SOUTHLAKE, Texas, Oct. 29, 2015 /PRNewswire/ -- Sabre
Corporation (NASDAQ: SABR) today announced financial results for
the quarter ended September 30,
2015.
"In the third quarter we delivered strong financial results
while doing great work to integrate Abacus. Sabre's expanding
global footprint, strong customer bookings growth and new product
innovation are key to driving our performance," said Tom Klein, Sabre president and CEO. "Travel
Network revenue increased 22.1% in the quarter. Our new,
wholly-owned Asia-Pacific business
was a big factor, underpinned with continuing strong booking growth
of 6.3% in North America and 15.5%
in EMEA. In Airline and Hospitality Solutions, revenue and Adjusted
EBITDA increased 4.9% and 4.4%, respectively. Our third quarter
results keep us on track to deliver on our full-year
objectives."
Q3 2015 Financial Summary
Sabre consolidated third quarter revenue increased 16.7% to
$785.0 million, compared to
$672.5 million for the same period
last year.
Income from continuing operations totaled $123.1 million, compared to $41.2 million in the third quarter of 2014. The
increase in income from continuing operations includes gains
totaling $97.7 million related to the
acquisition of Abacus. Consolidated Adjusted EBITDA was
$241.7 million, a 12.1% increase from
$215.5 million in the prior year
third quarter. The increase in consolidated Adjusted EBITDA is the
result of Adjusted EBITDA increases of 19.3% in Travel Network and
4.4% in Airline and Hospitality Solutions, respectively.
For the quarter, Sabre reported income from continuing
operations of $0.44 per share.
Adjusted net income from continuing operations (Adjusted EPS)
increased 26.1% to $0.29 per
share.
Cash flow from operations totaled $121.7
million, compared to $81.1
million in the third quarter of 2014. Third quarter Free
Cash Flow was $46.6 million, compared
to $33.3 million in the year ago
period. Capital expenditures totaled $75.1
million, compared to $47.7
million in the year ago period. Adjusted Capital
Expenditures, which include capitalized implementation costs,
totaled $95.2 million, compared to
$57.2 million in the third quarter of
2014.
Financial
Highlights
(in thousands;
unaudited):
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
2015
|
|
2014
|
%
Change
|
|
2015
|
|
2014
|
%
Change
|
Total Company
(Continuing Operations):
|
|
|
Revenue
|
$
|
785,002
|
|
|
$
|
672,480
|
|
16.7
|
|
|
$
|
2,202,441
|
|
|
$
|
1,985,275
|
|
10.9
|
|
Income from
continuing operations
|
$
|
123,124
|
|
|
$
|
41,229
|
|
198.6
|
|
|
$
|
205,043
|
|
|
$
|
69,643
|
|
194.4
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA*
|
$
|
241,666
|
|
|
$
|
215,542
|
|
12.1
|
|
|
$
|
712,825
|
|
|
$
|
641,353
|
|
11.1
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow from
Operations
|
$
|
121,711
|
|
|
$
|
81,088
|
|
50.1
|
|
|
$
|
389,710
|
|
|
$
|
285,544
|
|
36.5
|
|
Capital
Expenditures
|
$
|
75,108
|
|
|
$
|
47,742
|
|
57.3
|
|
|
$
|
203,071
|
|
|
$
|
154,212
|
|
31.7
|
|
Adjusted Capital
Expenditures*
|
$
|
95,189
|
|
|
$
|
57,236
|
|
66.3
|
|
|
$
|
252,713
|
|
|
$
|
181,303
|
|
39.4
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow*
|
$
|
46,603
|
|
|
$
|
33,346
|
|
39.8
|
|
|
$
|
186,639
|
|
|
$
|
131,332
|
|
42.1
|
|
Adjusted Free Cash
Flow*
|
$
|
67,201
|
|
|
$
|
101,163
|
|
(33.6)
|
|
|
$
|
232,960
|
|
|
$
|
252,018
|
|
(7.6)
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt (total
debt, less cash)
|
$
|
2,997,095
|
|
|
$
|
2,944,461
|
|
|
|
|
|
|
|
Net Debt / LTM
Adjusted EBITDA**
|
3.3x
|
|
|
3.5x
|
|
|
|
|
|
|
|
Airline and
Hospitality Solutions:
|
|
|
Revenue
|
$
|
218,978
|
|
|
$
|
208,684
|
|
4.9
|
|
|
$
|
640,510
|
|
|
$
|
571,975
|
|
12.0
|
|
Passengers
Boarded
|
141,994
|
|
|
136,545
|
|
4.0
|
|
|
407,433
|
|
|
385,611
|
|
5.7
|
|
Operating
Income
|
$
|
52,912
|
|
|
$
|
55,640
|
|
(4.9)
|
|
|
$
|
130,478
|
|
|
$
|
117,957
|
|
10.6
|
|
Adjusted
EBITDA*
|
$
|
85,275
|
|
|
$
|
81,671
|
|
4.4
|
|
|
$
|
237,748
|
|
|
$
|
197,686
|
|
20.3
|
|
Travel
Network:
|
|
|
Revenue
|
$
|
569,190
|
|
|
$
|
466,278
|
|
22.1
|
|
|
$
|
1,571,635
|
|
|
$
|
1,420,341
|
|
10.7
|
|
Air
Bookings
|
107,361
|
|
|
81,047
|
|
32.5
|
|
|
287,226
|
|
|
251,145
|
|
14.4
|
|
Non-air
Bookings
|
15,499
|
|
|
13,806
|
|
12.3
|
|
|
44,197
|
|
|
