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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Sabre Corporation | NASDAQ:SABR | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.065 | 2.08% | 3.195 | 3.19 | 3.20 | 3.20 | 3.13 | 3.13 | 939,969 | 17:43:07 |
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FORM 10-K
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Delaware
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001-36422
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20-8647322
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(State or other jurisdiction
of incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer
Identification No.)
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3150 Sabre Drive
Southlake, TX 76092
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(Address, including zip code, of principal executive offices)
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(682) 605-1000
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(Registrant's telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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Common Stock, $0.01 par value
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The NASDAQ Stock Market LLC
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(Title of class)
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(Name of exchange on which registered)
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Securities registered pursuant to Section 12(g) of the Act:
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None
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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ITEM 1.
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BUSINESS
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•
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Commitment to develop innovative technology products through investment of significant resources in solutions that address key customer needs which include retailing solutions, mobile capabilities, data analytics and business intelligence and workflow optimization.
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•
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Geographic expansion beyond our traditional strengths by seeking to deepen our presence in high-growth geographies in Europe, including high-growth APAC, Eastern European markets and Latin America.
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•
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Pursuit of new customers and marketplace content through seeking to actively add new travel supplier content to Travel Network and continuing to pursue new customers for our Airline and Hospitality Solutions business.
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Strengthen relationships with existing customers, including promoting the adoption of our products within and across our existing customers.
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ITEM 1A.
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RISK FACTORS
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•
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general and local economic conditions;
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financial instability of travel suppliers and the impact of any fundamental corporate changes to such travel suppliers, such as airline bankruptcies or consolidations, on the cost and availability of travel content;
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factors that affect demand for travel such as outbreaks of contagious diseases, including Zika, Ebola and the MERS virus, increases in fuel prices, changing attitudes towards the environmental costs of travel and safety concerns;
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political events like acts or threats of terrorism, hostilities, and war;
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inclement weather, natural or man-made disasters; and
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factors that affect supply of travel such as changes to regulations governing airlines and the travel industry, like government sanctions that do or would prohibit doing business with certain state-owned travel suppliers, work stoppages or labor unrest at any of the major airlines, hotels or airports.
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•
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the features of the implemented software may not meet the expectations or fit the business model of the customer;
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our limited pool of trained experts for implementations cannot quickly and easily be augmented for complex implementation projects, such that resources issues, if not planned and managed effectively, could lead to costly project delays;
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customer-specific factors, such as the stability, functionality, interconnection and scalability of the customer’s pre-existing information technology infrastructure, as well as financial or other circumstances could destabilize, delay or prevent the completion of the implementation process, which, for airline reservations systems, typically takes 12 to 18 months; and
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customers and their partners may not fully or timely perform the actions required to be performed by them to ensure successful implementation, including measures we recommend to safeguard against technical and business risks.
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business, political and economic instability in foreign locations, including actual or threatened terrorist activities, and military action;
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changes in foreign currency exchange rates and financial risk arising from transactions in multiple currencies;
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adverse laws and regulatory requirements, including more comprehensive regulation in the EU and the possible effects of the Brexit vote;
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difficulty in developing, managing and staffing international operations because of distance, language and cultural differences;
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disruptions to or delays in the development of communication and transportation services and infrastructure;
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consumer attitudes, including the preference of customers for local providers;
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increasing labor costs due to high wage inflation in foreign locations, differences in general employment conditions and regulations, and the degree of employee unionization and activism;
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export or trade restrictions or currency controls;
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more restrictive data privacy requirements;
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governmental policies or actions, such as consumer, labor and trade protection measures and travel restrictions;
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taxes, restrictions on foreign investment and limits on the repatriation of funds;
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diminished ability to legally enforce our contractual rights; and
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decreased protection for intellectual property.
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Any of these providers fail to enable us to provide our customers and suppliers with reliable, real-time access to our systems. For example, in 2013, we experienced a significant outage of the Sabre platform due to a failure on the part of one of our service providers. This outage, which affected both our Travel Network business and our Airline Solutions business, lasted several hours and caused significant problems for our customers. Any such future outages could cause damage to our reputation, customer loss and require us to pay compensation to affected customers for which we may not be indemnified or compensated.
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•
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Our arrangements with such providers are terminated or impaired and we cannot find alternative sources of technology or systems support on commercially reasonable terms or on a timely basis. For example, our substantial dependence on HPE for many of our systems makes it difficult for us to switch vendors and makes us more sensitive to changes in HPE’s pricing for its services.
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•
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While we take reasonable steps to protect our brands and trademarks, we may not be successful in maintaining or defending our brands or preventing third parties from adopting similar brands. If our competitors infringe our principal
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Our patent applications may not be granted, and the patents we own could be challenged, invalidated, narrowed or circumvented by others and may not be of sufficient scope or strength to provide us with any meaningful protection or commercial advantage. Once our patents expire, or if they are invalidated, narrowed or circumvented, our competitors may be able to utilize the technology protected by our patents which may adversely affect our business.
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Although we rely on copyright laws to protect the works of authorship created by us, we do not generally register the copyrights in our copyrightable works where such registration is permitted. Copyrights of U.S. origin must be registered before the copyright owner may bring an infringement suit in the United States. Accordingly, if one of our unregistered copyrights of U.S. origin is infringed by a third party, we will need to register the copyright before we can file an infringement suit in the United States, and our remedies in any such infringement suit may be limited.
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We use reasonable efforts to protect our trade secrets. However, protecting trade secrets can be difficult and our efforts may provide inadequate protection to prevent unauthorized use, misappropriation, or disclosure of our trade secrets, know how, or other proprietary information.
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We also rely on our domain names to conduct our online businesses. While we use reasonable efforts to protect and maintain our domain names, if we fail to do so the domain names may become available to others. Further, the regulatory bodies that oversee domain name registration may change their regulations in a way that adversely affects our ability to register and use certain domain names.
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general economic and capital market conditions;
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the availability of credit from banks or other lenders;
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investor confidence in us; and
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our results of operations.
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increased vulnerability to general adverse economic and industry conditions;
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higher interest expense if interest rates increase on our floating rate borrowings and our hedging strategies do not effectively mitigate the effects of these increases;
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need to divert a significant portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of cash to fund working capital, capital expenditures, acquisitions, investments and other general corporate purposes;
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limited ability to obtain additional financing, on terms we find acceptable, if needed, for working capital, capital expenditures, expansion plans and other investments, which may adversely affect our ability to implement our business strategy;
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limited flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate or to take advantage of market opportunities; and
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a competitive disadvantage compared to our competitors that have less debt.
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re-measurement gains and losses from changes in the value of foreign denominated assets and liabilities;
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translation gains and losses on foreign subsidiary financial results that are translated into U.S. dollars, our functional currency, upon consolidation;
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planning risk related to changes in exchange rates between the time we prepare our annual and quarterly forecasts and when actual results occur; and
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the impact of relative exchange rate movements on cross-border travel, principally travel between Europe and the United States.
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incur liens on our property, assets and revenue;
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borrow money, and guarantee or provide other support for the indebtedness of third parties;
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pay dividends or make other distributions on, redeem or repurchase our capital stock;
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prepay, redeem or repurchase certain of our indebtedness;
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enter into certain change of control transactions;
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make investments in entities that we do not control, including joint ventures;
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enter into certain asset sale transactions, including divestiture of certain company assets and divestiture of capital stock of wholly-owned subsidiaries;
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enter into certain transactions with affiliates;
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enter into secured financing arrangements;
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enter into sale and leaseback transactions;
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change our fiscal year; and
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enter into substantially different lines of business.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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Name
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Age
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Position
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Lawrence W. Kellner
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58
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Executive Chairman of the Board and Director, Sabre
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Sean Menke
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48
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Chief Executive Officer, President and Director, Sabre
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Richard A. Simonson
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58
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Executive Vice President and Chief Financial Officer, Sabre
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Alexander S. Alt
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42
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Executive Vice President, Sabre and President, Hospitality Solutions
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Rachel A. Gonzalez
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47
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Executive Vice President and General Counsel, Sabre
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Hugh W. Jones
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53
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Executive Vice President, Sabre and President, Sabre Airline Solutions
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William G. Robinson
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52
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Executive Vice President and Chief Human Resources Officer, Sabre
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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High
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Low
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Dividends
Declared
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Year Ended December 31, 2016:
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Fourth Quarter
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$
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27.99
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$
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23.18
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$
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0.13
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Third Quarter
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$
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29.34
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$
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26.63
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$
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0.13
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Second Quarter
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$
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29.35
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$
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25.30
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$
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0.13
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First Quarter
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$
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28.92
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$
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23.18
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$
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0.13
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Year Ended December 31, 2015:
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Fourth Quarter
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$
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30.23
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$
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27.63
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$
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0.09
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Third Quarter
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$
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29.34
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$
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23.93
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$
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0.09
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Second Quarter
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$
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26.53
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$
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23.57
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$
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0.09
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First Quarter
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$
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24.48
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$
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19.40
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$
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0.09
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Period 2016
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Total Number of Shares Purchased
(1)
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Average Price Paid Per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(2)
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Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
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October 1 to October 31
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—
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—
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—
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—
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November 1 to November 30
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2,513,633
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$
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24.72
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2,513,633
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$
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37,874,267
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December 1 to December 31
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1,467,039
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$
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25.82
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1,467,039
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—
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Total
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3,980,672
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$
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25.12
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3,980,672
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—
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(1)
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Represents shares repurchased in open market transactions pursuant to the Share Repurchase Program (as defined below).
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(2)
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Share repurchases were made pursuant to a share repurchase program (the "Share Repurchase Program") authorized by our board of directors on November 2, 2016. This program was announced on November 3, 2016 and allowed for the purchase of up to $100 million of outstanding shares of our common stock in privately negotiated transactions or in the open market, or otherwise. The Share Repurchase Program expired on December 31, 2016. Further share repurchases would require authorization by our board of directors.
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ITEM 6.
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SELECTED FINANCIAL DATA
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Year Ended December 31,
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2016
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2015
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2014
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2013
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2012
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Consolidated Statements of Operations Data:
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Revenue
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$
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3,373,387
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$
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2,960,896
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$
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2,631,417
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$
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2,523,546
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$
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2,382,148
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Operating income (loss)
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459,572
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459,769
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421,345
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380,930
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(6,586
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)
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Income (loss) from continuing operations
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241,390
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234,555
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110,873
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52,066
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(215,427
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)
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Income (loss) from discontinued operations, net of tax
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5,549
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314,408
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(38,918
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)
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(149,697
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)
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(394,410
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)
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Net income (loss) attributable to Sabre Corporation
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242,562
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545,482
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69,223
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(100,494
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)
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(611,356
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)
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Net income (loss) attributable to common stockholders
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242,562
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545,482
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57,842
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(137,198
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)
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(645,939
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)
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Net Income (loss) per share attributable to common stockholders:
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Basic
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$
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0.87
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$
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2.00
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$
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0.24
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$
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(0.77
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)
