Sabre
Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-Ký ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2018or¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Sabre Corporation(Exact name of registrant as specified in its charter) Delaware001-3642220-8647322(State or other jurisdictionof incorporation or organization)(Commission File Number)(I.R.S. EmployerIdentification No.) 3150 Sabre DriveSouthlake, TX 76092 (Address, including zip code, of principal executive offices) (682) 605-1000 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Common Stock, $0.01 par value The NASDAQ Stock Market LLC(Title of class) (Name of exchange on which registered) Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No ¨Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No ýIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. Yes ý No ¨Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit suchfiles). Yes ý No ¨Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will notbe contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K orany amendment to this Form 10-K. ýIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, oremerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” "smaller reporting company,” and "emerging growth company" inRule 12b-2 of the Exchange Act.Large accelerated filerý Accelerated filer¨Non-accelerated filer¨ Smaller reporting company¨ Emerging growth company¨If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ýThe aggregate market value of the registrant’s common stock held by non-affiliates, as of June 29, 2018, was $5,819,622,350. As of February 11, 2019, therewere 275,405,379 shares of the registrant’s common stock outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant’s definitive proxy statement relating to its 2019 annual meeting of stockholders to be held on April 23, 2019, are incorporated byreference in Part III of this Annual Report on Form 10-K. Table of Contents PagePART I Item 1.Business1Item 1A.Risk Factors5Item 1B.Unresolved Staff Comments23Item 2.Properties23Item 3.Legal Proceedings23Item 4.Mine Safety Disclosures26 Executive Officers of the Registrant27 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities29Item 6.Selected Financial Data30Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations38Item 7A.Quantitative and Qualitative Disclosures About Market Risk59Item 8.Financial Statements and Supplementary Data61Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure108Item 9A.Controls and Procedures109Item 9B.Other Information109 PART III Item 10.Directors, Executive Officers and Corporate Governance110Item 11.Executive Compensation110Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters110Item 13.Certain Relationships and Related Transactions, and Director Independence111Item 14.Principal Accounting Fees and Services111 PART IV Item 15.Exhibits and Financial Statement Schedules112Item 16.Form 10-K Summary117FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K, including the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” inPart II, Item 7, contains information that may constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections,future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, such as statements regardingour future financial condition or results of operations, our prospects and strategies for future growth, the development and introduction of new products, andthe implementation of our strategies. In many cases, you can identify forward-looking statements by terms such as “expects,” "outlook," “believes,”"provisional," “may,” "intends," “will,” “predicts,” “potential,” “anticipates,” “estimates,” "should,” “plans” or the negative of these terms or other comparableterminology. The forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other futureconditions and are subject to risks, uncertainties and changes in circumstances that may cause events or our actual activities or results to differ significantlyfrom those expressed in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements arereasonable, we cannot guarantee future events, results, actions, levels of activity, performance or achievements. You are cautioned not to place unduereliance on these forward-looking statements. Unless required by law, we undertake no obligation to publicly update or revise any forward-lookingstatements to reflect circumstances or events after the date they are made. A number of important factors could cause actual results to differ materially fromthose indicated by the forward-looking statements, including, but not limited to, those factors described in Part I, Item 1A, “Risk Factors,” in Part I, Item 7“Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Our Results” and elsewhere in this AnnualReport.In this Annual Report on Form 10-K, references to “Sabre,” the “Company,” “we,” “our,” “ours” and “us” refer to Sabre Corporation and its consolidatedsubsidiaries unless otherwise stated or the context otherwise requires.PART IITEM 1.BUSINESSOverviewSabre Corporation is a Delaware corporation formed in December 2006. On March 30, 2007, Sabre Corporation acquired Sabre Holdings Corporation(“Sabre Holdings”), which is the sole subsidiary of Sabre Corporation. Sabre GLBL Inc. (“Sabre GLBL”) is the principal operating subsidiary and sole directsubsidiary of Sabre Holdings. Sabre GLBL or its direct or indirect subsidiaries conduct all of our businesses. Our principal executive offices are located at3150 Sabre Drive, Southlake, Texas 76092.We are a leading technology solutions provider to the global travel and tourism industry. We span the breadth of the global travel ecosystem, providingkey software and services to a broad range of travel suppliers and travel buyers. We connect the world’s leading travel suppliers, including airlines, hotels,car rental brands, rail carriers, cruise lines and tour operators, with travel buyers in a comprehensive travel marketplace. We also offer travel suppliers anextensive suite of leading software solutions, ranging from airline and hotel reservations systems to high-value marketing and operations solutions, such asplanning airline crew schedules, re-accommodating passengers during irregular flight operations and managing day-to-day hotel operations. Thesesolutions allow our customers to market, distribute and sell their products more efficiently, manage their core operations, and deliver enhanced travelexperiences.Business SegmentsEffective the first quarter of 2018, we operate through three business segments: Travel Network, Airline Solutions and Hospitality Solutions. Inconjunction with this change, we have modified the methodology we have historically used to allocate shared corporate technology costs. Each segment nowreflects a portion of our shared corporate costs that historically were not allocated to a business unit, based on relative consumption of shared technologyinfrastructure costs and defined revenue metrics. These changes have no impact on our consolidated results of operations, but result in a decrease ofindividual segment profitability only. Financial information about our business segments and geographic areas is provided in Note 16. Segment Information,to our consolidated financial statements in Part II, Item 8 in this Annual Report on Form 10-K.In July 2018, we announced the creation of the Travel Solutions organization, which consists of Travel Network and Airline Solutions. This newstructure reinforces our focus on the next generation of retailing, distribution and fulfillment. Sabre’s reportable segments continue to be Travel Network,Airline Solutions and Hospitality Solutions.1Travel NetworkTravel Network is our global business-to-business travel marketplace and consists primarily of our global distribution system (“GDS”) and a broad setof solutions that integrate with our GDS to add value for travel suppliers and travel buyers. Our GDS facilitates travel by efficiently bringing together travelcontent such as inventory, prices and availability from a broad array of travel suppliers, including airlines, hotels, car rental brands, rail carriers, cruise linesand tour operators, with a large network of travel buyers, including online travel agencies (“OTAs”), offline travel agencies, travel management companies(“TMCs”) and corporate travel departments.Airline SolutionsOur Airline Solutions business offers a broad portfolio of software technology products and solutions, through software-as-a-service (“SaaS”) andhosted delivery model, to airlines and other travel suppliers and provides industry-leading and comprehensive software solutions that help our airlinecustomers better market, sell, serve and operate. We offer airline software solutions in three functional suites: our reservation system, SabreSonic CustomerSales & Service (“SabreSonic”); our commercial solutions, Sabre AirVision Marketing & Planning; and Sabre AirCentre Enterprise Operations. SabreSonicprovides comprehensive capabilities around managing sales and customer service across an airline’s diverse touch points. Sabre AirVision Marketing &Planning is a set of strategic airline commercial planning solutions that focuses on helping our customers improve profitability and develop their brand. SabreAirCentre Enterprise Operations is a set of strategic solutions that drive operational effectiveness through holistic planning and management of airline, airportand customer operations.Hospitality SolutionsOur Hospitality Solutions business provides software and solutions, through SaaS and hosted delivery model, to hoteliers around the world. Ourofferings include distribution through our SynXis central reservation system (“CRS”), property management through SynXis Property Manager Solution(“PMS”), marketing services and professional services that optimize distribution and marketing.In January 2016, we completed the acquisition of the Trust Group of Companies (“Trust Group”), a central reservation, revenue management and hotelmarketing provider with a significant presence in Europe, the Middle East and Africa (“EMEA”) and in APAC. Inclusive of this acquisition, we provide oursoftware and solutions to over 42,000 hotel properties around the world.StrategyWe connect people and places with technology that reimagines the business of travel. The key elements of our strategy include:•Commitment to develop innovative technology products through investment of significant resources in solutions that address key customer needswhich include retailing solutions, mobile capabilities, data analytics and business intelligence and workflow optimization.•Geographic expansion beyond our traditional strengths by seeking to deepen our presence in high-growth geographies in Asia-Pacific ("APAC"),Europe, including high-growth Eastern European markets, and Latin America.•Pursuit of new customers and marketplace content through seeking to actively add new travel supplier content to Travel Network and continuing topursue new customers for our Airline Solutions and Hospitality Solutions business.•Strengthen relationships with existing customers, including promoting the adoption of our products within and across our existing customers.CustomersTravel Network customers consist of travel suppliers, including airlines, hotels and other lodging providers, car rental brands, rail carriers, cruise lines,tour operators, attractions and services; a large network of travel buyers, including OTAs, offline travel agencies, TMCs and corporate travel departments.Airline Solutions serves airlines of all sizes and in every region of the world, including hybrid carriers and low-cost carriers (collectively, “LCC/hybrids”),global network carriers and regional network carriers; and other customers such as airports, corporate aviation fleets, governments and tourism boards.Hospitality Solutions has a global customer base of over 42,000 hotel properties of all sizes.No individual customer accounted for more than 10% of our consolidated revenues for the years ended December 31, 2018, 2017 and 2016.2Sources of RevenueTransactions—Bookings that generate fees directly to Travel Network (“Direct Billable Booking”) include bookings made through our GDS (e.g., air, carand hotel bookings) and through our joint venture partners in cases where we are paid directly by the travel supplier. A transaction occurs when a travelagency or corporate travel department books or reserves a travel supplier’s product on our GDS, for which we receive a fee. Transaction fees include, but arenot limited to transaction fees paid by travel suppliers for selling their inventory through our GDS and fees paid by travel agency subscribers related to theiruse of certain solutions integrated with our GDS. We receive revenue from the travel supplier and the travel agency according to the commercial arrangementwith each.SaaS and Hosted—Airline Solutions and Hospitality Solutions generate revenue through upfront solution fees and recurring usage-based fees for theuse of our software solutions hosted on secure platforms or deployed via SaaS. We maintain our SaaS and hosted software and manage the relatedinfrastructure. We collect the implementation fees and recurring usage-based fees pursuant to contracts with terms that typically range between three and tenyears and generally include minimum annual volume requirements.Software Licensing—Airline Solutions generates revenue from fees for the installation and use of our software products. Some contracts under thismodel generate additional revenue for the maintenance of the software product.Professional Service Fees—Airline Solutions and Hospitality Solutions offerings that utilize the SaaS and hosted revenue model are sometimes soldas part of multiple-element agreements for which we also provide professional services, including consulting services. Our professional services are primarilyfocused on helping customers achieve better utilization of and return on their software investment. Often, we provide these services during theimplementation phase of our SaaS solutions.Media—Advertising revenue is generated by Travel Network from customers that advertise products on our GDS. Advertisers use two types ofadvertising metrics: (i) display advertising and (ii) action advertising. In display advertising, advertisers generally pay based on the number of customers whoview the advertisement, and are charged based on cost-per-thousand impressions. In action advertising, advertisers generally pay based on the number ofcustomers who perform a specific action, such as click on the advertisement, and are charged based on the cost per action.CompetitionWe operate in highly competitive markets. Travel Network competes with several other regional and global travel marketplace providers, includingother GDSs, local distribution systems and travel marketplace providers primarily owned by airlines or government entities and direct distribution by travelsuppliers. In addition to other GDSs and direct distributors, there are a number of other competitors in the travel distribution marketplace, including newentrants in the travel space, that offer metasearch capabilities that direct shoppers to supplier websites and/or OTAs, third party aggregators and peer-to-peeroptions for travel services. Airline Solutions operates in an industry that is very competitive, which includes other providers of reservations systems andsoftware applications solutions and airlines that develop their own software applications and reservations systems in-house. Primary competitors ofHospitality Solutions are in the hospitality CRS and PMS fields and hotels that develop their own software applications and CRSs in house, including globalhotel chains.Technology and OperationsOur technology strategy is based on achieving company-wide stability, reliability and performance at the most efficient price point. Significantinvestment has gone into building a centralized middleware environment with an emphasis on simplicity, security and scalability. We invest heavily insoftware development, delivery and operational support capabilities and strive to provide best in class products for our customers. We operate standardizedinfrastructure in our data center environments across hardware, operating systems, databases, and other key enabling technologies to minimize costs onnon-differentiators. We expect to continue to make significant investments in our information technology infrastructure to modernize our architecture, driveefficiency in development and ongoing technology costs, further enhance the stability and security of our network, comply with data privacy regulations, andaccelerate our shift to open source and cloud-based solutions.Our architecture has evolved from a mainframe centric transaction processing environment to a secure processing platform that is one of the world’smost heavily used and resilient service oriented architecture (“SOA”) environments. A variety of products and services run on this technology infrastructure:high volume air shopping systems; desktop access applications providing continuous, real-time data access to travel agents; airline operations and decisionsupport systems; an array of customized applications available through the Sabre Red 360; and web based services that provide an automated interfacebetween us and our travel suppliers and customers. The flexibility and scale of our standardized SOA based technology infrastructure allow us to quicklydeliver a broad variety of SaaS and hosted solutions.3Intellectual PropertyWe use software, business processes and proprietary information to carry out our business. These assets and related intellectual property rights aresignificant assets of our business. We rely on a combination of patent, copyright, trade secret and trademark laws, confidentiality procedures, and contractualprovisions to protect these assets and we license software and other intellectual property both to and from third parties. We may seek patent protection ontechnology, software and business processes relating to our business, and our software and related documentation may also be protected under trade secretand copyright laws where applicable. We may also benefit from both statutory and common law protection of our trademarks.Although we rely heavily on our brands, associated trademarks, and domain names, we do not believe that our business is dependent on any singleitem of intellectual property, or that any single item of intellectual property is material to the operation of our business. However, since we consider trademarksto be a valuable asset of our business, we maintain our trademark portfolio throughout the world by filing trademark applications with the relevant trademarkoffices, renewing appropriate registrations and regularly monitoring potential infringement of our trademarks in certain key markets.Government RegulationWe are subject to or affected by international, federal, state and local laws, regulations and policies, which are constantly subject to change. Theselaws, regulations and policies include regulations applicable to the GDS in the European Union (“EU”), Canada, the United States and other locations.We are subject to the application of data protection and privacy regulations in many of the countries in which we operate, including the General DataProtection Regulation ("GDPR") in the EU, which became effective in May 2018. See "Risk Factors —Our collection, processing, storage, use andtransmission of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal requirements, differing views on data privacyor security breaches." We are also subject to prohibitions administered by the Office of Foreign Assets Control (the “OFAC rules”), which prohibit U.S. persons from engagingin financial transactions with or relating to the prohibited individual, entity or country, require the blocking of assets in which the individual, entity or countryhas an interest, and prohibit transfers of property subject to U.S. jurisdiction (including property in the possession or control of U.S. persons) to suchindividual, entity or country.Our businesses may also be subject to regulations affecting issues such as: trade sanctions, exports of technology, telecommunications and e-commerce. These regulations may vary among jurisdictions.See “Risk Factors—Any failure to comply with regulations or any changes in such regulations governing our businesses could adversely affect us.”SeasonalityThe travel industry is seasonal in nature. Travel bookings for Travel Network, and the revenue we derive from those bookings, are typically seasonallystrong in the first and third quarters, but decline significantly each year in the fourth quarter, primarily in December. We recognize air-related revenue at thedate of booking, and because customers generally book their November and December holiday leisure-related travel earlier in the year and business-relatedtravel declines during the holiday season, revenue resulting from bookings is typically lower in the fourth quarter.EmployeesAs of December 31, 2018, we employed approximately 8,860 people. We have not experienced any work stoppages and consider our relations withour employees to be good.Available InformationWe are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and under theserequirements, we file reports, proxy and information statements and other information with the Securities and Exchange Commission (“SEC”). Our AnnualReport on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other information to those reports filed or furnished pursuant toSection 13(a) or 15(d) of the Exchange Act are available through the investor relations section of our website at investors.sabre.com. Reports are availablefree of charge as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC. The information contained on our websiteis not incorporated by reference into this Annual Report on Form 10-K.4ITEM 1A.RISK FACTORSThe following risk factors may be important to understanding any statement in this Annual Report on Form 10-K or elsewhere. Our business, financialcondition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those describedbelow. Any one or more of these factors could directly or indirectly cause our actual results of operations and financial condition to vary materially from past oranticipated future results of operations and financial condition. Any of these factors, in whole or in part, could materially and adversely affect our business,financial condition, results of operations and stock price.Our revenue is highly dependent on transaction volumes in the global travel industry, particularly air travel transaction volumes.Our Travel Network, Airline Solutions and Hospitality Solutions revenue is largely tied to travel suppliers’ transaction volumes rather than to their unitpricing for an airplane ticket, hotel room or other travel products. This revenue is generally not contractually committed to recur annually under ouragreements with our travel suppliers. As a result, our revenue is highly dependent on the global travel industry, particularly air travel from which we derive asubstantial amount of our revenue, and directly correlates with global travel, tourism and transportation transaction volumes. Our revenue is therefore highlysusceptible to declines in or disruptions to leisure and business travel that may be caused by factors entirely out of our control, and therefore may not recur ifthese declines or disruptions occur.Various factors may cause temporary or sustained disruption to leisure and business travel. The impact these disruptions would have on our businessdepends on the magnitude and duration of such disruption. These factors include, among others:•general and local economic conditions;•financial instability of travel suppliers and the impact of any fundamental corporate changes to such travel suppliers, such as airline bankruptciesor consolidations, on the cost and availability of travel content;•factors that affect demand for travel such as outbreaks of contagious diseases, including influenza, Zika, Ebola and the MERS virus, increases infuel prices, government shutdowns, changing attitudes towards the environmental costs of travel and safety concerns;•political events like acts or threats of terrorism, hostilities, and war;•inclement weather, natural or man-made disasters; and•factors that affect supply of travel such as travel restrictions or changes to regulations governing airlines and the travel industry, like governmentsanctions that do or would prohibit doing business with certain state-owned travel suppliers, work stoppages or labor unrest at any of the majorairlines, hotels or airports.Travel suppliers’ use of alternative distribution models, such as direct distribution models, could adversely affect our Travel Network business.Some travel suppliers that provide content to Travel Network, including some of Travel Network’s largest airline customers, have sought to increaseusage of direct distribution channels. For example, these travel suppliers are trying to move more consumer traffic to their proprietary websites, and sometravel suppliers have explored direct connect initiatives linking their internal reservations systems directly with travel agencies or TMCs, thereby bypassingthe GDSs. This direct distribution trend enables them to apply pricing pressure on intermediaries and negotiate travel distribution arrangements that are lessfavorable to intermediaries. With travel suppliers’ adoption of certain technology solutions over the last decade, including those offered by our AirlineSolutions business, air travel suppliers have increased the proportion of direct bookings relative to indirect bookings. In the future, airlines may increase theiruse of direct distribution, which may cause a material decrease in their use of our GDS. Travel suppliers may also offer travelers advantages through theirwebsites such as special fares and bonus miles, which could make their offerings more attractive than those available through our GDS platform. Similarly,travel suppliers may also seek to encourage travelers’ and travel agencies’ usage of their proprietary booking platforms by selectively increasing the ticketprice in our GDS, making our GDS platform’s offerings more expensive than some alternative offerings. For example, we are currently engaged in litigationwith the Lufthansa Group in connection with a surcharge that the Lufthansa Group has imposed on tickets purchased through three selected GDSs, includingSabre. The Lufthansa Group is seeking declaratory judgment that this surcharge does not violate the terms of its agreement with us, in addition to damagesrelated to the allegations of breach of contract and tortious interference with agency contracts. We deny the allegations and we have filed a counterclaim thatasserts the Lufthansa Group’s surcharge is a violation of its agreement and that seeks an order requiring the Lufthansa Group to specifically perform itsobligations under the agreement.In addition, with respect to ancillary products, travel suppliers may choose not to comply with the technical standards that would allow ancillaryproducts to be immediately distributed via intermediaries, thus resulting in a delay before these products become available through our GDS relative toavailability through direct distribution. In addition, if enough travel suppliers choose not to develop ancillary products in a standardized way with respect totechnical standards our investment in adapting our various systems to enable the sale of ancillary products may not be successful.Companies with close relationships with end consumers, like Facebook, as well as new entrants introducing new paradigms into the travel industry,such as metasearch engines, like Google, may promote alternative distribution channels to our GDS by diverting consumer traffic away from intermediaries,which may adversely affect our GDS business.5Additionally, technological advancements may allow airlines and hotels to facilitate broader connectivity to and integration with large travel buyers,such that certain airline and hotel offerings could be made available directly to such travel buyers without the involvement of intermediaries such as TravelNetwork and its competitors.Our Travel Network business is exposed to pricing pressure from travel suppliers.Travel suppliers continue to look for ways to decrease their costs and to increase their control over distribution. For example, consolidation in theairline industry, the growth of LCC/hybrids and macroeconomic factors, among other things, have driven some airlines to negotiate for lower fees duringcontract renegotiations, thereby exerting increased pricing pressure on our Travel Network business, which, in turn, negatively affects our revenues andmargins. In addition, travel suppliers’ use of alternative distribution channels, such as direct distribution through supplier-operated websites, may alsoadversely affect our contract renegotiations with these suppliers and negatively impact our transaction fee revenue. For example, as we attempt torenegotiate new agreements with our travel suppliers, they may withhold some or all of their content (fares and associated economic terms) for distributionexclusively through their direct distribution channels (for example, the relevant airline’s website) or offer travelers more attractive terms for content availablethrough those direct channels after their contracts expire. As a result of these sources of negotiating pressure, we may have to decrease our prices to retaintheir business. If we are unable to renew our contracts with these travel suppliers on similar economic terms or at all, or if our ability to provide this content issimilarly impeded, this would also adversely affect the value of our Travel Network business as a marketplace due to our more limited content. See “—Travelsuppliers’ use of alternative distribution models, such as direct distribution models, could adversely affect our Travel Network business.”Our travel supplier customers may experience financial instability or consolidation, pursue cost reductions, change their distribution model orundergo other changes.We generate the majority of our revenue and accounts receivable from airlines. We also derive revenue from hotels, car rental brands, rail carriers,cruise lines, tour operators and other suppliers in the travel and tourism industries. Adverse changes in any of these relationships or the inability to enter intonew relationships could negatively impact the demand for and competitiveness of our travel products and services. For example, a lack of liquidity in thecapital markets or weak economic performance may cause our travel suppliers to increase the time they take to pay or to default on their payment obligations,which could lead to a higher level of bad debt expense and negatively affect our results. Any large-scale bankruptcy or other insolvency proceeding of anairline or hospitality supplier could subject our agreements with that customer to rejection or early termination, and, if applicable, result in asset impairmentswhich could be significant. Because we generally do not require security or collateral from our customers as a condition of sale, our revenues may be subjectto credit risk more generally.Furthermore, supplier consolidation, particularly in the airline industry, could harm our business. Our Travel Network business depends on a relativelysmall number of U.S.