41,274
|
|
7.1
|
|
Total
Bookings
|
122,860
|
|
|
94,853
|
|
29.5
|
|
|
331,423
|
|
|
292,419
|
|
13.3
|
|
Bookings
Share
|
37.1
|
%
|
|
36.0
|
%
|
|
|
36.5
|
%
|
|
35.7
|
%
|
|
Operating
Income
|
$
|
205,386
|
|
|
$
|
164,979
|
|
24.5
|
|
|
$
|
576,328
|
|
|
$
|
515,093
|
|
11.9
|
|
Adjusted
EBITDA*
|
$
|
231,230
|
|
|
$
|
193,823
|
|
19.3
|
|
|
$
|
669,274
|
|
|
$
|
606,637
|
|
10.3
|
|
|
*indicates non-GAAP
financial measure; see descriptions and reconciliations
below
|
**LTM Adjusted EBITDA
includes Abacus Adjusted EBITDA only for Q3 2015
|
Sabre Airline and Hospitality Solutions
Third quarter 2015 Airline and Hospitality Solutions revenue
increased 4.9% to $219.0 million from
$208.7 million in the prior year
period. Contributing to the rise in revenue was a 4.0% increase in
airline passengers boarded through the SabreSonic reservation
solution and continued momentum in Sabre Hospitality Solutions,
including the implementation of Sabre Hospitality Solutions
products at more than 600 incremental properties.
Sabre Airline and Hospitality Solutions Adjusted EBITDA
increased 4.4% to $85.3 million from
$81.7 million in the prior year
period. Third quarter Adjusted EBITDA margin was 38.9%, compared to
39.1% for the prior year quarter.
Subsequent to the third quarter, Sabre worked with American
Airlines to complete the largest technology integration in the
airline industry's history, making American Airlines the largest
customer in the SabreSonic community.
Sabre Travel Network
On July 1, Sabre completed the
acquisition of Abacus International, the leading global
distribution system (GDS) in the Asia-Pacific region. Sabre previously owned
35% of Abacus. As the largest and fastest growing region in the
travel industry, Asia-Pacific is a
platform for investment and growth. Concurrent with the completion
of the Abacus acquisition, Sabre signed long-term distribution
agreements with the 11 Asian airlines that sold their 65% share in
Abacus to Sabre.
Third quarter Travel Network revenue increased 22.1% to
$569.2 million, compared to
$466.3 million for the same period in
2014. Total bookings increased 29.5% driven by Sabre's now
wholly-owned Asia-Pacific business
and strong growth in all regions except Latin America. Excluding the Abacus
acquisition, global bookings increased 6.5% in the quarter.
Bookings growth in North America
was 6.3% in the quarter. EMEA continues to be Sabre Travel
Network's fastest growing region, with an increase of 15.5% year
over year, while bookings in Latin
America declined 3.9%. Third quarter 2015 Travel Network
Adjusted EBITDA increased 19.3% to $231.2
million.
Business Outlook and Financial Guidance
Reflecting strong year-to-date results and continued momentum,
Sabre narrowed full-year revenue, Adjusted EBITDA, Adjusted net
income and Adjusted EPS guidance.
Sabre expects full-year revenue of between $2.955 billion and $2.975 billion. 2015 Adjusted
EBITDA is expected to be between $935
million and $943 million.
In Airline and Hospitality Solutions, Sabre continues to expect
2015 revenue growth toward the higher end of its 9% to 11% range.
Full-year passengers boarded are expected to increase at or above
10% in 2015, including the added volume from American Airlines.
In Travel Network, Sabre continues to expect 2015 revenue growth
of 13% or more, with full-year bookings growth of approximately
17%.
Sabre's full-year Adjusted net income is expected to be between
$293 million to $303 million, and
Adjusted EPS is forecast to be in a range of $1.06 to $1.10. Free Cash Flow and Adjusted Free
Cash Flow are expected to be $240
million and more than $290
million, respectively.
In summary, for the full-year 2015, Sabre's guidance for results
from continuing operations is as follows:
Full-Year 2015
Guidance
|
|
($ millions,
except for EPS)
|
Revenue
|
$2,955 -
$2,975
|
|
|
Adjusted
EBITDA
|
$935 -
$943
|
|
|
Adjusted Net
Income
|
$293 -
$303
|
|
|
Adjusted
EPS
|
$1.06 -
$1.10
|
Conference Call
Sabre will conduct its third quarter 2015 investor conference
call today at 9:00 a.m. ET. The live
webcast and accompanying slide presentation can be accessed via the
Sabre Investor Relations website at investors.sabre.com. A replay
of the event will be available on the website for at least 90 days
following the event.