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$
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(3.65
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)
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Diluted
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$
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0.86
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$
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1.95
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$
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0.23
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$
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(0.74
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)
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$
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(3.65
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)
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Weighted-average common shares outstanding:
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Basic
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277,546
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273,139
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238,633
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178,125
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177,206
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Diluted
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282,752
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280,067
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246,747
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184,978
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177,206
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Consolidated Statements of Cash Flows Data:
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Cash provided by operating activities
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$
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699,400
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$
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529,207
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$
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387,659
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$
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228,232
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$
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308,164
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Cash used in investing activities
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(445,808
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)
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(729,041
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)
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(258,791
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)
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(239,999
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)
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(209,815
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)
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Cash provided by (used in) financing activities
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(190,025
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)
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93,144
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(71,945
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)
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262,172
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(25,120
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)
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|||||
Additions to property and equipment
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327,647
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286,697
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227,227
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209,523
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167,043
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|||||
Cash payments for interest
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151,495
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154,307
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197,782
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255,620
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264,990
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|||||
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||||||||||
Other Financial Data:
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|||||
Adjusted Gross Profit
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$
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1,460,675
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$
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1,316,820
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$
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1,146,792
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$
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1,060,302
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$
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998,607
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Adjusted Net Income
|
370,937
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|
|
308,072
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|
|
232,477
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182,187
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|
147,734
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|||||
Adjusted EBITDA
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1,046,646
|
|
|
941,587
|
|
|
840,028
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|
|
778,754
|
|
|
731,412
|
|
|||||
Adjusted Capital Expenditures
|
411,052
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|
|
350,079
|
|
|
265,038
|
|
|
268,337
|
|
|
245,586
|
|
|||||
Free Cash Flow
|
371,753
|
|
|
242,510
|
|
|
160,432
|
|
|
18,709
|
|
|
141,121
|
|
|||||
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|
||||||||||
Key Metrics:
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|||||
Travel Network
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|||||
Direct Billable Bookings - Air
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445,050
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|
|
384,309
|
|
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321,962
|
|
|
314,275
|
|
|
326,175
|
|
|||||
Direct Billable Bookings - Non-Air
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60,421
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|
|
58,414
|
|
|
54,122
|
|
|
53,503
|
|
|
53,669
|
|
|||||
Total Direct Billable Bookings
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505,471
|
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442,723
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|
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376,084
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|
367,778
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|
379,844
|
|
|||||
Airline Solutions Passengers Boarded
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789,260
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|
|
584,876
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|
|
510,713
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|
|
478,088
|
|
|
405,420
|
|
|
As of December 31,
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||||||||||||||||||
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2016
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2015
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2014
|
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2013
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|
2012
|
||||||||||
Consolidated Balance Sheet Data:
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|
|||||
Cash and cash equivalents
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$
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364,114
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|
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$
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321,132
|
|
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$
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155,679
|
|
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$
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308,236
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|
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$
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126,695
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Total assets
(1)
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5,724,570
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|
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5,393,627
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|
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4,643,073
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|
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4,755,708
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|
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4,711,245
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|
|||||
Long-term debt
(1)
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3,276,281
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3,169,344
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3,040,009
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|
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3,643,548
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|
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3,420,927
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|
|||||
Working capital deficit
(1)
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(312,977
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)
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|
(222,400
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)
|
|
(201,052
|
)
|
|
(268,272
|
)
|
|
(428,569
|
)
|
|||||
Redeemable preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
634,843
|
|
|
598,139
|
|
|||||
Noncontrolling interest
|
2,579
|
|
|
1,438
|
|
|
621
|
|
|
508
|
|
|
88
|
|
|||||
Total stockholders’ equity
|
625,615
|
|
|
484,140
|
|
|
84,383
|
|
|
(952,536
|
)
|
|
(876,875
|
)
|
(1)
|
In the fourth quarter of 2015, we adopted new accounting standards that changed the presentation of deferred tax assets and liabilities and debt issuance costs; see Note 1, Summary of Business and Significant Accounting Policies for additional information. We applied the new guidance on a retrospective basis to the balance sheet data as of December 31, 2014. The balance sheet data as of December 2013 and 2012 were not adjusted.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Net income (loss) attributable to common stockholders
|
$
|
242,562
|
|
|
$
|
545,482
|
|
|
$
|
57,842
|
|
|
$
|
(137,198
|
)
|
|
$
|
(645,939
|
)
|
Net (income) loss from discontinued operations, net of tax
|
(5,549
|
)
|
|
(314,408
|
)
|
|
38,918
|
|
|
149,697
|
|
|
394,410
|
|
|||||
Net income (loss) attributable to noncontrolling interests
(1)
|
4,377
|
|
|
3,481
|
|
|
2,732
|
|
|
2,863
|
|
|
1,519
|
|
|||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
11,381
|
|
|
36,704
|
|
|
34,583
|
|
|||||
Income (loss) from continuing operations
|
241,390
|
|
|
234,555
|
|
|
110,873
|
|
|
52,066
|
|
|
(215,427
|
)
|
|||||
Adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,054
|
|
|||||
Gain on sale of business and assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,850
|
)
|
|||||
Acquisition-related amortization
(3a)
|
143,425
|
|
|
108,121
|
|
|
99,383
|
|
|
132,685
|
|
|
129,869
|
|
|||||
Loss on extinguishment of debt
|
3,683
|
|
|
38,783
|
|
|
33,538
|
|
|
12,181
|
|
|
—
|
|
|||||
Other, net
(5)
|
(27,617
|
)
|
|
(91,377
|
)
|
|
63,860
|
|
|
305
|
|
|
6,635
|
|
|||||
Restructuring and other costs
(6)
|
18,286
|
|
|
9,256
|
|
|
10,470
|
|
|
27,921
|
|
|
5,408
|
|
|||||
Acquisition-related costs
(7)
|
779
|
|
|
14,437
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Litigation costs
(8)
|
46,995
|
|
|
16,709
|
|
|
14,144
|
|
|
18,514
|
|
|
396,412
|
|
|||||
Stock-based compensation
|
48,524
|
|
|
29,971
|
|
|
20,094
|
|
|
3,387
|
|
|
4,365
|
|
|||||
Management fees
(9)
|
—
|
|
|
—
|
|
|
23,701
|
|
|
8,761
|
|
|
7,769
|
|
|||||
Tax impact of net income adjustments
(10), (12)
|
(104,528
|
)
|
|
(52,383
|
)
|
|
(143,586
|
)
|
|
(73,633
|
)
|
|
(205,501
|
)
|
|||||
Adjusted Net Income from continuing operations
|
$
|
370,937
|
|
|
$
|
308,072
|
|
|
$
|
232,477
|
|
|
$
|
182,187
|
|
|
$
|
147,734
|
|
Adjusted Net Income from continuing operations per share
|
$
|
1.31
|
|
|
$
|
1.10
|
|
|
$
|
0.94
|
|
|
$
|
0.98
|
|
|
$
|
0.81
|
|
Diluted weighted-average common shares outstanding
(11)
|
282,752
|
|
|
280,067
|
|
|
246,747
|
|
|
184,978
|
|
|
182,830
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Net Income from continuing operations
|
370,937
|
|
|
308,072
|
|
|
232,477
|
|
|
182,187
|
|
|
147,734
|
|
|||||
Adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization of property and equipment
(3b)
|
233,303
|
|
|
213,520
|
|
|
157,592
|
|
|
123,414
|
|
|
96,668
|
|
|||||
Amortization of capitalized implementation costs
(3c)
|
37,258
|
|
|
31,441
|
|
|
35,859
|
|
|
34,143
|
|
|
19,439
|
|
|||||
Amortization of upfront incentive consideration
(4)
|
55,724
|
|
|
43,521
|
|
|
45,358
|
|
|
36,649
|
|
|
36,527
|
|
|||||
Interest expense, net
|
158,251
|
|
|
173,298
|
|
|
218,877
|
|
|
274,689
|
|
|
232,450
|
|
|||||
Remaining provision (benefit) for income taxes
|
191,173
|
|
|
171,735
|
|
|
149,865
|
|
|
127,672
|
|
|
198,594
|
|
|||||
Adjusted EBITDA
|
$
|
1,046,646
|
|
|
$
|
941,587
|
|
|
$
|
840,028
|
|
|
$
|
778,754
|
|
|
$
|
731,412
|
|
|
Year Ended December 31, 2016
|
||||||||||||||
|
Travel
Network |
|
Airline and
Hospitality Solutions |
|
Corporate
|
|
Total
|
||||||||
Operating income (loss)
|
$
|
835,248
|
|
|
$
|
217,631
|
|
|
$
|
(593,307
|
)
|
|
$
|
459,572
|
|
Add back:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
132,537
|
|
|
71,685
|
|
|
421,931
|
|
|
626,153
|
|
||||
Cost of revenue adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
(3)
|
72,110
|
|
|
153,204
|
|
|
62,039
|
|
|
287,353
|
|
||||
Restructuring and other costs
(6)
|
—
|
|
|
—
|
|
|
12,660
|
|
|
12,660
|
|
||||
Amortization of upfront incentive consideration
(4)
|
55,724
|
|
|
—
|
|
|
—
|
|
|
55,724
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
19,213
|
|
|
19,213
|
|
||||
Adjusted Gross Profit
|
1,095,619
|
|
|
442,520
|
|
|
(77,464
|
)
|
|
1,460,675
|
|
||||
Selling, general and administrative
|
(132,537
|
)
|
|
(71,685
|
)
|
|
(421,931
|
)
|
|
(626,153
|
)
|
||||
Joint venture equity income
|
2,780
|
|
|
—
|
|
|
—
|
|
|
2,780
|
|
||||
Selling, general and administrative adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
(3)
|
4,826
|
|
|
1,228
|
|
|
120,579
|
|
|
126,633
|
|
||||
Restructuring and other costs
(6)
|
—
|
|
|
—
|
|
|
5,626
|
|
|
5,626
|
|
||||
Acquisition-related costs
(7)
|
—
|
|
|
—
|
|
|
779
|
|
|
779
|
|
||||
Litigation costs
(8)
|
—
|
|
|
—
|
|
|
46,995
|
|
|
46,995
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
29,311
|
|
|
29,311
|
|
||||
Adjusted EBITDA
|
$
|
970,688
|
|
|
$
|
372,063
|
|
|
$
|
(296,105
|
)
|
|
$
|
1,046,646
|
|
|
Year Ended December 31, 2015
|
||||||||||||||
|
Travel
Network |
|
Airline and
Hospitality Solutions |
|
Corporate
|
|
Total
|
||||||||
Operating income (loss)
|
$
|
751,546
|
|
|
$
|
180,448
|
|
|
$
|
(472,225
|
)
|
|
$
|
459,769
|
|
Add back:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
116,511
|
|
|
62,247
|
|
|
378,319
|
|
|
557,077
|
|
||||
Cost of revenue adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
(3)
|
62,337
|
|
|
142,109
|
|
|
40,089
|
|
|
244,535
|
|
||||
Amortization of upfront incentive consideration
(4)
|
43,521
|
|
|
—
|
|
|
—
|
|
|
43,521
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
11,918
|
|
|
11,918
|
|
||||
Adjusted Gross Profit
|
973,915
|
|
|
384,804
|
|
|
(41,899
|
)
|
|
1,316,820
|
|
||||
Selling, general and administrative
|
(116,511
|
)
|
|
(62,247
|
)
|
|
(378,319
|
)
|
|
(557,077
|
)
|
||||
Joint venture equity income
|
14,842
|
|
|
—
|
|
|
—
|
|
|
14,842
|
|
||||
Joint venture intangible amortization
(3a)
|
1,602
|
|
|
—
|
|
|
—
|
|
|
1,602
|
|
||||
Selling, general and administrative adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
(3)
|
3,428
|
|
|
904
|
|
|
102,613
|
|
|
106,945
|
|
||||
Restructuring and other costs
(6)
|
—
|
|
|
—
|
|
|
9,256
|
|
|
9,256
|
|
||||
Acquisition-related costs
(7)
|
|
|
|
|
14,437
|
|
|
14,437
|
|
||||||
Litigation costs
(8)
|
—
|
|
|
—
|
|
|
16,709
|
|
|
16,709
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
18,053
|
|
|
18,053
|
|
||||
Adjusted EBITDA
|
877,276
|
|
|
323,461
|
|
|
(259,150
|
)
|
|
941,587
|
|
|
Year Ended December 31, 2014
|
||||||||||||||
|
Travel
Network |
|
Airline and
Hospitality Solutions |
|
Corporate
|
|
Total
|
||||||||
Operating income (loss)
|
$
|
657,326
|
|
|
$
|
176,730
|
|
|
$
|
(412,711
|
)
|
|
$
|
421,345
|
|
Add back:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
102,059
|
|
|
56,195
|
|
|
309,340
|
|
|
467,594
|
|
||||
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 Profit
|
863,276
|
|
|
337,851
|
|
|
(54,335
|
)
|
|
1,146,792
|
|
||||
Selling, general and administrative
|
(102,059
|
)
|
|
(56,195
|
)
|
|
(309,340
|
)
|
|
(467,594
|
)
|
||||
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)
|
—
|
|
|
—
|
|
|
4,428
|
|
|
4,428
|
|
||||
Litigation costs
(8)
|
—
|
|
|
—
|
|
|
14,144
|
|
|
14,144
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
12,050
|
|
|
12,050
|
|
||||
Management fees
(9)
|
—
|
|
|
—
|
|
|
23,701
|
|
|
23,701
|
|
||||
Adjusted EBITDA
|
$
|
778,677
|
|
|
$
|
282,648
|
|
|
$
|
(221,297
|
)
|
|
$
|
840,028
|
|
|
Year Ended December 31, 2013
|
||||||||||||||
|
Travel
Network |
|
Airline and
Hospitality Solutions |
|
Corporate
|
|
Total
|
||||||||
Operating income (loss)
|
$
|
667,498
|
|
|
$
|
135,755
|
|
|
$
|
(422,323
|
)
|
|
$
|
380,930
|
|
Add back:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
106,392
|
|
|
51,538
|
|
|
279,523
|
|
|
437,453
|
|
||||
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 Profit
|
860,793
|
|
|
262,386
|
|
|
(62,877
|
)
|
|
1,060,302
|
|
||||
Selling, general and administrative
|
(106,392
|
)
|
|
(51,538
|
)
|
|
(279,523
|
)
|
|
(437,453
|
)
|
||||
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)
|
—
|
|
|
—
|
|
|
16,430
|
|
|
16,430
|
|
||||
Litigation costs
(8)
|
—
|
|
|
—
|
|
|
18,514
|
|
|
18,514
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,031
|
|
|
2,031
|
|
||||
Management fees
(9)
|
—
|
|
|
—
|
|
|
8,761
|
|
|
8,761
|
|
||||
Adjusted EBITDA
|
772,208
|
|
|
213,075
|
|
|
(206,529
|
)
|
|
778,754
|
|
|
Year Ended December 31, 2012
|
||||||||||||||
|
Travel
Network |
|
Airline and
Hospitality Solutions |
|
Corporate
|
|
Total
|
||||||||
Operating income (loss)
|
$
|
670,778
|
|
|
$
|
114,272
|
|
|
$
|
(791,636
|
)
|
|
$
|
(6,586
|
)
|
Add back:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
101,934
|
|
|
52,754
|
|
|
638,606
|
|
|
793,294
|
|
||||
Impairment
(2)
|
—
|
|
|
—
|
|
|
20,254
|
|
|
20,254
|
|
||||
Cost of revenue adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
(3)
|
34,624
|
|
|
51,395
|
|
|
63,456
|
|
|
149,475
|
|
||||
Amortization of upfront incentive consideration
(4)
|
36,527
|
|
|
—
|
|
|
—
|
|
|
36,527
|
|
||||
Restructuring and other costs
(6)
|
—
|
|
|
—
|
|
|
4,283
|
|
|
4,283
|
|
||||
Litigation costs
(8)
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
(23
|
)
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,383
|
|
|
1,383
|
|
||||
Adjusted Gross Profit
|
843,863
|
|
|
218,421
|
|
|
(63,677
|
)
|
|
998,607
|
|
||||
Selling, general and administrative
|
(101,934
|
)
|
|
(52,754
|
)
|
|
(638,606
|
)
|
|
(793,294
|
)
|
||||
Joint venture equity income
|
21,287
|
|
|
—
|
|
|
—
|
|
|
21,287
|
|
||||
Joint venture intangible amortization
(3a)
|
3,200
|
|
|
—
|
|
|
—
|
|
|
3,200
|
|
||||
Selling, general and administrative adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
(3)
|
2,036
|
|
|
615
|
|
|
90,650
|
|
|
93,301
|
|
||||
Restructuring and other costs
(6)
|
—
|
|
|
—
|
|
|
1,125
|
|
|
1,125
|
|
||||
Litigation costs
(8)
|
—
|
|
|
—
|
|
|
396,435
|
|
|
396,435
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,982
|
|
|
2,982
|
|
||||
Management fees
(9)
|
—
|
|
|
—
|
|
|
7,769
|
|
|
7,769
|
|
||||
Adjusted EBITDA
|
$
|
768,452
|
|
|
$
|
166,282
|
|
|
$
|
(203,322
|
)
|
|
$
|
731,412
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Additions to property and equipment
|
$
|
327,647
|
|
|
$
|
286,697
|
|
|
$
|
227,227
|
|
|
$
|
209,523
|
|
|
$
|
167,043
|
|
Capitalized implementation costs
|
83,405
|
|
|
63,382
|
|
|
37,811
|
|
|
58,814
|
|
|
78,543
|
|
|||||
Adjusted capital expenditures
|
$
|
411,052
|
|
|
$
|
350,079
|
|
|
$
|
265,038
|
|
|
$
|
268,337
|
|
|
$
|
245,586
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Cash provided by operating activities
|
$
|
699,400
|
|
|
$
|
529,207
|
|
|
$
|
387,659
|
|
|
$
|
228,232
|
|
|
$
|
308,164
|
|
Cash used in investing activities
|
(445,808
|
)
|
|
(729,041
|
)
|
|
(258,791
|
)
|
|
(239,999
|
)
|
|
(209,815
|
)
|
|||||
Cash provided by (used in) financing activities
|
(190,025
|
)
|
|
93,144
|
|
|
(71,945
|
)
|
|
262,172
|
|
|
(25,120
|
)
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Cash provided by operating activities
|
$
|
699,400
|
|
|
$
|
529,207
|
|
|
$
|
387,659
|
|
|
$
|
228,232
|
|
|
$
|
308,164
|
|
Additions to property and equipment
|
(327,647
|
)
|
|
(286,697
|
)
|
|
(227,227
|
)
|
|
(209,523
|
)
|
|
(167,043
|
)
|
|||||
Free Cash Flow
|
$
|
371,753
|
|
|
$
|
242,510
|
|
|
$
|
160,432
|
|
|
$
|
18,709
|
|
|
$
|
141,121
|
|
(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, (ii) Sabre Australia Technologies I Pty Ltd (“Sabre Pacific”) of 49% through February 24, 2012, the date we sold this business, (iii) Travelocity.com LLC of approximately 9.5% through December 31, 2012, the date we merged this minority interest back into our capital structure, (iv) Sabre Seyahat Dagitim Sistemleri A.S. of 40% beginning in April 2014, and (v) Abacus International Lanka Pte Ltd of 40% beginning in July 2015.
|
(2)
|
Impairment charges in 2012, represent our share of impairment charges recorded by our previous equity method investment, SAPPL, for $24 million and a $20 million impairment charge on assets associated with an abandoned corporate facility.
|
(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. Also includes amortization of the excess basis in our underlying equity interest in SAPPL's net assets prior to our acquisition of SAPPL on July 1, 2015.
|
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. This consideration is made with the objective of increasing the number of clients or to ensure or improve customer loyalty. These 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. These 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 2016, other, net primarily includes a gain of $15 million in the fourth quarter from the sale of our available-for-sale marketable securities, and $6 million gain from the first quarter associated with the receipt of an earn-out payment related to the sale of a business in 2013. In 2015, we recognized a gain of
$78 million
associated with the remeasurement of our previously-held 35% investment in SAPPL to its fair value and a gain of $12 million related to the settlement of pre-existing agreements between us and SAPPL. 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 addition, all periods presented include foreign exchange gains and losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into the relevant functional currency. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Tax Receivable Agreement” for additional information regarding the TRA.
|
(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. In 2016, we recognized a $20 million charge to implement a plan to restructure a portion of our global workforce in support of funding our efforts to modernize our technology infrastructure, as well as to align and improve our operational efficiency to reflect expected changes by customers on implementation schedules for certain of Sabre Airline Solutions products, most of which will be paid in 2017. In 2015, we recognized a restructuring charge of $9 million associated with the integration of Abacus, of which $2 million was paid as of
December 31, 2016
. In 2016, we reduced our restructuring liability by $4 million as a result of the reevaluation of our plan derived from a shift in timing and strategy of originally contemplated actions.
|
(7)
|
Acquisition-related costs represent fees and expenses incurred associated with the acquisition of Abacus, the Trust Group and Airpas Aviation.
|
(8)
|
Litigation costs, net represent charges and legal fee reimbursements associated with antitrust litigation, including an accrual of
$32
million as of December 31, 2016, representing the trebling of the jury award plus our estimate of attorneys’ fees, expenses and costs in the US Airways litigation. See Item 3, "Legal Proceedings"
|
(9)
|
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, plus reimbursement of certain costs incurred by TPG and Silver Lake, pursuant to the management services agreement (the “MSA”). In addition, we paid a $21 million fee, in the aggregate, to TPG and Silver Lake in connection with our initial public offering in 2014. The MSA was terminated in conjunction with our initial public offering.
|
(10)
|
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.
|
(11)
|
The diluted weighted-average share outstanding presented for the year ended December 31, 2012 differs from GAAP and assumes the inclusion of 5,624,000 common stock equivalents associated with stock-options and restricted stock awards. We recognized a loss from continuing operations during the year ended December 31, 2012, which results in the basic weighted-average shares outstanding and the diluted-weighted average shares outstanding to be the same under GAAP.
|
(12)
|
In the first quarter of 2016, we adopted Accounting Standards Update ("ASU") 2016-09, Improvements to Employee Share-Based Payment Accounting. For the year ended
December 31, 2016
, we recognized
$35 million
in excess tax benefits associated with employee equity-based awards, as a result of the adoption of this standard. There were no other material impacts to our consolidated financial statements as a result of adopting this updated standard.
|
•
|
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 Profit 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 removes the impact of accrual-basis accounting on asset accounts and non-debt liability accounts, and does not reflect the cash requirements necessary to service the principal payments on our indebtedness; and
|
•
|
other companies, including companies in our industry, may calculate Adjusted Gross Profit, Adjusted Net Income, Adjusted EBITDA, Adjusted Capital Expenditures, or Free Cash Flow differently, which reduces their usefulness as comparative measures.