-based airlines for a substantial portion of its revenue, and all of our businesses are highly dependent on airline ticket volumes.Consolidation among airlines could result in the loss of an existing customer and the related fee revenue, decreased airline ticket volumes due to capacityrestrictions implemented concurrently with the consolidation, and increased airline concentration and bargaining power to negotiate lower transaction fees.See "—Our Travel Network business is exposed to pricing pressure from travel suppliers." In addition, consolidation among travel suppliers may result in oneor more suppliers refusing to provide certain content to Sabre but rather making it exclusively available on the suppliers’ proprietary websites, hurting thecompetitive position of our GDS relative to those websites. See “—Travel suppliers’ use of alternative distribution models, such as direct distribution models,could adversely affect our Travel Network business.”Our success depends on maintaining the integrity of our systems and infrastructure, which may suffer from failures, capacity constraints,business interruptions and forces outside of our control.We may be unable to maintain and improve the efficiency, reliability and integrity of our systems. Unexpected increases in the volume of our businesscould exceed system capacity, resulting in service interruptions, outages and delays. These constraints can also lead to the deterioration of our services orimpair our ability to process transactions. We occasionally experience system interruptions that make certain of our systems unavailable including, but notlimited to, our GDS and the services that our Airline Solutions and Hospitality Solutions businesses provide to airlines and hotels. System interruptions mayprevent us from efficiently providing services to customers or other third parties, which could cause damage to our reputation and result in our losingcustomers and revenues or cause us to incur litigation and liabilities. Although we have contractually limited our liability for damages caused by outages ofour GDS (other than damages caused by our gross negligence or willful misconduct), we cannot guarantee that we will not be subject to lawsuits or otherclaims for compensation from our customers in connection with such outages for which we may not be indemnified or compensated.6Our systems may also be susceptible to external damage or disruption. Much of the computer and communications hardware upon which we dependis located across multiple data center facilities in a single geographic region. Our systems could be damaged or disrupted by power, hardware, software ortelecommunication failures, human errors, natural events including floods, hurricanes, fires, winter storms, earthquakes and tornadoes, terrorism, break-ins,hostilities, war or similar events. Computer viruses, malware, denial of service attacks, attacks on hardware vulnerabilities, physical or electronic break-ins,cybersecurity incidents or other security breaches, and similar disruptions affecting the Internet, telecommunication services or our systems could causeservice interruptions or the loss of critical data, and could prevent us from providing timely services. See “—Security breaches could expose us to liability anddamage our reputation and our business.” Failure to efficiently provide services to customers or other third parties could cause damage to our reputation andresult in the loss of customers and revenues, asset impairments, significant recovery costs or litigation and liabilities. Moreover, such risks are likely toincrease as we expand our business and as the tools and techniques involved become more sophisticated.Although we have implemented measures intended to protect systems and critical data and provide comprehensive disaster recovery and contingencyplans for certain customers that purchase this additional protection, these protections and plans are not in place for all systems. Furthermore, several of ourexisting critical backup systems are located in the same metropolitan area as our primary systems and we may not have sufficient disaster recovery tools orresources available, depending on the type or size of the disruption. Disasters affecting our facilities, systems or personnel might be expensive to remedy andcould significantly diminish our reputation and our brands, and we may not have adequate insurance to cover such costs.Customers and other end-users who rely on our software products and services, including our SaaS and hosted offerings, for applications that areintegral to their businesses may have a greater sensitivity to product errors and security vulnerabilities than customers for software products generally.Additionally, security breaches that affect third parties upon which we rely, such as travel suppliers, may further expose us to negative publicity, possibleliability or regulatory penalties. Events outside our control could cause interruptions in our IT systems, which could have a material adverse effect on ourbusiness operations and harm our reputation.7Security breaches could expose us to liability and damage our reputation and our business.We process, store, and transmit large amounts of data, including personally identifiable information ("PII") and payment card industry data ("PCI") of ourcustomers, and it is critical to our business strategy that our facilities and infrastructure, including those provided by DXC Technology ("DXC") or othervendors, remain secure and are perceived by the marketplace to be secure. Our infrastructure may be vulnerable to physical or electronic break-ins,computer viruses, or similar disruptive problems.In addition, we, like most technology companies, are the target of cybercriminals who attempt to compromise our systems. We are subject to andexperience threats and intrusions that have to be identified and remediated to protect sensitive information along with our intellectual property and our overallbusiness. To address these threats and intrusions, we have a team of experienced security experts and support from firms that specialize in data security andcybersecurity. We are periodically subject to these threats and intrusions, and sensitive or material information could be compromised as a result. The costsof any investigation of such incidents, as well as any remediation related to these incidents, may be material. As previously disclosed, we became aware ofan incident involving unauthorized access to payment information contained in a subset of hotel reservations processed through the Sabre HospitalitySolutions SynXis Central Reservation system (the “HS Central Reservation System”). Our investigation was supported by third party experts, including aleading cybersecurity firm. Our investigation determined that an unauthorized party: obtained access to account credentials that permitted access to a subsetof hotel reservations processed through the HS Central Reservation System; used the account credentials to view a credit card summary page on the HSCentral Reservation System and access payment card information (although we use encryption, this credential had the right to see unencrypted card data);and first obtained access to payment card information and some other reservation information on August 10, 2016. The last access to payment cardinformation was on March 9, 2017. The unauthorized party was able to access information for certain hotel reservations, including cardholder name; paymentcard number; card expiration date; and, for a subset of reservations, card security code. The unauthorized party was also able, in some cases, to accesscertain information such as guest name(s), email, phone number, address, and other information if provided to the HS Central Reservation System.Information such as Social Security, passport, or driver’s license number was not accessed. The investigation did not uncover forensic evidence that theunauthorized party removed any information from the system, but it is a possibility. We took successful measures to ensure this unauthorized access to theHS Central Reservation System was stopped and is no longer possible. There is no indication that any of our systems beyond the HS Central ReservationSystem, such as Sabre’s Airline Solutions and Travel Network platforms, were affected or accessed by the unauthorized party. We notified law enforcementand the payment card brands and engaged a payment card industry data forensic investigator at the payment card brands' request to investigate this incident.We have notified customers and other companies that use or interact with, directly or indirectly, the HS Central Reservation System about the incident. We arealso cooperating with various governmental authorities that are investigating this incident. Separately, in November 2017, Sabre Hospitality Solutionsobserved a pattern of activity that, after further investigation, led it to believe that an unauthorized party improperly obtained access to certain hotel usercredentials for purposes of accessing the HS Central Reservation System. We deactivated the compromised accounts and notified law enforcement of thisactivity. We also notified the payment card brands, and at their request, we have engaged a PCI forensic investigator to investigate this incident. We have notfound any evidence of a breach of the network security of the HS Central Reservation System, and we believe that the number of affected reservationsrepresents only a fraction of 1% of the bookings in the HS Central Reservation System. The costs related to these incidents, including any associatedpenalties assessed by any governmental authority or payment card brand, or indemnification obligations to our customers, as well as any other impacts orremediation related to them, may be material. As noted below, we maintain insurance that covers certain aspects of cyber risks, and we continue to work withour insurance carriers in these matters.Any computer viruses, malware, denial of service attacks, attacks on hardware vulnerabilities, physical or electronic break-ins, cybersecurity incidents,such as the items described above, or other security breach or compromise of the information handled by us or our service providers may jeopardize thesecurity or integrity of information in our computer systems and networks or those of our customers and cause significant interruptions in our and ourcustomers’ operations.Any systems and processes that we have developed that are designed to protect customer information and prevent data loss and other securitybreaches cannot provide absolute security. In addition, we may not successfully implement remediation plans to address all potential exposures. It is possiblethat we may have to expend additional financial and other resources to address these problems. Failure to prevent or mitigate data loss or other securitybreaches could expose us or our customers to a risk of loss or misuse of such information, cause customers to lose confidence in our data protectionmeasures, damage our reputation, adversely affect our operating results or result in litigation or potential liability for us. While we maintain insurancecoverage that may, subject to policy terms and conditions, cover certain aspects of cyber risks, this insurance coverage is subject to a retention amount andmay not be applicable to a particular incident or otherwise may be insufficient to cover all our losses beyond any retention. Similarly, we expect to continue tomake significant investments in our information technology infrastructure. The implementation of these investments may be more costly or take longer thanwe anticipate, or could otherwise adversely affect our business operations, which could negatively impact our financial position, results of operations or cashflows.8Any inability or failure to adapt to technological developments or the evolving competitive landscape could harm our business operations andcompetitiveness.We depend upon the use of sophisticated information technology and systems. Our competitiveness and future results depend on our ability tomaintain and make timely and cost-effective enhancements, upgrades and additions to our products, services, technologies and systems in response to newtechnological developments, industry standards and trends and customer requirements. For example, IATA has promulgated its new distribution capability(“NDC”) standard. Depending on the level of adoption of this standard, our failure to integrate NDC into our technology or anticipate the evolution of nextgeneration retailing and distribution could adversely affect our financial performance. As another example, migration of our enterprise applications andplatforms to other hosting environments would cause us to incur substantial costs, and could result in instability and business interruptions, which couldmaterially harm our business.Adapting to new technological and marketplace developments, such as NDC, may require substantial expenditures and lead time and we cannotguarantee that projected future increases in business volume will actually materialize. We may experience difficulties that could delay or prevent thesuccessful development, marketing and implementation of enhancements, upgrades and additions. Moreover, we may fail to maintain, upgrade or introducenew products, services, technologies and systems as quickly as our competitors or in a cost-effective manner. For example, we must constantly update ourGDS with new capabilities to adapt to the changing technological environment and customer needs. However, this process can be costly and time-consuming, and our efforts may not be successful as compared to our competitors in the travel distribution market. Those that we do develop may not achieveacceptance in the marketplace sufficient to generate material revenue or may be rendered obsolete or non-competitive by our competitors’ offerings.In addition, our competitors are constantly evolving, including increasing their product and service offerings through organic research anddevelopment or through strategic acquisitions. For example, one of our competitors, Travelport Worldwide Limited, has recently announced that it is to beacquired by private-equity firms, in a transaction that is expected to close in 2019. There could be uncertainty resulting from any such acquisition, includingpossible changes to Travelport’s product and service offerings. As a result, we must continue to invest significant resources in research and development inorder to continually improve the speed, accuracy and comprehensiveness of our services and we may be required to make changes to our technologyplatforms or increase our investment in technology, increase marketing, adjust prices or business models and take other actions, which could affect ourfinancial performance and liquidity.The travel distribution market is highly competitive, and we are subject to competition from other GDS providers, direct distribution by travelsuppliers and new entrants or technologies that may challenge the GDS business model.The evolution of the global travel and tourism industry, the introduction of new technologies and standards and the expansion of existing technologiesin key markets, among other factors, could contribute to an intensification of competition in the business areas and regions in which we operate. Increasedcompetition could require us to increase spending on marketing activities or product development, to decrease our booking or transaction fees and othercharges (or defer planned increases in such fees and charges), to increase incentive consideration or take other actions that could harm our business. AGDS has two broad categories of customers: (i) travel suppliers, such as airlines, hotels, car rental brands, rail carriers, cruise lines and tour operators, and(ii) travel buyers, such as online and offline travel agencies, TMCs and corporate travel departments. The competitive positioning of a GDS depends on thesuccess it achieves with both customer categories. Other factors that may affect the competitive success of a GDS include the comprehensiveness, timelinessand accuracy of the travel content offered, the reliability, ease of use and innovativeness of the technology, the perceived value proposition of our GDS bytravel suppliers and travel buyers, the incentive consideration provided to travel agencies, the transaction fees charged to travel suppliers and the range ofproducts and services available to travel suppliers and travel buyers. Our GDS competitors could seek to capture market share by offering more differentiatedcontent, products or services, increasing the incentive consideration to travel agencies, or decreasing the transaction fees charged to travel suppliers, whichwould harm our business to the extent they gain market share from us or force us to respond by lowering our prices or increasing the incentive considerationwe provide.We cannot guarantee that we will be able to compete successfully against our current and future competitors in the travel distribution market, some ofwhich may achieve greater brand recognition than us, have greater financial, marketing, personnel and other resources or be able to secure services andproducts from travel suppliers on more favorable terms. If we fail to overcome these competitive pressures, we may lose market share and our business mayotherwise be negatively affected.9Our ability to maintain and grow our Airline Solutions and Hospitality Solutions businesses may be negatively affected by competition fromother third-party solutions providers and new participants that seek to enter the solutions market.Our Airline Solutions and Hospitality Solutions businesses principally face competition from existing third-party solutions providers. We also competewith various point solutions providers on a more limited basis in several discrete functional areas. For our Hospitality Solutions business, we face competitionacross many aspects of our business but our primary competitors are in the hospitality CRS and PMS fields.Factors that may affect the competitive success of our Airline Solutions and Hospitality Solutions businesses include our pricing structure, our ability tokeep pace with technological developments, the effectiveness and reliability of our implementation and system migration processes, our ability to meet avariety of customer specifications, the effectiveness and reliability of our systems, the cost and efficiency of our system upgrades and our customer supportservices. Our failure to compete effectively on these and other factors could decrease our market share, adversely impact our pricing or otherwise negativelyaffect our Airline Solutions and Hospitality Solutions businesses.Implementation of software solutions often involves a significant commitment of resources, and any failure to deliver as promised on asignificant implementation could adversely affect our business.In our Travel Network, Airline Solutions and Hospitality Solutions businesses, the implementation of software solutions often involves a significantcommitment of resources and is subject to a number of significant risks over which we may or may not have control. These risks include:•the features of the implemented software may not meet the expectations or fit the business model of the customer;•our limited pool of trained experts for implementations cannot quickly and easily be augmented for complex implementation projects, such thatresources issues, if not planned and managed effectively, could lead to costly project delays;•customer-specific factors, such as the stability, functionality, interconnection and scalability of the customer’s pre-existing information technologyinfrastructure, 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•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.As a result of these and other risks, some of our customers may incur large, unplanned costs in connection with the purchase and installation of oursoftware products. Also, implementation projects could take longer than planned or fail. We may not be able to reduce or eliminate protracted installation orsignificant additional costs. Significant delays or unsuccessful customer implementation projects could result in cancellation or renegotiation of existingagreements, claims from customers, harm our reputation and negatively impact our operating results.We rely on the availability and performance of information technology services provided by third parties, including DXC, which manages asignificant portion of our systems.Our businesses are largely dependent on the computer data centers and network systems operated for us by DXC, and its third-party providers,including AT&T, to which DXC outsources certain network services. We also rely on other developers and service providers to maintain and support ourglobal telecommunications infrastructure, including to connect our computer data center and call centers to end-users. Moreover, we outsourced our globalenterprise resource planning system to a third-party provider, and any disruption to that outsourced system may negatively impact our business.Our success is dependent on our ability to maintain effective relationships with these third-party technology and service providers. Some of ouragreements with third-party technology and service providers are terminable for cause on short notice and often provide limited recourse for serviceinterruptions. For example, our agreement with DXC provides us with limited indemnification rights. We could face significant additional cost or businessdisruption if:•Any of these providers fail to enable us to provide our customers and suppliers with reliable, real-time access to our systems. For example, in2013, we experienced a significant outage of the Sabre platform due to a failure on the part of one of our service providers. This outage, whichaffected both our Travel Network business and our Airline Solutions business, lasted several hours and caused significant problems for ourcustomers. Any such future outages could cause damage to our reputation, customer loss and require us to pay compensation to affectedcustomers for which we may not be indemnified or compensated.•Our arrangements with such providers are terminated or impaired and we cannot find alternative sources of technology or systems support oncommercially reasonable terms or on a timely basis. For example, our substantial dependence on DXC for many of our systems makes it difficultfor us to switch vendors and makes us more sensitive to changes in DXC's pricing for its services.10Our Travel Network, Airline Solutions and Hospitality Solutions businesses depend on maintaining and renewing contracts with their customersand other counterparties.In our Travel Network business, we enter into participating carrier distribution and services agreements with airlines. Our contracts with major carrierstypically last for three- to five-year terms and are generally subject to automatic renewal at the end of the term, unless terminated by either party with therequired advance notice. Our contracts with smaller airlines generally last for one year and are also subject to automatic renewal at the end of the term,unless terminated by either party with the required advance notice. Airlines are not typically contractually obligated to distribute exclusively through our GDSduring the contract term and may terminate their agreements with us upon providing the required advance notice after the expiration of the initial term. Wecannot guarantee that we will be able to renew our airline contracts in the future on favorable economic terms or at all. See “—Our Travel Network business isexposed to pricing pressure from travel suppliers."We also enter into contracts with travel buyers. Although most of our travel buyer contracts have terms of one to three years, we typically have non-exclusive, five- to ten-year contracts with our major travel agency customers. We also typically have three- to five-year contracts with corporate traveldepartments, which generally renew automatically unless terminated with the required advance notice. A meaningful portion of our travel buyer agreements,typically representing approximately 15% to 20% of our bookings, are up for renewal in any given year. We cannot guarantee that we will be able to renewour travel buyer agreements in the future on favorable economic terms or at all.Similarly, our Airline Solutions and Hospitality Solutions businesses are based on contracts with travel suppliers for a typical duration of three to sevenyears for airlines and one to five years for hotels, respectively. We cannot guarantee that we will be able to renew our solutions contracts in the future onfavorable economic terms or at all.Additionally, we use several third-party distributor partners and joint ventures to extend our GDS services in EMEA and APAC. The termination of ourcontractual arrangements with any of these third-party distributor partners and joint ventures could adversely impact our Travel Network business in therelevant markets. See “—We rely on third-party distributor partners and joint ventures to extend our GDS services to certain regions, which exposes us to risksassociated with lack of direct management control and potential conflicts of interest” for more information on our relationships with our third-party distributorpartners and joint ventures.Our failure to renew some or all of these agreements on economically favorable terms or at all, or the early termination of these existing contracts,would adversely affect the value of our Travel Network business as a marketplace due to our limited content and distribution reach, which could cause someof our subscribers to move to a competing GDS or use other travel technology providers for the solutions we provide and would materially harm our business,reputation and brand. Our business therefore relies on our ability to renew our agreements with our travel buyers, travel suppliers, third-party distributorpartners and joint ventures or developing relationships with new travel buyers and travel suppliers to offset any customer losses.We are subject to a certain degree of revenue concentration among a portion of our customer base. Because of this concentration among a smallnumber of customers, if an event were to adversely affect one of these customers, it could have a material impact on our business.Our Travel Network business depends on relationships with travel buyers.Our Travel Network business relies on relationships with several large travel buyers, including TMCs and OTAs, to generate a large portion of itsrevenue through bookings made by these travel companies. This revenue concentration in a relatively small number of travel buyers makes us particularlydependent on factors affecting those companies. For example, if demand for their services decreases, or if a key supplier pulls its content from us, travelbuyers may stop utilizing our services or move all or some of their business to competitors or competing channels.Although our contracts with larger travel agencies often increase the incentive consideration when the travel agency processes a certain volume orpercentage of its bookings through our GDS, travel buyers are not contractually required to book exclusively through our GDS during the contract term. Travelbuyers may shift bookings to other distribution intermediaries for many reasons, including to avoid becoming overly dependent on a single source of travelcontent or to increase their bargaining power with GDS providers. Additionally, some regulations allow travel buyers to terminate their contracts earlier.These risks are exacerbated by increased consolidation among travel agencies and TMCs, which may ultimately reduce the pool of travel agenciesthat subscribe to GDSs. We must compete with other GDSs and other competitors for their business by offering competitive upfront incentive consideration,which, due to the strong bargaining power of these large travel buyers, tend to increase in each round of contract renewals. See "Management's Discussionand Analysis of Financial Condition and Results of Operations—Factors Affecting Our Results—Increasing travel agency incentive consideration" included inPart II, Item 7 for more information about our incentive consideration. However, any reduction in transaction fees from travel suppliers due to supplierconsolidation or other market forces could limit our ability to increase incentive consideration to travel agencies in a cost-effective manner or otherwise affectour margins.11Our collection, processing, storage, use and transmission of personal data could give rise to liabilities as a result of governmental regulation,conflicting legal requirements, differing views on data privacy or security breaches.We collect, process, store, use and transmit a large volume of personal data on a daily basis, including, for example, to process travel transactions forour customers and to deliver other travel-related products and services. Personal data is increasingly subject to legal and regulatory protections around theworld, which vary widely in approach and which possibly conflict with one another. In recent years, for example, U.S. legislators and regulatory agencies,such as the Federal Trade Commission, as well as U.S. states, have increased their focus on protecting personal data by law and regulation, and haveincreased enforcement actions for violations of privacy and data protection requirements. The GDPR, a data protection law, adopted by the EuropeanCommission, went into effect on May 25, 2018. These data protection laws and regulations are intended to protect the privacy and security of personal data,including credit card information that is collected, processed and transmitted in or from the relevant jurisdiction. Implementation of and compliance with theselaws and regulations may be more costly or take longer than we anticipate, or could otherwise adversely affect our business operations, which couldnegatively impact our financial position or cash flows. Additionally, media coverage of data breaches has escalated, in part because of the increased numberof enforcement actions, investigations and lawsuits. As this focus and attention on privacy and data protection increases, we also risk exposure to potentialliabilities and costs resulting from the compliance with, or any failure to comply with applicable legal requirements, conflicts among these legal requirementsor differences in approaches to privacy and security of travel data. Our business could be materially adversely affected by our inability, or the inability of ourvendors who receive personal data from us, to comply with legal obligations regarding the use of personal data, new data handling requirements that conflictwith or negatively impact our business practices. In addition, our agreements with customers may also require that we indemnify the customer for liabilityarising from data breaches under the terms of our agreements with these customers. These indemnification obligations could be significant and may exceedthe limits of any applicable insurance policy we maintain. See “—Security breaches could expose us to liability and damage our reputation and ourbusiness.”We are exposed to risks associated with PCI compliance.The PCI Data Security Standard (“PCI DSS”) is a specific set of comprehensive security standards required by credit card brands for enhancingpayment account data security, including but not limited to requirements for security management, policies, procedures, network architecture, and softwaredesign. PCI DSS compliance is required in order to maintain credit card processing services. The cost of compliance with PCI DSS is significant and mayincrease as the requirements change. We are tested periodically for assurance and successfully completed our last annual assessment in September 2018.Compliance does not guarantee a completely secure environment and notwithstanding the results of this assessment there can be no assurance thatpayment card brands will not request further compliance assessments or set forth additional requirements to maintain access to credit card processingservices. See “—Security breaches could expose us to liability and damage our reputation and our business.” Compliance is an ongoing effort and therequirements evolve as new threats are identified. In the event that we were to lose PCI DSS compliance status (or fail to renew compliance under a futureversion of the PCI DSS), we could be exposed to increased operating costs, fines and penalties and, in extreme circumstances, may have our credit cardprocessing privileges revoked, which would have a material adverse effect on our business.Our business could be harmed by adverse global and regional economic and political conditions.Travel expenditures are sensitive to personal and business discretionary spending levels and grow more slowly or decline during economicdownturns. We derive the majority of our revenue from the United States and Europe, and we have expanded Travel Network's presence in APAC. Ourgeographic concentration in the United States and Europe, as well as our expanded focus in APAC, makes our business potentially vulnerable to economicand political conditions that adversely affect business and leisure travel originating in or traveling to these regions.Despite modest growth in the U.S. economy, there is still weakness in other parts of the global economy, including increased unemployment, reducedfinancial capacity of both business and leisure travelers, diminished liquidity and credit availability, declines in consumer confidence and discretionaryincome and general uncertainty about economic stability. Furthermore, recent changes in the U.S. political environment have resulted in additionaluncertainties with respect to travel restrictions, and the regulatory, tax and economic environment in the United States, which could adversely impact traveldemand, our business operations or our financial results. We cannot predict the magnitude, length or recurrence of recessionary or low-growth economicpatterns, which have impacted, and may continue to impact, demand for travel and lead to reduced spending on the services we provide.We derive the remainder of our revenues from Latin America, the Middle East and Africa and APAC. Any unfavorable economic, political or regulatorydevelopments in these regions could negatively affect our business, such as delays in payment or non-payment of contracts, delays in contractimplementation or signing, carrier control issues and increased costs from regulatory changes particularly as parts of our growth strategy involve expandingour presence in these emerging markets. For example, markets that have traditionally had a high level of exports to China, or that have commodities-basedeconomies, have continued to experience slowing or deteriorating economic conditions. These adverse economic conditions may negatively impact ourbusiness results in those regions.12Similarly, in Venezuela, due to currency controls that impact the ability of certain of our airline customers operating in the country to obtain U.S. dollarsto make timely payments to us, the collection of accounts receivable due to us can be, and has been, delayed. Due to the nature of this delay, we aredeferring the recognition of any future revenues until cash is collected in accordance with our policies. Accordingly, our accounts receivable are subject to ageneral collection risk, as there can be no assurance that we will be paid from such customers in a timely manner, if at all. In response to the political andeconomic uncertainty in Venezuela, certain airlines have scaled back operations in response to the reduced demand for travel by local consumers as well asthe currency controls which has impacted our airline customers in Venezuela.Voters in the U.K. have approved the exit of that country from the E.U. (“Brexit”), and the British government has provided official notification to the E.U.that it intends to withdraw from the E.U. The Brexit vote and related process have created significant economic uncertainty in the U.K. and in EMEA, whichmay negatively impact our business results in those regions. In addition, the terms of the U.K.’s withdrawal from the E.U., once negotiated, could potentiallydisrupt the markets we serve and the tax jurisdictions in which we operate and adversely change tax benefits or liabilities in these or other jurisdictions,including our ability to obtain VAT refunds on transactions between the U.K. and the E.U., and may cause us to lose customers, suppliers, and employees. Inaddition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the U.K. determines which E.U. laws to replace orreplicate.We operate a global business that exposes us to risks associated with international activities.Our international operations involve risks that are not generally encountered when doing business in the United States. These risks include, but arenot limited to:•business, political and economic instability in foreign locations, including actual or threatened terrorist activities, and military action;•adverse laws and regulatory requirements, including more comprehensive regulation in the E.U. and the possible effects of the Brexit vote;•changes in foreign currency