About Sabre Corporation
Sabre Corporation is the leading technology provider to the
global travel industry. Sabre's software, data, mobile and
distribution solutions are used by hundreds of airlines and
thousands of hotel properties to manage critical operations,
including passenger and guest reservations, revenue management,
flight, network and crew management. Sabre also operates a leading
global travel marketplace, which processes more than $110 billion of estimated travel spend annually
by connecting travel buyers and suppliers. Headquartered in
Southlake, Texas, USA, Sabre
serves customers in more than 160 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
"will," "outlook," "guidance," "expect," "on track," "forecast,"
"momentum," "may," "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, the financial and business effects
of acquisitions, including integration of these acquisitions,
adverse global and regional economic and political conditions,
including, but not limited to, conditions in Venezuela and Russia, exposure to pricing pressure in the
Travel Network business, the implementation and effects of new
agreements, dependence on maintaining and renewing contracts with
customers and other counterparties, dependence on relationships
with travel buyers, changes affecting travel supplier customers,
travel suppliers' usage of alternative distribution models, risks
arising from global operations, 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
"Forward-Looking Statements" sections in our Quarterly Reports on
Form 10-Q and our Annual Report on Form 10-K filed with the SEC.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future events, outlook, guidance, results, actions, levels of
activity, performance or achievements. Readers are cautioned not to
place undue reliance on these forward-looking statements. Unless
required by law, Sabre undertakes no obligation to publicly update
or revise any forward-looking statements to reflect circumstances
or events after the date they are made.
SABR-F
Contacts:
|
|
|
Media
|
Investors
|
Daniel
Duarte
|
Barry
Sievert
|
214-236-9473
|
682-605-0214
|
daniel.duarte@sabre.com
|
barry.sievert@sabre.com
|
SABRE
CORPORATION
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenue
|
$
|
785,002
|
|
|
$
|
672,480
|
|
|
$
|
2,202,441
|
|
|
$
|
1,985,275
|
|
Cost of revenue
(1) (2)
|
509,906
|
|
|
441,052
|
|
|
1,440,030
|
|
|
1,315,669
|
|
Selling, general and
administrative (2)
|
166,324
|
|
|
113,581
|
|
|
412,042
|
|
|
351,970
|
|
Operating
income
|
108,772
|
|
|
117,847
|
|
|
350,369
|
|
|
317,636
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(40,581)
|
|
|
(50,153)
|
|
|
(129,643)
|
|
|
(167,332)
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
(33,235)
|
|
|
(33,538)
|
|
Joint venture equity
income
|
372
|
|
|
2,867
|
|
|
14,198
|
|
|
9,367
|
|
Other, net
|
92,568
|
|
|
1,124
|
|
|
88,320
|
|
|
(839)
|
|
Total other income
(expense), net
|
52,359
|
|
|
(46,162)
|
|
|
(60,360)
|
|
|
(192,342)
|
|
Income from
continuing operations before income taxes
|
161,131
|
|
|
71,685
|
|
|
290,009
|
|
|
125,294
|
|
Provision for income
taxes
|
38,007
|
|
|
30,456
|
|
|
84,966
|
|
|
55,651
|
|
Income from
continuing operations
|
123,124
|
|
|
41,229
|
|
|
205,043
|
|
|
69,643
|
|
Income (loss) from
discontinued operations, net of tax
|
53,892
|
|
|
(3,946)
|
|
|
213,499
|
|
|
(44,652)
|
|
Net income
|
177,016
|
|
|
37,283
|
|
|
418,542
|
|
|
24,991
|
|
Net income
attributable to noncontrolling interests
|
676
|
|
|
720
|
|
|
2,501
|
|
|
2,168
|
|
Net income
attributable to Sabre Corporation
|
176,340
|
|
|
36,563
|
|
|
416,041
|
|
|
22,823
|
|
Preferred stock
dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
11,381
|
|
Net income
attributable to common stockholders
|
$
|
176,340
|
|
|
$
|
36,563
|
|
|
$
|
416,041
|
|
|
$
|
11,442
|
|
|
|
|
|
|
|
|
|
Basic net income per
share attributable to common
stockholders:
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
0.44
|
|
|
$
|
0.15
|
|
|
$
|
0.74
|
|
|
$
|
0.24
|
|
Income (loss) from
discontinued operations
|
0.20
|
|
|
(0.01)
|
|
|
0.78
|
|
|
(0.19)
|
|
Net income per common
share
|
$
|
0.64
|
|
|
$
|
0.14
|
|
|
$
|
1.53
|
|
|
$
|
0.05
|
|
Diluted net income
per share attributable to common
stockholders:
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
0.44
|
|
|
$
|
0.15
|
|
|
$
|
0.73
|
|
|
$
|
0.24
|
|