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Year Ended December 31,
|
|
% Change
|
|||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2016 - 2015
|
|
2015 - 2014
|
|||||
Travel Network
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Billable Bookings - Air
|
445,050
|
|
|
384,309
|
|
|
321,962
|
|
|
15.8
|
%
|
|
19.4
|
%
|
Direct Billable Bookings - Non-Air
|
60,421
|
|
|
58,414
|
|
|
54,122
|
|
|
3.4
|
%
|
|
7.9
|
%
|
Total Direct Billable Bookings
|
505,471
|
|
|
442,723
|
|
|
376,084
|
|
|
14.2
|
%
|
|
17.7
|
%
|
Airline Solutions Passengers Boarded
|
789,260
|
|
|
584,876
|
|
|
510,713
|
|
|
34.9
|
%
|
|
14.5
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Amounts in thousands)
|
||||||||||
Revenue
|
$
|
3,373,387
|
|
|
$
|
2,960,896
|
|
|
$
|
2,631,417
|
|
Cost of revenue
|
2,287,662
|
|
|
1,944,050
|
|
|
1,742,478
|
|
|||
Selling, general and administrative
|
626,153
|
|
|
557,077
|
|
|
467,594
|
|
|||
Operating income
|
459,572
|
|
|
459,769
|
|
|
421,345
|
|
|||
Interest expense, net
|
(158,251
|
)
|
|
(173,298
|
)
|
|
(218,877
|
)
|
|||
Loss on extinguishment of debt
|
(3,683
|
)
|
|
(38,783
|
)
|
|
(33,538
|
)
|
|||
Joint venture equity income
|
2,780
|
|
|
14,842
|
|
|
12,082
|
|
|||
Other income (expense), net
|
27,617
|
|
|
91,377
|
|
|
(63,860
|
)
|
|||
Income from continuing operations before income taxes
|
328,035
|
|
|
353,907
|
|
|
117,152
|
|
|||
Provision for income taxes
|
86,645
|
|
|
119,352
|
|
|
6,279
|
|
|||
Income from continuing operations
|
$
|
241,390
|
|
|
$
|
234,555
|
|
|
$
|
110,873
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Travel Network
|
$
|
2,374,849
|
|
|
$
|
2,102,792
|
|
|
$
|
272,057
|
|
|
13
|
%
|
Airline and Hospitality Solutions
|
1,019,306
|
|
|
872,086
|
|
|
147,220
|
|
|
17
|
%
|
|||
Total segment revenue
|
3,394,155
|
|
|
2,974,878
|
|
|
419,277
|
|
|
14
|
%
|
|||
Eliminations
|
(20,768
|
)
|
|
(13,982
|
)
|
|
(6,786
|
)
|
|
49
|
%
|
|||
Total revenue
|
$
|
3,373,387
|
|
|
$
|
2,960,896
|
|
|
$
|
412,491
|
|
|
14
|
%
|
•
|
a $312 million increase in transaction-based revenue to $2,199 million due to growth in the business and the impact of the acquisition of Abacus in 2015. Direct Billable Bookings increased by
14%
to
505 million
in the year ended
December 31, 2016
. Excluding the impact of the acquisition of Abacus, Direct Billable Bookings increased by 3%, which was driven by growth of 6% in EMEA, 3% in North America and 1% in Latin America;
|
•
|
a decrease of $40 million in other revenue resulting from a $51 million decrease in other revenue related to services we provided to Abacus prior to the acquisition in July 2015, offset by an increase of $11 million primarily due to data analytic products revenue.
|
•
|
a $66 million increase in Airline Solutions’ SabreSonic revenue for the year ended
December 31, 2016
compared to the prior year. Passengers boarded increased by
35%
to
789 million
for the year ended
December 31, 2016
, driven primarily by the cutover to SabreSonic CSS for American Airlines Group and Alitalia in the fourth quarter of 2015 and 2016, respectively, and by growth of existing customers. Revenue increased by $105 million primarily as a result of growth in PBs for the year ended
December 31, 2016
. This increase was partially offset by a $39 million decrease in non-PB revenue, primarily due to the expiration of a service contract in the fourth quarter of 2015 in conjunction with a litigation settlement agreement with that customer in 2012. In addition, in the last part of 2016, implementation schedules for several airlines were delayed to future years;
|
•
|
a $32 million increase in Airline Solutions’ commercial and operations solutions revenue driven by growth in multiple products across our portfolio;
|
•
|
a $66 million increase in Hospitality Solutions revenue to $225 million for the year ended
December 31, 2016
compared to the prior year, primarily driven by an increase in CRS transactions. The increase was mainly driven by revenue growth of $26 million from new and existing customers and revenue growth of $40 million from the acquisition of the Trust Group; and
|
•
|
a $17 million decrease in discrete professional service fees revenue, as a result of certain unrealized customer contracts.
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Travel Network
|
$
|
1,279,231
|
|
|
$
|
1,128,878
|
|
|
$
|
150,353
|
|
|
13
|
%
|
Airline and Hospitality Solutions
|
576,786
|
|
|
487,282
|
|
|
89,504
|
|
|
18
|
%
|
|||
Eliminations
|
(20,371
|
)
|
|
(13,653
|
)
|
|
(6,718
|
)
|
|
49
|
%
|
|||
Total segment cost of revenue
|
1,835,646
|
|
|
1,602,507
|
|
|
233,139
|
|
|
15
|
%
|
|||
Corporate
|
108,939
|
|
|
53,487
|
|
|
55,452
|
|
|
104
|
%
|
|||
Depreciation and amortization
|
287,353
|
|
|
244,535
|
|
|
42,818
|
|
|
18
|
%
|
|||
Amortization of upfront incentive consideration
|
55,724
|
|
|
43,521
|
|
|
12,203
|
|
|
28
|
%
|
|||
Total cost of revenue
|
$
|
2,287,662
|
|
|
$
|
1,944,050
|
|
|
$
|
343,612
|
|
|
18
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Selling, general and administrative
|
$
|
626,153
|
|
|
$
|
557,077
|
|
|
$
|
69,076
|
|
|
12
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Interest expense, net
|
$
|
158,251
|
|
|
$
|
173,298
|
|
|
$
|
(15,047
|
)
|
|
(9
|
)%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Loss on extinguishment of debt
|
$
|
3,683
|
|
|
$
|
38,783
|
|
|
$
|
(35,100
|
)
|
|
(91
|
)%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Joint venture equity income
|
$
|
2,780
|
|
|
$
|
14,842
|
|
|
$
|
(12,062
|
)
|
|
(81
|
)%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Other (income), net
|
$
|
(27,617
|
)
|
|
$
|
(91,377
|
)
|
|
$
|
63,760
|
|
|
(70
|
)%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Provision for income taxes
|
$
|
86,645
|
|
|
$
|
119,352
|
|
|
$
|
(32,707
|
)
|
|
(27
|
)%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Travel Network
|
$
|
2,102,792
|
|
|
$
|
1,854,785
|
|
|
$
|
248,007
|
|
|
13
|
%
|
Airline and Hospitality Solutions
|
872,086
|
|
|
786,478
|
|
|
85,608
|
|
|
11
|
%
|
|||
Total segment revenue
|
2,974,878
|
|
|
2,641,263
|
|
|
333,615
|
|
|
13
|
%
|
|||
Eliminations
|
(13,982
|
)
|
|
(9,846
|
)
|
|
(4,136
|
)
|
|
42
|
%
|
|||
Total revenue
|
$
|
2,960,896
|
|
|
$
|
2,631,417
|
|
|
$
|
329,479
|
|
|
13
|
%
|
•
|
a $272 million increase in transaction-based revenue to $1,887 million primarily due to the acquisition of Abacus. Direct Billable Bookings increased by
18%
to
443 million
in the year ended December 31, 2015. Excluding the impact of the acquisition of Abacus, Direct Billable Bookings increased by 6%, which was driven by growth of 6% in North America and 15% in EMEA, partially offset by a slight decline in Latin America; and
|
•
|
the increase in revenue was partially offset by a $21 million decrease in other revenue related to services we provided to Abacus prior to the acquisition.
|
•
|
a $57 million increase in Airline Solutions’ SabreSonic revenue for the year ended December 31, 2015 compared to the same period in the prior year. Approximately $38 million of the revenue increase in SabreSonic is attributable to growth in PBs of
15%
to
585 million
for the year ended December 31, 2015, combined with a $10 million increase in revenue due to broader adoption of our products by our existing customers. The growth in PBs was driven by existing customers and also by the cutover of American Airlines Group to SabreSonic in the fourth quarter of 2015. In addition, revenue associated with the extension of a services contract with a significant customer increased by $10 million during the year ended December 31, 2015. This contract was extended in conjunction with a litigation settlement agreement with that customer in 2012; and
|
•
|
a $28 million increase in Hospitality Solutions revenue to $159 million for the year ended December 31, 2015 compared to $132 million in the prior year, primarily driven by an increase in CRS transactions.
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Travel Network
|
$
|
1,128,878
|
|
|
$
|
991,509
|
|
|
$
|
137,369
|
|
|
14
|
%
|
Airline and Hospitality Solutions
|
487,282
|
|
|
448,627
|
|
|
38,655
|
|
|
9
|
%
|
|||
Eliminations
|
(13,653
|
)
|
|
(9,830
|
)
|
|
(3,823
|
)
|
|
39
|
%
|
|||
Total segment cost of revenue
|
1,602,507
|
|
|
1,430,306
|
|
|
172,201
|
|
|
12
|
%
|
|||
Corporate
|
53,487
|
|
|
68,405
|
|
|
(14,918
|
)
|
|
(22
|
)%
|
|||
Depreciation and amortization
|
244,535
|
|
|
198,409
|
|
|
46,126
|
|
|
23
|
%
|
|||
Amortization of upfront incentive consideration
|
43,521
|
|
|
45,358
|
|
|
(1,837
|
)
|
|
(4
|
)%
|
|||
Total cost of revenue
|
$
|
1,944,050
|
|
|
$
|
1,742,478
|
|
|
$
|
201,572
|
|
|
12
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Selling, general and administrative
|
$
|
557,077
|
|
|
$
|
467,594
|
|
|
$
|
89,483
|
|
|
19
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Interest expense, net
|
$
|
173,298
|
|
|
$
|
218,877
|
|
|
$
|
(45,579
|
)
|
|
(21
|
)%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Loss on extinguishment of debt
|
$
|
38,783
|
|
|
$
|
33,538
|
|
|
$
|
5,245
|
|
|
16
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||||||
|
(Amounts in thousands)
|
|
|
|
|
|||||||||
Joint venture equity income
|
$
|
14,842
|
|
|
$
|
12,082
|
|
|
$
|
2,760
|
|
|
23
|
%
|
|
Year Ended December 31,
|
|
|
|
|
||||||||
|
2015
|
|
2014
|
|
Change
|
||||||||
|
(Amounts in thousands)
|
|
|
|
|
||||||||
Other (income) expense, net
|
$
|
(91,377
|
)
|
|
$
|
63,860
|
|
|
$
|
(155,237
|
)
|
|
**%
|
|
Year Ended December 31,
|
|
|
|
|
||||||||
|
2015
|
|
2014
|
|
Change
|
||||||||
|
(Amounts in thousands)
|
|
|
|
|
||||||||
Provision for income taxes
|
$
|
119,352
|
|
|
$
|
6,279
|
|
|
$
|
113,073
|
|
|
**%
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
Cash and cash equivalents
|
$
|
364,114
|
|
|
$
|
321,132
|
|
Revolver outstanding balance
|
—
|
|
|
—
|
|
||
Available balance under the Revolver
|
365,006
|
|
|
380,603
|
|
||
Outstanding letters of credit
|
34,994
|
|
|
24,560
|
|
•
|
we received proceeds of $597 million (net of $3 million discount) from the Term Loan A and used a portion of the proceeds to repay $350 million of outstanding principal on our Term Loan B and Incremental Term Loan Facility;
|
•
|
we paid the remaining principal of $165 million on our senior secured notes due 2016, which matured in March 2016, paid down $26 million of the term loan outstanding as part of quarterly principal repayments;
|
•
|
we made draws on our Prior Revolver totaling $458 million and payments totaling $458 million resulting in no outstanding balance as of December 31, 2016;
|
•
|
we made payments of $13 million for capital leases;
|
•
|
we paid
$144 million
in dividends on our common stock; and
|
•
|
we received proceeds of
$27 million
from the settlement of employee stock-option awards;
|
•
|
we repurchased 3,980,672 shares of our common stock outstanding totaling
$100 million
.
|
•
|
in April 2015, we issued $530 million of our 5.375% senior secured notes due in 2023 and used the net proceeds of $522 million to redeem all of the $480 million principal of our senior secured notes due 2019, pay a $31 million redemption premium and $2 million make-whole premium;
|
•
|
in November 2015, we issued $500 million of 5.25% senior secured notes due 2023 and used the net proceeds of $494 million to repay $235 million of the $400 million senior secured notes due 2016, pay a $5 million make-whole premium and repurchase 3,400,000 shares of our common stock totaling $99 million;
|
•
|
we paid down $21 million of the term loan outstanding as part of quarterly principal repayments;
|
•
|
we paid $
99 million
in dividends on our common stock; and
|
•
|
received net proceeds of $
47 million
from the settlement of stock-based awards.
|
•
|
we entered into the Repricing Amendments which resulted in proceeds of $
148 million
from new lenders which were utilized to repay prior lenders. There was no net change in our outstanding indebtedness as a result of the Repricing Amendments;
|
•
|
we raised $
672 million
net proceeds from our initial public offering and utilized the net proceeds to repay $296 million aggregate principal amount of our Term Loan C and $320 million aggregate principal amount of our 2019 Notes;
|
•
|
we paid down $37 million of the term loan outstanding as part of quarterly principal repayments;
|
•
|
we paid $30 million in debt-related costs including a $27 million prepayment fee on our 2019 Notes;
|
•
|
we paid $27 million in contingent consideration associated with our acquisition of PRISM in 2012; and
|
•
|
we paid $48 million in dividends on our common stock.
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Total debt
(1)
|
$
|
243,108
|
|
|
$
|
724,934
|
|
|
$
|
1,777,653
|
|
|
$
|
59,195
|
|
|
$
|
54,738
|
|
|
$
|
1,125,231
|
|
|
$
|
3,984,859
|
|
Headquarters mortgage
(2)
|
80,895
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80,895
|
|
|||||||
Operating lease obligations
(3)
|
29,398
|
|
|
26,498
|
|
|
23,037
|
|
|
20,479
|
|
|
17,671
|
|
|
39,927
|
|
|
157,010
|
|
|||||||
IT outsourcing agreement
(4)
|
181,453
|
|
|
173,561
|
|
|
144,108
|
|
|
136,117
|
|
|
122,366
|
|
|
210,067
|
|
|
967,672
|
|
|||||||
Purchase orders
(5)
|
326,033
|
|
|
3,298
|
|
|
1,307
|
|
|
1,333
|
|
|
—
|
|
|
—
|
|
|
331,971
|
|
|||||||
Letters of credit
(6)
|
34,796
|
|
|
55
|
|
|
143
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,994
|
|
|||||||
Unrecognized tax benefits
(7)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71,176
|
|
|||||||
Tax Receivable Agreement
(8)
|
100,501
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
394,763
|
|
|||||||
Total contractual cash obligations
(9)
|
$
|
996,184
|
|
|
$
|
928,346
|
|
|
$
|
1,946,248
|
|
|
$
|
217,124
|
|
|
$
|
194,775
|
|
|
$
|
1,375,225
|
|
|
$
|
6,023,340
|
|
(1)
|
Includes all interest and principal of borrowings under our senior secured credit facilities, senior secured notes due 2023 and capital lease obligations. Under certain circumstances, we are required to pay a percentage of the excess cash flow, if any, generated each year to our lenders which obligation is not reflected in the table above. Interest on the term loan is based on the LIBOR rate plus a base margin and includes the effect of interest rate swaps. For purposes of this table, we have used projected LIBOR rates for all future periods. See Note 7, Debt, to our consolidated financial statements.
|
(2)
|
Includes all interest and principal related to our mortgage facility, which matures on April 1, 2017. See Note 7, Debt, to our consolidated financial statements.
|
(3)
|
We lease approximately one million square feet of office space in 114 locations in 53 countries. Lease payment escalations are based on fixed annual increases, local consumer price index changes or market rental reviews. We have renewal options of various term lengths in 89 leases. We have no purchase options and no restrictions imposed by our leases concerning dividends or additional debt.
|
(4)
|
Represents minimum amounts due to HPE under the terms of an outsourcing agreement through which HPE manages a significant portion of our information technology systems. Actual payments may vary significantly from the minimum amounts presented.
|
(5)
|
Purchase obligations represent an estimate of all open purchase orders and contractual obligations in the ordinary course of business for which we have not received the goods or services as of
December 31, 2016
. Although open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule and adjust our requirements based on our business needs prior to the delivery of goods or performance of services.
|
(6)
|
Our letters of credit consist of stand-by letters of credit, underwritten by a group of lenders, which we primarily issue for certain regulatory purposes as well as to certain hotel properties to secure our payment for hotel room transactions. The contractual expiration dates of these letters of credit are shown in the table above. There were no claims made against any stand‑by letters of credit during the years ended
December 31, 2016
,
2015
and
2014
.
|
(7)
|
Unrecognized tax benefits include associated interest and penalties. The timing of related cash payments for substantially all of these liabilities is inherently uncertain because the ultimate amount and timing of such liabilities is affected by factors which are variable and outside our control.
|
(8)
|
We paid $101 million, including interest, under our TRA in January 2017. See Note 6, Income Taxes, to our consolidated financial statements and “—Tax Receivable Agreement.” The exact timing of future payments under the TRA is uncertain and dependent on the timing of the realization of taxable income.