exchange rates and financial risk arising from transactions in multiple currencies;•difficulty in developing, managing and staffing international operations because of distance, language and cultural differences;•disruptions to or delays in the development of communication and transportation services and infrastructure;•more restrictive data privacy requirements, including the GDPR;•consumer attitudes, including the preference of customers for local providers;•increasing labor costs due to high wage inflation in foreign locations, differences in general employment conditions and regulations, and thedegree of employee unionization and activism;•export or trade restrictions or currency controls;•governmental policies or actions, such as consumer, labor and trade protection measures and travel restrictions;•taxes, restrictions on foreign investment and limits on the repatriation of funds;•diminished ability to legally enforce our contractual rights; and•decreased protection for intellectual property.Any of the foregoing risks may adversely affect our ability to conduct and grow our business internationally.13Our ability to recruit, train and retain employees, including our key executive officers and technical employees, is critical to our results ofoperations and future growth.Our continued ability to compete effectively depends on our ability to recruit new employees and retain and motivate existing employees, particularlyprofessionals with experience in our industry, information technology and systems, as well as our key executive officers. For example, the specialized skillswe require can be difficult and time-consuming to acquire and are often in short supply. There is high demand and competition for well-qualified employeeson a global basis, such as software engineers, developers and other technology professionals with specialized knowledge in software development,especially expertise in certain programming languages. This competition affects both our ability to retain key employees and to hire new ones. Similarly,uncertainty in the global political environment may adversely affect our ability to hire and retain key employees. Any of our employees may choose toterminate their employment with us at any time, and a lengthy period of time is required to hire and train replacement employees when such skilledindividuals leave the company. Furthermore, changes in our employee population, including our executive team, could impact our results of operations andgrowth. For example, Sean Menke was elected as President and Chief Executive Officer of Sabre on December 31, 2016. Subsequent to his election, wehave announced modifications to our business strategies and increased long-term investment in key areas, such as technology infrastructure, that maycontinue to have a negative impact in the short term due to expected increases in operating expenses and capital expenditures. If we fail to attract well-qualified employees or to retain or motivate existing employees, our business could be materially hindered by, for example, a delay in our ability to deliverproducts and services under contract, bring new products and services to market or respond swiftly to customer demands or new offerings from competitors.We may have higher than anticipated tax liabilities.We are subject to a variety of taxes in many jurisdictions globally, including income taxes in the United States at the federal, state and local levels, andin many other countries. Significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business,there are many transactions and calculations where the ultimate tax determination is uncertain. We operate in numerous countries where our income taxreturns are subject to audit and adjustment by local tax authorities. Because we operate globally, the nature of the uncertain tax positions is often verycomplex and subject to change, and the amounts at issue can be substantial. It is inherently difficult and subjective to estimate such amounts, as we have todetermine the probability of various possible outcomes. We re-evaluate uncertain tax positions on a quarterly basis. This evaluation is based on factorsincluding, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit and new audit activity. Although webelieve our tax estimates are reasonable, the final determination of tax audits could be materially different from our historical income tax provisions andaccruals. Our effective tax rate may change from year to year based on changes in the mix of activities and income allocated or earned among variousjurisdictions, tax laws in these jurisdictions, tax treaties between countries, our eligibility for benefits under those tax treaties, and the estimated values ofdeferred tax assets and liabilities. Such changes could result in an increase in the effective tax rate applicable to all or a portion of our income which wouldreduce our profitability.We establish reserves for our potential liability for U.S. and non-U.S. taxes, including sales, occupancy and value-added taxes (“VAT”), consistentwith applicable accounting principles and in light of all current facts and circumstances. We also establish reserves when required relating to the collection ofrefunds related to value-added taxes, which are subject to audit and collection risks in various countries. Historically our right to recover certain value-addedtax receivables associated with our European businesses has been questioned by tax authorities. These reserves represent our best estimate of ourcontingent liability for taxes. The interpretation of tax laws and the determination of any potential liability under those laws are complex, and the amount of ourliability may exceed our established reserves.We consider the undistributed capital investments in our foreign subsidiaries to be indefinitely reinvested as of December 31, 2018 and, accordingly,have not provided deferred taxes on any outside basis differences.New tax laws, statutes, rules, regulations or ordinances could be enacted at any time and existing tax laws, statutes, rules, regulations and ordinancescould be interpreted, changed, modified or applied adversely to us. These events could require us to pay additional tax amounts on a prospective orretroactive basis, as well as require us to pay fees, penalties or interest for past amounts deemed to be due. New, changed, modified or newly interpreted orapplied laws could also increase our compliance, operating and other costs, as well as the costs of our products and services. For example, on December 22,2017, the Tax Cuts and Jobs Act (the “TCJA”) was signed into law. The TCJA contains significant changes to the U.S. corporate income tax system, includinga reduction of the federal corporate income tax rate from 35% to 21%, a limitation of the tax deduction for interest expense to 30% of adjusted taxable income(as defined in the TCJA), base erosion provisions related to intercompany foreign payments and global low-taxed income, one-time taxation of offshoreearnings at reduced rates in connection with the transition of U.S. international taxation from a worldwide tax system to a territorial tax system, elimination ofU.S. tax on foreign earnings (subject to certain important exceptions), and modifying or repealing many business deductions and credits. We continue toevaluate the potential effects that the TCJA may have on our operations, cash flows and results of operations. Notwithstanding the reduction in the federalcorporate income tax rate, the future impact of the TCJA, including on our global operations, is uncertain, and our business and financial condition could beadversely affected.14We rely on the value of our brands, which may be damaged by a number of factors, some of which are out of our control.We believe that maintaining and expanding our portfolio of product and service brands are important aspects of our efforts to attract and expand ourcustomer base. Our brands may be negatively impacted by, among other things, unreliable service levels from third-party providers, customers’ inability toproperly interface their applications with our technology, the loss or unauthorized disclosure of personal data, including PCI or PII, or other bad publicity dueto litigation, regulatory concerns or otherwise relating to our business. See “—Security breaches could expose us to liability and damage our reputation andour business.” Any inability to maintain or enhance awareness of our brands among our existing and target customers could negatively affect our current andfuture business prospects.We are exposed to risks associated with acquiring or divesting businesses or business operations.We have acquired, and, as part of our growth strategy, may in the future acquire, businesses or business operations. We may not be able to identifysuitable candidates for additional business combinations and strategic investments, obtain financing on acceptable terms for such transactions, obtainnecessary regulatory approvals or otherwise consummate such transactions on acceptable terms, or at all. For example, we announced on November 14,2018 that we have entered into an agreement to acquire Farelogix Inc. (“Farelogix”), a recognized innovator in the travel industry with offer management andNDC order delivery technology used by many of the world’s leading airlines. At closing, Sabre will purchase Farelogix for $360 million, funded by cash onhand and Revolver borrowing. The acquisition is subject to customary closing conditions and regulatory approvals and is expected to close in 2019.Regulatory reviews are ongoing. We cannot assure you that the acquisition will occur on these terms or at all.Any acquisitions that we are able to identify and complete may also involve a number of risks, including our inability to successfully or profitablyintegrate, operate, maintain and manage our newly acquired operations or employees; the diversion of our management’s attention from our existingbusiness to integrate operations and personnel; possible material adverse effects on our results of operations during the integration process; becomingsubject to contingent or other liabilities, including liabilities arising from events or conduct predating the acquisition that were not known to us at the time ofthe acquisition; and our possible inability to achieve the intended objectives of the transaction, including the inability to achieve anticipated business orfinancial results, cost savings and synergies. Acquisitions may also have unanticipated tax, regulatory and accounting ramifications, including recordinggoodwill and nonamortizable intangible assets that are subject to impairment testing on a regular basis and potential periodic impairment charges andincurring amortization expenses related to certain intangible assets. To consummate any of these transactions, we may need to raise external funds throughthe sale of equity or the issuance of debt in the capital markets or through private placements, which may affect our liquidity and may dilute the value of ourcommon stock. See "—We have a significant amount of indebtedness, which could adversely affect our cash flow and our ability to operate our business andto fulfill our obligations under our indebtedness."We have also divested, and may in the future divest, businesses or business operations. Any divestitures may involve a number of risks, including thediversion of management’s attention, significant costs and expenses, the loss of customer relationships and cash flow, and the disruption of the affectedbusiness or business operations. Failure to timely complete or to consummate a divestiture may negatively affect the valuation of the affected business orbusiness operations or result in restructuring charges.We are involved in various legal proceedings which may cause us to incur significant fees, costs and expenses and may result in unfavorableoutcomes.We are involved in various legal proceedings that involve claims for substantial amounts of money or which involve how we conduct our business. SeeNote 15. Commitments and Contingencies, to our consolidated financial statements. For example, the court has entered a judgment against us as a result ofthe jury verdict we recently received in the antitrust litigation with US Airways, and we have appealed this judgment. Other parties might likewise seek tobenefit from any unfavorable outcome by threatening to bring or actually bringing their own claims against us on the same or similar grounds or utilizing thelitigation to seek more favorable contract terms. We are also subject to a U.S. Department of Justice ("DOJ") antitrust investigation from 2011 relating to thepricing and conduct of the airline distribution industry. We received a civil investigation demand ("CID") from the DOJ and we are fully cooperating. The DOJhas also sent CIDs to other companies in the travel industry. Based on its findings in the investigation, the DOJ may (i) close the file, (ii) seek a consentdecree to remedy issues it believes violate the antitrust laws, or (iii) file suit against us for violating the antitrust laws, seeking injunctive relief. In addition, theEuropean Commission’s Directorate-General for Competition (“DG Comp”) has announced that it has opened an investigation to assess whether our andAmadeus’ respective agreements with airlines and travel agents may restrict competition in breach of E.U. antitrust rules. There is no legal deadline for theDG Comp to bring an antitrust investigation to an end, and the duration of the investigation is unknown. Depending on the outcome of any of these matters,and the scope of the outcome, the manner in which our airline distribution business is operated could be affected and could potentially force changes to theexisting airline distribution business model.The defense of these actions, as well as any of the other actions described under Note 15. Commitments and Contingencies, to our consolidatedfinancial statements or elsewhere in this Annual Report on Form 10-K, and any other actions brought against us in the future, is time consuming and divertsmanagement’s attention. Even if we are ultimately successful in defending ourselves in such matters, we are likely to incur significant fees, costs andexpenses as long as they are ongoing. Any of these consequences could have a material adverse effect on our business, financial condition and results ofoperations.15Any failure to comply with regulations or any changes in such regulations governing our businesses could adversely affect us.Parts of our business operate in regulated industries and could be adversely affected by unfavorable changes in or the enactment of new laws, rules orregulations applicable to us, which could decrease demand for our products and services, increase costs or subject us to additional liabilities. Moreover,regulatory authorities have relatively broad discretion to grant, renew and revoke licenses and approvals and to implement or interpret regulations.Accordingly, these regulatory authorities could prevent or temporarily suspend us from carrying on some or all of our activities or otherwise penalize us if ourpractices were found not to comply with the applicable regulatory or licensing requirements or any interpretation of such requirements by the regulatoryauthority. Our failure to comply with any of these requirements or interpretations could have a material adverse effect on our operations.Further, the United States has imposed economic sanctions, and could impose further sanctions in the future, that affect transactions with designatedcountries, including Cuba, Iran, Crimea region, North Korea and Syria, and nationals and others of those countries, and certain specifically targetedindividuals and entities engaged in conduct detrimental to U.S. national security interests. These sanctions are administered by the OFAC and are typicallyknown as the OFAC regulations. These regulations are extensive and complex, and they differ from one sanctions regime to another. Failure to comply withthese regulations could subject us to legal and reputational consequences, including civil and criminal penalties.We have GDS contracts with carriers that fly to Cuba, Iran, Crimea region, North Korea and Syria but are based outside of those countries and are notowned by those governments or nationals of those governments. With respect to Iran, Sudan, North Korea and Syria we believe that our activities aredesigned to comply with certain information and travel-related exemptions. With respect to Cuba, we have advised OFAC that customers outside the UnitedStates we display on the Sabre GDS flight information for, and support booking and ticketing of, services of non-Cuban airlines that offer service to Cuba.Based on advice of counsel, we believe these activities to fall under an exemption from OFAC regulations applicable to the transmission of information andinformational materials and transactions related thereto.We believe that our activities with respect to these countries are known to OFAC. We note, however, that OFAC regulations and related interpretiveguidance are complex and subject to varying interpretations. Due to this complexity, OFAC’s interpretation of its own regulations and guidance vary on a caseto case basis. As a result, we cannot provide any guarantees that OFAC will not challenge any of our activities in the future, which could have a materialadverse effect on our results of operations.In Europe, GDS regulations or interpretations thereof may increase our cost of doing business or lower our revenues, limit our ability to sell marketingdata, impact relationships with travel buyers, airlines, rail carriers or others, impair the enforceability of existing agreements with travel buyers and other usersof our system, prohibit or limit us from offering services or products, or limit our ability to establish or change fees. Although regulations specifically governingGDSs have been lifted in the United States, they remain subject to general regulation regarding unfair trade practices by the U.S. Department ofTransportation (“DOT”). In addition, continued regulation of GDSs in the E.U. and elsewhere could also create the operational challenge of supportingdifferent products, services and business practices to conform to the different regulatory regimes. We do not currently maintain a central database of allregulatory requirements affecting our worldwide operations and, as a result, the risk of non-compliance with the laws and regulations described above isheightened. Our failure to comply with these laws and regulations may subject us to fines, penalties and potential criminal violations. Any changes to theselaws or regulations or any new laws or regulations may make it more difficult for us to operate our business.We rely on third-party distributor partners and joint ventures to extend our GDS services to certain regions, which exposes us to risksassociated with lack of direct management control and potential conflicts of interest.Our Travel Network business utilizes third-party distributor partners and joint ventures to extend our GDS services in EMEA and APAC. We work withthese partners to establish and maintain commercial and customer service relationships with both travel suppliers and travel buyers. Since, in many cases,we do not exercise full management control over their day-to-day operations, the success of their marketing efforts and the quality of the services they provideare beyond our control. If these partners do not meet our standards for distribution, our reputation may suffer materially, and sales in those regions coulddecline significantly. Any interruption in these third-party services, deterioration in their performance or termination of our contractual arrangements with themcould negatively impact our ability to extend our GDS services in the relevant markets. In addition, our business may be harmed due to potential conflicts ofinterest with our joint venture partners.16We use open source software in our solutions that may subject our software solutions to general release or require us to re-engineer oursolutions.We use open source software in our solutions and may use more open source software in the future. From time to time, there have been claims bycompanies claiming ownership of software that was previously thought to be open source and that was incorporated by other companies into their products.As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software. Some open source licenses containrequirements that we make available source code for modifications or derivative works we create based upon the open source software and that we licensethese modifications or derivative works under the terms of a particular open source license or other license granting third parties certain rights of further use. Ifwe combine or, in some cases, link our proprietary software solutions with or to open source software in a certain manner, we could, under certain of the opensource licenses, be required to release the source code of our proprietary software solutions or license such proprietary solutions under the terms of aparticular open source license or other license granting third parties certain rights of further use. In addition to risks related to license requirements, usage ofopen source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties orcontrols on origin of the software. In addition, open source license terms may be ambiguous and many of the risks associated with usage of open sourcecannot be eliminated, and could, if not properly addressed, negatively affect our business. If we were found to have inappropriately used open sourcesoftware, we may be required to seek licenses from third parties in order to continue offering our software, to re-engineer our solutions, to discontinue the saleof our solutions in the event re-engineering cannot be accomplished on a timely basis or take other remedial action that may divert resources away from ourdevelopment efforts, any of which could adversely affect our business, operating results and financial condition.Intellectual property infringement actions against us could be costly and time consuming to defend and may result in business harm if we areunsuccessful in our defense.Third parties may assert, including by means of counterclaims against us as a result of the assertion of our intellectual property rights, that ourproducts, services or technology, or the operation of our business, violate their intellectual property rights. We are currently subject to such assertions,including patent infringement claims, and may be subject to such assertions in the future. These assertions may also be made against our customers whomay seek indemnification from us. In the ordinary course of business, we enter into agreements that contain indemnity obligations whereby we are requiredto indemnify our customers against these assertions arising from our customers’ usage of our products, services or technology. As the competition in ourindustry increases and the functionality of technology offerings further overlaps, these claims and counterclaims could become more common. We cannot becertain that we do not or will not infringe third parties’ intellectual property rights.Legal proceedings involving intellectual property rights are highly uncertain, and can involve complex legal and scientific questions. Any intellectualproperty claim against us, regardless of its merit, could result in significant liabilities to our business, and can be expensive and time consuming to defend.Depending on the nature of such claims, our businesses may be disrupted, our management’s attention and other company resources may be diverted andwe may be required to redesign, reengineer or rebrand our products and services, if feasible, to stop offering certain products and services or to enter intoroyalty or licensing agreements in order to obtain the rights to use necessary technologies, which may not be available on terms acceptable to us, if at all, andmay result in a decrease of our competitive advantage. Our failure to prevail in such matters could result in loss of intellectual property rights, judgmentsawarding substantial damages, including possible treble damages and attorneys’ fees, and injunctive or other equitable relief against us. If we are heldliable, we may be unable to exploit some or all of our intellectual property rights or technology. Even if we are not held liable, we may choose to settle claimsby making a monetary payment or by granting a license to intellectual property rights that we otherwise would not license. Further, judgments may result inloss of reputation, may force us to take costly remediation actions, delay selling our products and offering our services, reduce features or functionality in ourservices or products, or cease such activities altogether. Insurance may not cover or be insufficient for any such claim.We may not have sufficient insurance to cover our liability in pending litigation claims and future claims either due to coverage limits or as aresult of insurance carriers seeking to deny coverage of such claims, which in either case could expose us to significant liabilities.We maintain third-party insurance coverage against various liability risks, including securities, stockholders, derivative, ERISA, and product liabilityclaims, as well as other claims that form the basis of litigation matters pending against us. We believe these insurance programs are an effective way toprotect our assets against liability risks. However, the potential liabilities associated with litigation matters pending against us, or that could arise in the future,could exceed the coverage provided by such programs. In addition, our insurance carriers have in the past sought or may in the future seek to rescind ordeny coverage with respect to pending claims or lawsuits, completed investigations or pending or future investigations and other legal actions against us. Ifwe do not have sufficient coverage under our policies, or if the insurance companies are successful in rescinding or denying coverage, we may be requiredto make material payments in connection with third-party claims.17We may not be able to protect our intellectual property effectively, which may allow competitors to duplicate our products and services.Our success and competitiveness depend, in part, upon our technologies and other intellectual property, including our brands. Among our significantassets are our proprietary and licensed software and other proprietary information and intellectual property rights. We rely on a combination of copyright,trademark and patent laws, laws protecting trade secrets, confidentiality procedures and contractual provisions to protect these assets both in the UnitedStates and in foreign countries. The laws of some jurisdictions may provide less protection for our technologies and other intellectual property assets than thelaws of the United States.There is no certainty that our intellectual property rights will provide us with substantial protection or commercial benefit. Despite our efforts to protectour intellectual property, some of our innovations may not be protectable, and our intellectual property rights may offer insufficient protection from competitionor unauthorized use, lapse or expire, be challenged, narrowed, invalidated, or misappropriated by third parties, or be deemed unenforceable or abandoned,which could have a material adverse effect on our business, financial condition and results of operations and the legal remedies available to us may notadequately compensate us. We cannot be certain that others will not independently develop, design around, or otherwise acquire equivalent or superiortechnology or intellectual property rights.•While we take reasonable steps to protect our brands and trademarks, we may not be successful in maintaining or defending our brands orpreventing third parties from adopting similar brands. If our competitors infringe our principal trademarks, our brands may become diluted or if ourcompetitors introduce brands or products that cause confusion with our brands or products in the marketplace, the value that our consumersassociate with our brands may become diminished, which could negatively impact revenue.•Our patent applications may not be granted, and the patents we own could be challenged, invalidated, narrowed or circumvented by others andmay not be of sufficient scope or strength to provide us with any meaningful protection or commercial advantage. Once our patents expire, or ifthey are invalidated, narrowed or circumvented, our competitors may be able to utilize the technology protected by our patents which mayadversely affect our business.•Although we rely on copyright laws to protect the works of authorship created by us, we do not generally register the copyrights in ourcopyrightable works where such registration is permitted. Copyrights of U.S. origin must be registered before the copyright owner may bring aninfringement 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 toregister the copyright before we can file an infringement suit in the United States, and our remedies in any such infringement suit may be limited.•We use reasonable efforts to protect our trade secrets. However, protecting trade secrets can be difficult and our efforts may provide inadequateprotection to prevent unauthorized use, misappropriation, or disclosure of our trade secrets, know how, or other proprietary information.