Income (loss) from
discontinued operations
|
0.19
|
|
|
(0.01)
|
|
|
0.77
|
|
|
(0.19)
|
|
Net income per common
share
|
$
|
0.63
|
|
|
$
|
0.13
|
|
|
$
|
1.49
|
|
|
$
|
0.05
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
275,471
|
|
|
264,768
|
|
|
272,224
|
|
|
229,405
|
|
Diluted
|
281,395
|
|
|
273,330
|
|
|
278,848
|
|
|
237,994
|
|
|
|
|
|
|
|
|
|
Dividends per common
share
|
$
|
0.09
|
|
|
$
|
—
|
|
|
$
|
0.27
|
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
(1) Includes
amortization of upfront incentive consideration
|
$
|
9,525
|
|
|
$
|
10,388
|
|
|
$
|
31,575
|
|
|
$
|
33,177
|
|
(2) Includes
stock-based compensation as follows:
|
|
|
|
|
|
|
|
Cost of
revenue
|
$
|
2,853
|
|
|
$
|
2,165
|
|
|
$
|
9,288
|
|
|
$
|
5,523
|
|
Selling, general and
administrative
|
4,351
|
|
|
3,200
|
|
|
14,040
|
|
|
8,326
|
|
SABRE
CORPORATION
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands,
except share amounts)
|
(Unaudited)
|
|
|
September 30,
2015
|
|
December 31,
2014
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
132,695
|
|
|
$
|
155,679
|
|
Accounts receivable,
net
|
430,362
|
|
|
362,911
|
|
Prepaid expenses and
other current assets
|
27,966
|
|
|
34,841
|
|
Current deferred
income taxes
|
148,190
|
|
|
182,277
|
|
Other receivables,
net
|
50,733
|
|
|
29,893
|
|
Assets held for
sale
|
—
|
|
|
112,558
|
|
Total current
assets
|
789,946
|
|
|
878,159
|
|
Property and
equipment, net of accumulated depreciation of $947,016 and
$792,161
|
583,795
|
|
|
551,276
|
|
Investments in joint
ventures
|
24,024
|
|
|
145,320
|
|
Goodwill
|
2,425,963
|
|
|
2,153,499
|
|
Acquired customer
relationships, net of accumulated amortization of $588,059 and
$535,334
|
447,904
|
|
|
170,629
|
|
Other intangible
assets, net of accumulated amortization of $550,146 and
$527,921
|
424,333
|
|
|
309,357
|
|
Other assets,
net
|
635,755
|
|
|
509,764
|
|
Total
assets
|
$
|
5,331,720
|
|
|
$
|
4,718,004
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
$
|
149,976
|
|
|
$
|
117,855
|
|
Accrued compensation
and related benefits
|
91,916
|
|
|
83,828
|
|
Accrued subscriber
incentives
|
206,023
|
|
|
145,581
|
|
Deferred
revenues
|
178,965
|
|
|
167,827
|
|
Litigation settlement
liability and related deferred revenue
|
40,140
|
|
|
73,252
|
|
Other accrued
liabilities
|
190,854
|
|
|
189,612
|
|
Current portion of
debt
|
420,244
|
|
|
22,435
|
|
Liabilities held for
sale
|
—
|
|
|
96,544
|
|
Total current
liabilities
|
1,278,118
|
|
|
896,934
|
|
Deferred income
taxes
|
253,883
|
|
|
61,577
|
|
Other noncurrent
liabilities
|
639,894
|
|
|
613,710
|
|
Long-term
debt
|
2,701,085
|
|
|
3,061,400
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
Common
Stock: $0.01 par value; 450,000,000 authorized shares; 277,922,158
and 268,237,547 shares issued, 277,204,130 and 267,800,161 shares
outstanding at September 30, 2015 and December 31, 2014,
respectively
|
2,779
|
|
|
2,682
|
|
Additional paid-in
capital
|
2,001,436
|
|
|
1,931,796
|
|
Treasury Stock, at cost, 718,028 and 437,386 shares at September
30, 2015 and December 31, 2014, respectively
|
(11,528)
|
|
|
(5,297)
|
|
Retained
deficit
|
(1,433,129)
|
|
|
(1,775,616)
|
|
Accumulated other
comprehensive loss
|
(101,537)
|
|
|
(69,803)
|
|
Noncontrolling
interest
|
719
|
|
|
621
|
|
Total stockholders'
equity
|
458,740
|
|
|
84,383
|
|
Total liabilities and
stockholders' equity
|
$
|
5,331,720
|
|
|
$
|
4,718,004
|
|
SABRE
CORPORATION
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
Operating
Activities
|
|
|
|
Net income
|
$
|
418,542
|
|
|
$
|
24,991
|
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
254,854
|
|
|
221,016
|
|
Amortization of
upfront incentive consideration
|
31,575
|
|
|
33,177
|
|
Litigation-related
(credits) charges
|
(49,194)
|
|
|
(6,132)
|
|
Stock-based
compensation expense
|
23,328
|
|
|
13,849
|
|
Allowance for
doubtful accounts
|
6,745
|
|
|
5,916
|
|
Deferred income
taxes
|
63,402
|
|
|
34,952
|
|
Joint venture equity
income
|
(14,198)
|
|
|
(9,367)
|
|
Dividends received
from joint venture investments
|
28,700
|
|
|
2,205
|
|
Amortization of debt
issuance costs
|
4,893
|
|
|
4,779
|
|
Gain on remeasurement
of previously-held joint venture interest
|
(86,082)
|
|
|
—
|
|
Loss on
extinguishment of debt
|
33,235
|
|
|
33,538
|
|
Other
|
10,730
|
|
|
1,880
|
|
(Income) loss from
discontinued operations
|
(213,499)
|
|
|
44,652