|
(9)
|
Excludes pension obligations, see Note 13, Pension and Other Postretirement Benefit Plans, to our consolidated financial statements.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
|
Notional Amount
|
|
Interest Rate
Received
|
|
Interest Rate Paid
|
|
Effective Date
|
|
Maturity Date
|
Outstanding:
|
|
$750 million
|
|
1 month LIBOR
|
|
2.19%
|
|
December 30, 2016
|
|
December 29, 2017
|
|
|
$750 million
|
|
1 month LIBOR
|
|
2.61%
|
|
December 29, 2017
|
|
December 31, 2018
|
Matured:
|
|
$400 million
|
|
1 month LIBOR
|
|
2.03%
|
|
July 29, 2011
|
|
September 30, 2014
|
|
|
$350 million
|
|
1 month LIBOR
|
|
2.51%
|
|
April 30, 2012
|
|
September 30, 2014
|
|
|
$750 million
|
|
1 month LIBOR
|
|
1.48%
|
|
December 31, 2015
|
|
December 30, 2016
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Consolidated Financial Statements:
|
|
|
|
Financial Statement Schedules:
|
|
Dallas, Texas
|
February 17, 2017
|
Dallas, Texas
|
February 17, 2017
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue
|
$
|
3,373,387
|
|
|
$
|
2,960,896
|
|
|
$
|
2,631,417
|
|
Cost of revenue
|
2,287,662
|
|
|
1,944,050
|
|
|
1,742,478
|
|
|||
Selling, general and administrative
|
626,153
|
|
|
557,077
|
|
|
467,594
|
|
|||
Operating income
|
459,572
|
|
|
459,769
|
|
|
421,345
|
|
|||
Other (expense) income:
|
|
|
|
|
|
||||||
Interest expense, net
|
(158,251
|
)
|
|
(173,298
|
)
|
|
(218,877
|
)
|
|||
Loss on extinguishment of debt
|
(3,683
|
)
|
|
(38,783
|
)
|
|
(33,538
|
)
|
|||
Joint venture equity income
|
2,780
|
|
|
14,842
|
|
|
12,082
|
|
|||
Other, net
|
27,617
|
|
|
91,377
|
|
|
(63,860
|
)
|
|||
Total other expense, net
|
(131,537
|
)
|
|
(105,862
|
)
|
|
(304,193
|
)
|
|||
Income from continuing operations before income taxes
|
328,035
|
|
|
353,907
|
|
|
117,152
|
|
|||
Provision for income taxes
|
86,645
|
|
|
119,352
|
|
|
6,279
|
|
|||
Income from continuing operations
|
241,390
|
|
|
234,555
|
|
|
110,873
|
|
|||
(Loss) income from discontinued operations, net of tax
|
5,549
|
|
|
314,408
|
|
|
(38,918
|
)
|
|||
Net income
|
246,939
|
|
|
548,963
|
|
|
71,955
|
|
|||
Net income attributable to noncontrolling interests
|
4,377
|
|
|
3,481
|
|
|
2,732
|
|
|||
Net income attributable to Sabre Corporation
|
242,562
|
|
|
545,482
|
|
|
69,223
|
|
|||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
11,381
|
|
|||
Net income attributable to common stockholders
|
$
|
242,562
|
|
|
$
|
545,482
|
|
|
$
|
57,842
|
|
|
|
|
|
|
|
||||||
Basic net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
0.85
|
|
|
$
|
0.85
|
|
|
$
|
0.41
|
|
Income (loss) from discontinued operations
|
0.02
|
|
|
1.15
|
|
|
(0.16
|
)
|
|||
Net income (loss) per common share
|
$
|
0.87
|
|
|
$
|
2.00
|
|
|
$
|
0.24
|
|
Diluted net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
0.84
|
|
|
$
|
0.83
|
|
|
$
|
0.39
|
|
Income (loss) income from discontinued operations
|
0.02
|
|
|
1.12
|
|
|
(0.16
|
)
|
|||
Net income per common share
|
$
|
0.86
|
|
|
$
|
1.95
|
|
|
$
|
0.23
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
277,546
|
|
|
273,139
|
|
|
238,633
|
|
|||
Diluted
|
282,752
|
|
|
280,067
|
|
|
246,747
|
|
|||
|
|
|
|
|
|
||||||
Dividend per common share
|
$
|
0.52
|
|
|
$
|
0.36
|
|
|
$
|
0.18
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
$
|
246,939
|
|
|
$
|
548,963
|
|
|
$
|
71,955
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments (“CTA”):
|
|
|
|
|
|
||||||
Foreign CTA (losses) gains, net of tax
|
(1,265
|
)
|
|
(4,382
|
)
|
|
7,794
|
|
|||
Reclassification adjustment for realized losses on foreign CTA, net of taxes of $107, $12,152, and $0
|
(198
|
)
|
|
(18,558
|
)
|
|
—
|
|
|||
Net change in foreign CTA (losses) gains, net of tax
|
(1,463
|
)
|
|
(22,940
|
)
|
|
7,794
|
|
|||
Retirement-related benefit plans:
|
|
|
|
|
|
||||||
Net actuarial (loss), net of taxes of $9,701, $2,273 and $16,296
|
(17,223
|
)
|
|
(4,060
|
)
|
|
(28,554
|
)
|
|||
Amortization of prior service credits, net of taxes of $518, $516 and $516
|
(914
|
)
|
|
(915
|
)
|
|
(916
|
)
|
|||
Amortization of actuarial losses, net of taxes of $(2,123), $(2,545) and $(1,730)
|
3,748
|
|
|
4,500
|
|
|
3,058
|
|
|||
Total retirement-related benefit plans
|
(14,389
|
)
|
|
(475
|
)
|
|
(26,412
|
)
|
|||
Derivatives and available-for-sale securities:
|
|
|
|
|
|
||||||
Unrealized losses (gains), net of taxes of $2,214, $5,753 and $2,604
|
4,307
|
|
|
(9,642
|
)
|
|
(8,797
|
)
|
|||
Reclassification adjustment for realized (gains) losses, net of taxes of $1,170, $(3,312) and $(2,913)
|
(13,422
|
)
|
|
10,646
|
|
|
4,086
|
|
|||
Net change in derivatives and available-for-sale securities, net of tax
|
(9,115
|
)
|
|
1,004
|
|
|
(4,711
|
)
|
|||
Share of other comprehensive (loss)/income of joint ventures
|
(697
|
)
|
|
(4,921
|
)
|
|
3,421
|
|
|||
Other comprehensive loss
|
(25,664
|
)
|
|
(27,332
|
)
|
|
(19,908
|
)
|
|||
Comprehensive income
|
221,275
|
|
|
521,631
|
|
|
52,047
|
|
|||
Less: Comprehensive income attributable to noncontrolling interests
|
(4,377
|
)
|
|
(3,481
|
)
|
|
(2,732
|
)
|
|||
Comprehensive income attributable to Sabre Corporation
|
$
|
216,898
|
|
|
$
|
518,150
|
|
|
$
|
49,315
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
364,114
|
|
|
$
|
321,132
|
|
Accounts receivable, net
|
400,667
|
|
|
375,789
|
|
||
Prepaid expenses and other current assets
|
88,600
|
|
|
81,167
|
|
||
Total current assets
|
853,381
|
|
|
778,088
|
|
||
Property and equipment, net
|
753,279
|
|
|
627,529
|
|
||
Investments in joint ventures
|
25,582
|
|
|
24,348
|
|
||
Goodwill
|
2,548,447
|
|
|
2,440,431
|
|
||
Acquired customer relationships, net
|
387,632
|
|
|
416,887
|
|
||
Other intangible assets, net
|
387,805
|
|
|
419,666
|
|
||
Deferred income taxes
|
95,285
|
|
|
44,464
|
|
||
Other assets, net
|
673,159
|
|
|
642,214
|
|
||
Total assets
|
$
|
5,724,570
|
|
|
$
|
5,393,627
|
|
|
|
|
|
||||
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
168,576
|
|
|
$
|
138,421
|
|
Accrued compensation and related benefits
|
102,037
|
|
|
99,382
|
|
||
Accrued subscriber incentives
|
216,011
|
|
|
185,270
|
|
||
Deferred revenues
|
187,108
|
|
|
165,124
|
|
||
Other accrued liabilities
|
222,879
|
|
|
221,976
|
|
||
Current portion of debt
|
169,246
|
|
|
190,315
|
|
||
Tax Receivable Agreement
|
100,501
|
|
|
—
|
|
||
Total current liabilities
|
1,166,358
|
|
|
1,000,488
|
|
||
Deferred income taxes
|
88,957
|
|
|
83,562
|
|
||
Other noncurrent liabilities
|
567,359
|
|
|
656,093
|
|
||
Long-term debt
|
3,276,281
|
|
|
3,169,344
|
|
||
Commitments and contingencies (Note 15)
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
||||
Common Stock: $0.01 par value; 450,000,000 authorized shares; 285,461,125 and 279,082,473 shares issued; 276,949,802 and 274,955,830 shares outstanding at December 31, 2016 and 2015, respectively
|
2,854
|
|
|
2,790
|
|
||
Additional paid-in capital
|
2,105,843
|
|
|
2,016,325
|
|
||
Treasury stock, at cost, 8,511,323 and 4,126,643 shares at December 31, 2016 and 2015 respectively
|
(221,746
|
)
|
|
(110,548
|
)
|
||
Retained deficit
|
(1,141,116
|
)
|
|
(1,328,730
|
)
|
||
Accumulated other comprehensive loss
|
(122,799
|
)
|
|
(97,135
|
)
|
||
Noncontrolling interest
|
2,579
|
|
|
1,438
|
|
||
Total stockholders’ equity
|
625,615
|
|
|
484,140
|
|
||
Total liabilities and stockholders’ equity
|
$
|
5,724,570
|
|
|
$
|
5,393,627
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
246,939
|
|
|
$
|
548,963
|
|
|
$
|
71,955
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
413,986
|
|
|
351,480
|
|
|
289,630
|
|
|||
Amortization of upfront incentive consideration
|
55,724
|
|
|
43,521
|
|
|
45,358
|
|
|||
Litigation-related credits
|
(25,527
|
)
|
|
(60,998
|
)
|
|
(41,672
|
)
|
|||
Stock-based compensation expense
|
48,524
|
|
|
29,971
|
|
|
20,094
|
|
|||
Allowance for doubtful accounts
|
10,567
|
|
|
8,558
|
|
|
10,356
|
|
|||
Deferred income taxes
|
48,454
|
|
|
97,225
|
|
|
(3,829
|
)
|
|||
Joint venture equity income
|
(2,780
|
)
|
|
(14,842
|
)
|
|
(12,082
|
)
|
|||
Dividends received from joint venture investments
|
640
|
|
|
28,700
|
|
|
2,261
|
|
|||
Amortization of debt issuance costs
|
9,611
|
|
|
6,759
|
|
|
6,316
|
|
|||
Debt modification costs
|
—
|
|
|
—
|
|
|
3,290
|
|
|||
Gain on remeasurement of previously-held joint venture interest
|
—
|
|
|
(78,082
|
)
|
|
—
|
|
|||
Loss on extinguishment of debt
|
3,683
|
|
|
38,783
|
|
|
33,538
|
|
|||
Other
|
(5,426
|
)
|
|
3,556
|
|
|
6,023
|
|
|||
Loss (income) from discontinued operations
|
(5,549
|
)
|
|
(314,408
|
)
|
|
38,918
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts and other receivables
|
(12,949
|
)
|
|
10,662
|
|
|
(7,295
|
)
|
|||
Prepaid expenses and other current assets
|
(11,809
|
)
|
|
(13,255
|
)
|
|
6,948
|
|
|||
Capitalized implementation costs
|
(83,405
|
)
|
|
(63,382
|
)
|
|
(37,811
|
)
|
|||
Upfront incentive consideration
|
(70,702
|
)
|
|
(63,510
|
)
|
|
(50,936
|
)
|
|||
Other assets
|
(2,799
|
)
|
|
(66,873
|
)
|
|
(78,873
|
)
|
|||
Accrued compensation and related benefits
|
2,768
|
|
|
18,268
|
|
|
(5,301
|
)
|
|||
Accounts payable and other accrued liabilities
|
56,787
|
|
|
8,721
|
|
|
52,128
|
|
|||
Deferred revenue including upfront solution fees
|
22,663
|
|
|
9,390
|
|
|
38,643
|
|
|||
Cash provided by operating activities
|
699,400
|
|
|
529,207
|
|
|
387,659
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Additions to property and equipment
|
(327,647
|
)
|
|
(286,697
|
)
|
|
(227,227
|
)
|
|||
Acquisitions, net of cash acquired
|
(164,120
|
)
|
|
(442,344
|
)
|
|
(31,799
|
)
|
|||
Proceeds from sale of marketable securities
|
45,959
|
|
|
—
|
|
|
—
|
|
|||
Other investing activities
|
—
|
|
|
—
|
|
|
235
|
|
|||
Cash used in investing activities
|
(445,808
|
)
|
|
(729,041
|
)
|
|
(258,791
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Proceeds of borrowings from lenders
|
1,055,000
|
|
|
1,252,000
|
|
|
148,307
|
|
|||
Payments on borrowings from lenders
|
(999,868
|
)
|
|
(960,807
|
)
|
|
(802,664
|
)
|
|||
Debt prepayment fees and issuance costs
|
(11,377
|
)
|
|
(52,674
|
)
|
|
(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
|
27,344
|
|
|
47,414
|
|
|
13,809
|
|
|||
Cash dividends paid to common stockholders
|
(144,355
|
)
|
|
(98,596
|
)
|
|
(47,904
|
)
|
|||
Repurchase of common stock
|
(100,000
|
)
|
|
(98,770
|
)
|
|
—
|
|
|||
Other financing activities
|
(16,769
|
)
|
|
4,577
|
|
|
1,860
|
|
|||
Cash (used in) provided by financing activities
|
(190,025
|
)
|
|
93,144
|
|
|
(71,945
|
)
|
|||
Cash Flows from Discontinued Operations
|
|
|
|
|
|
||||||
Cash (used in) provided by operating activities
|
(19,478
|
)
|
|
236
|
|
|
(205,988
|
)
|
|||
Cash provided by (used in) investing activities
|
—
|
|
|
278,834
|
|
|
(1,965
|
)
|
|||
Cash (used in) provided by discontinued operations
|
(19,478
|
)
|
|
279,070
|
|
|
(207,953
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(1,107
|
)
|
|
(6,927
|
)
|
|
(1,527
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
42,982
|
|
|
165,453
|
|
|
(152,557
|
)
|
|||
Cash and cash equivalents at beginning of period
|
321,132
|
|
|
155,679
|
|
|
308,236
|
|
|||
Cash and cash equivalents at end of period
|
$
|
364,114
|
|
|
$
|
321,132
|
|
|
$
|
155,679
|
|
Cash payments for income taxes
|
$
|
39,032
|
|
|
$
|
27,816
|
|
|
$
|
47,545
|
|
Cash payments for interest
|
$
|
151,495
|
|
|
$
|
154,307
|
|
|
$
|
197,782
|
|
Capitalized interest
|
$
|
13,887
|
|
|
$
|
11,981
|
|
|
$
|
13,412
|
|
Preferred shares dividend
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,381
|
|
|
Temporary Equity
|
|
Stockholders’ Equity (Deficit)
|
|||||||||||||||||||||||||||||||||||||
|
Series A Redeemable
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid in
Capital
|
|
Treasury Stock
|
|
Retained
Earnings
(Deficit)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Noncontrolling
Interest
|
|
Total
Stockholders'
Equity
(Deficit)
|
|||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||||||||||||
Balance at December 31, 2013
|
87,229,703
|
|
|
$
|
634,843
|
|
|
178,633,409
|
|
|
$
|
1,786
|
|
|
$
|
880,619
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,785,554
|
)
|
|
$
|
(49,895
|
)
|
|
$
|
508
|
|
|
$
|
(952,536
|
)
|
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69,223
|
|
|
(19,908
|
)
|
|
2,732
|
|
|
52,047
|
|
||||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47,904
|
)
|
|
—
|
|
|
—
|
|
|
(47,904
|
)
|
||||||||
Issuances pursuant to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Initial public offering, net of offering costs
|
—
|
|
|
—
|
|
|
45,080,000
|
|
|
451
|
|
|
671,686
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
672,137
|
|
||||||||
Conversion of redeemable preferred stock to common stock
|
(87,229,703
|
)
|
|
(646,224
|
)
|
|
40,343,529
|
|
|
403
|
|
|
645,821
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
646,224
|
|
||||||||
Settlement of stock-based awards
|
—
|
|
|
—
|
|
|
4,180,609
|
|
|
42
|
|
|
19,584
|
|
|
437,386
|
|
|
(5,297
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,329
|
|
||||||||
Accrued preferred shares dividend
|
—
|
|
|
11,381
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,381
|
)
|
|
—
|
|
|
—
|
|
|
(11,381
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,217
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,217
|
|
||||||||
Initial recognition of tax receivable agreement liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(321,377
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(321,377
|
)
|
||||||||
Tax effect of initial public offering related costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,246
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,246
|
|
||||||||
Dividends paid to non-controlling interest on subsidiary common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,844
|
)
|
|
(2,844
|
)
|
||||||||
Acquisition of minority interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
225
|
|
|
225
|
|
||||||||
Balance at December 31, 2014
|
—
|
|
|
—
|
|
|
268,237,547
|
|
|
2,682
|
|
|
1,931,796
|
|
|
437,386
|
|
|
(5,297
|
)
|
|
(1,775,616
|
)
|
|
(69,803
|
)
|
|
621
|
|
|
84,383
|
|
||||||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
545,482
|
|
|
(27,332
|
)
|
|
3,481
|
|
|
521,631
|
|
||||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(98,596
|
)
|
|
—
|
|
|
—
|
|
|
(98,596
|
)
|
||||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,400,000
|
|
|
(98,770
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(98,770
|
)
|
||||||||
