
|
|
|
821
|
|
Litigation and taxes,
including penalties(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,775
|
|
|
|
2,775
|
|
Stock-based
compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,724
|
|
|
|
3,724
|
|
Management
fees(8)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
-
|
|
Adjusted
EBITDA
|
|
$
|
172,040
|
|
|
$
|
84,961
|
|
|
$
|
—
|
|
|
$
|
(58,327)
|
|
|
$
|
198,674
|
|
|
|
|
Three Months Ended
December 31, 2013
|
|
|
|
Travel
Network
|
|
|
Airline
and
Hospitality
Solutions
|
|
|
Eliminations
|
|
|
Corporate
|
|
|
Total
|
|
Operating income
(loss)
|
|
$
|
162,052
|
|
|
$
|
47,495
|
|
|
$
|
—
|
|
|
$
|
(132,135)
|
|
|
$
|
77,413
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
$
|
24,188
|
|
|
$
|
11,754
|
|
|
$
|
(6)
|
|
|
$
|
69,008
|
|
|
|
104,944
|
|
Restructuring
charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,163
|
|
|
|
8,163
|
|
Cost of revenue
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization(3)
|
|
|
14,072
|
|
|
|
19,900
|
|
|
|
—
|
|
|
|
16,965
|
|
|
|
50,937
|
|
Amortization of
upfront incentive consideration(4)
|
|
|
7,913
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,913
|
|
Restructuring and
other costs (6)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,375
|
|
|
|
7,375
|
|
Stock-based
compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
789
|
|
|
|
789
|
|
Adjusted Gross
Margin
|
|
|
208,225
|
|
|
|
79,149
|
|
|
|
(6)
|
|
|
|
(29,835)
|
|
|
|
257,533
|
|
Selling, general and
administrative
|
|
|
(24,188)
|
|
|
|
(11,754)
|
|
|
|
6
|
|
|
|
(69,008)
|
|
|
|
(104,944)
|
|
Joint venture equity
income
|
|
|
4,477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,477
|
|
Joint venture
intangible amortization(3a)
|
|
|
801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
801
|
|
Selling, general and
administrative adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization(3)
|
|
|
625
|
|
|
|
195
|
|
|
|
—
|
|
|
|
22,128
|
|
|
|
22,948
|
|
Restructuring and
other costs (6)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,693
|
|
|
|
3,693
|
|
Litigation and taxes,
including penalties(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,835
|
|
|
|
6,835
|
|
Stock-based
compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,260
|
|
|
|
1,260
|
|
Management
fees(8)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,414
|
|
|
|
1,414
|
|
Adjusted
EBITDA
|
|
$
|
189,940
|
|
|
$
|
67,590
|
|
|
$
|
—
|
|
|
$
|
(63,513)
|
|
|
$
|
194,017
|
|
Reconciliation of
Adjusted Gross Margin and Adjusted EBITDA by
Segment:
|
|
|
|
Fiscal Year Ended
December 31, 2014
|
|
|
|
Travel
Network
|
|
|
Airline
and
Hospitality
Solutions
|
|
|
Eliminations
|
|
|
Corporate
|
|
|
Total
|
|
Operating income
(loss)
|
|
$
|
657,326
|
|
|
$
|
176,730
|
|
|
$
|
—
|
|
|
$
|
(412,711)
|
|
|
$
|
421,345
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
|
102,059
|
|
|
|
56,195
|
|
|
|
(17)
|
|
|
|
309,915
|
|
|
|
468,152
|
|
Restructuring
charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(558)
|
|
|
|
(558)
|
|
Cost of revenue
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization(3)
|
|
|
58,533
|
|
|
|
104,926
|
|
|
|
—
|
|
|
|
34,950
|
|
|
|
198,409
|
|
Amortization of
upfront incentive consideration(4)
|
|
|
45,358
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
45,358
|
|
Restructuring and
other costs (6)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,042
|
|
|
|
6,042
|
|
Stock-based
compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,044
|
|
|
|
8,044
|
|
Adjusted Gross
Margin
|
|
|