•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 maychange their regulations in a way that adversely affects our ability to register and use certain domain names.We license software and other intellectual property from third parties. These licensors may breach or otherwise fail to perform their obligations, or claimthat we have breached or otherwise attempt to terminate their license agreements with us. We also rely on license agreements to allow third parties to useour intellectual property rights, including our software, but there is no guarantee that our licensees will abide by the terms of our license agreements or thatthe terms of our agreements will always be enforceable.In addition, policing unauthorized use of and enforcing intellectual property can be difficult and expensive. The fact that we have intellectual propertyrights, including registered intellectual property rights, may not guarantee success in our attempts to enforce these rights against third parties. Besidesgeneral litigation risks, changes in, or interpretations of, intellectual property laws may compromise our ability to enforce our rights. We may not be aware ofinfringement or misappropriation, or elect not to seek to prevent it. Our decisions may be based on a variety of factors, such as costs and benefits of takingaction, and contextual business, legal, and other issues. Any inability to adequately protect our intellectual property on a cost-effective basis could harm ourbusiness.Defects in our products may subject us to significant warranty liabilities or product liability claims and we may have insufficient product liabilityinsurance to pay material uninsured claims.Our business exposes us to the risk of product liability claims that are inherent in software development. We may inadvertently create defectivesoftware, or supply our customers with defective software or software components that we acquire from third parties, which could result in personal injury,property damage or other liabilities, and may result in warranty or product liability claims brought against us, our travel supplier customers or third parties.18Under our customer agreements, we generally must indemnify our customers for liability arising from intellectual property infringement claims withrespect to our software. These indemnifications could be significant and we may not have adequate insurance coverage to protect us against all claims. Thecombination of our insurance coverage, cash flows and reserves may not be adequate to satisfy product liabilities we may incur in the future. Even meritlessclaims could subject us to adverse publicity, hinder us from securing insurance coverage in the future, require us to incur significant legal fees, decreasedemand for any products that we successfully develop, divert management’s attention, and force us to limit or forgo further development andcommercialization of these products. The cost of any product liability litigation or other proceedings, even if resolved in our favor, could be substantial.We may recognize impairments on long-lived assets, including goodwill and other intangible assets, or recognize impairments on our equitymethod investments.Our consolidated balance sheet at December 31, 2018 contained goodwill and intangible assets, net totaling $3.2 billion. Future acquisitions thatresult in the recognition of additional goodwill and intangible assets would cause an increase in these types of assets. We do not amortize goodwill andintangible assets that are determined to have indefinite useful lives, but we amortize definite-lived intangible assets on a straight-line basis over their usefuleconomic lives, which range from four to thirty years, depending on classification.We evaluate goodwill for impairment on an annual basis or earlier if impairment indicators exist and we evaluate definite-lived intangible assets forimpairment whenever events or changes in circumstances indicate that the carrying amount of definite-lived intangible assets used in combination togenerate cash flows largely independent of other assets may not be recoverable. We record an impairment charge whenever the estimated fair value of ourreporting units or of such intangible assets is less than its carrying value.The fair values used in our impairment evaluation are estimated using a combined approach based upon discounted future cash flow projections andobserved market multiples for comparable businesses. Changes in estimates based on changes in risk-adjusted discount rates, future booking andtransaction volume levels, future price levels, rates of growth in our consumer and corporate direct booking businesses, rates of increase in operatingexpenses, cost of revenue and taxes could result in material impairment charges.Our pension plan obligations are currently unfunded, and we may have to make significant cash contributions to our plans, which could reducethe cash available for our business.Our pension plans in the aggregate are estimated to be unfunded by $116 million as of December 31, 2018. With approximately 4,900 participants inour pension plans, we incur substantial costs relating to pension benefits, which can vary substantially as a result of changes in healthcare laws and costs,volatility in investment returns on pension plan assets and changes in discount rates used to calculate related liabilities. Our estimates of liabilities andexpenses for pensions and other post-retirement healthcare benefits require the use of assumptions, including assumptions relating to the rate used todiscount the future estimated liability, the rate of return on plan assets, inflation and several assumptions relating to the employee workforce (medical costs,retirement age and mortality). Actual results may differ, which may have a material adverse effect on our business, prospects, financial condition or results ofoperations. Future volatility and disruption in the stock markets could cause a decline in the asset values of our pension plans. In addition, a decrease in thediscount rate used to determine minimum funding requirements could result in increased future contributions. If either occurs, we may need to makeadditional pension contributions above what is currently estimated, which could reduce the cash available for our businesses.We may require more cash than we generate in our operating activities, and additional funding on reasonable terms or at all may not beavailable.We cannot guarantee that our business will generate sufficient cash flow from operations to fund our capital investment requirements or other liquidityneeds. Moreover, because we are a holding company with no material direct operations, we depend on loans, dividends and other payments from oursubsidiaries to generate the funds necessary to meet our financial obligations. Our subsidiaries are legally distinct from us and may be prohibited or restrictedfrom paying dividends or otherwise making funds available to us under certain conditions.As a result, we may be required to finance our cash needs through bank loans, additional debt financing, public or private equity offerings or otherwise.Our ability to arrange financing and the cost of such financing are dependent on numerous factors, including but not limited to general economic and capitalmarket conditions, the availability of credit from banks or other lenders, investor confidence in us, and our results of operations.There can be no assurance that financing will be available on terms favorable to us or at all, which could force us to delay, reduce or abandon ourgrowth strategy, increase our financing costs, or both. Additional funding from debt financings may make it more difficult for us to operate our businessbecause a portion of our cash generated from internal operations would be used to make principal and interest payments on the indebtedness and we maybe obligated to abide by restrictive covenants contained in the debt financing agreements, which may, among other things, limit our ability to make businessdecisions and further limit our ability to pay dividends.19In addition, any downgrade of our debt ratings by Standard & Poor’s, Moody’s Investor Service or similar ratings agencies, increases in generalinterest rate levels and credit spreads or overall weakening in the credit markets could increase our cost of capital. Furthermore, raising capital through publicor private sales of equity to finance acquisitions or expansion could cause earnings or ownership dilution to your shareholding interests in our company.We have a significant amount of indebtedness, which could adversely affect our cash flow and our ability to operate our business and to fulfillour obligations under our indebtedness.We have a significant amount of indebtedness. As of December 31, 2018, we had $3.4 billion of indebtedness outstanding in addition to $385 millionof availability under our Revolver, after taking into account the availability reduction of $15 million for letters of credit issued under our Revolver. Oursubstantial level of indebtedness increases the possibility that we may not generate enough cash flow from operations to pay, when due, the principal of,interest on or other amounts due in respect of, these obligations. Other risks relating to our long-term indebtedness include:•increased vulnerability to general adverse economic and industry conditions;•higher interest expense if interest rates increase on our floating rate borrowings and our hedging strategies do not effectively mitigate the effects ofthese increases;•need to divert a significant portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of cash tofund working capital, capital expenditures, acquisitions, investments and other general corporate purposes;•limited ability to obtain additional financing, on terms we find acceptable, if needed, for working capital, capital expenditures, expansion plans andother investments, which may adversely affect our ability to implement our business strategy;•limited flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate or to take advantage of marketopportunities; and•a competitive disadvantage compared to our competitors that have less debt.In addition, it is possible that we may need to incur additional indebtedness in the future in the ordinary course of business. The terms of our Amendedand Restated Credit Agreement and the indentures governing our senior secured notes due in 2023 allow us to incur additional debt subject to certainlimitations. If new debt is added to current debt levels, the risks described above could intensify. In addition, our inability to maintain certain leverage ratioscould result in acceleration of a portion of our debt obligations and could cause us to be in default if we are unable to repay the accelerated obligations.We are exposed to interest rate fluctuations.Our floating rate indebtedness exposes us to fluctuations in prevailing interest rates. To reduce the impact of large fluctuations in interest rates, wetypically hedge a portion of our interest rate risk by entering into derivative agreements with financial institutions. Our exposure to interest rates relatesprimarily to our borrowings under the Amended and Restated Credit Agreement.The derivative agreements that we use to manage the risk associated with fluctuations in interest rates may not be able to eliminate the exposure tothese changes. Interest rates are sensitive to numerous factors outside of our control, such as government and central bank monetary policy in thejurisdictions in which we operate. Depending on the size of the exposures and the relative movements of interest rates, if we choose not to hedge or fail toeffectively hedge our exposure, we could experience a material adverse effect on our results of operations and financial condition.As of December 31, 2018, we had outstanding approximately $2,382 million of variable debt that is indexed to the London Interbank Offered Rate(“LIBOR”). In July 2017, the Financial Conduct Authority announced its intention to phase out LIBOR by the end of 2021. It is not possible to predict the effectof any changes in the methods by which LIBOR is determined or regulatory activity related to LIBOR’s phaseout. Any of these developments could causeLIBOR to perform differently than in the past or cease to exist. If a published U.S. dollar LIBOR rate is unavailable, the interest rates on our debt indexed toLIBOR will be determined using various alternative methods set forth in our Amended and Restated Credit Agreement, any of which could result in interestobligations that are more than or that do not otherwise correlate over time with the payments that would have been made on this debt if U.S. dollar LIBORwere available in its current form. Any of these proposals or consequences could have a material adverse effect on our financing costs. Moreover, ourinterest rate swap agreements designated in a hedging relationship utilize one-month LIBOR and have maturities that extend through 2021. See Note 6.Derivatives, to our consolidated financial statements. The phaseout of the LIBOR may adversely effect our assessment of effectiveness or measurement ofineffectiveness for accounting purposes.20We are exposed to exchange rate fluctuations.We conduct various operations outside the United States, primarily in APAC, Europe and Latin America. During the year ended December 31, 2018,foreign currency operations included $264 million of revenue and $583 million of operating expenses, representing approximately 7% and 18% of our totalrevenue and operating expenses, respectively. During the year ended December 31, 2017, foreign currency operations included $256 million of revenue and$595 million of operating expenses, representing approximately 7% and 20% of our total revenue and operating expenses, respectively. Our most significantforeign currency operating expenses are in the Euro, representing approximately 7% and 8% of our operating expenses for the year ended December 31,2018 and 2017, respectively. As a result, we face exposure to movements in currency exchange rates. These exposures include but are not limited to:•re-measurement gains and losses from changes in the value of foreign denominated assets and liabilities;•translation gains and losses on foreign subsidiary financial results that are translated into U.S. dollars, our functional currency, upon consolidation;•planning risk related to changes in exchange rates between the time we prepare our annual and quarterly forecasts and when actual resultsoccur; and•the impact of relative exchange rate movements on cross-border travel, principally travel between Europe and the United States.Depending on the size of the exposures and the relative movements of exchange rates, if we choose not to hedge or fail to hedge effectively ourexposure, we could experience a material adverse effect on our results of operations and financial condition. As we have seen in prior periods, in the event ofsevere volatility in exchange rates, these exposures can increase, and the impact on our results of operations and financial condition can be morepronounced. In addition, the current environment and the increasingly global nature of our business have made hedging these exposures more complex andcostly.To reduce the impact of this earnings volatility, we hedge our foreign currency exposure by entering into foreign currency forward contracts on severalof our largest foreign currency exposures, including the Singaporean Dollar, the British Pound Sterling, the Polish Zloty, the Australian Dollar, the IndianRupee, the Brazilian Real, and the Swedish Krona. Although we have increased and may continue to increase the scope, complexity and duration of ourforeign exchange risk management strategy, our current or future hedging activities may not sufficiently protect us from the adverse effects of currencyexchange rate movements. Moreover, we make a number of estimates in conducting hedging activities, including in some cases the level of future bookings,cancellations, refunds, customer stay patterns and payments in foreign currencies. In the event those estimates differ significantly from actual results, wecould experience greater volatility as a result of our hedging activities.The terms of our debt covenants could limit our discretion in operating our business and any failure to comply with such covenants could resultin the default of all of our debt.The agreements governing our indebtedness contain and the agreements governing our future indebtedness will likely contain various covenants,including those that restrict our or our subsidiaries’ ability to, among other things:•incur liens on our property, assets and revenue;•borrow money, and guarantee or provide other support for the indebtedness of third parties;•pay dividends or make other distributions on, redeem or repurchase our capital stock;•prepay, redeem or repurchase certain of our indebtedness;•enter into certain change of control transactions;•make investments in entities that we do not control, including joint ventures;•enter into certain asset sale transactions, including divestiture of certain company assets and divestiture of capital stock of wholly-ownedsubsidiaries;•enter into certain transactions with affiliates;•enter into secured financing arrangements;•enter into sale and leaseback transactions;•change our fiscal year; and•enter into substantially different lines of business.These covenants may limit our ability to effectively operate our businesses or maximize stockholder value. In addition, our Amended and RestatedCredit Agreement requires that we meet certain financial tests, including the maintenance of a leverage ratio and a minimum net worth. Our ability to satisfythese tests may be affected by factors and events beyond our control, and we may be unable to meet such tests in the future.Any failure to comply with the restrictions of our Amended and Restated Credit Agreement, the indentures governing our senior secured notes due2023 or any agreement governing our other indebtedness may result in an event of default under those agreements. Such default may allow the creditors toaccelerate the related debt, which may trigger cross-acceleration or cross-default provisions in other debt. In addition, lenders may be able to terminate anycommitments they had made to supply us with further funds.21Maintaining and improving our financial controls and the requirements of being a public company may strain our resources, divertmanagement’s attention and affect our ability to attract and retain qualified board members.As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”),the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and The NASDAQ Stock Market (“NASDAQ”) rules. Therequirements of these rules and regulations have increased and will continue to significantly increase our legal and financial compliance costs, includingcosts associated with the hiring of additional personnel, making some activities more difficult, time-consuming or costly, and may also place undue strain onour personnel, systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to ourbusiness and financial condition.The Sarbanes-Oxley Act requires, among other things, that we maintain disclosure controls and procedures and internal control over financialreporting. Ensuring that we have adequate internal financial and accounting controls and procedures in place, as well as maintaining these controls andprocedures, is a costly and time-consuming effort that needs to be re-evaluated frequently. Section 404 of the Sarbanes-Oxley Act (“Section 404”) requiresthat we annually evaluate our internal control over financial reporting to enable management to report on, and our independent auditors to audit as of the endof each fiscal year the effectiveness of those controls. In connection with the Section 404 requirements, both we and our independent registered publicaccounting firm test our internal controls and could, as part of that documentation and testing, identify material weaknesses, significant deficiencies or otherareas for further attention or improvement.Implementing any appropriate changes to our internal controls may require specific compliance training for our directors, officers and employees,require the hiring of additional finance, accounting and other personnel, entail substantial costs to modify our existing accounting systems, and take asignificant period of time to complete. These changes may not, however, be effective in maintaining the adequacy of our internal controls, and any failure tomaintain that adequacy, or consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs and couldmaterially impair our ability to operate our business. Moreover, adequate internal controls are necessary for us to produce reliable financial reports and areimportant to help prevent fraud. As a result, our failure to satisfy the requirements of Section 404 on a timely basis could result in the loss of investorconfidence in the reliability of our financial statements, which in turn could cause the market value of our common stock to decline.Various rules and regulations applicable to public companies make it more difficult and more expensive for us to maintain directors’ and officers’liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to maintain coverage. If we are unable to maintainadequate directors’ and officers’ liability insurance, our ability to recruit and retain qualified officers and directors, especially those directors who may bedeemed independent for purposes of the NASDAQ rules, will be significantly curtailed.The market price of our common stock could decline due to the large number of outstanding shares of our common stock eligible for futuresale.Sales of substantial amounts of our common stock in the public market in future offerings, or the perception that these sales could occur, could causethe market price of our common stock to decline. These sales could also make it more difficult for us to sell equity or equity-related securities in the future, at atime and price that we deem appropriate. In addition, the additional sale of our common stock by our officers or directors in the public market, or theperception that these sales may occur, could cause the market price of our common stock to decline.We may issue shares of our common stock or other securities from time to time as consideration for, or to finance, future acquisitions and investmentsor for other capital needs. We cannot predict the size of future issuances of our shares or the effect, if any, that future sales and issuances of shares wouldhave on the market price of our common stock. If any such acquisition or investment is significant, the number of shares of common stock or the number oraggregate principal amount, as the case may be, of other securities that we may issue may in turn be substantial and may result in additional dilution to ourstockholders. We may also grant registration rights covering shares of our common stock or other securities that we may issue in connection with any suchacquisitions and investments.To the extent that any of us, our executive officers or directors sell, or indicate an intent to sell, substantial amounts of our common stock in the publicmarket, the trading price of our common stock could decline significantly.22Our ability to pay regular dividends to our stockholders is subject to the discretion of our board of directors and may be limited by our holdingcompany structure and applicable provisions of Delaware law.We intend to continue to pay quarterly cash dividends on our common stock. However, our board of directors may, in its sole discretion, change theamount or frequency of dividends or discontinue the payment of dividends entirely. In addition, because we are a holding company with no material directoperations, we are dependent on loans, dividends and other payments from our operating subsidiaries to generate the funds necessary to pay dividends onour common stock. We expect to cause our subsidiaries to make distributions to us in an amount sufficient for us to pay dividends. However, their ability tomake such distributions will be subject to their operating results, cash requirements and financial condition, the applicable provisions of Delaware law thatmay limit the amount of funds available for distribution and our ability to pay cash dividends, compliance with covenants and financial ratios related to existingor future indebtedness, including under our Amended and Restated Credit Agreement, our senior secured notes due in 2023, and other agreements withthird parties. In addition, each of the companies in our corporate chain must manage its assets, liabilities and working capital in order to meet all of its cashobligations, including the payment of dividends or distributions. As a consequence of these various limitations and restrictions, we may not be able to make,or may have to reduce or eliminate, the payment of dividends on our common stock. Any change in the level of our dividends or the suspension of thepayment thereof could adversely affect the market price of our common stock.ITEM 1B.UNRESOLVED STAFF COMMENTSNot applicable.ITEM 2.PROPERTIESAs a company with global operations, we operate in many countries with a variety of sales, administrative, product development and customer serviceroles provided in these offices.Americas: Our corporate and business unit headquarters and domestic operations are located in a property which we own in Southlake, Texas, and intwo leased offices located in Westlake, Texas. The Westlake leases expire in 2026 and include early termination options in 2022. There are nine additionaloffices across North America and nine offices across Latin America that serve in various sales, administration, software development and customer servicecapacities for all our business segments. All of these additional offices are leased.Europe: Travel Network has its European regional headquarters in London, United Kingdom, with a lease that expires in 2027 and includes an earlytermination option in 2022. There are 24 additional offices across Europe that serve in various sales, administration, software development and customerservice capacities. All of these additional offices are leased.APAC: Travel Network, Airline Solutions and Hospitality Solutions have their APAC regional operations headquarters in Singapore. There are threeoffices that are leased with two leases which expire in 2019 and one lease which expires in 2022, with an early termination option in 2019. There are 29additional offices across APAC that serve in various sales, administration, software development and customer service capacities. All of the additional officesare leased, with the exception of one property in Kuala Lumpur, Malaysia, which is owned.ITEM 3.LEGAL PROCEEDINGSWhile certain legal proceedings and related indemnification obligations to which we are a party specify the amounts claimed, these claims may notrepresent reasonably possible losses. Given the inherent uncertainties of litigation, the ultimate outcome of these matters cannot be predicted at this time, norcan the amount of possible loss or range of loss, if any, be reasonably estimated, except in circumstances where an aggregate litigation accrual has beenrecorded for probable and reasonably estimable loss contingencies. A determination of the amount of accrual required, if any, for these contingencies ismade after careful analysis of each matter. The required accrual may change in the future due to new information or developments in each matter or changesin approach such as a change in settlement strategy in dealing with these matters. See “Risk Factors—"We are involved in various legal proceedings whichmay cause us to incur significant fees, costs and expenses and may result in unfavorable outcomes.”23Antitrust Litigation and InvestigationsUS Airways Antitrust LitigationIn April 2011, US Airways filed suit against us in federal court in the Southern District of New York, alleging violations of the Sherman Act Section 1(anticompetitive agreements) and Section 2 (monopolization). The complaint was filed fewer than two months after we entered into a new distributionagreement with US Airways. In September 2011, the court dismissed all claims relating to Section 2. The claims that were not dismissed are claims broughtunder Section 1 of the Sherman Act, relating to our contracts with US Airways, which US Airways claims contain anticompetitive provisions, and an allegedconspiracy with the other GDSs, allegedly to maintain the industry structure and not to compete for content. We strongly deny all of the allegations made byUS Airways.Sabre filed summary judgment motions in April 2014. In January 2015, the court issued an order granting Sabre's summary judgment motions in part,eliminating a majority of US Airways' alleged damages and rejecting its request for injunctive relief by which US Airways sought to bar Sabre from enforcingcertain provisions in our contracts. In September 2015, the court also dismissed US Airways' claim for declaratory relief. In February 2017, US Airways soughtreconsideration of the court's opinion dismissing the claim for declaratory relief, which the court denied in March 2017.The trial on the remaining claims commenced in October 2016. In December 2016, the jury issued a verdict in favor of US Airways with respect to itsclaim under Section 1 of the Sherman Act regarding Sabre's contract with US Airways and awarded it$5 million in single damages. The jury rejected USAirways' claim alleging a conspiracy with the other GDSs. We continue to believe that our business practices and contract terms are lawful. In January 2017,we filed a motion seeking judgment as a matter of law in favor of Sabre on the one claim on which the jury found for US Airways, which the court denied inMarch 2017.Based on the jury’s verdict, in March 2017 the court entered final judgment in favor of US Airways in the amount of $15 million, which is three times thejury’s award of $5 million as required by the Sherman Act.In April 2017, we filed an appeal with the United States Court of Appeals for the Second Circuit seeking a reversal of the judgment. US Airways alsofiled a counter-appeal challenging earlier court orders, including the above-referenced orders dismissing and/or issuing summary judgment as to portions ofits claims and damages. In connection with this appeal, we posted an appellate bond equal to the aggregate amount of the $15 million judgment entered plusinterest, which stayed the judgment pending the appeal. The Second Circuit heard oral arguments on this matter in December 2018.As a result of the jury's verdict, US Airways is also entitled to receive reasonable attorneys’ fees and costs under the Sherman Act. As such, it filed amotion seeking approximately $125 million in attorneys’ fees and costs, the amount of which we strongly dispute. In January 2018, the court denied USAirways' motion seeking attorneys' fees and costs, based on the fact that the appeal of the underlying judgment remains pending, as discussed above. Thecourt's denial of the motion was without prejudice, and US Airways may refile the motion if it prevails on the appeal.In the fourth quarter of 2016, we accrued a loss of $32 million, which represents the court's final judgment of $15 million, plus our estimate of $17million for US Airways' reasonable attorneys’ fees, expenses and costs. We are unable to estimate the exact amount of the loss associated with the verdict,but we estimate that there is a range of outcomes between $32 million and $65 million, inclusive of the trebled damage award of approximately $15 million.No amount within the range is considered a better estimate than any other amount within the range and therefore, the minimum within the range wasrecorded in selling, general and administrative expense during 2016. As noted above, the amount of attorneys' fees and costs to be awarded is subject toconclusion of the appellate process and, if US Airways ultimately prevails on the appeal, final decision by the trial court, which may itself be appealed. Theultimate resolution of this matter may be greater or less than the amount recorded and, if greater, could adversely affect our results of operations. We haveand will incur significant fees, costs and expenses for as long as the lawsuit, including any appeal, is ongoing. In addition, litigation by its nature is highlyuncertain and fraught with risk, and it is therefore difficult to predict the outcome of any particular matter, including any appeal or changes to our business thatmay be required as a result of the litigation. Depending on the outcome of the litigation, any of these consequences could have a material adverse effect onour business, financial condition and results of operations.24Lawsuit on Antitrust ClaimsIn July 2015, a putative class action lawsuit was filed against us and two other GDSs, in the United States District Court for the Southern District of NewYork. The plaintiffs, who are asserting claims on behalf of a putative class of consumers in various states, are generally alleging that the GDSs conspired tonegotiate for full content from the airlines, resulting in higher ticket prices for consumers, in violation of various federal and state laws. The plaintiffs sought anunspecified amount of damages in connection with their state law claims, and they requested injunctive relief in connection with their federal claim. In July2016, the court granted, in part, our motion to dismiss the lawsuit, finding that plaintiffs’ state law claims are preempted by federal law, thereby precludingtheir claims for damages. The court declined to dismiss plaintiffs’ claim seeking an injunction under federal antitrust law. The plaintiffs may appeal the court’sdismissal of their state law claims upon a final judgment. In August 2018, the plaintiffs sought leave from the court to withdraw their motion for classcertification. In October 2018, the court denied the plaintiffs’ motion for class certification with prejudice. The case is now proceeding on an individual basisonly. We believe that the losses associated with this case are neither probable nor estimable and therefore have not accrued any losses as of December 31,2018. We may incur significant fees, costs and expenses for as long as this litigation is ongoing. We intend to vigorously defend against the remaining claims.European Commission’s Directorate-General for Competition ("DG Comp") InvestigationOn November 23, 2018, the DG Comp announced that it has opened an investigation to assess whether our agreements with airlines and travel agentsmay restrict competition in breach of European Union antitrust rules. We intend to fully cooperate with the DG Comp’s investigation and are unable to makeany prediction regarding its outcome at this time. There is no legal deadline for the DG Comp to bring an antitrust investigation to an end, and the duration ofthe investigation is uncertain. Depending on the findings of the DG Comp, the outcome of the investigation could have a material adverse effect on ourbusiness, financial condition and results of operations. We may incur significant fees, costs and expenses for as long as this investigation is ongoing. Weintend to vigorously defend against any allegations of anticompetitive activity by the DG Comp.Department of Justice InvestigationOn May 19, 2011, we received a civil investigative demand (“CID”) from the U.S. Department of Justice (“DOJ”) investigating alleged anticompetitiveacts related to the airline distribution component of our business. We are fully cooperating with the DOJ investigation and are unable to make any predictionregarding its outcome. The DOJ is also investigating other companies that own GDSs, and has sent CIDs to other companies in the travel industry. Based onits findings in the investigation, the DOJ may (i) close the file, (ii) seek a consent decree to remedy issues it believes violate the antitrust laws, or (iii) file suitagainst us for violating the antitrust laws, seeking injunctive relief. If injunctive relief were granted, depending on its scope, it could affect the manner in whichour airline distribution business is operated and potentially force changes to the existing airline distribution business model. Any of these consequenceswould have a material adverse effect on our business, financial condition and results of operations. We have not received any communications from the DOJregarding this matter for several years; however, we have not been notified that this matter is closed.Indian Income Tax LitigationWe are currently a defendant in income tax litigation brought by the Indian Director of Income Tax (“DIT”) in the Supreme Court of India. The disputearose in 1999 when the DIT asserted that we have a permanent establishment within the meaning of the Income Tax Treaty between the United States andthe Republic of India and accordingly issued tax assessments for assessment years ending March 1998 and March 1999, and later issued further taxassessments for assessment years ending March 2000 through March 2006. The DIT has continued to issue further tax assessments on a similar basis forsubsequent years; however, the tax assessments for assessment years ending March 2007 and later are no longer material. We appealed the taxassessments for assessment years ending March 1998 through March 2006 and the Indian Commissioner of Income Tax Appeals returned a mixed verdict.We filed further appeals with the Income Tax Appellate Tribunal (“ITAT”). The ITAT ruled in our favor on June 19, 2009 and July 10, 2009, stating that noincome would be chargeable to tax for assessment years ending March 1998 and March 1999, and from March 2000 through March 2006. The DIT appealedthose decisions to the Delhi High Court, which found in our favor on July 19, 2010. The DIT has appealed the decision to the Supreme Court of India. Ourcase has been listed for hearing with the Supreme Court, and it has not yet been presented. We have appealed the tax assessments for the assessmentyears ended March 2013 to March 2016 with the ITAT and no trial date has been set for these subsequent years.In addition, Sabre Asia Pacific Pte Ltd. ("SAPPL") is currently a defendant in similar income tax litigation brought by the DIT. The dispute arose whenthe DIT asserted that SAPPL has a permanent establishment within the meaning of the Income Tax Treaty between Singapore and India and accordinglyissued tax assessments for assessment years ending March 2000 through March 2005. SAPPL appealed the tax assessments, and the Indian Commissionerof Income Tax (Appeals) returned a mixed verdict. SAPPL filed further appeals with the ITAT. The ITAT ruled in SAPPL’s favor, finding that no income wouldbe chargeable to tax for assessment years ending March 2000 through March 2005. The DIT appealed those decisions to the Delhi High Court. No hearingdate has been set. The DIT also assessed taxes on a similar basis for assessment years ending March 2006 through March 2014 and appeals forassessment years ending March 2006 through 2014 are pending before the ITAT.25If the DIT were to fully prevail on every claim against us, including SAPPL, we could be subject to taxes, interest and penalties of approximately $42million as of December 31, 2018. We intend to continue to aggressively defend against each of the foregoing claims. Although we do not believe that theoutcome of the proceedings will result in a material impact on our business or financial condition, litigation is by its nature uncertain. We do not believe thisoutcome is more likely than not and therefore have not made any provisions or recorded any liability for the potential resolution of any of these claims.Indian Service Tax LitigationSAPPL's Indian subsidiary is also subject to litigation by the India Director General (Service Tax) ("DGST"), which has assessed the subsidiary formultiple years related to its alleged failure to pay service tax on marketing fees and reimbursements of expenses. Indian courts have returned verdictsfavorable to the Indian subsidiary. The DGST has appealed the verdict to the Indian Supreme Court. We do not believe that an adverse outcome is probableand therefore have not made any provisions or recorded any liability for the potential resolution of any of these claims.Litigation Relating to Routine ProceedingsWe are also engaged from time to time in other routine legal and tax proceedings incidental to our business. We do not believe that any of theseroutine proceedings will have a material impact on the business or our financial condition.ITEM 4.MINE SAFETY DISCLOSURESNot applicable.26EXECUTIVE OFFICERS OF THE REGISTRANTThe names and ages of our executive officers as of February 15, 2019, together with certain biographical information, are as follows:Name Age PositionSean Menke 50 Chief Executive Officer, President and Director, SabreDouglas Barnett 59 Executive Vice President and Chief Financial Officer, SabreClinton Anderson 48 Executive Vice President, Sabre and President, Hospitality SolutionsWade Jones 52 Executive Vice President, Sabre and President, Travel NetworkDavid Shirk 52 Executive Vice President, Sabre and President, Travel SolutionsRichard Simonson 60 Senior AdvisorCem Tanyel 50 Executive Vice President, Sabre and President, Airline SolutionsKimberly Warmbier 57 Executive Vice President and Chief Human Resources Officer, SabreSean Menke was elected president and CEO effective December 31, 2016. Prior to that, he served as executive vice president and president of TravelNetwork. Before joining Sabre in October 2015, Mr. Menke served as executive vice president and chief operating officer of Hawaiian Airlines from October2014 to October 2015. From 2013 to 2014, he was executive vice president of resources at IHS Inc., a global information technology company. He served asmanaging partner of Vista Strategic Group, LLC, a consulting firm, from 2012 to 2013 and from 2010 to 2011. From 2011 to 2012, he served as president andchief executive officer of Pinnacle Airlines, and from 2007 to 2010 as president and chief executive officer of Frontier Airlines. Frontier Airlines and PinnacleAirlines filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in 2008 and 2012, respectively. Mr. Menke earned anexecutive MBA from the University of Denver and dual bachelor of science degrees in Economics and Aviation Management from Ohio State University.Douglas Barnett is executive vice president and chief financial officer. Prior to joining Sabre in June 2018, Mr. Barnett served as executive vicepresident and chief financial officer of Informatica LLC, a global leader in enterprise cloud data management, since 2016. While there, he was responsible fora number of areas of Informatica’s business, including finance, legal, information technology, human resources and corporate development. From 2013 to2016, Mr. Barnett served as executive vice president and chief financial officer of TriZetto Corporation, a health care IT company, where he was responsiblefor all finance-related functions, including accounting, internal audit, banking, investor relations, cash management, internal and external reporting, tax andtreasury, as well as human resources, facilities and IT. From 2007 to 2013, Mr. Barnett was managing director, chief financial officer and chief administrativeofficer of AlixPartners LLP, a global business-advisory firm, where he was responsible for most non-client facing functions at the firm, including accounting,finance, treasury, HR, facilities, internal audit, tax, IT and other operations for 16 global locations. Prior to that, he held financial leadership roles at UGSCorporation, Colfax Corporation and Giddings & Lewis, Inc. Mr. Barnett is a current board member of ECI Software Solutions. Mr. Barnett received a Mastersof Management degree from the J.L. Kellogg Graduate School of Management at Northwestern University and his Bachelor of Science degree from theUniversity of Illinois.Clinton Anderson is executive vice president of Sabre and president of Sabre Hospitality Solutions. He joined Sabre in 2014 as the senior vicepresident of strategy and business development. In this role, Mr. Anderson was responsible for identifying and evaluating growth opportunities, as well asleading the corporate strategy team. Prior to joining Sabre, from 2012 to 2014, Mr. Anderson was with Emerson/Anderson, a private investment firm focusedon small cap businesses, which he co-founded. From 1994 to 2012, he was a consultant at Bain and Company where he was a partner and served as aleader of consumer products and performance improvement practices. Mr. Anderson holds an MBA from Harvard Business School and a Bachelor ofCommerce degree in Business Administration from the University of Alberta.Wade Jones is executive vice president of Sabre and president of Travel Network. He joined Sabre in 2015 in the product, marketing and strategy rolefor Travel Network globally. From April of 2012 to September of 2014 he was senior vice president and general manager of Deem’s syndicated commercebusiness. From 2011 to 2012, Mr. Jones served as a founder and chief executive officer of Haystack Ventures, LLC, which filed for bankruptcy protectionunder Chapter 7 of the United States Bankruptcy Code in 2012. Prior to joining Sabre, Mr. Jones spent more than 10 years with Barclaycard, leading thecompany’s U.K partnership business that provides, co-branded credit card, and loyalty programs for other companies across the travel, retail, financialservices, and other industries. He received his master’s degree in business administration from the Kellogg School of Management at NorthwesternUniversity and his undergraduate degree from Texas Christian University.David Shirk is executive vice president of Sabre and president of Travel Solutions. Mr. Shirk previously served as executive vice president of Sabreand president of Airline Solutions from June 2017 to July 2018. Prior to joining Sabre, Mr. Shirk served as president at Kony, Inc., an industry leader in mobileapplication development. He previously served as general manager and vice president at Computer Services Corp. (CSC), where he led the company’ssoftware, services, and business process outsourcing division. Prior to joining CSC, Mr. Shirk was senior vice president of industry solutions and chiefmarketing officer for the Enterprise Business division of HP. He holds a bachelor’s degree in business administration and management from The Ohio StateUniversity.27Richard Simonson is senior advisor. Prior to that, he served from 2013 to July 2018 as executive vice president and chief financial officer. He led ourglobal finance organization and is responsible for the following functions - accounting, tax, financial planning and analysis, investor relations, treasury,procurement, corporate development and mergers and acquisitions. He brings a combination of experiences across global finance, business operations andcapital markets focused on the technology, telecom and media sectors. Before joining Sabre in March 2013, Mr. Simonson acted as an independent advisorto private equity and venture capital firms from May 2012 to March 2013 and from July 2010 to May 2011. He served as CFO and president for businessoperations at Rearden Commerce, a venture-backed e-commerce company from March 2011 to May 2012. From September 2001 to July 2010 he was anexecutive at Nokia Corporation in several global roles based in locations around the world - Helsinki, Zurich and New York-including more than five years aschief financial officer and executive vice president, followed by executive vice president and general manager of Nokia's mobile phones unit and head ofstrategic sourcing. He was a member of Nokia's Group Executive Board from 2004-2010. Mr. Simonson's career includes time with Barclays Capital asmanaging director in the telecom and media investment banking group. He also spent 16 years with Bank of America Securities in the Global Corporate andInvestment Banking group based out of San Francisco and Chicago, where he held various finance and investment banking positions, culminating asmanaging director of Global Project Finance. Mr. Simonson currently serves on the board of directors of Electronic Arts where he currently chairs the auditcommittee and additionally served as lead director from 2009- 2015. He graduated from the Colorado School of Mines with a B.S. in mining engineering andholds an M.B.A. from Wharton School of Business at the University of Pennsylvania. Mr. Simonson is a trustee of the board of The Lyle School of Engineeringat Southern Methodist University.Cem Tanyel is executive vice president of Sabre and president of Airline Solutions. Prior to joining Sabre in September 2018, Mr. Tanyel served asexecutive vice president and general manager, Global Services at Kony from October 2016 to October 2018. From 2015 to 2016, he was chief services officerand senior vice president, consulting and service delivery of Trizetto Corp. Mr. Tanyel served as Vice president and general manager, healthcare and lifesciences global solutions at CSC Corp. from 2012 to 2015, and he served as senior vice president, research and development, health systems enterprisesolutions at McKesson Corp. from 2010 to 2012.Kimberly Warmbier is executive vice president and chief human resources officer. Prior to joining Sabre in June 2018, Ms. Warmbier served asexecutive vice president of Dean Foods from November 2012 to December 2017 and served as senior vice president of human resources for Fresh DairyDirect of Dean Foods from May 2012 to November 2012. She was promoted to her current position in November 2012. Prior to Dean Foods, Ms. Warmbierserved as the senior vice president, human resources, for J.C. Penney Company, Inc. from November 2009 to December 2011 where she led humanresource professionals supporting more than 150,000 associates in supply chain, stores and corporate. Her experience also includes more than 20 years inthe consumer packaged goods industry with PepsiCo, Inc. where she led the HR PepsiCo Customer teams for the company's five North American salesdivisions including Frito-Lay, Pepsi, Tropicana, Quaker Oats and Gatorade. Ms. Warmbier currently serves on the North Texas Food Bank Board of Directorsand is a member of their NTFB Finance and Executive Committees. She is a former member of the Board of Directors of Girl Scouts Northeast Texas, anonprofit organization, where she served on the CEO Selection Committee.28PART IIITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIESOur common stock is listed on the NASDAQ Global Select Market under the symbol “SABR.” As of February 12, 2019, there were 114 stockholders ofrecord of our common stock. We expect to continue to pay quarterly cash dividends on our common stock, subject to declaration of our board of directors. Theamount of future cash dividends, if any, will depend upon, among other things, our future operations and earnings, capital requirements and surplus, generalfinancial condition, contractual restrictions, number of shares of common stock outstanding and other factors the board of directors may deem relevant. Thetiming and amount of future dividend payments will be at the discretion of our board of directors. Our board of directors has declared a cash dividendof $0.14 per share of common stock which will be paid on March 29, 2019 to stockholders of record as of March 21, 2019. See Item 7, “Management’sDiscussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources—Dividends.” There were no shares repurchasedduring the fourth quarter of 2018. See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations-Recent EventsImpacting Our Liquidity and Capital Resources—Share Repurchase Program."Stock Performance GraphThe following graph shows a comparison from April 17, 2014 (the date our common stock commenced trading on the NASDAQ Global Select Market)through December 31, 2018 of the cumulative total return for our common stock, the Nasdaq Composite Index ("NASDAQ Composite"), the Standard & Poor's500 Stock Index ("S&P 500") and the Standard & Poor's Software and Services Index ("S&P 500/Software & Services") (collectively, the "Indices"). The graphassumes that $100 was invested at the market close on April 17, 2014 in the common stock of Sabre Corporation and the Indices as well as reinvestments ofdividends. The stock price performance of the following graph is not necessarily indicative of future stock price performance.The stock price performance depicted in the above graph is not necessarily indicative of future price performance. The stock performance graph shallnot be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing by us under theSecurities Act or the Exchange Act, except to the extent that we specifically incorporate the graph by reference in such filing. 29ITEM 6.SELECTED FINANCIAL DATAThe following selected financial data should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition andResults of Operations,” and our consolidated financial statements and notes thereto contained in Item 8, “Financial Statements and Supplementary Data,” ofthis Annual Report on Form 10-K.The consolidated statements of operations data and consolidated statements of cash flows data for the years ended December 31, 2018, 2017 and2016 and the consolidated balance sheet data as of December 31, 2018 and 2017 are derived from our audited consolidated financial statements containedin Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. The consolidated statements of operations data andconsolidated statements of cash flows data for the years ended December 31, 2015 and 2014 and the consolidated balance sheet data as of December 31,2016, 2015 and 2014 are derived from audited consolidated financial statements not included in this Annual Report on Form 10-K. The unauditedconsolidated financial statements have been prepared on the same basis as our audited consolidated financial statements and, in the opinion ofmanagement, reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of this data. Our historical results are notnecessarily indicative of the results to be expected in the future. All amounts presented below are in thousands, except per share amounts. Year Ended December 31, 2018 2017 2016 2015 2014Consolidated Statements of Operations Data: Revenue (1)$3,866,956 $3,598,484 $3,373,387 $2,960,896 $2,631,417Operating income (1)562,016 493,440 459,572 459,769 421,345Income from continuing operations (1)340,921 249,576 241,390 234,555 110,873Income (loss) from discontinued operations, net of tax (1)1,739 (1,932) 5,549 314,408 (38,918)Net income attributable to Sabre Corporation (1)337,531 242,531 242,562 545,482 69,223Net income attributable to common stockholders (1)337,531 242,531 242,562 545,482 57,842Net income per share attributable to common stockholders: Basic (1)$1.23 $0.87 $0.87 $2.00 $0.24Diluted (1)$1.22 $0.87 $0.86 $1.95 $0.23Weighted-average common shares outstanding: Basic275,235 276,893 277,546 273,139 238,633Diluted277,518 278,320 282,752 280,067 246,747 Consolidated Statements of Cash Flows Data: Cash provided by operating activities$724,797 $678,033 $699,400 $529,207 $387,659Cash used in investing activities(275,259) (317,525) (445,808) (729,041) (258,791)Cash (used in) provided by financing activities(306,506) (356,780) (190,025) 93,144 (71,945)Additions to property and equipment283,940 316,436 327,647 286,697 227,227Cash payments for interest156,041 149,572 151,495 154,307 197,782 Other Financial Data: Adjusted Gross Profit (1)$1,521,408 $1,500,186 $1,460,675 $1,316,820 $1,146,792Adjusted Operating Income (1)701,432 706,149 720,361 653,105 601,219Adjusted Net Income (1)427,570 390,118 370,937 308,072 232,477Adjusted EBITDA (1)1,124,390 1,078,571 1,046,646 941,587 840,028Free Cash Flow440,857 361,597 371,753 242,510 160,432 Key Metrics: Travel Network Direct Billable Bookings - Air491,820 462,381 445,050 384,309 321,962Direct Billable Bookings - Lodging, Ground and Sea66,454 62,443 60,421 58,414 54,122Total Direct Billable Bookings558,274 524,824 505,471 442,723 376,084Airline Solutions Passengers Boarded752,548 772,149 789,260 584,876 510,713________________________________(1)In the first quarter of 2018, we adopted the comprehensive update to revenue recognition guidance, ASC 606, on a prospective basis from January 1, 2018. See Note 2.Revenue from Contracts with Customers, to our consolidated financial statements.30 As of December 31, 2018 2017 2016 2015 2014Consolidated Balance Sheet Data: Cash and cash equivalents$509,265 $361,381 $364,114 $321,132 $155,679Total assets(1) (2)5,806,381 5,649,364 5,724,570 5,393,627 4,643,073Long-term debt (2)3,337,467 3,398,731 3,276,281 3,169,344 3,040,009Working capital surplus (deficit) (1) (2)169,235 (11,455) (312,977) (222,400) (201,052)Noncontrolling interest (1)7,205 5,198 2,579 1,438 621Total stockholders’ equity (1)974,271 698,500 625,615 484,140 84,383________________________________(1)In the first quarter of 2018, we adopted the comprehensive update to revenue recognition guidance, ASC 606, on a prospective basis from January 1, 2018. See Note 2.Revenue from Contracts with Customers, to our consolidated financial statements.(2) 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. Weapplied the new guidance on a retrospective basis to the balance sheet data as of December 31, 2014.Non-GAAP Financial MeasuresThe following table sets forth the reconciliation of net income (loss) attributable to common stockholders to Adjusted Net Income, Adjusted EBITDA andAdjusted Operating Income (in thousands): Year Ended December 31, 2018 2017 2016 2015 2014Net income attributable to common stockholders$337,531 $242,531 $242,562 $545,482 $57,842(Income) loss from discontinued operations, net of tax(1,739) 1,932 (5,549) (314,408) 38,918Net income attributable to noncontrolling interests(1)5,129 5,113 4,377 3,481 2,732Preferred stock dividends— — — — 11,381Income from continuing operations340,921 249,576 241,390 234,555 110,873Adjustments: Impairment and related charges(2)— 81,112 — — —Acquisition-related amortization(3a)68,008 95,860 143,425 108,121 99,383Loss on extinguishment of debt633 1,012 3,683 38,783 33,538Other, net(5)8,509 (36,530) (27,617) (91,377) 63,860Restructuring and other costs(6)— 23,975 18,286 9,256 10,470Acquisition-related costs(7)3,266 — 779 14,437 —Litigation costs (reimbursements), net(8)8,323 (35,507) 46,995 16,709 14,144Stock-based compensation57,263 44,689 48,524 29,971 20,094Management fees(9)— — — — 23,701Tax impact of net income adjustments(10), (11)(59,353) (34,069) (104,528) (52,383) (143,586)Adjusted Net Income from continuing operations$427,570 $390,118 $370,937 $308,072 $232,477Adjusted Net Income from continuing operations per share$1.54 $1.40 $1.31 $1.10 $0.94Diluted weighted-average common shares outstanding277,518 278,320 282,752 280,067 246,747 Adjusted Net Income from continuing operations427,570390,118370,937308,072232,477Adjustments: Depreciation and amortization of property and equipment(3b)303,612 264,880 233,303 213,520 157,592Amortization of capitalized implementation costs(3c)41,724 40,131 37,258 31,441 35,859Amortization of upfront incentive consideration(4)77,622 67,411 55,724 43,521 45,358Interest expense, net157,017 153,925 158,251 173,298 218,877Remaining provision for income taxes116,845 162,106 191,173 171,735 149,865Adjusted EBITDA1,124,390 1,078,571 1,046,646 941,587 840,028Less: Depreciation and amortization(3)413,344 400,871 413,986 351,480 289,630Amortization of upfront incentive consideration(4)77,622 67,411 55,724 43,521 45,358Acquisition related amortization(3a)(68,008) (95,860) (143,425) (106,519) (96,179)Adjusted Operating Income$701,432$706,149$720,361$653,105$601,21931The following tables set forth the reconciliation of operating income (loss) in our statement of operations to Adjusted Gross Profit, Adjusted EBITDA andAdjusted Operating Income (Loss) by business segment (in thousands): Year Ended December 31, 2018 Travel Network Airline Solutions Hospitality Solutions Corporate TotalOperating income (loss)$753,255 111,146 $12,881 $(315,266) $562,016Add back: Selling, general and administrative160,298 73,675 33,626 245,927 513,526Cost of revenue adjustments: Depreciation and amortization(3)106,877 170,258 36,826 27,692 341,653Amortization of upfront incentive consideration(4)77,622 — — — 77,622Stock-based compensation— — — 26,591 26,591Adjusted Gross Profit1,098,052 355,07983,333(15,056)1,521,408Selling, general and administrative(160,298) (73,675) (33,626) (245,927) (513,526)Joint venture equity income2,556 — — — 2,556Selling, general and administrative adjustments: Depreciation and amortization(3)11,399 12,173 3,117 45,002 71,691Acquisition-related costs(7)— — — 3,266 3,266Litigation costs(8)— — — 8,323 8,323Stock-based compensation— — — 30,672 30,672Adjusted EBITDA951,709 293,57752,824(173,720)1,124,390Less: Depreciation and amortization(3)118,276 182,431 39,943 72,694 413,344Amortization of upfront incentive consideration(4)77,622 — — — 77,622Acquisition-related amortization(3a)— — — (68,008) (68,008)Adjusted Operating Income (Loss)$755,811 $111,146$12,881$(178,406)$701,432 Year Ended December 31, 2017 Travel Network Airline Solutions Hospitality Solutions Corporate TotalOperating income (loss)$744,045 137,932 $9,670 $(398,207) $493,440Add back: Selling, general and administrative162,997 78,638 47,121 221,319 510,075Impairment and related charges(2)— — — 81,112 81,112Cost of revenue adjustments: Depreciation and amortization(3)96,796 149,685 31,686 39,645 317,812Restructuring and other costs(6)— — — 12,604 12,604Amortization of upfront incentive consideration(4)67,411 — — — 67,411Stock-based compensation— — — 17,732 17,732Adjusted Gross Profit1,071,249 366,255 88,477 (25,795) 1,500,186Selling, general and administrative(162,997) (78,638) (47,121) (221,319) (510,075)Joint venture equity income2,580 — — — 2,580Selling, general and administrative adjustments: Depreciation and amortization(3)12,783 8,820 1,428 60,028 83,059Restructuring and other costs(6)— — — 11,371 11,371Litigation reimbursements(8)— — — (35,507) (35,507)Stock-based compensation— — — 26,957 26,957Adjusted EBITDA923,615 296,437 42,784 (184,265) 1,078,571Less: Depreciation and amortization(3)109,579 158,505 33,114 99,673 400,871Amortization of upfront incentive consideration(4)67,411 — — — 67,411Acquisition-related amortization(3a)— — — (95,860) (95,860)Adjusted Operating Income (Loss)$746,625 $137,932$9,670$(188,078)$706,14932 Year Ended December 31, 2016 Travel Network Airline Solutions Hospitality Solutions Corporate TotalOperating income (loss)$735,354 136,177 $16,807 $(428,766) $459,572Add back: Selling, general and administrative165,520 74,048 33,867 352,718 626,153Cost of revenue adjustments: Depreciation and amortization(3)82,963 144,697 21,823 37,870 287,353Restructuring and other costs(6)— — — 12,660 12,660Amortization of upfront incentive consideration(4)55,724 — — — 55,724Stock-based compensation— — — 19,213 19,213Adjusted Gross Profit1,039,561 354,92272,497(6,305)1,460,675Selling, general and administrative(165,520) (74,048) (33,867) (352,718) (626,153)Joint venture equity income2,780 — — — 2,780Selling, general and administrative adjustments: Depreciation and amortization(3)9,809 5,488 1,334 110,002 126,633Restructuring and other costs(6)— — — 5,626 5,626Acquisition-related costs(7)— — — 779 779Litigation costs(8)— — — 46,995 46,995Stock-based compensation— — — 29,311 29,311Adjusted EBITDA886,630 286,36239,964(166,310)1,046,646Less: Depreciation and amortization(3)92,772 150,185 23,157 147,872 413,986Amortization of upfront incentive consideration(4)55,724 — — — 55,724Acquisition-related amortization(3a)— — — (143,425) (143,425)Adjusted Operating Income (Loss)$738,134 $136,177$16,807$(170,757)$720,361 Year Ended December 31, 2015 Travel Network Airline Solutions Hospitality Solutions Corporate TotalOperating income (loss)$679,045 $134,660 $6,236 $(360,172) $459,769Add back: Selling, general and administrative156,775 68,730 30,387 301,185 557,077Cost of revenue adjustments: Depreciation and amortization(3)71,003 134,811 16,313 22,408 244,535Amortization of upfront incentive consideration(4)43,521 — — — 43,521Stock-based compensation— — — 11,918 11,918Adjusted Gross Profit950,344 338,201 52,936 (24,661) 1,316,820Selling, general and administrative(156,775) (68,730) (30,387) (301,185) (557,077)Joint venture equity income14,842 — — — 14,842Joint venture intangible amortization(3a)1,602 — — — 1,602Selling, general and administrative adjustments: Depreciation and amortization(3)8,900 5,939 903 91,203 106,945Restructuring and other costs (6)— — — 9,256 9,256Acquisition-related costs(7)— — — 14,437 14,437Litigation costs(8)— — — 16,709 16,709Stock-based compensation— — — 18,053 18,053Adjusted EBITDA818,913 275,410 23,452 (176,188) 941,587Less: Depreciation and amortization(3)79,903 140,750 17,216 113,611 351,480Amortization of upfront incentive consideration(4)43,521 — — — 43,521Acquisition-related amortization(3a)1,602 — — (108,121) (106,519)Adjusted Operating Income (Loss)$693,887$134,660 $6,236$(181,678)$653,10533 Year Ended December 31, 2014(a) Travel Network Airline andHospitality Solutions Corporate TotalOperating income (loss)$657,326 $176,730 $(412,711) $421,345Add back: Selling, general and administrative102,059 56,195 309,340 467,594Cost of revenue adjustments: Depreciation and amortization(3)58,533 104,926 34,950 198,409Amortization of upfront incentive consideration(4)45,358 — — 45,358Restructuring and other costs(6)— — 6,042 6,042Stock-based compensation— — 8,044 8,044Adjusted Gross Profit863,276 337,851 (54,335) 1,146,792Selling, general and administrative(102,059) (56,195) (309,340) (467,594)Joint venture equity income12,082 — — 12,082Joint venture intangible amortization(3a)3,204 — — 3,204Selling, general and administrative adjustments: Depreciation and amortization(3)2,174 992 88,055 91,221Restructuring and other costs(6)— — 4,428 4,428Litigation costs(8)— — 14,144 14,144Stock-based compensation— — 12,050 12,050Management fees(9)— — 23,701 23,701Adjusted EBITDA778,677 282,648 (221,297) 840,028Less: Depreciation and amortization(3)60,707 105,918 123,005 289,630Amortization of upfront incentive consideration(4)45,358 — — 45,358Acquisition-related amortization(3a)3,204 — (99,383) (96,179)Adjusted Operating Income (Loss)$669,408$176,730$(244,919)$601,219(a)For the year ended December 31, 2014, recasted amounts for the reportable segments and the allocation changes effective January 1, 2018 are notpresented as management does not believe the presentation of these impacts is material to the understanding of current operations.The following tables present information from our statements of cash flows and set forth the reconciliation of Free Cash Flow to cash provided byoperating activities, the most directly comparable GAAP measure (in thousands): Year Ended December 31, 2018 2017 2016 2015 2014Cash provided by operating activities$724,797 $678,033 $699,400 $529,207 $387,659Cash used in investing activities(275,259) (317,525) (445,808) (729,041) (258,791)Cash provided by (used in) financing activities(306,506) (356,780) (190,025) 93,144 (71,945) Year Ended December 31, 2018 2017 2016 2015 2014Cash provided by operating activities$724,797 $678,033 $699,400 $529,207 $387,659Additions to property and equipment(283,940) (316,436) (327,647) (286,697) (227,227)Free Cash Flow$440,857 $361,597 $371,753 $242,510 $160,432________________________________(1)Net income 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 Seyahat Dagitim Sistemleri A.S. of 40% beginning in April 2014, (iii)Abacus International Lanka Pte Ltd of 40% beginning in July 2015, and (iv) Sabre Bulgaria of 40% beginning in November 2017.(2)Impairment and related charges represents an $81 million charge in 2017 associated with net capitalized contract costs related to an AirlineSolutions' customer based on our analysis of the recoverability of such amounts. See Item 7, “Management’s Discussion and Analysis of FinancialCondition and Results of Operations—Overview—Factors Affecting our Results” for additional information.(3)Depreciation and amortization expenses:a.Acquisition-related amortization represents amortization of intangible assets from the take-private transaction in 2007 as well as intangiblesassociated with acquisitions since that date. Also includes amortization of the excess basis in our underlying equity interest in the net assetsof SAPPL prior to its acquisition on July 1, 2015.b.Depreciation and amortization of property and equipment includes software developed for internal use.34c.Amortization of capitalized implementation costs represents amortization of upfront costs to implement new customer contracts under ourSaaS 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 aservice contract, which are capitalized and amortized to cost of revenue over an average expected life of the service contract, generally over three tofive years. This consideration is made with the objective of increasing the number of clients or to ensure or improve customer loyalty. These servicecontract terms are established such that the supplier and other fees generated over the life of the contract will exceed the cost of the incentiveconsideration provided up front. These service contracts with travel agency subscribers require that the customer commit to achieving certaineconomic objectives and generally have terms requiring repayment of the upfront incentive consideration if those objectives are not met.(5)In 2018, Other, net, includes an expense of $5 million related to our liability under the Tax Receivable Agreement ("TRA") and an offsetting gain of$8 million on the sale of an investment. In 2017, we recognized a benefit of $60 million due to a reduction to our liability under the TRA primarily dueto a provisional adjustment resulting from the enactment of TCJA which reduced the U.S. corporate income tax rate, offset by a loss of $15 millionrelated to debt modification costs associated with a debt refinancing. In 2016, we recognized a gain of $15 million from the sale of our available-for-sale marketable securities, and $6 million gain 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 gainof $12 million related to the settlement of pre-existing agreements between us and SAPPL. In 2014, Other, net primarily includes a 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 maintainedagainst 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 thevaluation allowance which is included in tax impacts of net income adjustments. In addition, all periods presented include foreign exchange gainsand losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into the relevantfunctional currency. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and CapitalResources—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 inseverance benefits related to employee terminations, integration and facility opening or closing costs and other business reorganization costs. Werecorded $25 million and $20 million in charges associated with announced actions to reduce our workforce in 2017 and 2016, respectively. Thesereductions aligned our operations with business needs and implemented an ongoing cost and organizational structure consistent with our expectedgrowth needs and opportunities. In 2015, we recognized a restructuring charge of $9 million associated with the integration of Abacus, and reducedthat estimate by $4 million in 2016, as a result of the reevaluation of our plan derived from a shift in timing and strategy of originally contemplatedactions. As of December 31, 2018, our actions under these activities were substantially completed and payments under the plans have been made.(7)Acquisition-related costs represent fees and expenses incurred associated with the 2018 agreement to acquire Farelogix, which is anticipated toclose in 2019, and in 2016, the acquisition of the Trust Group and Airpas Aviation. See Note 3. Acquisitions, to our consolidated financial statements.(8)Litigation costs (reimbursements), net represent charges associated with antitrust and other foreign non-income tax contingency matters. In 2018, werecorded non-income tax expense of $4 million for tax, penalties and interest associated with certain non-income tax claims for historical periodsregarding permanent establishment in a foreign jurisdiction. In 2017, we recorded a $43 million reimbursement, net of accrued legal and relatedexpenses, from a settlement with our insurance carriers with respect to the American Airlines litigation. In 2016, we recorded an accrual of $32million 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, to our consolidated financial statements.(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 servicesagreement (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 in2014. The MSA was terminated in conjunction with our initial public offering.(10)The tax impact on net income adjustments includes the tax effect of each separate adjustment based on the statutory tax rate for the jurisdiction(s) inwhich the adjustment was taxable or deductible, and the tax effect of items that relate to tax specific financial transactions, tax law changes, uncertaintax positions and other items. In 2018, the tax impact on net income adjustments includes a benefit of $27 million recognized in the fourth quarter of2018 related to the provisional impact for deferred taxes and foreign tax effects recorded for the enactment of the TCJA in 2017. In 2017, the taximpact on net income adjustments includes a provisional impact of $47 million recognized in the fourth quarter of 2017 as a result of the enactmentof the TCJA in December 2017. In 2014, the tax impact on net income adjustments includes a $66 million benefit recognized from the reduction in avaluation allowance maintained against our deferred tax assets.