Settlement of stock-based awards
|
—
|
|
|
—
|
|
|
10,844,926
|
|
|
108
|
|
|
54,425
|
|
|
289,257
|
|
|
(6,481
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,052
|
|
||||||||
Tax benefits from stock-based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,104
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,104
|
|
||||||||
Dividends paid to non-controlling interest on subsidiary common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,664
|
)
|
|
(2,664
|
)
|
||||||||
Balance at December 31, 2015
|
—
|
|
|
—
|
|
|
279,082,473
|
|
|
2,790
|
|
|
2,016,325
|
|
|
4,126,643
|
|
|
(110,548
|
)
|
|
(1,328,730
|
)
|
|
(97,135
|
)
|
|
1,438
|
|
|
484,140
|
|
||||||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
242,562
|
|
|
(25,664
|
)
|
|
4,377
|
|
|
221,275
|
|
||||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(144,307
|
)
|
|
—
|
|
|
—
|
|
|
(144,307
|
)
|
||||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,980,672
|
|
|
(100,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100,000
|
)
|
||||||||
Settlement of stock-based awards
|
—
|
|
|
—
|
|
|
6,378,652
|
|
|
64
|
|
|
38,602
|
|
|
404,008
|
|
|
(11,198
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,468
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,524
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,524
|
|
||||||||
Dividends paid to non-controlling interest on subsidiary common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,236
|
)
|
|
(3,236
|
)
|
||||||||
Adoption of New Accounting Standard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,392
|
|
|
—
|
|
|
—
|
|
|
89,359
|
|
|
—
|
|
|
—
|
|
|
91,751
|
|
||||||||
Balance at December 31, 2016
|
—
|
|
|
$
|
—
|
|
|
285,461,125
|
|
|
$
|
2,854
|
|
|
$
|
2,105,843
|
|
|
8,511,323
|
|
|
$
|
(221,746
|
)
|
|
$
|
(1,141,116
|
)
|
|
$
|
(122,799
|
)
|
|
$
|
2,579
|
|
|
$
|
625,615
|
|
Buildings
|
Lesser of lease term or 35 years
|
Leasehold improvements
|
Lesser of lease term or useful life
|
Furniture and fixtures
|
5 to 15 years
|
Equipment, general office and computer
|
3 to 5 years
|
Software developed for internal use
|
3 to 5 years
|
Cash and cash equivalents
|
$
|
4,209
|
|
Accounts receivable
|
10,564
|
|
|
Other current assets
|
793
|
|
|
Goodwill
|
102,333
|
|
|
Intangible assets:
|
|
||
Customer relationships
|
52,292
|
|
|
Purchased technology
|
23,362
|
|
|
Trademarks and brand names
|
2,183
|
|
|
Property and equipment, net
|
1,556
|
|
|
Current liabilities
|
(11,152
|
)
|
|
Deferred income taxes
|
(25,766
|
)
|
|
Total acquisition price
|
$
|
160,374
|
|
Cash and cash equivalents
|
$
|
65,641
|
|
Accounts receivable, net
|
49,099
|
|
|
Other current assets
|
12,522
|
|
|
Intangible assets:
|
|
||
Customer relationships
|
319,000
|
|
|
Reacquired rights
(1)
|
113,500
|
|
|
Purchased technology
|
14,000
|
|
|
Supplier agreements
|
13,000
|
|
|
Trademarks and brand names
|
4,000
|
|
|
Property and equipment, net
|
6,402
|
|
|
Other assets
|
66,423
|
|
|
Current liabilities
|
(123,307
|
)
|
|
Noncurrent liabilities
|
(44,245
|
)
|
|
Noncurrent deferred income taxes
|
(78,054
|
)
|
|
Goodwill
|
292,267
|
|
|
|
710,248
|
|
|
Fair value of Sabre Corporation's previously held equity investment in SAPPL
|
(200,000
|
)
|
|
Fair value of SAPPL's previously held equity investment in national marketing companies
|
(1,880
|
)
|
|
Total acquisition price
|
$
|
508,368
|
|
|
Year Ended December 31,
|
|||||
|
2015
|
2014
|
||||
Revenue
|
$
|
3,109,310
|
|
$
|
2,905,944
|
|
Income from continuing operations
|
165,006
|
|
122,561
|
|
||
Net income attributable to common stockholders
|
475,933
|
|
69,524
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue
|
$
|
—
|
|
|
$
|
24,815
|
|
|
$
|
328,835
|
|
Cost of revenue
|
—
|
|
|
21,520
|
|
|
113,092
|
|
|||
Selling, general and administrative
|
11,619
|
|
|
(23,077
|
)
|
|
273,195
|
|
|||
Restructuring charges
|
—
|
|
|
—
|
|
|
1,785
|
|
|||
Operating income (loss)
|
(11,619
|
)
|
|
26,372
|
|
|
(59,237
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||
Gain (loss) on sale of businesses
(1)
|
305
|
|
|
294,276
|
|
|
—
|
|
|||
Other, net
|
(1,025
|
)
|
|
4,640
|
|
|
(10,545
|
)
|
|||
Total other income (expense), net
|
(720
|
)
|
|
298,916
|
|
|
(10,545
|
)
|
|||
Income (loss) from discontinuing operations before income taxes
|
(12,339
|
)
|
|
325,288
|
|
|
(69,782
|
)
|
|||
Provision (benefit) for income taxes
(2)
|
(17,888
|
)
|
|
10,880
|
|
|
(30,864
|
)
|
|||
Net income (loss) from discontinued operations
|
$
|
5,549
|
|
|
$
|
314,408
|
|
|
$
|
(38,918
|
)
|
(1)
|
The year ended December 31, 2015 includes
$31 million
of reclassified cumulative translation gains associated with our lastminute.com subsidiaries. See “Divestiture of lastminute.com—Cumulative Translation Adjustments” for additional information.
|
(2)
|
The year ended December 31, 2016 includes a
$17 million
tax benefit associated with the resolution of uncertain tax positions. The year ended December 31, 2015 includes a U.S. tax benefit of
$93 million
; see “Divestiture of lastminute.com—U.S. Tax Benefit” for additional information.
|
|
Travel Network
|
|
Airline and
Hospitality
Solutions
|
|
Total
Goodwill
|
||||||
Balance as of December 31, 2014
|
$
|
1,812,500
|
|
|
$
|
340,999
|
|
|
$
|
2,153,499
|
|
Acquired
|
287,349
|
|
|
—
|
|
|
287,349
|
|
|||
Adjustments
(1)
|
(269
|
)
|
|
(148
|
)
|
|
(417
|
)
|
|||
Balance as of December 31, 2015
|
2,099,580
|
|
|
340,851
|
|
|
2,440,431
|
|
|||
Acquired
|
4,894
|
|
|
105,990
|
|
|
110,884
|
|
|||
Adjustments
(1)
|
68
|
|
|
(2,936
|
)
|
|
(2,868
|
)
|
|||
Balance as of December 31, 2016
|
$
|
2,104,542
|
|
|
$
|
443,905
|
|
|
$
|
2,548,447
|
|
(1)
|
Includes net foreign currency effects during the year.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Acquired customer relationships
|
$
|
1,034,483
|
|
|
$
|
(646,851
|
)
|
|
$
|
387,632
|
|
|
$
|
978,763
|
|
|
$
|
(561,876
|
)
|
|
$
|
416,887
|
|
Trademarks and brand names
|
332,238
|
|
|
(114,430
|
)
|
|
217,808
|
|
|
330,054
|
|
|
(99,814
|
)
|
|
230,240
|
|
||||||
Reacquired rights
|
113,500
|
|
|
(24,481
|
)
|
|
89,019
|
|
|
113,500
|
|
|
(8,267
|
)
|
|
105,233
|
|
||||||
Purchased technology
|
427,823
|
|
|
(366,456
|
)
|
|
61,367
|
|
|
403,524
|
|
|
(342,805
|
)
|
|
60,719
|
|
||||||
Acquired contracts, supplier and distributor agreements
|
37,600
|
|
|
(18,953
|
)
|
|
18,647
|
|
|
37,600
|
|
|
(15,494
|
)
|
|
22,106
|
|
||||||
Non-compete agreements
|
15,025
|
|
|
(14,061
|
)
|
|
964
|
|
|
15,025
|
|
|
(13,657
|
)
|
|
1,368
|
|
||||||
Total intangible assets
|
$
|
1,960,669
|
|
|
$
|
(1,185,232
|
)
|
|
$
|
775,437
|
|
|
$
|
1,878,466
|
|
|
$
|
(1,041,913
|
)
|
|
$
|
836,553
|
|
2017
|
$
|
95,840
|
|
2018
|
67,983
|
|
|
2019
|
63,866
|
|
|
2020
|
62,256
|
|
|
2021
|
60,743
|
|
|
2022 and thereafter
|
424,749
|
|
|
Total
|
$
|
775,437
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Prepaid Expenses
|
$
|
61,539
|
|
|
$
|
46,177
|
|
Value added tax receivable, net
|
26,244
|
|
|
28,830
|
|
||
Other
|
817
|
|
|
6,160
|
|
||
Prepaid Expenses and Other Current Assets
|
$
|
88,600
|
|
|
$
|
81,167
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Buildings and leasehold improvements
|
$
|
144,604
|
|
|
$
|
141,070
|
|
Furniture, fixtures and equipment
|
35,525
|
|
|
29,265
|
|
||
Computer equipment
|
288,982
|
|
|
321,001
|
|
||
Software developed for internal use
|
1,271,059
|
|
|
986,780
|
|
||
|
1,740,170
|
|
|
1,478,116
|
|
||
Accumulated depreciation and amortization
|
(986,891
|
)
|
|
(850,587
|
)
|
||
Property and equipment, net
|
$
|
753,279
|
|
|
$
|
627,529
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Capitalized implementation costs, net
|
$
|
249,317
|
|
|
$
|
206,429
|
|
Deferred customer discounts
|
212,065
|
|
|
212,037
|
|
||
Deferred upfront incentive consideration
|
125,289
|
|
|
109,943
|
|
||
Other
|
86,488
|
|
|
113,805
|
|
||
Other assets, net
|
$
|
673,159
|
|
|
$
|
642,214
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Tax receivable agreement
|
$
|
288,146
|
|
|
$
|
387,342
|
|
Pension and other postretirement benefits
|
123,002
|
|
|
96,733
|
|
||
Deferred revenue
|
77,260
|
|
|
71,434
|
|
||
Other
|
78,951
|
|
|
100,584
|
|
||
Other noncurrent liabilities
|
$
|
567,359
|
|
|
$
|
656,093
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Defined benefit pension and other postretirement benefit plans
|
$
|
(105,036
|
)
|
|
$
|
(90,647
|
)
|
Unrealized loss on foreign currency forward contracts, interest rate swaps and available-for-sale securities
|
(15,499
|
)
|
|
(6,391
|
)
|
||
Unrealized foreign currency translation gain
|
(2,264
|
)
|
|
(97
|
)
|
||
Total accumulated other comprehensive loss, net of tax
|
$
|
(122,799
|
)
|
|
$
|
(97,135
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Components of pre-tax income:
|
|
|
|
|
|
|
|
|
|||
Domestic
|
$
|
206,182
|
|
|
$
|
262,682
|
|
|
$
|
109,481
|
|
Foreign
|
121,853
|
|
|
91,225
|
|
|
7,671
|
|
|||
|
$
|
328,035
|
|
|
$
|
353,907
|
|
|
$
|
117,152
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Current portion:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
8,357
|
|
|
$
|
1,730
|
|
|
$
|
—
|
|
State and Local
|
1,346
|
|
|
(6,249
|
)
|
|
(10,099
|
)
|
|||
Non U.S.
|
28,488
|
|
|
26,646
|
|
|
20,207
|
|
|||
Total current
|
38,191
|
|
|
22,127
|
|
|
10,108
|
|
|||
Deferred portion:
|
|
|
|
|
|
|
|
|
|||
Federal
|
60,372
|
|
|
89,682
|
|
|
(10,852
|
)
|
|||
State and Local
|
(4,352
|
)
|
|
5,715
|
|
|
3,381
|
|
|||
Non U.S.
|
(7,566
|
)
|
|
1,828
|
|
|
3,642
|
|
|||
Total deferred
|
48,454
|
|
|
97,225
|
|
|
(3,829
|
)
|
|||
Total provision for income taxes
|
$
|
86,645
|
|
|
$
|
119,352
|
|
|
$
|
6,279
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Income tax provision at statutory federal income tax rate
|
$
|
114,812
|
|
|
$
|
123,867
|
|
|
$
|
41,003
|
|
State income taxes, net of federal benefit
|
(1,964
|
)
|
|
(1,263
|
)
|
|
(3,224
|
)
|
|||
Impact of non U.S. taxing jurisdictions, net
|
11,482
|
|
|
13,966
|
|
|
30,476
|
|
|||
Non-taxable gain on remeasurement of previously-held investment in Abacus
|
—
|
|
|
(27,279
|
)
|
|
—
|
|
|||
Employee stock based compensation
|
(34,789
|
)
|
|
—
|
|
|
—
|
|
|||
Research tax credit
|
(9,817
|
)
|
|
(3,857
|
)
|
|
(3,101
|
)
|
|||
Tax receivable agreement
|
—
|
|
|
—
|
|
|
22,982
|
|
|||
Valuation allowance
|
8
|
|
|
3,010
|
|
|
(82,116
|
)
|
|||
Other, net
|
6,913
|
|
|
10,908
|
|
|
259
|
|
|||
Total provision for income taxes
|
$
|
86,645
|
|
|
$
|
119,352
|
|
|
$
|
6,279
|
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
|
|
||
Accrued expenses
|
$
|
30,953
|
|
|
$
|
33,823
|
|
Employee benefits other than pension
|
43,197
|
|
|
29,726
|
|
||
Deferred revenue
|
75,727
|
|
|
57,197
|
|
||
Pension obligations
|
43,145
|
|
|
34,718
|
|
||
Tax loss carryforwards
|
312,073
|
|
|
295,329
|
|
||
Incentive consideration
|
12,586
|
|
|
17,897
|
|
||
Tax credit carryforwards
|
58,357
|
|
|
36,897
|
|
||
Suspended loss
|
23,702
|
|
|
23,713
|
|
||
Other
|
(562
|
)
|
|
8,183
|
|
||
Total deferred tax assets
|
599,178
|
|
|
537,483
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
||
Depreciation and amortization
|
(42,238
|
)
|
|
(24,938
|
)
|
||
Software developed for internal use
|
(286,653
|
)
|
|
(232,924
|
)
|
||
Intangible assets
|
(173,838
|
)
|
|
(189,600
|
)
|
||
Write off of Intercompany Debt
|
—
|
|
|
(35,544
|
)
|
||
Unrealized gains and losses
|
(5,050
|
)
|
|
(13,622
|
)
|
||
Currency translation adjustment
|
—
|
|
|
82
|
|
||
Non U.S. operations
|
(760
|
)
|
|
609
|
|
||
Investment in partnership
|
(9,788
|
)
|
|
131
|
|
||
Total deferred tax liabilities
|
(518,327
|
)
|
|
(495,806
|
)
|
||
Valuation allowance
|
(74,523
|
)
|
|
(80,775
|
)
|
||
Net deferred tax (liability) asset
|
$
|
6,328
|
|
|
$
|
(39,098
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of year
|
$
|
68,746
|
|
|
$
|
58,616
|
|
|
$
|
61,241
|
|
Additions for tax positions taken in the current year
|
538
|
|
|
8,252
|
|
|
4,565
|
|
|||
Additions for tax positions of prior years
|
2,096
|
|
|
(786
|
)
|
|
2,259
|
|
|||
Additions for tax positions from acquisitions
|
—
|
|
|
11,343
|
|
|
—
|
|
|||
Reductions for tax positions of prior years
|
(17,706
|
)
|
|
(4,599
|
)
|
|
(43
|
)
|
|||
Reductions for tax positions of expired statute of limitations
|
(3,743
|
)
|
|
(3,456
|
)
|
|
(2,439
|
)
|
|||
Settlements
|
(600
|
)
|
|
(624
|
)
|
|
(6,967
|
)
|
|||
Balance at end of year
|
$
|
49,331
|
|
|
$
|
68,746
|
|
|
$
|
58,616
|
|
|
|
|
|
|
December 31,
|
||||||
|
Rate
|
|
Maturity
|
|
2016
|
|
2015
|
||||
Senior secured credit facilities:
|
|
|
|
|
|
|
|
||||
Term A facility
(1)
|
L + 2.50%
|
|
November 2018
|
|
$
|
585,000
|
|
|
$
|
—
|
|
Term B facility
|
L + 3.00%
|
|
February 2019
|
|
1,420,896
|
|
|
1,721,750
|
|
||
Incremental term loan facility
|
L + 3.50%
|
|
February 2019
|
|
282,354
|
|
|
342,125
|
|
||
Term C facility
|
L + 3.00%
|
|
December 2017
|
|
49,313
|
|
|
49,313
|
|
||
Revolver, $400 million
(1)
|
L + 2.50%
|
|
November 2018
|
|
—
|
|
|
—
|
|
||
Senior unsecured notes due 2016
|
8.35%
|
|
March 2016
|
|
—
|
|
|
165,000
|
|
||
5.375% senior secured notes due 2023
|
5.375%
|
|
April 2023
|
|
530,000
|
|
|
530,000
|
|
||
5.25% senior secured notes due 2023
|
5.25%
|
|
November 2023
|
|
500,000
|
|
|
500,000
|
|
||
Mortgage facility
|
5.80%
|
|
April 2017
|
|
79,741
|
|
|
80,984
|
|
||
Capital lease obligations
|
|
|
|
|
31,190
|
|
|
6,502
|
|
||
Face value of total debt outstanding
|
|
|
|
|
3,478,494
|
|
|
3,395,674
|
|
||
Less current portion of debt outstanding
|
|
|
|
|
(169,246
|
)
|
|
(190,687
|
)
|
||
Face value of long-term debt outstanding
|
|
|
|
|
$
|
3,309,248
|
|
|
$
|
3,204,987
|
|
(1)
|
The Term Loan A and the Revolver mature in July 2021 and include an accelerated maturity of November 19, 2018 if on November 19, 2018 the Term Loan B and Incremental Term Loan Facility have not been repaid in full or refinanced with a maturity date subsequent to July 18, 2021.
|
|
Eurocurrency borrowings
|
|
Base rate borrowings
|
||||
|
Applicable Margin
(1)
|
|
Floor
|
|
Applicable Margin
|
|
Floor
|
Term Loan A
|
2.50%
|
|
—%
|
|
1.50%
|
|
—%
|
Term Loan B
|
3.00%
|
|
1.00%
|
|
2.00%
|
|
2.00%
|
Incremental term loan facility
|
3.50%
|
|
1.00%
|
|
2.50%
|
|
2.00%
|
Term Loan C
|
3.00%
|
|
1.00%
|
|
2.00%
|
|
2.00%
|
Revolver, $400 million
|
2.50%
|
|
N/A
|
|
1.50%
|
|
N/A
|
(1)
|
Applicable margins do not reflect potential step downs which are determined by the Senior Secured Leverage Ratio. See below for additional information.