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts and other
receivables
|
(64,296)
|
|
|
(72,559)
|
|
Prepaid expenses and
other current assets
|
5,249
|
|
|
3,721
|
|
Capitalized
implementation costs
|
(49,642)
|
|
|
(27,091)
|
|
Upfront incentive
consideration
|
(46,409)
|
|
|
(31,633)
|
|
Other
assets
|
(55,439)
|
|
|
(60,526)
|
|
Accrued compensation
and related benefits
|
10,294
|
|
|
(5,752)
|
|
Accounts payable and
other accrued liabilities
|
60,554
|
|
|
29,654
|
|
Deferred revenue
including upfront solution fees
|
16,368
|
|
|
44,274
|
|
Cash provided by
operating activities
|
389,710
|
|
|
285,544
|
|
Investing
Activities
|
|
|
|
|
|
Additions to property
and equipment
|
(203,071)
|
|
|
(154,212)
|
|
Acquisitions, net of
cash acquired
|
(441,582)
|
|
|
(31,799)
|
|
Other investing
activities
|
148
|
|
|
234
|
|
Cash used in
investing activities
|
(644,505)
|
|
|
(185,777)
|
|
Financing
Activities
|
|
|
|
|
|
Proceeds of
borrowings from lenders
|
752,000
|
|
|
148,307
|
|
Payments on
borrowings from lenders
|
(719,507)
|
|
|
(797,028)
|
|
Debt prepayment fees
and issuance costs
|
(40,214)
|
|
|
(30,490)
|
|
Acquisition-related
contingent consideration paid
|
—
|
|
|
(27,000)
|
|
Proceeds from
issuance of common stock in initial public offering, net
|
—
|
|
|
672,137
|
|
Net proceeds on the
settlement of equity-based awards
|
40,045
|
|
|
2,376
|
|
Cash dividends paid
to common stockholders
|
(73,554)
|
|
|
(23,831)
|
|
Other financing
activities
|
1,975
|
|
|
(3,755)
|
|
Cash used in
financing activities
|
(39,255)
|
|
|
(59,284)
|
|
Cash Flows from
Discontinued Operations
|
|
|
|
|
|
Cash used in
operating activities
|
(908)
|
|
|
(189,802)
|
|
Cash provided by
(used in) investing activities
|
278,834
|
|
|
(1,904)
|
|
Cash provided by
(used in) discontinued operations
|
277,926
|
|
|
(191,706)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(6,860)
|
|
|
734
|
|
Decrease in cash and
cash equivalents
|
(22,984)
|
|
|
(150,489)
|
|
Cash and cash
equivalents at beginning of period
|
155,679
|
|
|
308,236
|
|
Cash and cash
equivalents at end of period
|
$
|
132,695
|
|
|
$
|
157,747
|
|
Non-GAAP Financial Measures
We have included both financial measures compiled in accordance
with GAAP and certain non-GAAP financial measures in this earnings
release, including Adjusted Gross Margin, Adjusted Net Income,
Adjusted EBITDA, Adjusted Net Income from continuing operations
(Adjusted EPS), Adjusted Capital Expenditures, Free Cash Flow,
Adjusted Free Cash Flow and ratios based on these financial
measures.
We define Adjusted Gross Margin as operating income adjusted for
selling, general and administrative expenses, amortization of
upfront incentive consideration, and the cost of revenue portion of
depreciation and amortization, restructuring and other costs, and
stock-based compensation.
We define Adjusted Net Income as income from continuing
operations adjusted for acquisition-related amortization, loss on
extinguishment of debt, other, net, restructuring and other costs,
acquisition-related costs, litigation costs, stock-based
compensation, management fees and the 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 for income taxes.
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, acquisition-related
costs, litigation settlement, 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 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 include 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 Gross Margin, Adjusted
Net Income, Adjusted EBITDA, Adjusted EPS and Adjusted Capital
Expenditures 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 Gross Margin, 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:
- these non-GAAP financial measures exclude certain
recurring, non-cash charges such as stock-based compensation
expense and amortization of acquired intangible assets;
- although depreciation and amortization are non-cash
charges, the assets being depreciated and amortized may have to be
replaced in the future, and Adjusted Gross Margin and Adjusted
EBITDA do 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, acquisition-related
and management fees;
- 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 Adjusted Gross Margin, Adjusted Net Income, Adjusted
EBITDA, Adjusted EPS, Adjusted Capital Expenditures, Free Cash Flow
or Adjusted Free Cash Flow differently, which reduces their
usefulness as comparative measures.