(11)In the first quarter of 2016, we adopted Accounting Standards Update ("ASU") 2016-09, Improvements to Employee Share-Based PaymentAccounting. For the year ended December 31, 2016, we recognized $35 million in excess tax benefits associated with employee equity-basedawards, as a result of the adoption of this standard. There were no other material impacts to our consolidated financial statements as a result ofadopting this updated standard.35Definitions of Non-GAAP Financial MeasuresWe have included both financial measures compiled in accordance with GAAP and certain non-GAAP financial measures in this Annual Report onForm 10-K, including Adjusted Gross Profit, Adjusted Operating Income (Loss), Adjusted Net Income from continuing operations ("Adjusted Net Income"),Adjusted EBITDA, Free Cash Flow and ratios based on these financial measures.We define Adjusted Gross Profit as operating income (loss) adjusted for selling, general and administrative expenses, impairment and relatedcharges, the cost of revenue portion of depreciation and amortization, restructuring and other costs, amortization of upfront incentive consideration, and stock-based compensation included in cost of revenue.We define Adjusted Operating Income (Loss) as operating income (loss) adjusted for joint venture equity income, impairment and related charges,acquisition-related amortization, restructuring and other costs, acquisition-related costs, litigation costs (reimbursements), net, and stock-basedcompensation.We define Adjusted Net Income as net income attributable to common stockholders adjusted for income (loss) from discontinued operations, net of tax,net income attributable to noncontrolling interests, preferred stock dividends, impairment and related charges, acquisition-related amortization, loss onextinguishment of debt, other, net, restructuring and other costs, acquisition-related costs, litigation costs (reimbursements), net, stock-based compensation,management fees, and tax impact of net income adjustments.We define Adjusted EBITDA as Adjusted Net Income adjusted for depreciation and amortization of property and equipment, amortization of capitalizedimplementation costs, amortization of upfront incentive consideration, interest expense, net, and the remaining provision for income taxes.We define Free Cash Flow as cash provided by operating activities less cash used in additions to property and equipment.We define Adjusted Net Income from continuing operations per share as Adjusted Net Income divided by diluted weighted-average common sharesoutstanding.These non-GAAP financial measures are key metrics used by management and our board of directors to monitor our ongoing core operationsbecause historical results have been significantly impacted by events that are unrelated to our core operations as a result of changes to our business and theregulatory environment. We believe that these non-GAAP financial measures are used by investors, analysts and other interested parties as measures offinancial performance and to evaluate our ability to service debt obligations, fund capital expenditures and meet working capital requirements. We alsobelieve that Adjusted Gross Profit, Adjusted Operating Income (Loss), Adjusted Net Income and Adjusted EBITDA assist investors in company-to-companyand period-to-period comparisons by excluding differences caused by variations in capital structures (affecting interest expense), tax positions and the impactof depreciation and amortization expense. In addition, amounts derived from Adjusted EBITDA are a primary component of certain covenants under oursenior secured credit facilities.Adjusted Gross Profit, Adjusted Operating Income (Loss), Adjusted Net Income, Adjusted EBITDA, Free Cash Flow and ratios based on these financialmeasures are not recognized terms under GAAP. These non-GAAP financial measures and ratios based on them are unaudited and have importantlimitations as analytical tools, and should not be viewed in isolation and do not purport to be alternatives to net income as indicators of operating performanceor cash flows from operating activities as measures of liquidity. These non-GAAP financial measures and ratios based on them exclude some, but not all,items that affect net income or cash flows from operating activities and these measures may vary among companies. Our use of these measures haslimitations as an analytical tool, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Some ofthese limitations are:•these non-GAAP financial measures exclude certain recurring, non-cash charges such as stock-based compensation expense and amortization ofacquired 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 Operating Income (Loss), Adjusted Net Income and Adjusted EBITDA do not reflect changes in, or cash requirements for, our workingcapital needs;•Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on ourindebtedness;•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 cashrequirements necessary to service the principal payments on our indebtedness; and36•other companies, including companies in our industry, may calculate Adjusted Gross Profit, Adjusted Operating Income (Loss), Adjusted NetIncome, Adjusted EBITDA or Free Cash Flow differently, which reduces their usefulness as comparative measures.37ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes included in Item 8 ofthis Annual Report on Form 10-K.OverviewWe connect people and places with technology that reimagines the business of travel. Effective the first quarter of 2018, we operate through threebusiness segments: (i) Travel Network, our global business-to-business travel marketplace for travel suppliers and travel buyers, (ii) Airline Solutions, a broadportfolio of software technology products and solutions primarily for airlines, and (iii) Hospitality Solutions, an extensive suite of leading software solutions forhoteliers. Collectively, these offerings enable travel suppliers to better serve their customers across the entire travel lifecycle, from route planning to post-tripbusiness intelligence and analytics.A significant portion of our revenue is generated through transaction based fees that we charge to our customers. For Travel Network, this fee is in theform of a transaction fee for bookings on our GDS; for Airline Solutions and Hospitality Solutions, this fee is a recurring usage-based fee for the use of ourSaaS and hosted systems, as well as upfront fees and professional service fees. Items that are not allocated to our business segments are identified ascorporate and primarily include stock-based compensation expense, litigation costs, corporate headcount-related costs and other items that are notidentifiable with either one of our segments.In January 2016, we completed the acquisition of the Trust Group, a central reservation, revenue management and hotel marketing provider with asignificant presence in EMEA and APAC, for net cash consideration of $156 million. The Trust Group has been integrated and is managed as part of ourHospitality Solutions segment.We announced on November 14, 2018 that we have entered into an agreement to acquire Farelogix, a recognized innovator in the travel industry withoffer management and NDC order delivery technology used by many of the world’s leading airlines. At closing, Sabre will purchase Farelogix for $360million, funded by cash on hand and Revolver borrowing. The acquisition is subject to customary closing conditions and regulatory approvals and isexpected to close in 2019. Regulatory reviews are ongoing. There can be no assurance that the acquisition will occur on these terms or at all.Recent Developments Affecting our Results of OperationsEffective the first quarter of 2018, we disaggregated the Airline and Hospitality Solutions reportable segment, such that our business has threereportable segments comprised of: (i) Travel Network, (ii) Airline Solutions and (iii) Hospitality Solutions. In conjunction with this change, we have modifiedthe methodology we have historically used to allocate shared corporate technology costs. Each segment now reflects a portion of our shared corporate coststhat historically were not allocated to a business unit, based on relative consumption of shared technology infrastructure costs and defined revenue metrics.These changes have no impact on our consolidated results of operations, but result in a decrease of segment profitability only, which aligns with informationthat our Chief Operating Decision Maker began utilizing in 2018 to evaluate segment performance and allocate resources.In the first quarter of 2018, we adopted the comprehensive update to revenue recognition guidance for Revenue from Contracts with Customers ("ASC606"), which replaced the previous standard ("ASC 605"), using the modified retrospective approach. Under the updated standard, revenue is recognizedwhen a company transfers the promised goods or services to customers in an amount that reflects the consideration that is expected to be received for thosegoods and services. See Note 2. Revenue from Contracts with Customers, to our consolidated financial statements for more information on impacts of ASC606 to our various streams of revenue recognition.On December 22, 2017, the TCJA was signed into law. The TCJA contains significant changes to the U.S. corporate income tax system, including areduction of the federal corporate income tax rate from 35% to 21%, a limitation of the tax deduction for interest expense to 30% of adjusted taxable income(as defined in the TCJA), base erosion provisions related to intercompany foreign payments and global low-taxed income, one-time taxation of offshoreearnings at reduced rates in connection with the transition of U.S. international taxation from a worldwide tax system to a territorial tax system, elimination ofU.S. tax on foreign earnings (subject to certain important exceptions), and modifying or repealing many business deductions and credits. As of December 31,2018, we have completed our accounting for the TCJA and recorded adjustments to our provisional amounts recognized as of December 31, 2017 (see Note7. Income Taxes, to our consolidated financial statements). These final adjustments resulted in a decrease in our provision for income taxes from continuingoperations of $27 million for deferred tax assets and foreign tax effects during the year ended December 31, 2018. We continue to evaluate the potentialeffects that the TCJA may have on our operations, cash flows and results of operations. Notwithstanding the reduction in the federal corporate income taxrate, the future impact of the TCJA, including on our global operations, is uncertain, and our business and financial condition could be adversely affected.The rate of growth of Airline Solutions revenue is impacted by the previously announced termination of an agreement with Southwest Airlines at theend of the second quarter in 2017 related to services and processing for their legacy reservations system.38Factors Affecting our ResultsThe following is a discussion of trends that we believe are the most significant opportunities and challenges currently impacting our business andindustry. The discussion also includes management’s assessment of the effects these trends have had and are expected to have on our results of continuingoperations. This information is not an exhaustive list of all of the factors that could affect our results and should be read in conjunction with the factors referredto in the sections entitled “Risk Factors” and “Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K.Change in mix of technology spend, including conversion to agile development processWe are accelerating our re-platforming efforts to open source and cloud-based solutions and, as previously disclosed, we expect to continue to makesignificant investments in our information technology infrastructure to modernize our architecture, drive efficiency in development and ongoing technologycosts, further enhance the stability and security of our network, comply with data privacy regulations. We expect that the costs associated with theseinvestments will result in an increase in our product and technology operating expenses as resources shift to these activities, with a corresponding reductionin capitalized software development expenditures.In addition, we deploy significant resources in research and development activities to enhance our infrastructure, software applications and reservationsystems in order to maintain a competitive advantage and deliver innovation to the marketplace, some of which may be eligible for capitalization during theapplication development stage. In 2019 we expect our development teams to substantially complete the transition to utilizing the agile developmentmethodology, which is characterized by a more dynamic development process with iterative activities that involve planning, design, coding and testing. Theagile approach results in more frequent and incremental revisions to software and releases with shorter development cycles that may be less likely to meetthe criteria for capitalization in accordance with GAAP. As such, we expect this transition towards implementing this methodology to reduce our capitalizationof certain costs. Correspondingly, we expect that the maturity of our agile adoption and our implementation of processes and controls to reflect these changesin our business will result in an increase in our product and technology operating expenses with a corresponding reduction in capitalized softwaredevelopment expenditures.We believe that continued investment in our technology will help to provide us the necessary framework and infrastructure for a secure and stablearchitecture for our customers, remain competitive, reduce costs and will help to improve sales of our software solutions. However, there are various risksassociated with our information technology infrastructure modernization and re-platforming efforts, including not achieving the amount of anticipated costsavings, not completing the steps during their current projected time frame, or changing the approach leading to, among other things, additional changes inour mix of technology spend between operating expense and capitalization. In 2019, we expect total capital expenditures to range from $130 million to $150million.Increasing travel agency incentive considerationTravel agency incentive consideration is a large portion of Travel Network expenses. The vast majority of incentive consideration is tied to absolutebooking volumes based on transactions such as flight segments booked. Incentive consideration, which often increases once a certain volume or percentageof bookings is met, is provided in two ways, according to the terms of the agreement: (i) on a periodic basis over the term of the contract and (ii) in someinstances, up front at the inception or modification of contracts, which is capitalized and amortized over the expected life of the contract.This consideration grew in the double digits on a per booking basis in 2017 and 2018 due to higher incentives in certain geographical markets andfrom new customer conversions. We expect growth to revert to single digits in the near term due to our focus on managing incentive consideration. Forexample, in one APAC market we recently declined a larger contract proposal from one travel buyer because that proposal included above-average incentiveconsideration. Although incentive rate increases may continue to impact margins, we expect these increases to be more than offset by growth in TravelNetwork revenue. This expectation is based in part on our continuing to offer value added services and content to travel buyers, such as the Sabre RedWorkspace, a SaaS product that provides a simplified interface and enhanced travel agency workflow and productivity tools.Shift to SaaS and hosted solutions by airlines and hotels to manage their daily operationsInitially, large travel suppliers built custom in-house software and applications for their business process needs. In response to a desire for moreflexible systems given increasingly complex and constantly changing technological requirements, reduced IT budgets and increased focus on cost efficiency,many travel suppliers turned to third party solutions providers for many of their key technologies and began to license software from software providers. Webelieve that significant revenue opportunity remains in this outsourcing trend, as legacy in-house systems continue to migrate and upgrade to third partysystems. The shift from a model with initial license fees to one with recurring monthly fees associated with our SaaS and hosted solutions, has resulted in anongoing revenue stream based on the number of passengers boarded. However, under the SaaS and hosted solutions revenue model, revenue recognitionmay be delayed due to longer implementation schedules for larger suppliers. For example, in the last part of 2016, implementation schedules for severalairlines were delayed to future years. The SaaS and hosted models’ centralized deployment also allows us to save time and money by reducing maintenanceand implementation tasks and lowering operating costs.39Recent insolvencies of certain Airline Solutions customersIn May 2017, given the substantial amount of uncertainty of reaching an agreement regarding the implementation of services pursuant to their contract,we evaluated the recoverability of net capitalized contract costs related to Air Berlin Plc & Co Luftverkehrs KG ("Air Berlin") and impacts from associated futurecontractual obligations and recorded an impairment charge of $81 million during the year ended December 31, 2017. In August 2017, Air Berlin filed forbankruptcy and ceased operations in the fourth quarter of 2017. The impairment charge did not impact our cash flows from operations. This impairmentcharge resulted in a material impact on our financial results, and related matters may adversely impact our future results of operations and cash flows. SeeNote 15. Commitments and Contingencies—Other, to our consolidated financial statements for additional information.In addition, future revenues may be negatively impacted by, among other things, reduced sales of our software solutions and lower growth inPassengers Boarded due to delayed or uncertain implementations and the insolvency of an airline carrier, such as Alitalia Compagnia Aerea Italiana S.p.A.operating as Alitalia (“Alitalia”), that implemented our services in the fourth quarter of 2016. See “Risk Factors—Our travel supplier customers may experiencefinancial instability or consolidation, pursue cost reductions, change their distribution model or undergo other changes.”Growing demand for continued technology improvements in the fragmented hotel marketMost of the hotel market is highly fragmented. Independent hotels and small to medium sized chains (groups of less than 300 properties) comprise amajority of hotel properties and available hotel rooms, with global and regional chains comprising the balance. Hotels use a number of different technologysystems to distribute and market their products and operate efficiently. We offer technology solutions to all segments of the hospitality market. Our SynXisEnterprise Platform integrates critical hospitality systems to optimize distribution, operations, retailing and guest experience via one scalable, flexible andintelligent platform. As these markets continue to grow, we believe both independent and enterprise hotel owners and operators will continue to seekincreased connectivity and integrated solutions to ensure access to global travelers. We anticipate that this will contribute to the continued growth ofHospitality Solutions, which is ultimately dependent upon these hoteliers accepting and utilizing our products and services.Impact of customer consolidation in Hospitality SolutionsGrowth through acquisition and brand consolidation is emerging as a strategy for enterprise hoteliers. This has resulted, and may continue to result, incustomer de-migration as larger hotel chains consolidate acquired brands onto their existing technology platforms. Certain of our Hospitality Solutionscustomers are in the process of being acquired by larger hoteliers, and it is possible that additional customer consolidations could occur in the future. Weexpect these consolidations to adversely impact revenue growth for the Hospitality Solutions business.Geographic mix of Travel NetworkThere are structural differences between the geographies in which we operate. Due to our geographic concentration, our results of operations areparticularly sensitive to factors affecting North America. For example, booking fees per transaction in North America have traditionally been lower than thosein Europe. By growing internationally with our TMC and OTA customers and expanding the travel content available on our GDS to target regional travelerpreferences, we anticipate that we will grow share in North America, Europe and Latin America. We invest for sustainable share growth, and in certain partsof Asia-Pacific, our share may be impacted by travel agency deals we have declined to pursue due to credit risk and unfavorable economics. For the yearended December 31, 2018, we derived approximately 53% of our Direct Billable Bookings from North America, 21% from APAC, 17% from EMEA and 9%from Latin America. For the year ended December 31, 2017, we derived approximately 53% of our Direct Billable Bookings from North America, 19% fromAPAC, 18% from EMEA and 10% from Latin America. During 2017, we established a regional operation company structure to better align geographicrevenue generation, supplier relationships, and intellectual property with our global footprint.Travel buyers can shift their bookings to or from our Travel Network businessOur Travel Network business relies on relationships with several large travel buyers, including TMCs and OTAs, to drive a large portion of its revenue.Although our contracts with larger travel agencies often increase the amount of the incentive consideration when the travel agency processes a certainvolume or percentage of its bookings through our GDS, travel buyers are not contractually required to book exclusively through our GDS during the contractterm. Travel buyers may shift bookings to other distribution intermediaries for many reasons, including to avoid becoming overly dependent on a singlesource of travel content and increase their bargaining power with the GDS providers. For example, certain travel agencies have adopted a dual GDS providerstrategy and shifted a sizeable portion of their business from our GDS to a competitor GDS, while other agencies have shifted a sizable portion their businessto our GDS.40Increasing importance of LCC/hybrids in Travel NetworkLow-cost carriers and hybrid carriers ("LCC/hybrids") have become a significant segment of the air travel market, stimulating demand for air travelthrough low fares. LCC/hybrids have traditionally relied on direct distribution for the majority of their bookings. However, as these LCC/hybrids are evolving,many are increasing their distribution through indirect channels to expand their offering into higher yield markets and to higher yield customers, such asbusiness and international travelers. Other LCC/hybrids, especially start up carriers, may choose not to distribute through the GDS until wider distribution isdesired.Continued focus by travel suppliers on cost cutting and exerting influence over distributionTravel suppliers continue to look for ways to decrease their costs and to increase their control over distribution. Airline consolidations, pricing pressureduring contract renegotiations and the use of direct distribution may continue to subject our business to challenges. The shift from indirect distributionchannels, such as our GDS, to direct distribution channels, may result from increased content availability on supplier operated websites or from increasedparticipation of meta search engines, such as Kayak and Google, which direct consumers to supplier operated websites. This trend may adversely affect ourTravel Network contract renegotiations with suppliers that use alternative distribution channels. For example, airlines may withhold part of their content fordistribution exclusively through their own direct distribution channels or offer more attractive terms for content available through those direct channels. Thisoccurred in 2018 when certain European carriers began to withhold part of their content from our GDS to make use of alternative distribution channels, whichmay adversely affect our future revenue growth. However, over the last few years the rate at which bookings have shifted from indirect to direct distributionchannels has been relatively consistent for a number of reasons, including the increased participation of LCC/hybrids in direct channels. Over the last severalyears, notable carriers that previously only distributed directly, including JetBlue, Norwegian and Interjet, have adopted our GDS. Other carriers such as EVAAirways and Virgin Australia have further increased their participation in a GDS.These trends have impacted the revenue of Travel Network, which recognizes revenue for airline ticket sales based on transaction volumes.Simultaneously, this focus on cost cutting and direct distribution has also presented opportunities for Airline Solutions. Many airlines have turned to outsideproviders for key systems, process and industry expertise and other products that assist in their cost cutting initiatives in order to focus on their primaryrevenue generating activities.Foreign tax jurisdictions mattersWe operate in a number of foreign jurisdictions in which the taxing authorities may challenge our tax positions. We routinely receive inquiries and mayreceive tax assessments in these foreign jurisdictions. We recognize liabilities associated with loss contingencies when we believe it is probable thatamounts will be owed to the taxing authorities and the amounts are estimable. We continue to defend against any and all such claims as presented and maybe required to prepay assessed amounts.Components of Revenues and ExpensesRevenuesTravel Network primarily generates revenues from Direct Billable Bookings processed on our GDS as well as the sale of aggregated bookings data tocarriers. Airline Solutions and Hospitality Solutions primarily generate revenue through upfront solution fees and recurring usage-based fees for the use ofour hosted software solutions or deployed through our SaaS and through other professional service fees, including Digital Experience ("DX"). Certainprofessional service fees are discrete sales opportunities that may have a high degree of variability from period to period, and we cannot guarantee that wewill have such fees in the future consistent with prior periods. Airline Solutions also generates revenue through software licensing and maintenance fees.In connection with the adoption of ASC 606 effective January 1, 2018, Airline Solutions license fees are recognized upon delivery, while ongoingmaintenance services are recognized ratably over the life of the contract. In addition, the allocation of contract revenues among various products andsolutions, and the timing of the recognition of those revenues, may be impacted by agreements with tiered pricing or variable rate structures that do notcorrespond with the goods or services delivered to the customer. See Note 2. Revenue from Contracts with Customers, to our consolidated financialstatements, and "Recent Developments Affecting our Results of Operations" above. Revenue may occasionally include amounts from transactions that werepartially or fully satisfied in previous periods, but recognized upon the resolution of an uncertainty regarding the amounts involved or changes in estimates.Cost of revenueCost of revenue incurred by Travel Network, Airline Solutions and Hospitality Solutions consists of expenses related to technology operationsincluding hosting, third-party software and expensed research and development labor costs, other salaries and benefits, and allocated overhead such asfacilities and other support costs. Cost of revenue for Travel Network also includes incentive consideration expense representing payments or otherconsideration to travel agencies for reservations made on our GDS which accrue on a monthly basis.41Corporate cost of revenue includes expenses associated with our technology organization such as corporate systems and risk and security. Corporatecost of revenue also includes certain expenses such as stock-based compensation, restructuring charges, legal reserves and other items not identifiable withone of our segments.Depreciation and amortization included in cost of revenue is associated with property and equipment, amortization of capitalized implementation costswhich relates to Airline Solutions and Hospitality Solutions, intangible assets for technology purchased through acquisitions or established with our take-private transaction in 2007, and software developed for internal use that supports our revenue, businesses and systems. Cost of revenue also includesamortization of upfront incentive consideration representing upfront payments or other consideration provided to travel agencies for reservations made on ourGDS which are capitalized and amortized over the expected life of the contract.Selling, General and Administrative ExpensesSelling, general and administrative expenses consist of personnel-related expenses, including stock-based compensation, for employees that sell ourservices to new customers and administratively support the business, information technology and communication costs, professional service fees, certainsettlement charges or reimbursements, costs to defend legal disputes, bad debt expense, depreciation and amortization and other overhead costs.Intersegment TransactionsWe account for significant intersegment transactions as if the transactions were with third parties, that is, at estimated current market prices. AirlineSolutions and Hospitality Solutions pay fees to Travel Network for airline trips and hotel stays booked through our GDS.Key Metrics“Direct Billable Bookings” and “Passengers Boarded” are the primary metrics utilized by Travel Network and Airline Solutions, respectively, to measureoperating performance. Travel Network generates fees for each Direct Billable Booking which include bookings made through our GDS (e.g., Air, andLodging, Ground and Sea ("LGS")) and through our joint venture partners in cases where we are paid directly by the travel supplier. Passengers Boarded(“PBs”) is the primary metric used by Airline Solutions to recognize SaaS and hosted revenue from recurring usage-based fees. The following table sets forththese key metrics for the periods indicated (in thousands): Year Ended December 31, % Change 2018 2017 2016 2018 - 2017 2017 - 2016Travel Network Direct Billable Bookings - Air491,820 462,381 445,050 6.4 % 3.9 %Direct Billable Bookings - LGS66,454 62,443 60,421 6.4 % 3.3 %Total Direct Billable Bookings558,274 524,824 505,471 6.4 % 3.8 %Airline Solutions Passengers Boarded752,548 772,149 789,260 (2.5)% (2.2)%Results of OperationsThe following table sets forth our consolidated statement of operations data for each of the periods presented (in thousands): Year Ended December 31, 2018 2017 2016Revenue$3,866,956 $3,598,484 $3,373,387Cost of revenue2,791,414 2,513,857 2,287,662Selling, general and administrative513,526 510,075 626,153Impairment and related charges— 81,112 —Operating income562,016 493,440 459,572Interest expense, net(157,017) (153,925) (158,251)Loss on extinguishment of debt(633) (1,012) (3,683)Joint venture equity income2,556 2,580 2,780Other income, net(8,509) 36,530 27,617Income from continuing operations before income taxes398,413 377,613 328,035Provision for income taxes57,492 128,037 86,645Income from continuing operations$340,921 $249,576 $241,39042Years Ended December 31, 2018 and 2017Revenue Year Ended December 31, 2018 2017 Change (Amounts in thousands) Travel Network$2,806,194 $2,550,470 $255,724 10%Airline Solutions822,747 816,008 6,739 1%Hospitality Solutions273,079 258,352 14,727 6%Total segment revenue3,902,020 3,624,830 277,190 8%Eliminations(35,064) (26,346) (8,718) 33%Total revenue$3,866,956 $3,598,484 $268,472 7%Travel Network—Revenue increased $256 million, or 10%, for the year ended December 31, 2018 compared to the prior year. The increase inrevenue primarily resulted from a $258 million increase in transaction-based revenue to $2,635 million, mainly due to an increase in Direct Billable Bookingsof 6% to 558 million and growth in the average booking fee rate in the year ended December 31, 2018 due to a favorable mix and a discrete shift in thedistribution pricing structure for specific European carriers.Airline Solutions—Revenue increased $7 million, or 1%, for the year ended December 31, 2018 compared to the prior year. The $7 million increase inrevenue primarily resulted from:•a $3 million decrease in SabreSonic Passenger Reservation System revenue for the year ended December 31, 2018 compared to thesame period in the prior year. Passengers Boarded decreased by 3% to 753 million for the year ended December 31, 2018, driven by thetermination of an agreement with Southwest Airlines related to services and processing for their legacy air reservation system at the end ofthe second quarter in 2017, which was at a lower than average passengers boarded rate. This decrease was offset by an increase involumes from consistent carrier growth of 5%, as well as the full implementation of LATAM Airlines Group S.A. Brasil in the second quarterof 2018;•a $16 million increase in AirVision and AirCentre commercial and operations solutions revenue driven primarily by newly implementedSaaS products and organic growth, as well as upfront license fee revenue from renewals and new implementations recognized upondelivery to the customer of $27 million. This increase was partially offset by other impacts related to the adoption of ASC 606 (see "RecentDevelopments Affecting our Results of Operations" above); and•a $6 