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Including the impact of interest rate swaps
|
4.72
|
%
|
|
4.48
|
%
|
|
5.43
|
%
|
Excluding the impact of interest rate swaps
|
4.55
|
%
|
|
4.48
|
%
|
|
4.89
|
%
|
|
Amount
|
||
Years Ending December 31,
|
|
|
|
2017
|
$
|
169,246
|
|
2018
|
564,385
|
|
|
2019
|
1,710,495
|
|
|
2020
|
4,368
|
|
|
2021
|
—
|
|
|
Thereafter
|
1,030,000
|
|
|
Total
|
$
|
3,478,494
|
|
December 31, 2015 Outstanding Notional Amount
|
|||||||||||
Buy Currency
|
|
Sell Currency
|
|
Foreign Amount
|
|
USD Amount
|
|
Average Contract
Rate
|
|||
US Dollar
|
|
Australian Dollar
|
|
2,080
|
|
|
1,570
|
|
|
0.7548
|
|
US Dollar
|
|
Euro
|
|
2,870
|
|
|
3,169
|
|
|
1.1042
|
|
Australian Dollar
|
|
US Dollar
|
|
1,260
|
|
|
939
|
|
|
0.7452
|
|
Euro
|
|
US Dollar
|
|
2,870
|
|
|
3,122
|
|
|
1.0878
|
|
British Pound Sterling
|
|
US Dollar
|
|
18,075
|
|
|
27,415
|
|
|
1.5167
|
|
Indian Rupee
|
|
US Dollar
|
|
1,880,500
|
|
|
27,736
|
|
|
0.0147
|
|
Polish Zloty
|
|
US Dollar
|
|
226,500
|
|
|
59,120
|
|
|
0.2610
|
|
|
Notional Amount
|
|
Interest Rate
Received
|
|
Interest Rate Paid
|
|
Effective Date
|
|
Maturity Date
|
Outstanding:
|
$750 million
|
|
1 month LIBOR
|
|
2.19%
|
|
December 30, 2016
|
|
December 29, 2017
|
|
$750 million
|
|
1 month LIBOR
|
|
2.61%
|
|
December 29, 2017
|
|
December 31, 2018
|
Matured:
|
$400 million
|
|
1 month LIBOR
|
|
2.03%
|
|
July 29, 2011
|
|
September 30, 2014
|
|
$350 million
|
|
1 month LIBOR
|
|
2.51%
|
|
April 30, 2012
|
|
September 30, 2014
|
|
$750 million
|
|
1 month LIBOR
|
|
1.48%
|
|
December 31, 2015
|
|
December 30, 2016
|
|
|
Derivative Liabilities
|
||||||||
|
|
|
|
Fair Value as of December 31,
|
||||||
Derivatives Designated as Hedging Instruments
|
|
Consolidated Balance Sheet Location
|
|
2016
|
|
2015
|
||||
Foreign exchange contracts
|
|
Other accrued liabilities
|
|
$
|
7,360
|
|
|
$
|
1,759
|
|
Interest rate swaps
|
|
Other accrued liabilities
|
|
8,345
|
|
|
3,912
|
|
||
Interest rate swaps
|
|
Other noncurrent liabilities
|
|
7,339
|
|
|
9,822
|
|
||
|
|
|
|
$
|
23,044
|
|
|
$
|
15,493
|
|
|
|
Amount of (Loss) Gain
Recognized in OCI on Derivative, Effective Portion
|
||||||||||
|
|
Year Ended December 31,
|
||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
2016
|
|
2015
|
|
2014
|
||||||
Foreign exchange contracts
|
|
$
|
(6,413
|
)
|
|
$
|
(5,505
|
)
|
|
$
|
(7,836
|
)
|
Interest rate swaps
|
|
(3,446
|
)
|
|
(7,939
|
)
|
|
(961
|
)
|
|||
Total loss
|
|
$
|
(9,859
|
)
|
|
$
|
(13,444
|
)
|
|
$
|
(8,797
|
)
|
|
|
|
|
Amount of Loss (Gain) Reclassified from Accumulated
OCI into Income, Effective Portion
|
||||||||||
|
|
|
|
Year Ended December 31,
|
||||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
Income Statement Location
|
|
2016
|
|
2015
|
|
2014
|
||||||
Foreign exchange contracts
|
|
Cost of revenue
|
|
$
|
1,991
|
|
|
$
|
10,646
|
|
|
$
|
2,902
|
|
Interest rate swaps
|
|
Interest Expense
|
|
2,336
|
|
|
—
|
|
|
7,750
|
|
|||
Total
|
|
|
|
$
|
4,327
|
|
|
$
|
10,646
|
|
|
$
|
10,652
|
|
|
|
|
Fair Value at Reporting Date Using
|
||||||||||||
|
December 31, 2016
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
$
|
(7,360
|
)
|
|
$
|
—
|
|
|
$
|
(7,360
|
)
|
|
$
|
—
|
|
Interest rate swap contracts
|
(15,684
|
)
|
|
—
|
|
|
(15,684
|
)
|
|
—
|
|
||||
Total
|
$
|
(23,044
|
)
|
|
$
|
—
|
|
|
$
|
(23,044
|
)
|
|
$
|
—
|
|
|
|
|
Fair Value at Reporting Date Using
|
||||||||||||
|
December 31, 2015
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Available-for-sale securities
|
$
|
36,711
|
|
|
$
|
36,711
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives:
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
(1,759
|
)
|
|
—
|
|
|
(1,759
|
)
|
|
—
|
|
||||
Interest rate swap contracts
|
(13,734
|
)
|
|
—
|
|
|
(13,734
|
)
|
|
—
|
|
||||
Total
|
$
|
21,218
|
|
|
$
|
36,711
|
|
|
$
|
(15,493
|
)
|
|
$
|
—
|
|
|
|
Fair Value at December 31,
|
|
Carrying Value at December 31,
|
||||||||||||
Financial Instrument
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Term Loan A
|
|
$
|
583,538
|
|
|
$
|
—
|
|
|
$
|
582,595
|
|
|
$
|
—
|
|
Term Loan B
|
|
1,435,993
|
|
|
1,705,609
|
|
|
1,417,616
|
|
|
1,716,048
|
|
||||
Incremental Term Loan Facility - Term Loan B
|
|
283,413
|
|
|
339,559
|
|
|
282,354
|
|
|
342,125
|
|
||||
Term Loan C
|
|
49,436
|
|
|
49,251
|
|
|
49,237
|
|
|
49,157
|
|
||||
Revolver, $400M
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Senior Unsecured Notes Due 2016
|
|
—
|
|
|
165,804
|
|
|
—
|
|
|
164,628
|
|
||||
Senior Secured Notes Due 2023
|
|
542,919
|
|
|
528,013
|
|
|
530,000
|
|
|
530,000
|
|
||||
Senior Secured Notes Due 2023
|
|
515,000
|
|
|
494,375
|
|
|
500,000
|
|
|
500,000
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Exercise price
|
$
|
27.12
|
|
|
$
|
22.64
|
|
|
$
|
16.82
|
|
Average risk-free interest rate
|
1.81
|
%
|
|
1.75
|
%
|
|
1.96
|
%
|
|||
Expected life (in years)
|
6.11
|
|
|
6.11
|
|
|
6.11
|
|
|||
Implied volatility
|
23.44
|
%
|
|
27.29
|
%
|
|
33.28
|
%
|
|||
Dividend yield
|
1.92
|
%
|
|
1.60
|
%
|
|
2.14
|
%
|
|
|
|
Weighted-Average
|
|
|
|||||||
|
Quantity
|
|
Exercise Price
|
|
Remaining
Contractual
Term (years)
|
|
Aggregate
Intrinsic Value
(in thousands)
(1)
|
|||||
Outstanding at December 31, 2015
(2)
|
9,965,532
|
|
|
$
|
11.19
|
|
|
6.4
|
|
$
|
167,279
|
|
Granted
|
1,175,764
|
|
|
27.12
|
|
|
|
|
|
|
||
Exercised
|
(5,044,409
|
)
|
|
7.69
|
|
|
|
|
|
|
||
Cancelled
|
(281,008
|
)
|
|
17.66
|
|
|
|
|
|
|
||
Outstanding at December 31, 2016
(2)
|
5,815,879
|
|
|
$
|
17.18
|
|
|
7.3
|
|
$
|
45,199
|
|
Vested and exercisable at December 31, 2016
|
3,100,324
|
|
|
$
|
13.00
|
|
|
6.3
|
|
$
|
37,046
|
|
(1)
|
Aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options awards and the closing price of our common stock of
$24.95
on
December 31, 2016
.
|
(2)
|
Includes performance-based stock options granted in 2008 under the Sovereign MEIP. The vesting of these performance-based stock options was contingent upon a liquidity event which occurred in the first quarter of 2015. As a result of the liquidity event, we recognized expense of
$3 million
during the year ended December 31, 2015.
|
|
Quantity
|
|
Weighted-Average
Grant Date
Fair Value
|
|||
Unvested at December 31, 2015
|
2,119,916
|
|
|
$
|
17.63
|
|
Granted
|
826,478
|
|
|
27.79
|
|
|
Vested
|
(724,741
|
)
|
|
16.23
|
|
|
Cancelled
|
(129,498
|
)
|
|
20.50
|
|
|
Unvested at December 31, 2016
|
2,092,155
|
|
|
$
|
21.94
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Numerator:
|
|
|
|
|
|
|
|
|
|||
Income from continuing operations
|
$
|
241,390
|
|
|
$
|
234,555
|
|
|
$
|
110,873
|
|
Net income attributable to noncontrolling interests
|
4,377
|
|
|
3,481
|
|
|
2,732
|
|
|||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
11,381
|
|
|||
Net income from continuing operations available to common stockholders, basic and diluted
|
$
|
237,013
|
|
|
$
|
231,074
|
|
|
$
|
96,760
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|||
Basic weighted-average common shares outstanding
|
277,546
|
|
|
273,139
|
|
|
238,633
|
|
|||
Dilutive effect of stock options and restricted stock awards
|
5,206
|
|
|
6,928
|
|
|
8,114
|
|
|||
Diluted weighted-average common shares outstanding
|
282,752
|
|
|
280,067
|
|
|
246,747
|
|
|||
Basic earnings per share
|
$
|
0.85
|
|
|
$
|
0.85
|
|
|
$
|
0.41
|
|
Diluted earnings per share
|
$
|
0.84
|
|
|
$
|
0.83
|
|
|
$
|
0.39
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Change in benefit obligation:
|
|
|
|
|
|
||
Benefit obligation at January 1
|
$
|
(420,516
|
)
|
|
$
|
(448,577
|
)
|
Service cost
|
—
|
|
|
—
|
|
||
Interest cost
|
(20,041
|
)
|
|
(19,097
|
)
|
||
Actuarial gains (losses), net
|
(28,350
|
)
|
|
22,669
|
|
||
Benefits paid
|
24,245
|
|
|
24,489
|
|
||
Benefit obligation at December 31
|
$
|
(444,662
|
)
|
|
$
|
(420,516
|
)
|
Change in plan assets:
|
|
|
|
|
|
||
Fair value of assets at January 1
|
$
|
326,586
|
|
|
$
|
359,099
|
|
Actual return on plan assets
|
22,130
|
|
|
(8,024
|
)
|
||
Employer contributions
|
—
|
|
|
—
|
|
||
Benefits paid
|
(24,245
|
)
|
|
(24,489
|
)
|
||
Fair value of assets at December 31
|
$
|
324,471
|
|
|
$
|
326,586
|
|
Unfunded status at December 31
|
$
|
(120,191
|
)
|
|
$
|
(93,930
|
)
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Net actuarial loss
|
$
|
(118,739
|
)
|
|
$
|
(105,017
|
)
|
Prior service credit
|
13,348
|
|
|
14,262
|
|
||
Accumulated other comprehensive loss
|
$
|
(105,391
|
)
|
|
$
|
(90,755
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Interest cost
|
$
|
20,041
|
|
|
$
|
19,097
|
|
|
$
|
19,582
|
|
Expected return on plan assets
|
(20,803
|
)
|
|
(21,117
|
)
|
|
(23,945
|
)
|
|||
Amortization of prior service credit
|
(1,432
|
)
|
|
(1,432
|
)
|
|
(1,432
|
)
|
|||
Amortization of actuarial loss
|
5,871
|
|
|
7,045
|
|
|
4,920
|
|
|||
Net cost (credit)
|
$
|
3,677
|
|
|
$
|
3,593
|
|
|
$
|
(875
|
)
|
Weighted-average discount rate used to measure benefit obligations
|
4.36
|
%
|
|
4.86
|
%
|
|
4.36
|
%
|
|||
Weighted average assumptions used to determine net benefit cost:
|
|
|
|
|
|
||||||
Discount rate
|
4.86
|
%
|
|
4.36
|
%
|
|
5.10
|
%
|
|||
Expected return on plan assets
|
6.50
|
%
|
|
6.50
|
%
|
|
7.50
|
%
|
Obligations Recognized in
|
Year Ended December 31,
|
||||||||||
Other Comprehensive Income
|
2016
|
|
2015
|
|
2014
|
||||||
Net actuarial loss
|
$
|
27,023
|
|
|
$
|
6,472
|
|
|
$
|
44,062
|
|
Amortization of actuarial loss
|
(5,871
|
)
|
|
(7,045
|
)
|
|
(4,920
|
)
|
|||
Amortization of prior service credit
|
1,432
|
|
|
1,432
|
|
|
1,432
|
|
|||
Total loss recognized in other comprehensive income
|
$
|
22,584
|
|
|
$
|
859
|
|
|
$
|
40,574
|
|
Total recognized in net periodic benefit cost and other comprehensive income
|
$
|
26,261
|
|
|
$
|
4,452
|
|
|
$
|
39,699
|
|
|
Fair Value Measurements at December 31, 2016
|
||||||||||||||
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
Common collective trusts:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed income securities
|
$
|
—
|
|
|
$
|
174,899
|
|
|
$
|
—
|
|
|
$
|
174,899
|
|
Global equity securities
|
—
|
|
|
127,321
|
|
|
—
|
|
|
127,321
|
|
||||
Money market mutual fund
|
3,732
|
|
|
—
|
|
|
—
|
|
|
3,732
|
|
||||
Real estate
|
—
|
|
|
—
|
|
|
18,519
|
|
|
18,519
|
|
||||
Total assets at fair value
|
$
|
3,732
|
|
|
$
|
302,220
|
|
|
$
|
18,519
|
|
|
$
|
324,471
|
|
|
Fair Value Measurements at December 31, 2015
|
||||||||||||||
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||
Common collective trusts:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed income securities
|
$
|
—
|
|
|
$
|
180,717
|
|
|
$
|
—
|
|
|
$
|
180,717
|
|
Global equity securities
|
—
|
|
|
123,413
|
|
|
—
|
|
|
123,413
|
|
||||
Money market mutual fund
|
5,148
|
|
|
—
|
|
|
—
|
|
|
5,148
|
|
||||
Real estate
|
—
|
|
|
—
|
|
|
17,308
|
|
|
17,308
|
|
||||
Total assets at fair value
|
$
|
5,148
|
|
|
$
|
304,130
|
|
|
$
|
17,308
|
|
|
$
|
326,586
|
|
|
Real Estate
|
||
Ending balance at December 31, 2014
|
$
|
15,214
|
|
Contributions
|
608
|
|
|
Net distributions
|
(687
|
)
|
|
Advisory fee
|
(95
|
)
|
|
Net investment income
|
393
|
|
|
Unrealized gain
|
1,863
|
|
|
Net realized gain
|
12
|
|
|
Ending balance at December 31, 2015
|
17,308
|
|
|
Contributions
|
246
|
|
|
Net distributions
|
(246
|
)
|
|
Advisory fee
|
(194
|
)
|
|
Net investment income
|
813
|
|
|
Unrealized gain
|
593
|
|
|
Net realized gain
|
(1
|
)
|
|
Ending balance at December 31, 2016
|
$
|
18,519
|
|
|
Amount
|
||
2017
|
$
|
30,694
|
|
2018
|
30,910
|
|
|
2019
|
30,491
|
|
|
2020
|
28,470
|
|
|
2021
|
31,037
|
|
|
2022-2026
|
153,245
|
|
|
Amount
|
||
2017
|
$
|
29,398
|
|
2018
|
26,498
|
|
|
2019
|
23,037
|
|
|
2020
|
20,479
|
|
|
2021
|
17,671
|
|
|
Thereafter
|
39,927
|
|
|
Total
|
$
|
157,010
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue
|
|
|
|
|
|
||||||
Travel Network
|
$
|
2,374,849
|
|
|
$
|
2,102,792
|
|
|
$
|
1,854,785
|
|
Airline and Hospitality Solutions
|
1,019,306
|
|
|
872,086
|
|
|
786,478
|
|
|||
Eliminations
|
(20,768
|
)
|
|
(13,982
|
)
|
|
(9,846
|
)
|
|||
Total revenue
|
$
|
3,373,387
|
|
|
$
|
2,960,896
|
|
|
$
|
2,631,417
|
|
Adjusted Gross Profit
(a)
|
|
|
|
|
|
|
|
|
|||
Travel Network
|
$
|
1,095,619
|
|
|
$
|
973,915
|
|
|
$
|
863,276
|
|
Airline and Hospitality Solutions
|
442,520
|
|
|
384,804
|
|
|
337,851
|
|
|||
Corporate
|
(77,464
|
)
|
|
(41,899
|
)
|
|
(54,335
|
)
|
|||
Total
|
$
|
1,460,675
|
|
|
$
|
1,316,820
|
|
|
$
|
1,146,792
|
|
Adjusted EBITDA
(b)
|
|
|
|
|
|
|
|
|
|||
Travel Network
|
$
|
970,688
|
|
|
$
|
877,276
|
|
|
$
|
778,677
|
|
Airline and Hospitality Solutions
|
372,063
|
|
|
323,461
|
|
|
282,648
|
|
|||
Total segments
|
1,342,751
|
|
|
1,200,737
|
|
|
1,061,325
|
|
|||
Corporate
|
(296,105
|
)
|
|
(259,150
|
)
|
|
(221,297
|
)
|
|||
Total
|
$
|
1,046,646
|
|
|
$
|
941,587
|
|
|
$
|
840,028
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|||
Travel Network
|
$
|
76,936
|
|
|
$
|
65,765
|
|
|
$
|
60,706
|
|
Airline and Hospitality Solutions
|
154,432
|
|
|
143,013
|
|
|