Tabular
Reconciliations for Non-GAAP Measures
|
(In thousands,
except per share amounts; unaudited)
|
|
Reconciliation of
Net income to Adjusted Net Income from continuing operations and
Adjusted EBITDA:
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net income
attributable to common stockholders
|
$
|
176,340
|
|
|
$
|
36,563
|
|
|
$
|
416,041
|
|
|
$
|
11,442
|
|
(Income) loss from
discontinued operations, net of tax
|
(53,892)
|
|
|
3,946
|
|
|
(213,499)
|
|
|
44,652
|
|
Net income
attributable to noncontrolling interests(1)
|
676
|
|
|
720
|
|
|
2,501
|
|
|
2,168
|
|
Preferred stock
dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
11,381
|
|
Income from
continuing operations
|
123,124
|
|
|
41,229
|
|
|
205,043
|
|
|
69,643
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
amortization(2a)
|
31,384
|
|
|
21,899
|
|
|
76,270
|
|
|
76,741
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
33,235
|
|
|
33,538
|
|
Other,
net(4)
|
(92,568)
|
|
|
(1,124)
|
|
|
(88,320)
|
|
|
839
|
|
Restructuring and
other costs(5)
|
8,888
|
|
|
5,150
|
|
|
8,888
|
|
|
8,834
|
|
Acquisition-related
costs(6)
|
9,350
|
|
|
—
|
|
|
13,214
|
|
|
—
|
|
Litigation
costs(7)
|
9,318
|
|
|
4,252
|
|
|
14,797
|
|
|
11,370
|
|
Stock-based
compensation
|
7,204
|
|
|
5,365
|
|
|
23,328
|
|
|
13,849
|
|
Management
fees(8)
|
—
|
|
|
193
|
|
|
—
|
|
|
23,701
|
|
Tax impact of net
income adjustments
|
(15,806)
|
|
|
(14,035)
|
|
|
(54,573)
|
|
|
(65,959)
|
|
Adjusted Net Income
from continuing operations
|
$
|
80,894
|
|
|
$
|
62,929
|
|
|
$
|
231,882
|
|
|
$
|
172,556
|
|
Adjusted Net Income
from continuing operations
per share
|
$
|
0.29
|
|
|
$
|
0.23
|
|
|
$
|
0.83
|
|
|
$
|
0.73
|
|
Diluted
weighted-average common shares outstanding
|
281,395
|
|
|
273,330
|
|
|
278,848
|
|
|
237,994
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
from continuing operations
|
$
|
80,894
|
|
|
$
|
62,929
|
|
|
$
|
231,882
|
|
|
$
|
172,556
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization of property
and equipment(2b)
|
49,247
|
|
|
38,498
|
|
|
157,154
|
|
|
119,608
|
|
Amortization of
capitalized implementation costs(2c)
|
7,606
|
|
|
9,083
|
|
|
23,032
|
|
|
27,070
|
|
Amortization of
upfront incentive consideration(3)
|
9,525
|
|
|
10,388
|
|
|
31,575
|
|
|
33,177
|
|
Interest expense,
net
|
40,581
|
|
|
50,153
|
|
|
129,643
|
|
|
167,332
|
|
Remaining provision
for income taxes
|
53,813
|
|
|
44,491
|
|
|
139,539
|
|
|
121,610
|
|
Adjusted
EBITDA
|
$
|
241,666
|
|
|
$
|
215,542
|
|
|
$
|
712,825
|
|
|
$
|
641,353
|
|
Reconciliation of
Adjusted Capital Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Additions to property
and equipment
|
$
|
75,108
|
|
|
$
|
47,742
|
|
|
$
|
203,071
|
|
|
$
|
154,212
|
|
Capitalized
implementation costs
|
20,081
|
|
|
9,494
|
|
|
49,642
|
|
|
27,091
|
|
Adjusted Capital
Expenditures
|
$
|
95,189
|
|
|
$
|
57,236
|
|
|
$
|
252,713
|
|
|
$
|
181,303
|
|
|
|
Reconciliation of
Adjusted Free Cash Flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Cash provided by
operating activities
|
$
|
121,711
|
|
|
$
|
81,088
|
|
|
$
|
389,710
|
|
|
$
|
285,544
|
|
Cash used in
investing activities
|
(516,690)
|
|
|
(79,542)
|
|
|
(644,505)
|
|
|
(185,777)
|
|
Cash used in
financing activities
|
(73,488)
|
|
|
(55,705)
|
|
|
(39,255)
|
|
|
(59,284)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Cash provided by
operating activities
|
$
|
121,711
|
|
|
$
|
81,088
|
|
|
$
|
389,710
|
|
|
$
|
285,544
|
|
Additions to property
and equipment
|
(75,108)
|
|
|
(47,742)
|
|
|
(203,071)
|
|
|
(154,212)
|
|
Free Cash
Flow
|
46,603
|
|
|
33,346
|
|
|
186,639
|
|
|
131,332
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring and
other costs(5)(9)
|
638
|
|
|
6,030
|
|
|
918
|
|
|
16,625
|
|
Acquisition-related
costs(6)(9)
|
9,350
|
|
|
—
|
|
|
13,214
|
|
|
—
|
|
Litigation
settlement(7)(10)
|
7,192
|
|
|
57,535
|
|
|
23,292
|
|
|
69,183
|
|
Other litigation
costs(7)(9)
|
3,418
|
|
|
4,252
|
|
|
8,897
|
|
|
11,370
|
|
Management
fees(8)(9)
|
—
|
|
|
—
|
|
|
—
|
|
|
23,508
|
|
Adjusted Free Cash
Flow
|
$
|
67,201
|
|
|
$
|
101,163
|
|
|
$
|
232,960
|
|
|
$
|
252,018
|
|
Reconciliation of
Operating Income (loss) to Adjusted Gross Margin and Adjusted