863,276
|
|
|
|
337,851
|
|
|
|
(17)
|
|
|
|
(54,318)
|
|
|
|
1,146,792
|
|
Selling, general and
administrative
|
|
|
(102,059)
|
|
|
|
(56,195)
|
|
|
|
17
|
|
|
|
(309,915)
|
|
|
|
(468,152)
|
|
Joint venture equity
income
|
|
|
12,082
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12,082
|
|
Joint venture
intangible amortization(3a)
|
|
|
3,204
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,204
|
|
Selling, general and
administrative adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization(3)
|
|
|
2,174
|
|
|
|
992
|
|
|
|
—
|
|
|
|
88,055
|
|
|
|
91,221
|
|
Restructuring and
other costs (6)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,986
|
|
|
|
4,986
|
|
Litigation and taxes,
including penalties(7)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
14,144
|
|
|
|
14,144
|
|
Stock-based
compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12,050
|
|
|
|
12,050
|
|
Management
fees(8)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
23,701
|
|
|
|
23,701
|
|
Adjusted
EBITDA
|
|
$
|
778,677
|
|
|
$
|
282,648
|
|
|
$
|
—
|
|
|
$
|
(221,297)
|
|
|
$
|
840,028
|
|
|
|
|
|
Fiscal Year Ended
December 31, 2013
|
|
|
|
Travel
Network
|
|
|
Airline
and
Hospitality
Solutions
|
|
|
Eliminations
|
|
|
Corporate
|
|
|
Total
|
|
Operating income
(loss)
|
|
$
|
667,498
|
|
|
$
|
135,755
|
|
|
$
|
—
|
|
|
$
|
(422,323)
|
|
|
$
|
380,930
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
|
106,392
|
|
|
|
51,538
|
|
|
|
(140)
|
|
|
|
271,500
|
|
|
|
429,290
|
|
Restructuring
charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,163
|
|
|
|
8,163
|
|
Cost of revenue
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization(3)
|
|
|
50,254
|
|
|
|
75,093
|
|
|
|
—
|
|
|
|
67,076
|
|
|
|
192,423
|
|
Amortization of
upfront incentive consideration(4)
|
|
|
36,649
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
36,649
|
|
Restructuring and
other costs (6)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11,491
|
|
|
|
11,491
|
|
Stock-based
compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,356
|
|
|
|
1,356
|
|
Adjusted Gross
Margin
|
|
|
860,793
|
|
|
|
262,386
|
|
|
|
(140)
|
|
|
|
(62,737)
|
|
|
|
1,060,302
|
|
Selling, general and
administrative
|
|
|
(106,392)
|
|
|
|
(51,538)
|
|
|
|
140
|
|
|
|
(271,500)
|
|
|
|
(429,290)
|
|
Joint venture equity
income
|
|
|
12,350
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12,350
|
|
Joint venture
intangible amortization(3a)
|
|
|
3,204
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,204
|
|
Selling, general and
administrative adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization(3)
|
|
|
2,253
|
|
|
|
2,227
|
|
|
|
—
|
|
|
|
90,135
|
|
|
|
94,615
|
|
Restructuring and
other costs (6)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,267
|
|
|
|
8,267
|
|
Litigation and taxes,
including penalties(7)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
18,514
|
|
|
|
18,514
|
|
Stock-based
compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,031
|
|
|
|
2,031
|
|
Management
fees(8)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,761
|
|
|
|
8,761
|
|
Adjusted
EBITDA
|
|
$
|
772,208
|
|
|
$
|
213,075
|
|
|
$
|
—
|
|
|
$
|
(206,529)
|
|
|
$
|
778,754
|
|
Non-GAAP
Footnotes
|
|
(1)
|
Net income (loss)
attributable to non-controlling interests represents an adjustment
to include earnings allocated to non-controlling interest held in
(i) Sabre Travel Network Middle East of 40% for all periods
presented and (ii) Sabre Seyahat Dagitim Sistemleri A.S. of
40% beginning in April 2014.