million decrease in discrete professional service fees revenue, as a result of reduced sales compared to the prior period.Hospitality Solutions—Revenue increased $15 million, or 6%, to $273 million for the year ended December 31, 2018 compared to the same period inthe prior year. The increase was primarily driven by growth in SynXis Software and Services revenue of $24 million, or 11%, partially offset by a decrease inDX revenue of $9 million. Total Central Reservation System transactions for the year ended December 31, 2018 were 89 million.Cost of Revenue Year Ended December 31, 2018 2017 Change (Amounts in thousands) Travel Network$1,708,142 $1,479,221 $228,921 15 %Airline Solutions467,668 449,753 17,915 4 %Hospitality Solutions189,746 169,877 19,869 12 %Eliminations(35,065) (26,346) (8,719) 33 %Total segment cost of revenue2,330,491 2,072,505 257,986 12 %Corporate41,648 56,129 (14,481) (26)%Depreciation and amortization341,653 317,812 23,841 8 %Amortization of upfront incentive consideration77,622 67,411 10,211 15 %Total cost of revenue$2,791,414 $2,513,857 $277,557 11 %43Travel Network—Cost of revenue increased $229 million, or 15%, for the year ended December 31, 2018 compared to the prior year, primarily as aresult of an increase in incentive consideration due to growth in booking volumes of 6% driven by organic growth and new customer conversions, and ahigher incentive rate per booking in all regions, including a prior year reduction to incentive consideration associated with the renegotiation of an out ofmarket agreement with a travel agency from our acquisition of Abacus of $16 million. Technology operations costs increased primarily to support the growthin the business, increased investments in the modernization, stability and security of our technology platforms, shift to cloud-based solutions and costsincurred in connection with the GDPR.Airline Solutions—Cost of revenue increased $18 million, or 4%, for the year ended December 31, 2018 compared to the prior year. Technologyoperations costs increased as a result of increased investments in the modernization, stability and security of our technology platforms and a shift to cloud-based solutions, which were partially offset by decreased other labor costs and service level agreement penalties. Service level agreement penalties are nowrecorded as a reduction to revenue under ASC 606.Hospitality Solutions—Cost of revenue increased $20 million, or 12%, for the year ended December 31, 2018 compared to the same period in the prioryear primarily as a result of an increase in labor and transaction related costs to support the growth in the business.Corporate—Cost of revenue associated with corporate costs decreased $14 million, or 26%, for the year ended December 31, 2018 compared to theprior year. The decrease was primarily due to a $12 million charge in the second quarter of 2017 associated with a reduction of our workforce.Depreciation and amortization—Cost of revenue associated with depreciation and amortization increased $24 million, or 8%, for the year endedDecember 31, 2018 compared to the prior year primarily due to the completion and amortization of software developed for internal use and higheramortization of capitalized labor related to customer implementations, offset by the completion at the end of the first quarter of 2017 of amortization of certainintangible assets from the take-private transaction in 2007.Amortization of upfront incentive consideration—Amortization of upfront incentive consideration increased $10 million, or 15%, for the year endedDecember 31, 2018 compared to the prior year primarily due to an increase in upfront consideration provided to travel agencies.Selling, General and Administrative Expenses Year Ended December 31, 2018 2017 Change (Amounts in thousands) Selling, general and administrative$513,526 $510,075 $3,451 1%Selling, general and administrative expenses increased by $3 million, or 1%, for the year ended December 31, 2018 compared to the same period inthe prior year. Professional services increased primarily due to an unfavorable comparison to a $43 million reimbursement, net of accrued legal and relatedexpenses, from a settlement in the third quarter of 2017 with our insurance carriers with respect to the American Airlines litigation. Additionally, costsassociated with implementing corporate systems and enhancements to our risk and security programs increased $29 million. These increases were offset bya decrease of $54 million in labor costs associated with the benefits of the cost reduction and business alignment program initiated in the prior year, includinga $13 million charge recorded in the second quarter of 2017 related to that program. Intangible amortization expense decreased by $15 million due to thecompletion at the end of the first quarter of 2017 of amortization of certain intangible assets from the take-private transaction in 2007.Impairment and Related Charges Year Ended December 31, 2018 2017 Change (Amounts in thousands) Impairment and related charges$— $81,112 $(81,112) 100%During the year ended December 31, 2017, we recorded an impairment charge of $81 million associated with net capitalized contract costs relatedto an Airline Solutions' customer, Air Berlin, based on our analysis of the recoverability of such amounts. See Note 4. Impairment and Related Charges, to ourconsolidated financial statements.44Other Expense, Net Year Ended December 31, 2018 2017 Change (Amounts in thousands) Other expense, net$8,509 $(36,530) $45,039 **** not meaningful Other expense, net increased $45 million for the year ended December 31, 2018 compared to the prior year. In 2018, we finalized the accounting forthe TCJA enactment, and recorded expense of $5 million with an offsetting increase to our TRA liability. See Note 7. Income Taxes, to our consolidatedfinancial statements. We also incurred realized and unrealized foreign currency exchange losses, offset by an $8 million gain on the sale of an investment. In2017, we recognized a benefit of $60 million associated with a reduction to our TRA liability, primarily due to a provisional adjustment resulting from theenactment of TCJA, which reduced the U.S. corporate income tax rate. This benefit was offset by a $15 million loss related to debt modification costsassociated with our debt refinancing in the first and third quarter of 2017 and realized and unrealized foreign currency exchange loses for the year endedDecember 31, 2017.Provision for Income Taxes Year Ended December 31, 2018 2017 Change (Amounts in thousands) Provision for income taxes$57,492 $128,037 $(70,545) (55)%Our effective tax rate for the year ended December 31, 2018 was 14.4%, which includes a net reduction due to the impact of adjustments related to theenactment of the TCJA for deferred taxes and foreign tax effects of $27 million. Our effective tax rate for the year ended December 31, 2017 was 33.9%,primarily due to the provisional net tax effect of the enactment of the TCJA. See "Recent Developments Affecting our Results of Operations" for additionalinformation.The differences between our effective tax rates and the U.S. federal statutory income tax rate primarily result from our geographic mix of taxableincome in various tax jurisdictions as well as the discrete tax items referenced above related to the enactment of the TCJA.Years Ended December 31, 2017 and 2016Revenue Year Ended December 31, 2017 2016 Change (Amounts in thousands) Travel Network$2,550,470 $2,374,849 $175,621 7%Airline Solutions816,008 794,637 21,371 3%Hospitality Solutions258,352 224,669 33,683 15%Total segment revenue3,624,830 3,394,155 230,675 7%Eliminations(26,346) (20,768) (5,578) 27%Total revenue$3,598,484 $3,373,387 $225,097 7%Travel Network—Revenue increased $176 million, or 7%, for the year ended December 31, 2017 compared to the prior year. The increase in revenueprimarily resulted from a $178 million increase in transaction-based revenue to $2,377 million, mainly due to an increase in Direct Billable Bookings of 4% to525 million and growth in the average booking fee rate in the year ended December 31, 2017.Airline Solutions—Revenue increased $21 million, or 3%, for the year ended December 31, 2017 compared to the prior year. The increase in revenueprimarily resulted from:•a $13 million increase in Airline Solutions’ SabreSonic revenue for the year ended December 31, 2017 compared to the prior year, drivenby passengers boarded growth of 6% on a consistent carrier basis and the cut-over of Alitalia to SabreSonic CSS in the fourth quarter of2016. Total passengers boarded decreased by 2% to 772 million for the year ended December 31, 2017, driven primarily by the terminationof an agreement with Southwest Airlines related to services and processing for their legacy air reservation system in the second quarter of2017, which was at a lower than average passengers boarded rate;45•a $14 million increase in AirVision and AirCentre commercial and operations solutions revenue driven by growth in multiple productsacross our portfolio; and•a $6 million decrease in discrete professional service fees revenue, as a result of reduced sales compared to the prior year period.Hospitality Solutions—Revenue increased $34 million, or 15%, to $258 million for the year ended December 31, 2017 compared to the prior year,primarily driven by an increase in CRS transaction revenue from new and existing customers.Cost of Revenue Year Ended December 31, 2017 2016 Change (Amounts in thousands) Travel Network$1,479,221 $1,335,288 $143,933 11%Airline Solutions449,753 439,714 10,039 2%Hospitality Solutions169,877 152,171 17,706 12%Eliminations(26,346) (20,371) (5,975) 29%Total segment cost of revenue2,072,505 1,906,802 165,703 9%Corporate56,129 37,783 18,346 49%Depreciation and amortization317,812 287,353 30,459 11%Amortization of upfront incentive consideration67,411 55,724 11,687 21%Total cost of revenue$2,513,857 $2,287,662 $226,195 10%Travel Network—Cost of revenue increased $144 million, or 11%, for the year ended December 31, 2017 compared to the prior year, primarily as aresult of an increase in incentive consideration due to growth in booking volumes of 4% driven by organic growth and new customer conversions, and ahigher incentive rate per booking in all regions, partially offset by a decrease in the APAC region due to the renegotiation of an out of market agreement witha travel agency. See Note 3. Acquisitions, to our consolidated financial statements for additional information.Airline Solutions—Cost of revenue increased $10 million, or 2%, for the year ended December 31, 2017 compared to the prior year, primarily due toincreases in labor and technology infrastructure costs to support the growth in the business.Hospitality Solutions—Cost of revenue increased $18 million, or 12%, for the year ended December 31, 2017 compared to the prior year, primarily dueto higher transaction costs to support the growth in the business.Corporate—Cost of revenue associated with corporate costs increased $18 million, or 49%, for the year ended December 31, 2017 compared to theprior year, primarily due to higher corporate systems and risk and security costs.Depreciation and amortization—Cost of revenue associated with depreciation and amortization increased $30 million, or 11%, for the year endedDecember 31, 2017 compared to the prior year, primarily due to the completion and amortization of software developed for internal use.Amortization of upfront incentive consideration—Amortization of upfront incentive consideration increased $12 million, or 21%, for the year endedDecember 31, 2017 compared to the prior year, primarily due to an increase in upfront consideration provided to travel agencies.Selling, General and Administrative Expenses Year Ended December 31, 2017 2016 Change (Amounts in thousands) Selling, general and administrative$510,075 $626,153 $(116,078) (19)%Selling, general and administrative expenses decreased by $116 million, or 19%, for the year ended December 31, 2017 compared to the prior yeardue to a decrease in amortization expense of $45 million due to the completion in the first quarter of 2017 of amortization of certain intangible assets from thetake-private transaction in 2007 and a $43 million reimbursement, net of accrued legal and related expenses, from a settlement in 2017 with our insurancecarriers with respect to the American Airlines litigation. Litigation costs also declined in 2017 compared to 2016 due to the accrual of $32 million in 2016 forthe US Airways litigation, which represents the trebling of the jury award plus our estimate of attorneys’ fees, expenses and costs (See Note 15. Commitmentsand Contingencies, to our consolidated financial statements), offset by $6 million of insurance reimbursements.46Impairment and Related Charges Year Ended December 31, 2017 2016 Change (Amounts in thousands) Selling, general and administrative$81,112 $— $81,112 100%During the year ended December 31, 2017, we recorded an impairment charge of $81 million associated with net capitalized contract costs relatedto an Airline Solutions' customer, Air Berlin, based on our analysis of the recoverability of such amounts. See Note 4. Impairment and Related Charges, to ourconsolidated financial statements for additional information.Other Income, Net Year Ended December 31, 2017 2016 Change (Amounts in thousands) Other income, net$(36,530) $(27,617) $(8,913) 32%Other income, net increased $9 million, or 32%, for the year ended December 31, 2017 compared to the prior year. In 2017, we recognized a benefit of$60 million associated with a reduction to our TRA liability, primarily due to a provisional adjustment resulting from the enactment of TCJA, which reduced theU.S. corporate income tax rate. See Note 7. Income Taxes, to our consolidated financial statements. This increase was offset by a $15 million loss related todebt modification costs associated with our debt refinancing in the first and third quarter of 2017 and realized and unrealized foreign currency exchangelosses for the year ended December 31, 2017. In 2016, we recognized a gain from sale of available-for-sale securities of $15 million, receipt of an earn-outpayment of $6 million associated with the sale of a business in 2013, and realized and unrealized foreign currency exchange gains.Provision for Income Taxes Year Ended December 31, 2017 2016 Change (Amounts in thousands) Provision for income taxes$128,037 $86,645 $41,392 48%Our effective tax rates for the years ended December 31, 2017 and 2016 were 33.9% and 26.4%, respectively. The increase in the effective tax rate forthe year ended December 31, 2017 as compared to the prior year is primarily due to the net tax effect of the enactment of the TCJA, and a reduction in excesstax benefits on employee equity-based awards, partially offset by the tax on the gain from the 2016 sale of available-for-sale securities. See Note 1. Summaryof Business and Significant Accounting Policies, to our consolidated financial statements for additional information.The differences between our effective tax rates and the U.S. federal statutory income tax rate primarily result from our geographic mix of taxableincome in various tax jurisdictions as well as the discrete tax items referenced above.Liquidity and Capital ResourcesOur principal sources of liquidity are: (i) cash flows from operations, (ii) cash and cash equivalents and (iii) borrowings under our $400 millionRevolver (see “—Senior Secured Credit Facilities”). Borrowing availability under our Revolver is reduced by our outstanding letters of credit and restrictedcash collateral. As of December 31, 2018 and 2017, our cash and cash equivalents, Revolver and outstanding letters of credit were as follows (in thousands): As of December 31, 2018 2017Cash and cash equivalents$509,265 $361,381Available balance under the Revolver385,335 378,542Reductions to the Revolver: Revolver outstanding balance— —Outstanding letters of credit14,665 21,45847We consider cash equivalents to be highly liquid investments that are readily convertible into cash. Securities with contractual maturities of threemonths or less, when purchased, are considered cash equivalents. We record changes in a book overdraft position, in which our bank account is notoverdrawn but recently issued and outstanding checks result in a negative general ledger balance, as cash flows from financing activities. We invest in amoney market fund which is classified as cash and cash equivalents in our consolidated balance sheets and statements of cash flows. We held no short-terminvestments as of December 31, 2018 and 2017.As a result of the enactment of the TCJA, we recorded a one-time transition tax on the undistributed earnings of our foreign subsidiaries. We do notconsider these undistributed earnings to be indefinitely reinvested as of December 31, 2018, with certain limited exceptions. We consider the undistributedcapital investments in our foreign subsidiaries to be indefinitely reinvested as of December 31, 2018, and have not provided deferred taxes on any outsidebasis differences. Our cash, cash equivalents and marketable securities held by our foreign subsidiaries are available to satisfy domestic liquidity needsarising in the ordinary course of business, including liquidity needs associated with our domestic debt service requirements.Liquidity OutlookOur ability to generate cash depends on many factors beyond our control, and any failure to meet our debt service obligations could harm ourbusiness, financial condition and results of operations. Our ability to make payments on and to refinance our indebtedness, and to fund working capitalneeds, planned capital expenditures, share repurchases and dividends will depend on our ability to generate cash in the future, which is subject to generaleconomic, financial, competitive, business, legislative, regulatory and other factors that are beyond our control. See “Risk Factors—We may require morecash than we generate in our operating activities, and additional funding on reasonable terms or at all may not be available.”We utilize cash and cash equivalents, supplemented by our Revolver, primarily to pay our operating expenses, make capital expenditures, invest inour information technology infrastructure, products and offerings, pay quarterly dividends on our common stock, make payments under the TRA, pay taxes,and service our debt and other long-term liabilities. In addition, we have entered into an agreement to purchase Farelogix for $360 million, which we will fundat closing by cash on hand and borrowings under our Revolver. Furthermore, on an ongoing basis, we will evaluate and consider strategic acquisitions,divestitures, joint ventures, repurchasing shares of our common stock (including pursuant to our multi-year $500 million share repurchase program (the"Share Repurchase Program") or our outstanding debt obligations in open market or in privately negotiated transactions, as well as other transactions webelieve may create stockholder value or enhance financial performance. These transactions may require cash expenditures or generate proceeds and, to theextent they require cash expenditures, may be funded through a combination of cash on hand, debt or equity offerings, or utilization of our Revolver.We believe that cash flows from operations, cash and cash equivalents on hand and our Revolver provide adequate liquidity for our operational andcapital expenditures and other obligations over the next twelve months, as well as fund our acquisition of Farelogix. We may supplement our current liquiditythrough debt or equity offerings to support future strategic investments, or to pay down debt. We funded TRA payments of $74 million, $60 million and $101million, including interest, due in January 2019, January 2018 and 2017, respectively, with cash on hand. We expect to fund future TRA payments through acombination of cash on hand, utilization of our Revolver or debt offerings.As of December 31, 2018 we have utilized substantially all of our U.S. federal net operating loss carryforwards and a portion of our available U.S.federal tax credits. As a result, we expect a significant increase in the amount of our cash taxes in future years, beginning in 2019.DividendsDuring the year ended December 31, 2018, we paid quarterly cash dividends on our common stock totaling $154 million and expect to continue to payquarterly cash dividends thereafter. Our board of directors has declared a cash dividend of $0.14 per share of our common stock, which will be paid on March29, 2019 to stockholders of record as of March 21, 2019. We funded the 2018 dividends, and intend to fund any future dividends, from cash generated fromour operations. Future cash dividends, if any, will be at the discretion of our board of directors and the amount of cash dividends per share will depend upon,among other things, our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions, number ofshares of common stock outstanding and other factors the board of directors may deem relevant. The timing and amount of future dividend payments will beat the discretion of our board of directors. See “Risk Factors—Our ability to pay regular dividends to our stockholders is subject to the discretion of our boardof directors and may be limited by our holding company structure and applicable provisions of Delaware law.”48Recent Events Impacting Our Liquidity and Capital ResourcesTerm Facility Amendment and Swaps DesignationsOn March 2, 2018, Sabre GLBL entered into a Fifth Incremental Term Facility Amendment to our Amended and Restated Credit Agreement to refinanceand modify the terms of the Term Loan B, resulting in a reduction of the applicable margins for the Term Loan B to 2.00% per annum for Eurocurrency rateloans and 1.00% per annum for base rate loans. We incurred no additional indebtedness as a result of this transaction and incurred $2 million in financingfees recorded within Other, net and a $1 million loss on extinguishment of debt, in our consolidated results of operations year ended December 31, 2018.Secondary Public OfferingsDuring the year ended December 31, 2018, certain of our stockholders sold an aggregate of 69,304,636 shares of our common stock throughsecondary public offerings. See "—Share Repurchase Program" for information on shares we repurchased in connection with one such offering. We did notoffer any shares or receive any proceeds from these secondary public offerings. Following the secondary public offering of approximately 23,304,636 sharesof common stock during the fourth quarter of 2018, stockholders affiliated with TPG Global, LLC and Silver Lake Management Company II, L.L.C. (the "SellingStockholders") no longer held any shares of our common stock. Share Repurchase ProgramIn February 2017, our Board approved a $500 million multi-year Share Repurchase Program. This program allows for the purchase of up to $500million of outstanding shares of our common stock in privately negotiated transactions or in the open market, or otherwise. For the year ended December 31,2018, we repurchased 1,075,255 shares totaling $26 million pursuant to the Share Repurchase Program. There were no shares repurchased during thefourth quarter of 2018. Approximately $365 million remains authorized for repurchases under the Share Repurchase Program as of December 31, 2018.Senior Secured Credit FacilitiesIn February 2013, Sabre GLBL entered into the Amended and Restated Credit Agreement. The agreement replaced (i) the existing term loans withnew classes of term loans of $1,775 million (the “2013 Term Loan B”) and $425 million (the “2013 Term Loan C”) and (ii) the existing revolving credit facilitywith a new revolving credit facility of $352 million (the “2013 Revolver”). In September 2013, Sabre GLBL entered into an agreement to amend the Amendedand Restated Credit Agreement to add a new class of term loans in the amount of $350 million (the “2013 Incremental Term Loan Facility”).In July 2016, Sabre GLBL entered into a series of amendments (the “Credit Agreement Amendments”) to our Amended and Restated CreditAgreement to provide for an incremental term loan under a new class with an aggregate principal amount of $600 million (the “2016 Term Loan A”) and toreplace the 2013 Revolver with a new revolving credit facility totaling $400 million (the “2016 Revolver”). The proceeds of $597 million, net of $3 milliondiscount, from the 2016 Term Loan A were used to repay $350 million of outstanding principal on our 2013 Term Loan B and 2013 Incremental Term LoanFacility, on a pro rata basis, repay the $120 million then-outstanding balance on the 2016 Revolver, and pay $11 million in associated financing fees. Werecognized a $4 million loss on extinguishment of debt during the year ended December 31, 2016 in connection with these transactions.On February 22, 2017, Sabre GLBL entered into a Third Incremental Term Facility Amendment to our Amended and Restated Credit Agreement (the“2017 Term Facility Amendment”). The new agreement replaced the 2013 Term Loan B, 2013 Incremental Term Loan Facility and 2013 Term Loan C with asingle class of term loan (the "2017 Term Loan B") with an aggregate principal amount of $1,900 million maturing on February 22, 2024. The proceeds of$1,898 million, net of $2 million discount on the 2017 Term Loan B, were used to pay off approximately $1,761 million of all existing classes of outstandingterm loans (other than the 2016 Term Loan A), pay related accrued interest and pay $12 million in associated financing fees, which were recorded as debtmodification costs in Other, net in the consolidated statement of operations during the three months ended March 31, 2017. The remaining proceeds of the2017 Term Loan B were used to pay off approximately $80 million of Sabre’s outstanding mortgage on its corporate headquarters on March 31, 2017 and forother general corporate purposes. Unamortized debt issuance costs and discount related to existing classes of outstanding term loans prior to the 2017 TermFacility Amendment of $9 million and $3 million, respectively, will continue to be amortized over the remaining term of the 2017 Term Loan B along with theTerm Loan B discount of $2 million. See Note 9. Derivatives, to our consolidated financial statements for information regarding the discontinuation of hedgeaccounting related to our existing interest rate swaps as a result of the 2017 Term Facility Amendment.49On August 23, 2017, Sabre GLBL entered into a Fourth Incremental Term Facility Amendment to our Amended and Restated Credit Agreement, TermLoan A Refinancing Amendment to the Credit Agreement, and Second Revolving Facility Refinancing Amendment to the Credit Agreement to refinance andmodify the terms of the 2017 Term Loan B, the 2016 Term Loan A, and the 2016 Revolver, resulting in a reduction of the applicable margins for each of theseinstruments and approximately a one-year extension of the maturity of the 2016 Term Loan A and 2016 Revolver (the “2017 Refinancing”). We incurred noadditional indebtedness as a result of the 2017 Refinancing. The 2017 Refinancing included a $400 million revolving credit facility ("Revolver") that replacedthe 2016 Revolver, as well as the application of the proceeds of the approximately $1,891 million incremental Term Loan B facility (“Term Loan B”) and $570million Term Loan A facility (“Term Loan A”) to replace the 2017 Term Loan B and the 2016 Term Loan A. The maturity of the Revolver and the Term Loan Awas extended from July 18, 2021 to July 1, 2022. The applicable margins for the Term Loan B were reduced to 2.25% per annum for Eurocurrency rate loansand 1.25% per annum for base rate loans. The applicable margins for the Term Loan A and the Revolver were reduced to (i) between 2.50% and 1.75% perannum for Eurocurrency rate loans and (ii) between 1.50% and 0.75% per annum for base rate loans, in each case with the applicable margin for any quarterreduced by 25 basis points (up to 75 basis points total) if the Senior Secured First-Lien Net Leverage Ratio (as defined in the Amended and Restated CreditAgreement) is less than 3.75 to 1.0, 3.00 to 1.0, or 2.25 to 1.0, respectively. The Eurocurrency rate is based on LIBOR. In July 2017, the Financial ConductAuthority announced its intention to phase out LIBOR by the end of 2021.If a published U.S. dollar LIBOR rate is unavailable, the interest rates on our debtindexed to LIBOR will be determined using various alternative methods set forth in our Amended and Restated Credit Agreement, any of which could result ininterest obligations that are more than or that do not otherwise correlate over time with the payments that would have been made on this debt if U.S. dollarLIBOR were available in its current form. See “Risk Factors—We are exposed to interest rate fluctuations.” We anticipate amending our Amended andRestated Credit Agreement prior to the phaseout of LIBOR to provide for a Eurocurrency rate alternative to LIBOR.On March 2, 2018, Sabre GLBL entered into a Fifth Incremental Term Facility Amendment to our Amended and Restated Credit Agreement to refinanceand modify the terms of the Term Loan B as discussed above. See "—Recent Events Impacting Our Liquidity and Capital Resources" above.We had no balance outstanding under the Revolver as of December 31, 2018 and as of December 31, 2017. We had outstanding letters of credittotaling $15 million and $21 million as of December 31, 2018 and December 31, 2017, respectively, which reduced our overall credit capacity under theRevolver.Under the Amended and Restated Credit Agreement, the loan parties are subject to certain customary non-financial covenants, including certainrestrictions on incurring certain types of indebtedness, creation of liens on certain assets, making of certain investments, and payment of dividends, as well asa maximum leverage ratio. Pursuant to Credit Agreement Amendments, effective July 18, 2016, the maximum leverage ratio has been adjusted to be basedon the Total Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement) and we are required, at all times (no longer solely when athreshold amount of revolving loans or letters of credit were outstanding), to maintain a Total Net Leverage Ratio of less than 4.5 to 1.0. As of December 31,2018 we are in compliance with all covenants under the Amended and Restated Credit Agreement.We are also required to pay down the term loans by an amount equal to 50% of annual excess cash flow, as defined in the Amended and RestatedCredit Agreement. This percentage requirement may decrease or be eliminated if certain leverage ratios are achieved. Based on our results for the yearended December 31, 2017, we were not required to make an excess cash flow payment in 2018, and no excess cash flow payment is required in 2019 withrespect to our results for the year ended December 31, 2018. We are further required to pay down the term loan with proceeds from certain asset sales orborrowings as defined in the Amended and Restated Credit Agreement.Tax Receivable AgreementImmediately prior to the closing of our initial public offering, we entered into the TRA that provides the Pre-IPO Existing Stockholders (as defined inNote 7. Income Taxes, to our consolidated financial statements) the right to receive future payments from us. The future payments will equal 85% of theamount of cash savings, if any, in U.S. federal income tax that we and our subsidiaries realize as a result of the utilization of the Pre-IPO Tax Assets (asdefined in Note 7. Income Taxes, to our consolidated financial statements). Based on current tax laws and assuming that we and our subsidiaries earnsufficient taxable income to realize the full tax benefits subject to the TRA, we estimate that future payments under the TRA relating to Pre-IPO Tax Assets willtotal $102 million, excluding interest. Primarily due to the enactment of the TCJA, which reduced the U.S. corporate income tax rate, we recorded a total netreduction in the TRA liability of $55 million across the years ended December 31, 2018 and 2017. See “Recent Developments Affecting our Results ofOperations” for additional information on the expected effects of the enactment of the TCJA. The TRA payments accrue interest in accordance with the termsof the TRA subsequent to the tax year in which the tax benefits are realized through the date of the benefit payment. No material payments occurred in 2016,and we made payments of $74 million, $60 million and $101 million, including interest, in January 2019, 2018 and 2017, respectively. We expect to make apayment of approximately $30 million in April 2019, including approximately $1 million of accrued interest. The estimate of future payments considers theimpact of Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), which imposes an annual limit on the ability of a corporation thatundergoes an ownership change to use its net operating loss carryforwards ("NOLs") to reduce its liability. We do not anticipate any material limitations onour ability to utilize U.S. federal NOLs under Section 382 of the Code.50These payment obligations are our obligations and not obligations of any of our subsidiaries. The actual utilization of the Pre-IPO Tax Assets, as wellas the timing of any payments under the TRA, will vary depending upon a number of factors, including the amount, character and timing of our and oursubsidiaries’ taxable income in the future. See Note 7. Income Taxes, to our consolidated financial statements for additional information regarding incometaxes and the TRA.In addition, the TRA provides that upon certain mergers, stock and asset sales, other forms of business combinations or other changes of control, theTRA will terminate and we will be required to make a payment intended to equal to the present value of future payments under the TRA, which paymentwould be based on certain assumptions, including those relating to our and our subsidiaries’ future taxable income. In these situations, our obligations underthe TRA could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales,other forms of business combinations or other changes of control. Different timing rules will apply to payments under the TRA to be made to holders that, priorto the completion of the initial public offering, held stock options and restricted stock units (collectively, the “Pre-IPO Award Holders”). These payments willgenerally be