106,415
|
|
|||
Total segments
|
231,368
|
|
|
208,778
|
|
|
167,121
|
|
|||
Corporate
|
182,618
|
|
|
142,702
|
|
|
122,509
|
|
|||
Total
|
$
|
413,986
|
|
|
$
|
351,480
|
|
|
$
|
289,630
|
|
Adjusted Capital Expenditures
(c)
|
|
|
|
|
|
|
|
|
|||
Travel Network
|
$
|
97,798
|
|
|
$
|
73,469
|
|
|
$
|
56,091
|
|
Airline and Hospitality Solutions
|
252,367
|
|
|
226,260
|
|
|
161,425
|
|
|||
Total segments
|
350,165
|
|
|
299,729
|
|
|
217,516
|
|
|||
Corporate
|
60,887
|
|
|
50,350
|
|
|
47,522
|
|
|||
Total
|
$
|
411,052
|
|
|
$
|
350,079
|
|
|
$
|
265,038
|
|
(a)
|
The following table sets forth the reconciliation of Adjusted Gross Profit to operating income in our statement of operations (in thousands):
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Adjusted Gross Profit
|
$
|
1,460,675
|
|
|
$
|
1,316,820
|
|
|
$
|
1,146,792
|
|
Less adjustments:
|
|
|
|
|
|
|
|
|
|||
Selling, general and administrative
|
626,153
|
|
|
557,077
|
|
|
467,594
|
|
|||
Cost of revenue adjustments:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
(1)
|
287,353
|
|
|
244,535
|
|
|
198,409
|
|
|||
Amortization of upfront incentive consideration
(2)
|
55,724
|
|
|
43,521
|
|
|
45,358
|
|
|||
Restructuring and other costs
(5)
|
12,660
|
|
|
—
|
|
|
6,042
|
|
|||
Stock-based compensation
|
19,213
|
|
|
11,918
|
|
|
8,044
|
|
|||
Operating income
|
$
|
459,572
|
|
|
$
|
459,769
|
|
|
$
|
421,345
|
|
(b)
|
The following tables set forth the reconciliation of Adjusted EBITDA to income from continuing operations in our statement of operations (in thousands):
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Adjusted EBITDA
|
$
|
1,046,646
|
|
|
$
|
941,587
|
|
|
$
|
840,028
|
|
Less adjustments:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization of property and equipment
(1a)
|
233,303
|
|
|
213,520
|
|
|
157,592
|
|
|||
Amortization of capitalized implementation costs
(1b)
|
37,258
|
|
|
31,441
|
|
|
35,859
|
|
|||
Acquisition-related amortization
(1c)
|
143,425
|
|
|
108,121
|
|
|
99,383
|
|
|||
Amortization of upfront incentive consideration
(2)
|
55,724
|
|
|
43,521
|
|
|
45,358
|
|
|||
Interest expense, net
|
158,251
|
|
|
173,298
|
|
|
218,877
|
|
|||
Loss on extinguishment of debt
|
3,683
|
|
|
38,783
|
|
|
33,538
|
|
|||
Other, net
(3)
|
(27,617
|
)
|
|
(91,377
|
)
|
|
63,860
|
|
|||
Restructuring and other costs
(4)
|
18,286
|
|
|
9,256
|
|
|
10,470
|
|
|||
Acquisition-related costs
(5)
|
779
|
|
|
14,437
|
|
|
—
|
|
|||
Litigation costs
(6)
|
46,995
|
|
|
16,709
|
|
|
14,144
|
|
|||
Stock-based compensation
|
48,524
|
|
|
29,971
|
|
|
20,094
|
|
|||
Management fees
(7)
|
—
|
|
|
—
|
|
|
23,701
|
|
|||
Provision for income taxes
|
86,645
|
|
|
119,352
|
|
|
6,279
|
|
|||
Income from continuing operations
|
$
|
241,390
|
|
|
$
|
234,555
|
|
|
$
|
110,873
|
|
(1)
|
Depreciation and amortization expenses (see Note 1, Summary of Business and Significant Accounting Policies for associated asset lives):
|
a.
|
Depreciation and amortization of property and equipment includes software developed for internal use.
|
b.
|
Amortization of capitalized implementation costs represents amortization of upfront costs to implement new customer contracts under our SaaS and hosted revenue model.
|
c.
|
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. Also includes amortization of the excess basis in our underlying equity interest in SAPPL's net assets prior to our acquisition of SAPPL on July 1, 2015.
|
(2)
|
Our Travel Network business at times makes upfront cash payments or other consideration to travel agency subscribers at the inception or modification of a service contract, which are capitalized and amortized over an average expected life of the service contract, generally over
three
years to
five
years. This consideration is made with the objective of increasing the number of clients or to ensure or improve customer loyalty. These 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 up front. These 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.
|
(3)
|
In 2016, we recognized a gain of
$15 million
in the fourth quarter from the sale of our available-for-sale marketable securities, and a
$6 million
gain in the first quarter associated with the receipt of an earn-out payment from the sale of a business in 2013. Additionally, in the third quarter of 2015, we recognized a gain of
$78 million
associated with the remeasurement of our previously-held
35%
investment in SAPPL to its fair value and a gain of
$12 million
related to the settlement of pre-existing agreements between us and SAPPL. In 2014, other, net primarily includes a fourth quarter charge of
$66 million
as a result of an increase to our 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 addition, all periods presented include foreign exchange gains and losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into the relevant functional currency.
|
(4)
|
Restructuring and other costs represents charges 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
|
(5)
|
Acquisition-related costs represent fees and expenses incurred associated with the acquisition of Abacus, the Trust Group and Airpas Aviation (see Note 2, Acquisitions).
|
(6)
|
Litigation costs, net represent charges and legal fee reimbursements associated with antitrust litigation
,
including an accrual of
$32
million as of December 31, 2016, representing the trebling of the jury award plus our estimate of attorneys’ fees, expenses and costs in the US Airways litigation, (see Note 15, Commitments and Contingencies).
|
(7)
|
We paid an annual management fee to TPG and Silver Lake in an amount between (i)
$5 million
and (ii)
$7 million
, plus reimbursement of certain costs incurred by TPG and Silver Lake, pursuant to the MSA. In addition, we paid a
$21 million
fee, in the aggregate, to TPG and Silver Lake in connection with our initial public offering in 2014. The MSA was terminated in conjunction with our initial public offering.
|
(c)
|
Includes capital expenditures and capitalized implementation costs as summarized below (in thousands):
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Additions to property and equipment
|
$
|
327,647
|
|
|
$
|
286,697
|
|
|
$
|
227,227
|
|
Capitalized implementation costs
|
83,405
|
|
|
63,382
|
|
|
37,811
|
|
|||
Adjusted Capital Expenditures
|
$
|
411,052
|
|
|
$
|
350,079
|
|
|
$
|
265,038
|
|
|
Year Ended December 31, 2016
|
||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Revenue
|
$
|
859,543
|
|
|
$
|
845,242
|
|
|
$
|
838,982
|
|
|
$
|
829,620
|
|
Operating income
|
171,422
|
|
|
142,039
|
|
|
90,150
|
|
|
55,961
|
|
||||
Income from continuing operations
|
134,343
|
|
|
106,468
|
|
|
49,464
|
|
|
31,020
|
|
||||
Income/(loss) from discontinued operations, net of tax
|
13,350
|
|
|
(2,098
|
)
|
|
(394
|
)
|
|
(5,309
|
)
|
||||
Net income
|
106,269
|
|
|
73,097
|
|
|
41,862
|
|
|
25,711
|
|
||||
Net income attributable to common stockholders
|
105,167
|
|
|
72,019
|
|
|
40,815
|
|
|
24,561
|
|
||||
Net income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
0.38
|
|
|
0.26
|
|
|
0.15
|
|
|
0.09
|
|
||||
Diluted
|
0.37
|
|
|
0.25
|
|
|
0.14
|
|
|
0.09
|
|
|
Year Ended December 31, 2015
|
||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Revenue
|
$
|
710,348
|
|
|
$
|
707,091
|
|
|
$
|
785,002
|
|
|
$
|
758,455
|
|
Operating income
|
118,992
|
|
|
122,605
|
|
|
108,772
|
|
|
109,400
|
|
||||
Income from continuing operations
|
49,330
|
|
|
32,589
|
|
|
123,124
|
|
|
29,512
|
|
||||
(Loss) income from discontinued operations, net of tax
|
158,911
|
|
|
696
|
|
|
53,892
|
|
|
100,909
|
|
||||
Net (loss) income
|
208,241
|
|
|
33,285
|
|
|
177,016
|
|
|
130,421
|
|
||||
Net (loss) income attributable to common stockholders
|
207,494
|
|
|
32,207
|
|
|
176,340
|
|
|
129,441
|
|
||||
Net (loss) income per share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
0.77
|
|
|
0.12
|
|
|
0.64
|
|
|
0.47
|
|
||||
Diluted
|
0.75
|
|
|
0.12
|
|
|
0.63
|
|
|
0.46
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
•
|
“Certain Information Regarding Nominees for Director” under “Proposal 1. Election of Directors,” which identifies our directors and nominees for our Board of Directors, and “Stockholders’ Agreement” under “Corporate Governance.”
|
•
|
Other Information—“Section 16(a) Beneficial Ownership Reporting Compliance.”
|
•
|
“Corporate Governance—Other Corporate Governance Matters—Code of Business Ethics,” which describes our Code of Ethics.
|
•
|
“Corporate Governance—Stockholder Nominations for Directors,” which describes the procedures by which stockholders may nominate candidates for election to our Board of Directors.
|
•
|
“Corporate Governance—Board Committees—Audit Committee," which identifies members of the Audit Committee of our Board of Directors and audit committee financial experts.
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
|
Number of securities to be issued upon exercise of outstanding options (a)
|
|
Weighted average exercise price of outstanding options (b)
|
|
Number of securities remaining available for future issuance under equity compensation plans
|
||
Equity compensation plans approved by stockholders
|
—
|
|
$
|
—
|
|
|
—
|
Equity compensation plans not approved by stockholders
|
11,754,365
|
|
$
|
17.18
|
|
|
15,700,380
|
(a)
|
Includes shares of common stock to be issued upon the exercise of outstanding options under our 2016 Omnibus Plan, 2014 Omnibus Plan, the Sovereign 2012 MEIP and the Sovereign MEIP. Also includes
5,938,486
restricted share units under our 2016 Omnibus Plan, 2014 Omnibus Plan and Sovereign 2012 MEIP (including shares that may be issued pursuant to outstanding performance-based restricted share units, assuming the target award is met; actual shares may vary, depending on actual performance).
|
(b)
|
Excludes restricted share units which do not have an exercise price.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
1.
|
Financial statements.
The financial statements are set forth under Item 8 of this Annual Report on Form 10-K.
|
2.
|
Financial statement schedules.
Schedule II Valuation and Qualifying Accounts is filed as part of this Annual Report on Form 10-K and should be read in conjunction with the financial statements and notes thereto contained in Item 8.
|
3.
|
Exhibits.
|
Exhibit
Number
|
|
Description of Exhibits
|
2.1
|
|
Asset Purchase Agreement, dated as of January 23, 2015 by and among Expedia Inc., Sabre GLBL Inc., Travelocity.com LP and certain affiliates of Sabre GLBL Inc. and Travelocity.com LP (incorporated by reference to Exhibit 2.1 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 26, 2015).
|
2.2
|
|
Share Purchase Agreement, dated as of May 14, 2015 by and between Abacus International Holdings Ltd and Sabre Technology Enterprises II Ltd. (incorporated by reference to Exhibit 2.1 of Sabre’s Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on May 14, 2015).
|
3.1
|
|
Third Amended and Restated Certificate of Incorporation of Sabre Corporation (incorporated by reference to Exhibit 3.1 of Sabre’s Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on April 22, 2014).
|
3.2
|
|
Second Amended and Restated Bylaws of Sabre Corporation (incorporated by reference to Exhibit 3.2 of Sabre’s Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on April 22, 2014).
|
4.1
|
|
Amended and Restated Registration Rights Agreement, dated as of April 23, 2014 by and among Sabre Corporation and the stockholders party thereto (incorporated by reference to Exhibit 4.1 of Sabre’s Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on April 23, 2014).
|
4.2
|
|
Indenture, dated as of April 14, 2015, among Sabre GLBL Inc., each of the guarantors party thereto and Wells Fargo Bank, National Association, as trustee and collateral agent. (incorporated by reference to Exhibit 4.1 of Sabre’s Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on April 15, 2015).
|
4.3
|
|
Form of 5.375% Senior Secured Notes due 2023 (included in Exhibit 4.5).
|
4.4
|
|
Indenture, dated as of November 9, 2015, among Sabre GLBL Inc., each of the guarantors party thereto and Wells Fargo Bank, National Association, as trustee and collateral agent. (incorporated by reference to Exhibit 4.1 of Sabre’s Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on November 9 2015).
|
4.5
|
|
Form of 5.250% Senior Secured Notes due 2023 (included in Exhibit 4.7).
|
10.1
|
|
Loan Agreement, dated March 29, 2007, between Sabre Headquarters, LLC, as borrower, and JPMorgan Chase Bank, N.A., as lender (incorporated by reference to Exhibit 10.1 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.2
|
|
Amendment and Restatement Agreement, dated as of February 19, 2013, among Sabre Inc., Sabre Holdings Corporation, the subsidiary guarantors party thereto, the lenders party thereto, Deutsche Bank AG New York Branch, as administrative agent and Bank of America, N.A. as successor administrative agent (incorporated by reference to Exhibit 10.2 of Sabre Corporation’s Amendment No. 1 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 10, 2014).