|
(2)
|
Not used
|
(3)
|
Depreciation and
amortization expenses:
|
|
a.
|
Acquisition related
amortization represents amortization of intangible assets from the
take-private transaction in 2007 as well as intangibles associated
with acquisitions since that date and amortization of the excess
basis in our underlying equity in joint ventures.
|
|
b.
|
Depreciation and
amortization of property and equipment includes software developed
for internal use.
|
|
c.
|
Amortization of
capitalized implementation costs represents amortization of upfront
costs to implement new customer contracts under our SaaS and hosted
revenue model.
|
(4)
|
Our Travel Network
business at times provides upfront incentive consideration to
travel agency subscribers at the inception or modification of a
service contract, which are capitalized and amortized to cost of
revenue over an average expected life of the service contract,
generally over three to five years. Such consideration is made with
the objective of increasing the number of clients or to ensure or
improve customer loyalty. Such service contract terms are
established such that the supplier and other fees generated over
the life of the contract will exceed the cost of the incentive
consideration provided upfront. Such service contracts with travel
agency subscribers require that the customer commit to achieving
certain economic objectives and generally have terms requiring
repayment of the upfront incentive consideration if those
objectives are not met.
|
(5)
|
In 2014, other, net
primarily includes a fourth quarter charge of $66 million as a
result of an increase to our Tax Receivable Agreement ("TRA")
liability. The increase in our TRA liability is due to a reduction
in a valuation allowance maintained against our deferred tax
assets. This charge is fully offset by an income tax benefit
recognized in the fourth quarter of 2014 from the reduction in the
valuation allowance which is included in tax impacts of net income
adjustments. In 2013, other, net primarily represents foreign
exchange gains and losses related to the re-measurement of foreign
currency denominated balances included in our consolidated balance
sheets into the relevant functional currency.
|
(6)
|
Restructuring and
other costs represents charges associated with business
restructuring and associated changes implemented which resulted in
severance benefits related to employee terminations, integration
and facility opening or closing costs and other business
reorganization costs.
|
(7)
|
Litigation settlement
and tax payments for certain items represent charges or settlements
associated with airline antitrust litigation.
|
(8)
|
We paid an annual
management fee to TPG Global, LLC ("TPG") and Silver Lake
Management Company ("Silver Lake") in an amount between (i) $5
million and (ii) $7 million, the actual amount of which is
calculated based upon 1% of Adjusted EBITDA, as defined in the
management services agreement (the "MSA"), earned by the company in
such fiscal year up to a maximum of $7 million. In addition, the
MSA provided for the reimbursement of certain costs incurred by TPG
and Silver Lake, which are included in this line item. The MSA was
terminated in connection with our initial public
offering.
|
(9)
|
In 2014, the tax
impact on net income adjustments includes a $66 million benefit
recognized in the fourth quarter of 2014 from the reduction in a
valuation allowance maintained against our deferred tax
assets.
|
(10)
|
The adjustments to
reconcile cash provided by operating activities to Adjusted Free
Cash Flow reflect the amounts expensed in our statements of
operations in the respective periods adjusted for cash and non-cash
portions in instances where material.
|
(11)
|
Includes payment
credits used by American Airlines to pay for purchases of our
technology services during the years ended December 31, 2014 and
2013. The payment credits were provided by us as part of our
litigation settlement with American Airlines. Also includes a $50
million payment to American Airlines made in the third quarter of
2014 in conjunction with the new Airline Solutions contract, which
will be amortized as a reduction to revenue over the contract term.
This payment reduces payment credits originally offered to American
Airlines as a part of the litigation settlement in 2012, contingent
upon the signature of a new reservation agreement, which were
extended to include the combined American Airlines and US Airways
reservation contract. The payment credits would have been utilized
for future billings under the new agreement.
|
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SOURCE Sabre Corporation