EBITDA by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2015
|
|
Travel
Network
|
|
Airline and
Hospitality
Solutions
|
|
Corporate
|
|
Total
|
Operating income
(loss)
|
$
|
205,386
|
|
|
$
|
52,912
|
|
|
$
|
(149,526)
|
|
|
$
|
108,772
|
|
Add back:
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
34,258
|
|
|
14,287
|
|
|
117,779
|
|
|
166,324
|
|
Cost of revenue
adjustments:
|
|
|
|
|
|
|
|
Depreciation and
amortization(2)
|
14,563
|
|
|
32,174
|
|
|
12,597
|
|
|
59,334
|
|
Amortization of
upfront incentive consideration(3)
|
9,525
|
|
|
—
|
|
|
—
|
|
|
9,525
|
|
Stock-based
compensation
|
—
|
|
|
—
|
|
|
2,853
|
|
|
2,853
|
|
Adjusted Gross
Margin
|
263,732
|
|
|
99,373
|
|
|
(16,297)
|
|
|
346,808
|
|
Selling, general and
administrative
|
(34,258)
|
|
|
(14,287)
|
|
|
(117,779)
|
|
|
(166,324)
|
|
Joint venture equity
income
|
372
|
|
|
—
|
|
|
—
|
|
|
372
|
|
Joint venture
intangible amortization(2a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Selling, general and
administrative adjustments:
|
|
|
|
|
|
|
|
Depreciation and
amortization(2)
|
1,384
|
|
|
189
|
|
|
27,330
|
|
|
28,903
|
|
Restructuring and
other costs(5)
|
—
|
|
|
—
|
|
|
8,888
|
|
|
8,888
|
|
Acquisition-related
costs(6)
|
—
|
|
|
—
|
|
|
9,350
|
|
|
9,350
|
|
Litigation
costs(7)
|
—
|
|
|
—
|
|
|
9,318
|
|
|
9,318
|
|
Stock-based
compensation
|
—
|
|
|
—
|
|
|
4,351
|
|
|
4,351
|
|
Adjusted
EBITDA
|
$
|
231,230
|
|
|
$
|
85,275
|
|
|
$
|
(74,839)
|
|
|
$
|
241,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2014
|
|
Travel
Network
|
|
Airline and
Hospitality
Solutions
|
|
Corporate
|
|
Total
|
Operating income
(loss)
|
$
|
164,979
|
|
|
$
|
55,640
|
|
|
$
|
(102,772)
|
|
|
$
|
117,847
|
|
Add back:
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
26,583
|
|
|
13,236
|
|
|
73,762
|
|
|
113,581
|
|
Cost of revenue
adjustments:
|
|
|
|
|
|
|
|
Depreciation and
amortization(2)
|
14,264
|
|
|
25,871
|
|
|
6,013
|
|
|
46,148
|
|
Amortization of
upfront incentive consideration(3)
|
10,388
|
|
|
—
|
|
|
—
|
|
|
10,388
|
|
Restructuring and
other costs(5)
|
—
|
|
|
—
|
|
|
2,694
|
|
|
2,694
|
|
Stock-based
compensation
|
—
|
|
|
—
|
|
|
2,165
|
|
|
2,165
|
|
Adjusted Gross
Margin
|
216,214
|
|
|
94,747
|
|
|
(18,138)
|
|
|
292,823
|
|
Selling, general and
administrative
|
(26,583)
|
|
|
(13,236)
|
|
|
(73,762)
|
|
|
(113,581)
|
|
Joint venture equity
income
|
2,867
|
|
|
—
|
|
|
—
|
|
|
2,867
|
|
Joint venture
intangible amortization(2a)
|
801
|
|
|
—
|
|
|
—
|
|
|
801
|
|
Selling, general and
administrative adjustments:
|
|
|
|
|
|
|
|
Depreciation and
amortization(2)
|
524
|
|
|
160
|
|
|
21,847
|
|
|
22,531
|
|
Restructuring and
other costs(5)
|
—
|
|
|
—
|
|
|
2,456
|
|
|
2,456
|
|
Litigation
costs(7)
|
—
|
|
|
—
|
|
|
4,252
|
|
|
4,252
|
|
Stock-based
compensation
|
—
|
|
|
—
|
|
|
3,200
|
|
|
3,200
|
|
Management
fees(8)
|
—
|
|
|
—
|
|
|
193
|
|
|
193
|
|
Adjusted
EBITDA
|
$
|
193,823
|
|
|
$
|
81,671
|
|
|
$
|
(59,952)
|
|
|
$
|
215,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2015
|
|
Travel
Network
|
|
Airline and
Hospitality
Solutions
|
|
Corporate
|
|
Total
|
Operating income
(loss)
|
$
|
576,328
|
|
|
$
|
130,478
|
|
|
$
|
(356,437)
|
|
|
$
|
350,369
|
|
Add back:
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
82,742
|
|
|
47,302
|
|
|
281,998
|
|
|
412,042
|
|
Cost of revenue
adjustments:
|
|
|
|
|
|
|
|
Depreciation and
amortization(2)
|
43,133
|
|
|
106,574
|
|
|
27,373
|
|
|
177,080
|
|
Amortization of
upfront incentive consideration(3)
|
31,575
|
|
|
—
|
|
|
—
|
|
|
31,575
|
|
Stock-based
compensation
|
—
|
|
|
—
|
|
|
9,288
|
|
|
9,288
|
|
Adjusted Gross
Margin
|
733,778
|
|
|
284,354
|
|
|
(37,778)
|
|
|
980,354
|
|
Selling, general and
administrative
|
(82,742)
|
|
|
(47,302)
|
|
|
(281,998)
|
|
|
(412,042)
|
|
Joint venture equity
income
|
14,198
|
|
|
—
|
|
|
—
|
|
|
14,198
|
|
Joint venture
intangible amortization(2a)
|
1,602
|
|
|
—
|
|
|
—
|
|
|
1,602
|
|
Selling, general and
administrative adjustments:
|
|
|
|
|
|
|
|
Depreciation and
amortization(2)
|
2,438
|
|
|
696
|
|
|
74,640
|
|
|
77,774
|
|
Restructuring and
other costs(5)
|
—
|
|
|
—
|
|
|
8,888
|
|
|
8,888
|
|