|
10.3
|
|
Amended and Restated Guaranty, dated as of February 19, 2013, among Sabre Holdings Corporation, certain subsidiaries of Sabre Inc. from time to time party thereto and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.3 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
Exhibit
Number
|
|
Description of Exhibits
|
10.4
|
|
Amended and Restated Pledge and Security Agreement, dated as of February 19, 2013, among Sabre Holdings Corporation, Sabre Inc., certain subsidiaries of Sabre Inc. from time to time party thereto and Bank of America, N.A., as administrative agent for the secured parties (incorporated by reference to Exhibit 10.4 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.5
|
|
First Lien Intercreditor Agreement, dated as of May 9, 2012, among Sabre Inc., Sabre Holdings Corporation, the other grantors party thereto, Deutsche Bank AG New York Branch, as administrative agent and authorized representative for the Credit Agreement secured parties, Wells Fargo Bank, National Association, as the Initial First Lien Collateral Agent and initial additional authorized representative, each Additional First Lien Collateral Agent and each additional Authorized Representative (incorporated by reference to Exhibit 10.5 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.6
|
|
First Incremental Term Facility Amendment to Amended and Restated Credit Agreement, dated as of September 30, 2013, among Sabre Inc., Sabre Holdings Corporation, the subsidiary guarantors party thereto, and Bank of America, N.A., as incremental term lender and administrative agent (incorporated by reference to Exhibit 10.7 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.7+
|
|
Sovereign Holdings, Inc. Management Equity Incentive Plan adopted June 11, 2007, as amended April 22, 2010 (incorporated by reference to Exhibit 10.8 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.8+
|
|
Form of Non Qualified Stock Option Grant Agreement under Sovereign Holdings, Inc. Management Equity Incentive Plan adopted June 11, 2007, as amended April 22, 2010 (incorporated by reference to Exhibit 10.9 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.9+
|
|
Sovereign Holdings, Inc. 2012 Management Equity Incentive Plan adopted September 14, 2012 (incorporated by reference to Exhibit 10.16 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.10+
|
|
Form of Non Qualified Stock Option Grant Agreement under the Sovereign Holdings, Inc. 2012 Management Equity Incentive Plan (incorporated by reference to Exhibit 10.17 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.11+
|
|
Form of Restricted Stock Unit Grant Agreement under the Sovereign Holdings, Inc. 2012 Management Equity Incentive Plan (incorporated by reference to Exhibit 10.18 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.12+
|
|
Form of Restricted Stock Unit Grant Agreement for Non Employee Directors under the Sovereign Holdings, Inc. 2012 Management Equity Incentive Plan (incorporated by reference to Exhibit 10.20 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.13+
|
|
Form of Non Qualified Stock Option Grant Agreement for Non Employee Directors under the Sovereign Holdings, Inc. 2012 Management Equity Incentive Plan (incorporated by reference to Exhibit 10.21 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.14+
|
|
Employment Agreement by and among Sabre Holdings Corporation, Sabre Inc., Sovereign Holdings, Inc. and Thomas Klein, dated August 14, 2013(incorporated by reference to Exhibit 10.22 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.15+
|
|
Employment Agreement by and between Sovereign Holdings, Inc. and William Robinson, dated December 5, 2013 (incorporated by reference to Exhibit 10.24 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.16+
|
|
Employment Agreement by and between Sovereign Holdings, Inc. and Deborah Kerr, dated March 7, 2013 (incorporated by reference to Exhibit 10.32 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.17+
|
|
Employment Agreement by and between Sovereign Holdings, Inc. and Rick Simonson, dated March 5, 2013 (incorporated by reference to Exhibit 10.33 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.18+
|
|
Employment Agreement by and between Sovereign Holdings, Inc. and Hugh Jones, dated July 29, 2009 (incorporated by reference to Exhibit 10.36 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.19+
|
|
Employment Agreement by and between Sovereign Holdings, Inc. and Greg Webb, dated February 2, 2011 (incorporated by reference to Exhibit 10.37 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).
|
10.20
|
|
Amendment No. 1 to Amended and Restated Credit Agreement, dated as of February 20, 2014, among Sabre GLBL Inc., Sabre Holdings Corporation, each of the other Loan Parties, Bank of America, N.A., as administrative agent and the Lenders thereto (incorporated by reference to Exhibit 10.38 of Sabre Corporation’s Amendment No. 1 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 10, 2014).
|
Exhibit
Number
|
|
Description of Exhibits
|
10.21
|
|
First Revolver Extension Amendment to Amended and Restated Credit Agreement, dated as of February 20, 2014, among Sabre GLBL Inc., Sabre Holdings Corporation, each of the other Loan Parties, Bank of America, N.A., as administrative agent and the Revolving Credit Lenders thereto (incorporated by reference to Exhibit 10.39 of Sabre Corporation’s Amendment No. 1 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 10, 2014).
|
10.22
|
|
First Incremental Revolving Credit Facility Amendment to Amended and Restated Credit Agreement, dated as of February 20, 2014, among Sabre GLBL Inc., Sabre Holdings Corporation, each of the other Loan Parties, Bank of America, N.A., as administrative agent and the Revolving Credit Lenders thereto (incorporated by reference to Exhibit 10.40 of Sabre Corporation’s Amendment No. 1 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 10, 2014).
|
10.23
|
|
Income Tax Receivable Agreement dated as of April 23, 2014 between Sabre Corporation and Sovereign Manager Co-Invest, LLC (incorporated by reference to Exhibit 10.1 of Sabre’s Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on April 23, 2014).
|
10.24
|
|
Amended and Restated Stockholders’ Agreement dated as of April 23, 2014 by and among Sabre Corporation and the stockholders party thereto (incorporated by reference to Exhibit 10.2 of Sabre’s Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on April 23, 2014).
|
10.25+
|
|
Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.46 of Sabre Corporation’s Amendment No. 6 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on April 4, 2014).
|
10.26+
|
|
Letter by and between Sovereign Holdings, Inc., Sabre Holdings Corporation and Sabre Inc. and Lawrence W. Kellner, dated August 30, 2013 (incorporated by reference to Exhibit 10.47 of Sabre Corporation’s Amendment No. 3 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 26, 2014).
|
10.27+
|
|
Sabre Corporation 2014 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.48 of Sabre Corporation’s Amendment No. 3 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 26, 2014).
|
10.28+
|
|
Form of Restricted Stock Unit Grant Agreement under the Sabre Corporation 2014 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.49 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 5, 2015).
|
10.29+
|
|
Form of Non Qualified Stock Option Grant Agreement under the Sabre Corporation 2014 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.50 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 5, 2015).
|
10.30+
|
|
Form of Restricted Stock Unit Annual Grant Agreement for Non Employee Directors under the Sabre Corporation 2014 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.51 of Sabre Corporation’s Amendment No. 3 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 26, 2014).
|
10.31+
|
|
Form of Restricted Stock Unit Initial Grant Agreement for Non Employee Directors under the Sabre Corporation 2014 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.52 of Sabre Corporation’s Amendment No. 3 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 26, 2014).
|
10.32
|
|
Supplement No. 1, dated as of December 31, 2012, to the Pledge and Security Agreement dated as of May 9, 2012, among Sabre Holdings Corporation, Sabre Inc., the subsidiary guarantors and Wells Fargo Bank, National Association, as collateral agent for the secured parties (incorporated by reference to Exhibit 10.53 of Sabre Corporation’s Amendment No. 4 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 31, 2014).
|
10.33+
|
|
Employment Agreement by and between Sabre Corporation and Rachel Gonzalez dated September 2, 2014 (incorporated by reference to Exhibit 10.55+ of Sabre’s Corporation Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 12, 2014).
|
10.34+
|
|
Sabre Corporation Non-Employee Directors Compensation Deferral Plan dated October 29, 2014 (incorporated by reference to Exhibit 10.57+ of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 26, 2015).
|
10.35
|
|
Second Amended and Restated Stockholders’ Agreement dated as of February 6, 2015 by and among Sabre Corporation and the stockholders party thereto (incorporated by reference to Exhibit 10.58 of Sabre Corporation's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 3, 2015).
|
10.36+
|
|
Form of Award Agreement for Long-Term Stretch Program (incorporated by reference to Exhibit 10.1 of Sabre’s Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on March 13, 2015).
|
10.37
|
|
Pledge and Security Agreement, dated as of April 14, 2015, among Sabre GLBL Inc., Sabre Holdings Corporation, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as collateral agent (incorporated by reference to Exhibit 10.1 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 15, 2015).
|
Exhibit
Number
|
|
Description of Exhibits
|
10.38+
|
|
Employment Agreement by and between Sabre Corporation and Sean Menke, dated August 29, 2015 (incorporated by reference to Exhibit 10.61 of Sabre Corporation’s Current Report on Form 10-Q filed with the Securities and Exchange Commission on October 29, 2015).
|
10.39+
|
|
Amendment to Letter Agreement by and between Sabre Corporation and Greg Webb, dated September 8, 2015 (incorporated by reference to Exhibit 10.1 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 9, 2015).
|
10.40
|
|
Pledge and Security Agreement, dated as of November 9, 2015, among Sabre GLBL Inc., Sabre Holdings Corporation, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as collateral agent (incorporated by reference to Exhibit 10.1 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 9, 2015).
|
10.41+
|
|
Sabre Corporation Executive Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 16, 2015).
|
10.42†
|
|
Master Services Agreement dated as of November 1, 2015, between Sabre GLBL, Inc. and HP Enterprise Services, LLC, as provider.
|
10.43+
|
|
Sabre Corporation 2016 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.49 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 26, 2016).
|
10.44+
|
|
Form of Restricted Stock Unit Grant Agreement under the Sabre Corporation 2016 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.49 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on April 28, 2016).
|
10.45+
|
|
Form of Non-Qualified Stock Option Grant Agreement under the Sabre Corporation 2016 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.49 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on April 28, 2016).
|
10.46+
|
|
Joinder Agreement to Second Amended and Restated Stockholders' Agreement, dated January 5, 2016, by Sovereign Co-Invest II, LLC (incorporated by reference to Exhibit 10.66 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on Aril 28, 2016).
|
10.47+
|
|
Joinder Agreement to Amended and Restated Registration Rights Agreement, dated January 5, 2016, by Sovereign Co-Invest II, LLC (incorporated by reference to Exhibit 10.67 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on Aril 28, 2016).
|
10.48+
|
|
Separation Agreement by and between Sabre Corporation and Tom Klein, dated June 20, 2016 (incorporated by reference to Exhibit 10.1 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 20, 2016).
|
10.49
|
|
Revolving Facility Refinancing Amendment to Amended and Restated Credit Agreement, dated July 18, 2016, among Sabre GLBL Inc., Sabre Holdings Corporation, each of the other Loan Parties party thereto, Bank of America, N.A., as Administrative Agent and the Revolving Credit Lenders party thereto (incorporated by reference to Exhibit 10.1 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 19, 2016).
|
10.50
|
|
Amendment No. 2 to Amended and Restated Credit Agreement, dated July 18, 2016, among Sabre GLBL Inc., Sabre Holdings Corporation, each of the other Loan Parties party thereto, Bank of America, N.A., as Administrative Agent and the Lenders party thereto (incorporated by reference to Exhibit 10.2 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 19, 2016).
|
10.51
|
|
Second Incremental Term Facility Amendment to Amended and Restated Credit Agreement, dated July 18, 2016, among Sabre GLBL Inc., Sabre Holdings Corporation, each of the other Loan Parties party thereto, Bank of America, N.A., as Administrative Agent and the Incremental Term A Lenders party thereto (incorporated by reference to Exhibit 10.3 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 19, 2016).
|
10.52+
|
|
Second Amendment to Letter Agreement by and between the Corporation and Greg Webb, dated June 15, 2016 (incorporated by reference to Exhibit 10.69 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 2, 2016).
|
10.53+
|
|
Letter Agreement by and between Sabre Corporation and Alex Alt, dated August 31, 2016 (incorporated by reference to Exhibit 10.74 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 2, 2016).
|
10.54+
|
|
Employment Agreement by and between Sabre Corporation and Sean Menke, dated December 15, 2016 (incorporated by reference to Exhibit 10.1 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2016).
|
10.55+
|
|
Letter Agreement by and between Sabre Corporation and Lawrence W. Kellner, dated December 15, 2016 (incorporated by reference to Exhibit 10.2 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2016).
|
10.56*
|
|
Amendment dated December 22, 2016, to that certain Master Services Agreement dated as of November 1, 2015 by and between HP Enterprise Services, LLC and Sabre GLBL Inc.
|
Exhibit
Number |
|
Description of Exhibits
|
10.57+*
|
|
Form of Executive Chairman Restricted Stock Unit Agreement under the Sabre Corporation 2016 Omnibus Incentive Compensation Plan.
|
10.58+*
|
|
Form of Executive Chairman Stock Option Grant Agreement under the Sabre Corporation 2016 Omnibus Incentive Compensation Plan.
|
21.1*
|
|
List of Subsidiaries
|
23.1*
|
|
Consent of Ernst & Young LLP
|
24.1*
|
|
Powers of Attorney (included on signature page)
|
31.1*
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2*
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1*
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2*
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS*
|
|
XBRL Instance Document
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase
|
+
|
Indicates management contract or compensatory plan or arrangement.
|
†
|
Confidential treatment has been granted to portions of this exhibit by the Securities and Exchange Commission.
|
*
|
Filed herewith.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
|
|
SABRE CORPORATION
|
|
|
|
|
Date:
|
February 17, 2017
|
By:
|
/s/ Richard A. Simonson
|
|
|
|
Richard A. Simonson
|
|
|
|
Executive Vice President and
|
|
|
|
Chief Financial Officer
|
/s/ Sean Menke
|
|
President and Chief Executive Officer and Director
|
February 17, 2017
|
Sean Menke
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Richard A. Simonson
|
|
Executive Vice President and Chief Financial Officer
|
February 17, 2017
|
Richard A. Simonson
|
|
(Principal Financial Officer)
|
|
|
|
|
|
/s/ Jami B. Kindle
|
|
Vice President and Corporate Controller
|
February 17, 2017
|
Jami B. Kindle
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
/s/ Lawrence W. Kellner
|
|
Executive Chairman of the Board and Director
|
February 17, 2017
|
Lawrence W. Kellner
|
|
|
|
|
|
|
|
/s/ George Bravante, Jr.
|
|
Director
|
February 17, 2017
|
George Bravante, Jr.
|
|
|
|
|
|
|
|
/s/ Renée James
|
|
Director
|
February 17, 2017
|
Renée James
|
|
|
|
|
|
|
|
/s/ Gary Kusin
|
|
Director
|
February 17, 2017
|
Gary Kusin
|
|
|
|
|
|
|
|
/s/ Greg Mondre
|
|
Director
|
February 17, 2017
|
Greg Mondre
|
|
|
|
|
|
|
|
/s/ Judy Odom
|
|
Director
|
February 17, 2017
|
Judy Odom
|
|
|
|
|
|
|
|
/s/ Joseph Osnoss
|
|
Director
|
February 17, 2017
|
Joseph Osnoss
|
|
|
|
|
|
|
|
/s/ Karl Peterson
|
|
Director
|
February 17, 2017
|
Karl Peterson
|
|
|
|
|
|
|
|
/s/ Zane Rowe
|
|
Director
|
February 17, 2017
|
Zane Rowe
|
|
|
|
|
Balance at
Beginning
|
|
Charged to
Expense or
Other Accounts
|
|
Write-offs and
Other Adjustments
|
|
Balance at
End of Period
|
||||||||
Allowance for Doubtful Accounts
|
|
|
|
|
|
|
|
|
|
|
|
||||
Year ended December 31, 2016
|
$
|
32.3
|
|
|
$
|
10.6
|
|
|
$
|
(5.8
|
)
|
|
$
|
37.1
|
|
Year ended December 31, 2015
|
$
|
27.5
|
|
|
$
|
8.6
|
|
|
$
|
(3.8
|
)
|
|
$
|
32.3
|
|
Year ended December 31, 2014
|
$
|
25.9
|
|
|
$
|
10.4
|
|
|
$
|
(8.8
|
)
|
|
$
|
27.5
|
|
Valuation Allowance for Deferred Tax Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Year ended December 31, 2016
|
$
|
80.7
|
|
|
$
|
1.1
|
|
|
$
|
(7.3
|
)
|
|
$
|
74.5
|
|
Year ended December 31, 2015
|
$
|
160.0
|
|
|
$
|
(69.8
|
)
|
|
$
|
(9.5
|
)
|
|
$
|
80.7
|
|
Year ended December 31, 2014
|
$
|
253.1
|
|
|
$
|
(79.3
|
)
|
|
$
|
(13.8
|
)
|
|
$
|
160.0
|
|
Reserve for Value-Added Tax Receivables
|
|
|
|
|
|
|
|
|
|
|
|
||||
Year ended December 31, 2016
|
$
|
1.8
|
|
|
$
|
(1.6
|
)
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
Year ended December 31, 2015
|
$
|
6.9
|
|
|
$
|
(3.1
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
1.8
|
|
Year ended December 31, 2014
|
$
|
3.9
|
|
|
$
|
4.0
|
|
|
$
|
(1.0
|
)
|
|
$
|
6.9
|
|
1 Year Sabre Chart |
1 Month Sabre Chart |
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