Acquisition-related
costs(6)
|
—
|
|
|
—
|
|
|
13,214
|
|
|
13,214
|
|
Litigation
costs(7)
|
—
|
|
|
—
|
|
|
14,797
|
|
|
14,797
|
|
Stock-based
compensation
|
—
|
|
|
—
|
|
|
14,040
|
|
|
14,040
|
|
Adjusted
EBITDA
|
$
|
669,274
|
|
|
$
|
237,748
|
|
|
$
|
(194,197)
|
|
|
$
|
712,825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2014
|
|
Travel
Network
|
|
Airline and
Hospitality
Solutions
|
|
Corporate
|
|
Total
|
Operating income
(loss)
|
$
|
515,093
|
|
|
$
|
117,957
|
|
|
$
|
(315,414)
|
|
|
$
|
317,636
|
|
Add back:
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
76,810
|
|
|
38,555
|
|
|
236,605
|
|
|
351,970
|
|
Cost of revenue
adjustments:
|
|
|
|
|
|
|
|
Depreciation and
amortization(2)
|
44,943
|
|
|
79,034
|
|
|
29,095
|
|
|
153,072
|
|
Amortization of
upfront incentive consideration(3)
|
33,177
|
|
|
—
|
|
|
—
|
|
|
33,177
|
|
Restructuring and
other costs(5)
|
—
|
|
|
—
|
|
|
5,273
|
|
|
5,273
|
|
Stock-based
compensation
|
—
|
|
|
—
|
|
|
5,523
|
|
|
5,523
|
|
Adjusted Gross
Margin
|
670,023
|
|
|
235,546
|
|
|
(38,918)
|
|
|
866,651
|
|
Selling, general and
administrative
|
(76,810)
|
|
|
(38,555)
|
|
|
(236,605)
|
|
|
(351,970)
|
|
Joint venture equity
income
|
9,367
|
|
|
—
|
|
|
—
|
|
|
9,367
|
|
Joint venture
intangible amortization(2a)
|
2,403
|
|
|
—
|
|
|
—
|
|
|
2,403
|
|
Selling, general and
administrative adjustments:
|
|
|
|
|
|
|
|
Depreciation and
amortization(2)
|
1,654
|
|
|
695
|
|
|
65,595
|
|
|
67,944
|
|
Restructuring and
other costs(5)
|
—
|
|
|
—
|
|
|
3,561
|
|
|
3,561
|
|
Litigation
costs(7)
|
—
|
|
|
—
|
|
|
11,370
|
|
|
11,370
|
|
Stock-based
compensation
|
—
|
|
|
—
|
|
|
8,326
|
|
|
8,326
|
|
Management
fees(8)
|
—
|
|
|
—
|
|
|
23,701
|
|
|
23,701
|
|
Adjusted
EBITDA
|
$
|
606,637
|
|
|
$
|
197,686
|
|
|
$
|
(162,970)
|
|
|
$
|
641,353
|
|
Non-GAAP Footnotes
|
|
(1)
|
Net Income
attributable to noncontrolling interests represents an adjustment
to include earnings allocated to noncontrolling interests held in
Sabre Travel Network Middle East of 40% for all periods presented
and in Sabre Seyahat Dagitim Sistemleri A.S. of 40% beginning in
April 2014 for the three and nine months ended September 30, 2015
and 2014.
|
|
|
(2)
|
Depreciation and
amortization expenses:
|
|
|
|
a.
|
Acquisition-related
amortization represents amortization of intangible assets from the
take-private transaction in 2007 as well as intangibles associated
with acquisitions since that date 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.
|
|
|
(3)
|
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.
|
|
|
(4)
|
The three and nine
month periods ending September 30, 2015 include a gain of $86
million associated with the remeasurement of our previously-held
35% investment in Abacus International Pte Ltd ("AIPL") to its fair
value and a gain of $12 million related to the settlement of
pre-existing agreements between us and AIPL. All periods presented
include foreign exchange gains and losses related to the
remeasurement of foreign currency denominated balances included in
our consolidated balance sheets into the relevant functional
currency.
|
|
|
(5)
|
Restructuring and
other costs represent 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.
|
|
|
(6)
|
Acquisition-related
costs represent fees and expenses incurred associated with the
acquisition of Abacus.
|
|
|
(7)
|
Litigation costs
represent charges associated with antitrust litigation.
|
|
|
(8)
|
We paid an annual
management fee, pursuant to a Management Services Agreement
("MSA"), 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 MSA, earned by the
company in such fiscal year up to a maximum of $7 million. In
addition, we paid a $21 million fee, in the aggregate, to TPG and
Silver Lake at the closing of our initial public offering in April
of 2014. The MSA was terminated thereafter.
|
|
|
(9)
|
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.
|
|
|
(10)
|
Includes payment
credits used by American Airlines to pay for purchases of our
technology services. The payment credits were provided by us as
part of our litigation settlement with American
Airlines.
|
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SOURCE Sabre Corporation