deemed invested in a notional account rather than made on the scheduled payment dates, and the account will be distributed on the fifthanniversary of the initial public offering, together with (a) interest accrued on these payments from the scheduled payment date to the distribution date, and(b) an amount equal to the net present value of the Award Holder’s future expected payments, if any, under the TRA. Moreover, payments to holders of stockoptions that were unvested prior to the completion of the initial public offering are subject to vesting on the same schedule as such holder’s unvested stockoptions.The TRA contains a Change of Control definition that includes, among other things, a change of a majority of the board of directors without approval ofa majority of the then existing Board members (the “Continuing Directors Provision”). Recent Delaware case law has stressed that such Continuing DirectorsProvisions could have a potential adverse impact on stockholders’ right to elect a company’s directors. In this regard, decisions of the Delaware ChanceryCourt (not involving us or our securities) have considered change of control provisions and noted that a board of directors may “approve” a dissidentstockholders’ nominees solely to avoid triggering the change of control provisions, without supporting their election, if the board determines in good faith thatthe election of the dissident nominees would not be materially adverse to the interests of the corporation or its stockholders. Further, according to thesedecisions, the directors’ duty of loyalty to stockholders under Delaware law may, in certain circumstances, require them to give such approval.Our counterparties under the TRA will not reimburse us for any payments previously made under the TRA if such benefits are subsequently disallowed(although future payments would be adjusted to the extent possible to reflect the result of such disallowance). As a result, in certain circumstances, paymentscould be made under the TRA in excess of our cash tax savings. Certain transactions by the company could cause it to recognize taxable income (possiblymaterial amounts of income) without a current receipt of cash. Payments under the TRA with respect to such taxable income would cause a net reduction inour available cash. For example, transactions giving rise to cancellation of debt income, the accrual of income from original issue discount or deferredpayments, a “triggering event” requiring the recapture of dual consolidated losses, or “Subpart F” or “GILTI” income would each produce income with nocorresponding increase in cash. In these cases, we may use some of the Pre-IPO Tax Assets to offset income from these transactions and, under the TRA,would be required to make a payment to our Pre-IPO Existing Stockholders even though we receive no cash from such income.Because Sabre Corporation, on an unconsolidated basis, is a holding company with no operations of its own, its ability to make payments under theTRA is dependent on the ability of its subsidiaries to make distributions to Sabre Corporation. The TRA is designed with the objective of causing our annualcash costs attributable to federal income taxes (without regard to our continuing 15% interest in the Pre-IPO Tax Assets) to be the same as we would havepaid had we not had the Pre-IPO Tax Assets available to offset our federal taxable income. As a result, stockholders who are not Pre-IPO ExistingStockholders will not be entitled to the economic benefit of the Pre-IPO Tax Assets that would have been available if the TRA were not in effect (except to theextent of our continuing 15% interest in the Pre-IPO Tax Assets).Technology ExpendituresWe maintain and make enhancements to our products, services, technologies and systems in response to technological developments, industrystandards and trends and customer demands. We deploy resources in research and development in order to help maintain a competitive advantage anddeliver innovation to the marketplace. Software developed for internal use includes costs incurred to enhance our infrastructure, software applications andreservation systems. Additionally, we rely on other third-party providers, including DXC, Amazon Web Services, Inc. ("AWS"), and Microsoft Corporation, tooperate computer data centers and network systems and provide hosting services. The aggregation of these costs represents our total technologyexpenditures of $999 million and $940 million for the years ended December 31, 2018 and 2017, respectively. These amounts include hosting, third-partysoftware and expensed research and development costs of $744 million and $675 million, and capitalized software development expenditures, of $256million and $264 million for these respective periods. See "Factors Affecting Our Results—Change in mix of technology spend, including conversion to agiledevelopment process."51Cash FlowsOperating ActivitiesCash provided by operating activities for the year ended December 31, 2018 was $725 million and consisted of net income from continuing operationsof $341 million, adjustments for non-cash and other items of $607 million and a decrease in cash from changes in operating assets and liabilities of $223million. The adjustments for non-cash and other items consist primarily of $413 million of depreciation and amortization, $78 million in amortization of upfrontincentive consideration, $57 million of stock-based compensation expense, and $43 million of deferred income taxes. The decrease in cash from changes inoperating assets and liabilities of $223 million was primarily the result of $89 million used for upfront incentive consideration, a $46 million increase inaccounts receivable, $39 million used for capitalized implementation costs, a $30 million increase in other assets, a $27 million decrease in accountspayable, and a $15 million decrease in accrued compensation and related benefits. These decreases were partially offset by an increase of $8 million indeferred revenues and a decrease of $14 million in prepaid expenses and other current assets.Cash provided by operating activities for the year ended December 31, 2017 was $678 million and consisted of net income from continuing operationsof $250 million, adjustments for non-cash and other items of $626 million and a decrease in cash from changes in operating assets and liabilities of $198million. The adjustments for non-cash and other items consist primarily of $401 million of depreciation and amortization, $81 million of impairment and relatedcharges, $67 million in amortization of upfront incentive consideration, $45 million of stock-based compensation expense, $49 million of deferred incometaxes and $15 million of debt modification costs, partially offset by $60 million reduction to our liability under the TRA primarily due to a provisional adjustmentresulting from the enactment of TCJA which reduced the U.S. corporate income tax rate in December 2017. The decrease in cash from changes in operatingassets and liabilities of $198 million was primarily the result of a $109 million increase in accounts receivable partially due to a $29 million receivable relatedto an insurance settlement, $94 million used for upfront incentive consideration, $61 million used for capitalized implementation costs, and a $21 millionincrease in other assets. These were partially offset by an increase of $67 million in accounts payable and accrued subscriber incentives, an increase of $14million in deferred revenue primarily due to upfront solution fees and an increase of $6 million in accrued compensation and related benefits.Cash provided by operating activities for the year ended December 31, 2016 was $699 million and consisted of net income from continuing operationsof $241 million, adjustments for non-cash and other items of $557 million and a decrease in cash from changes in operating assets and liabilities of $99million. The adjustments for non-cash and other items consist primarily of $414 million of depreciation and amortization, $56 million in amortization of upfrontincentive consideration, $49 million of stock-based compensation expense, and $48 million of deferred income taxes, partially offset by $26 million oflitigation-related credits. The decrease in cash from changes in operating assets and liabilities of $99 million was primarily the result of $83 million used forcapitalized implementation costs, $71 million used for upfront incentive consideration, a $13 million increase in accounts receivable, and a $12 millionincrease in prepaid expenses and other assets. These decreases were partially offset by an increase of $57 million in accounts payable and other accruedliabilities and an increase of $23 million in deferred revenue primarily due to upfront solution fees.Investing ActivitiesFor the year ended December 31, 2018, we used cash of $284 million on capital expenditures, which includes capitalized software development of$256 million, consisting of $252 million related to software developed for internal use and $4 million for development of on-premise licensed products.For the year ended December 31, 2017, we used cash of $316 million on capital expenditures, which includes capitalized software development of$264 million, consisting of $251 million related to software developed for internal use and $13 million for development of on-premise licensed products.For the year ended December 31, 2016, we used cash of $164 million for the acquisition of the Trust Group and Airpas Aviation and $328 million oncapital expenditures, which includes capitalized software development of $293 million, including $284 million related to software developed for internal useand $9 million for development of on-premise licensed products. The use of cash from investing activities was offset by proceeds received from the sale of ouravailable-for-sale securities of $46 million.52Financing ActivitiesFor the year ended December 31, 2018, we used $307 million for financing activities. Significant highlights of our financing activities included:•payment of $154 million in dividends on our common stock;•second annual payment in January 2018 on the TRA liability for $59 million, excluding interest;•payment of $47 million on our Term Loan A and Term Loan B and $2 million in debt issuance and modification costs;•repurchase of 1,075,255 shares of our common stock outstanding totaling $26 million; and•receipt of net proceeds totaling $2 million from the settlement of employee stock-option awards, including a payment of $10 million in income taxwithholdings associated with the settlement of employee restricted-stock awards.For the year ended December 31, 2017, we used $357 million for financing activities. Significant highlights of our financing activities included:•receipt of proceeds totaling $1,898 million (net of $2 million discount) in February 2017 from the 2017 Term Loan B, which were used to pay offapproximately $1,753 million of all existing classes of outstanding term loans (other than the 2016 Term Loan A) and $12 million in debt issuancecosts. The remaining proceeds were used for purposes of repaying approximately $80 million of Sabre's outstanding mortgage on its corporateheadquarters, and for other general corporate purposes;•payments totaling $48 million on the principal outstanding on our term loans;•pursuant to the 2017 Refinancing in August 2017, payment of $7 million in debt modification costs;•first annual payment in January 2017 on the TRA liability for $99 million, excluding interest;•payment of $155 million in dividends on our common stock;•receipt of net proceeds totaling $13 million from the settlement of employee stock-option awards and payment of $11 million in income taxwithholdings associated with the settlement of employee restricted-stock awards; and•repurchase of 5,779,769 shares of our common stock outstanding totaling $109 million.For the year ended December 31, 2016, cash provided from financing activities totaled $190 million. Significant highlights of our financing activitiesincluded:•receipt of proceeds totaling $597 million (net of $3 million discount) from the 2016 Term Loan A and used a portion of the proceeds to repay $350million of outstanding principal on our 2013 Term Loan B and 2013 Incremental Term Loan Facility;•payment of the remaining principal of $165 million on our senior secured notes due 2016, which matured in March 2016, paid down $26 million ofthe term loan outstanding as part of quarterly principal repayments;•draws on our 2013 Revolver totaling $458 million and payments totaling $458 million resulting in no outstanding balance as of December 31,2016;•payment of $13 million for capital leases;•payment of $144 million in dividends on our common stock;•receipt of net proceeds of $27 million from the settlement of employee stock-option awards; and•repurchase of 3,980,672 shares of our common stock outstanding totaling $100 million.Discontinued Travelocity BusinessCash flows used in discontinued operating activities were $2 million, $5 million, and $19 million for the years ended December 31, 2018, 2017 and2016, respectively. The cash flows used by discontinued operations for the year ended December 31, 2018 primarily resulted from expenses associated withlegal contingencies related to hotel occupancy taxes. The cash flows used by discontinued operations for the year ended December 31, 2017 primarilyresulted from expenses associated with legal contingencies related to hotel occupancy taxes. See Note 15. Commitments and Contingencies, to ourconsolidated financial statements for additional information. The cash flows used by discontinued operations for the year ended December 31, 2016 isprimarily due to a tax benefit associated with the resolution of uncertain tax positions.53Contractual ObligationsAs of December 31, 2018, our contractual obligations were as follows (in thousands): Payments Due by Period 2019 2020 2021 2022 2023 Thereafter TotalTotal debt(1)$229,163 $236,718 $230,587 $532,255 $1,169,748 $1,780,136 $4,178,607Operating lease obligations(2)27,171 18,350 12,438 9,029 6,149 13,429 86,566IT outsourcing agreement(3)144,108 136,117 122,365 105,034 105,034 — 612,658Purchase obligations(4)273,223 38,689 24,373 16,772 12,009 48,000 413,066Letters of credit(5)11,728 1,874 459 605 — — 14,666Unrecognized tax benefits(6)— 4,239 — — — 88,303 92,542Tax Receivable Agreement(7)104,724 — — — — — 179,565Total contractual cash obligations(8)$790,117 $435,987 $390,222 $663,695 $1,292,940 $1,929,868 $5,577,670_______________________(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 isnot 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 8. Debt, to our consolidated financial statements.(2)We lease approximately 1.5 million square feet of office space in 117 locations in 54 countries. Lease payment escalations are based on fixed annualincreases, local consumer price index changes or market rental reviews. We have renewal options of various term lengths in approximately 50 leases.We have no purchase options and no restrictions imposed by our leases concerning dividends or additional debt. See "Note 1. Summary of Businessand Significant Accounting Policies —Adoption of New Accounting Standards," to our consolidated financial statements.(3)Represents minimum amounts due to DXC under the terms of an outsourcing agreement through which DXC manages a significant portion of ourinformation technology systems. Actual payments may vary significantly from the minimum amounts presented.(4)Purchase obligations represent an estimate of all open purchase orders and contractual obligations in the ordinary course of business for which we havenot received the goods or services as of December 31, 2018. Although open purchase orders are considered enforceable and legally binding, the termsgenerally allow us the option to cancel, reschedule and adjust our requirements based on our business needs prior to the delivery of goods orperformance of services.(5)Our letters of credit consist of stand-by letters of credit, underwritten by a group of lenders, which we primarily issue in the normal course of business. Thecontractual expiration dates of these letters of credit are shown in the table above. There were no claims made against any stand‑by letters of creditduring the years ended December 31, 2018, 2017 and 2016.(6)Unrecognized tax benefits include associated interest and penalties. The timing of related cash payments for substantially all of these liabilities isinherently uncertain because the ultimate amount and timing of such liabilities is affected by factors which are variable and outside our control.(7)We paid $74 million, including interest, in January 2019 and expect to pay approximately $30 million in April 2019 under our TRA. See Note 7. IncomeTaxes, to our consolidated financial statements and “—Tax Receivable Agreement.” The exact timing of future payments under the TRA is uncertain anddependent on the timing of the realization of taxable income. We expect to pay substantially all of the remaining balance in 2020.(8)Excludes pension obligations, see Note 14. Pension and Other Postretirement Benefit Plans, to our consolidated financial statements.Off Balance Sheet ArrangementsWe had no off balance sheet arrangements during the years ended December 31, 2018, 2017 and 2016.Recent Accounting PronouncementsInformation related to Recent Accounting Pronouncements is included in Note 1. Summary of Business and Significant Accounting Policies, to ourconsolidated financial statements included in Part II, Item 8 in this Annual Report on Form 10-K, which is incorporated herein by reference.54Critical Accounting EstimatesThis discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have beenprepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect our reportedassets and liabilities, revenues and expenses and other financial information. Actual results may differ significantly from these estimates, and our reportedfinancial condition and results of operations could vary under different assumptions and conditions. In addition, our reported financial condition and results ofoperations could vary due to a change in the application of a particular accounting standard.Our accounting policies that include significant estimates and assumptions include: (i) estimation for revenue recognition and multiple performanceobligation arrangements, (ii) determination of the fair value of assets and liabilities acquired in a business combination, (iii) the evaluation of therecoverability of the carrying value of long-lived assets and goodwill, (iv) assumptions utilized to test recoverability of capitalized implementation costs, (v)judgments in capitalization of software developed for internal use , and (vi) the evaluation of uncertainties surrounding the calculation of our tax assets andliabilities. We regard an accounting estimate underlying our financial statements as a “critical accounting estimate” if the accounting estimate requires us tomake assumptions about matters that are uncertain at the time of estimation and if changes in the estimate are reasonably likely to occur and could have amaterial effect on the presentation of financial condition, changes in financial condition, or results of operations.We have included below a discussion of the accounting policies involving material estimates and assumptions that we believe are most critical to thepreparation of our financial statements, how we apply such policies and how results differing from our estimates and assumptions would affect the amountspresented in our financial statements. We have discussed the development, selection and disclosure of these accounting policies with our Audit Committee.Although we believe these policies to be the most critical, other accounting policies also have a significant effect on our financial statements and certain ofthese policies also require the use of estimates and assumptions. For further information about our significant accounting policies, see Note 1. Summary ofBusiness and Significant Accounting Policies, to our consolidated financial statements.Revenue Recognition and Multiple Performance Obligation ArrangementsOur agreements with customers of our Airline Solutions business may have multiple performance obligations which generally include softwaresolutions through SaaS and hosted delivery, professional service fees and implementation services. In addition, from time to time, we enter into agreementswith customers to provide access to Travel Network’s GDS and, at or near the same time, enter into a separate agreement to provide software solutionsthrough SaaS and hosted delivery. These multiple performance obligation arrangements involve judgments, including estimates of the selling prices of goodsand services, attribution of variable consideration, assessments of the likelihood of nonpayment and estimates of total costs and costs to complete a project.Revenue recognition from our Airline Solutions business requires significant judgments such as identifying distinct performance obligations includingmaterial rights within an agreement, estimation of stand alone selling price (“SSP”), determination of whether variable pricing within a contract meets theallocation objective and forecasting future volumes. For a small subset of our contracts, we are required to forecast volumes as a result of pricing variabilitywithin the contract in order to calculate the rate for revenue recognition. Any changes in these judgments and estimates could have an impact on the revenuerecognized in future periods.The professional and implementation services are generally performed in the early stages of the agreements. Access to our GDS is provided over thefull term of the contract. Software solutions through SaaS and hosted delivery are often not provided until implementation services are completed. Weevaluate revenue recognition for agreements with customers which generally are represented by individual contracts but could include groups of contracts ifthe contracts are executed at or near the same time. Typically, access to our GDS and our professional service fees are separated from the implementationand software hosting services. We account for separate performance obligations on an individual basis with value assigned to each performance obligationbased on its relative selling price. A comprehensive market analysis is performed on a periodic basis to determine the range of selling prices for each productand service. In making these judgments we analyze various factors, including competitive landscapes, value differentiators, continuous monitoring of marketprices, customer segmentation and overall market and economic conditions. Based on these results, estimated selling prices are set for each product andservice delivered to customers. Changes in judgments related to these items, or deterioration in industry or general economic conditions, could materiallyimpact the timing and amount of revenue and costs recognized. Revenue for professional service fees is generally recognized as the services are performedand revenue for implementation services, access to our GDS and SaaS and hosted services is generally recognized on a transaction basis over the term ofthe agreement.55Our contract assets include deferred customer advances and discounts, which are capitalized and amortized in future periods as the related revenue isearned. The contract assets also include revenue recognized for services already transferred to a customer, for which the fulfillment of another contractualperformance obligation is required, before we have the unconditional right to bill and collect based on contract terms. These assets are reviewed forrecoverability on a periodic basis based on review of impairment indicators. Deferred advances to customers and customer discounts are reviewed forrecoverability based on future contracted revenues and estimated direct costs of the contract when a significant event occurs that could impact therecoverability of the assets, such as a significant contract modification or early renewal of contract terms. We assessed recoverability of all balances with anAirline Solutions customer during the year ended December 31, 2017, resulting in an impairment charge totaling $81 million, which included related deferredcustomer advances and discounts. See Note 4. Impairment and Related Charges, to our consolidated financial statements for additional information.Contracts are priced to generate total revenues over the life of the contract that exceed any discounts or advances provided and any upfront costs incurred toimplement the customer contract.Air Booking Cancellation ReserveTransaction revenue for airline travel reservations is recognized by Travel Network at the time of the booking of the reservation, net of estimated futurecancellations. Cancellations prior to the day of departure are estimated based on the historical level of cancellation rates, adjusted to take into account anyrecent factors which could cause a change in those rates. In circumstances where expected cancellation rates or booking behavior changes, our estimatesare revised, and in these circumstances, future cancellation rates could vary materially, with a corresponding variation in revenue net of estimated futurecancellations. Factors that could have a significant effect on our estimates include global security issues, epidemics or pandemics, natural disasters, generaleconomic conditions, the financial condition of travel suppliers, and travel related accidents.Business CombinationsAuthoritative guidance for business combinations requires us to recognize separately from goodwill the assets acquired and the liabilities assumed attheir acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisitiondate fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired andliabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and, as a result,actual results may differ from estimates.Accounting for business combinations requires our management to make significant estimates and assumptions, especially at the acquisition dateincluding our estimates for intangible assets, contractual obligations assumed, pre-acquisition contingencies, contingent consideration, where applicable,and previously-held investment interests. Although we believe the assumptions and estimates we have made in the past have been reasonable andappropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherentlyuncertain.Examples of critical estimates in valuing certain of the intangible assets we have acquired include, but are not limited to: future expected cash flows,support agreements, consulting contracts, other customer contracts, acquired developed technologies and patents; the acquired company’s brand andcompetitive position, as well as assumptions about the period of time the acquired brand will continue to be used in the combined company’s productportfolio; and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates oractual results.For a given acquisition, we may identify certain pre-acquisition contingencies as of the acquisition date and may extend our review and evaluation ofthese pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether we include thesecontingencies as a part of the fair value estimates of assets acquired and liabilities assumed and, if so, to determine their estimated amounts. If we cannotreasonably determine the fair value of a pre-acquisition contingency (non-income tax related) by the end of the measurement period, which is generally thecase given the nature of such matters, we will recognize an asset or a liability for such pre-acquisition contingency if: (i) it is probable that an asset existed ora liability had been incurred at the acquisition date and (ii) the amount of the asset or liability can be reasonably estimated. Subsequent to the measurementperiod, changes in our estimates of such contingencies will affect earnings and could have a material effect on our results of operations and financialposition.Depending on the circumstances, the fair value of contingent consideration is determined based on management’s best estimate of fair value giventhe specific facts and circumstances of the contractual arrangement, considering the likelihood of payment, payment terms and management’s best estimatesof future performance results on the acquisition date, if applicable.In addition, uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated asof the acquisition date. We reevaluate these items quarterly based upon facts and circumstances that existed as of the acquisition date with any adjustmentsto our preliminary estimates being recorded to goodwill if identified within the measurement period. Subsequent to the measurement period or our finaldetermination of the tax allowance’s or contingency’s estimated value, whichever comes first, changes to these uncertain tax positions and tax-relatedvaluation allowances will affect our provision for income taxes in our consolidated statement of operations and could have a material impact on our results ofoperations and financial position.56Goodwill and Long-Lived AssetsWe evaluate goodwill for impairment on an annual basis or when impairment indicators exist. We begin our evaluation with a qualitative assessmentof whether it is more likely than not that a reporting unit’s fair value is less than its carrying value before applying the quantitative assessment describedbelow. If it is determined through the evaluation of events or circumstances that the carrying value may not be recoverable, we perform a comparison of theestimated fair value of the reporting unit to which the goodwill has been assigned to the sum of the carrying value of the assets and liabilities of that unit. If thesum of the carrying value of the assets and liabilities of a reporting unit exceeds the estimated fair value of that reporting unit, the carrying value of thereporting unit’s goodwill is reduced to its fair value through an adjustment to the goodwill balance, resulting in an impairment charge. Goodwill was assignedto each reporting unit based on that reporting unit’s percentage of enterprise value as of the date of the acquisition of Sabre Corporation by TPG and SilverLake plus goodwill associated with acquisitions since that time. We have three reporting units associated with our continuing operations: Travel Network,Airline Solutions and Hospitality Solutions.The fair values used in our evaluation are estimated using a combined approach based upon discounted future cash flow projections and observedmarket multiples for comparable businesses. The cash flow projections are based upon a number of assumptions, including risk-adjusted discount rates,future booking and transaction volume levels, future price levels, rates of growth in our consumer and corporate direct booking businesses and rates ofincrease in operating expenses, cost of revenue and taxes. Additionally, in accordance with authoritative guidance on fair value measurements, we made anumber of assumptions, including assumptions related to market participants, the principal markets and highest and best use of the reporting units. We didnot record any goodwill impairment charges for the years ended December 31, 2018, 2017 and 2016. Goodwill related to our reporting units totaled $2.6billion as of December 31, 2018. Changes in the assumptions used in our impairment testing may result in future impairment losses which could have amaterial impact on our results of operations. A change of 10% in the future cash flow projections, risk-adjusted discount rates, and rates of growth used in ourfair value calculations would not result in impairment of the remaining goodwill for any of our reporting units.Definite-lived intangible assets are assigned depreciable lives of two to thirty years, depending on classification, and are evaluated for impairmentwhenever events or changes in circumstances indicate that the carrying amount of definite-lived intangible assets used in combination to generate cash flowslargely independent of other assets may not be recoverable. If impairment indicators exist for definite-lived intangible assets, the undiscounted future cashflows associated with the expected service potential of the assets are compared to the carrying value of the assets. If our projection of undiscounted futurecash flows is in excess of the carrying value of the intangible assets, no impairment charge is recorded. If our projection of undiscounted cash flows is lessthan the carrying value, the intangible assets are then measured at fair value and an impairment charge is recorded based on the excess of the carryingvalue of the assets over its fair value. We also evaluate the need for additional impairment disclosures based on our Level 3 inputs. For fair valuemeasurements categorized within Level 3 of the fair value hierarchy, we disclose the valuation processes used by the reporting entity. We did not recordmaterial intangible asset impairment charges for the years ended December 31, 2018, 2017 and 2016.The most significant assumptions used in the discounted cash flows calculation to determine the fair value of our reporting units in connection withimpairment testing include: (i) the discount rate, (ii) the expected long-term growth rate and (iii) annual cash flow projections. See Note 10. Fair ValueMeasurements, to our consolidated financial statements.Capitalized Implementation CostsCapitalized implementation costs represents upfront costs to implement new customer contracts under our SaaS and hosted revenue model.Capitalized implementation costs are amortized on a straight-line basis over the related contract term, ranging from three to ten years, as they arerecoverable through deferred or future revenues associated with the relevant contract. These assets are reviewed for recoverability on a periodic basis orwhen an event occurs that could impact the recoverability of the assets, such as a significant contract modification or early renewal of contract terms.Recoverability is measured based on the future estimated revenue and direct costs of the contract compared to the capitalized implementation costs. Werecord an impairment charge for the portion of the asset considered unrecoverable in the period identified, while considering the uncertainties associatedwith these types of contracts and judgments made in estimating revenue and direct costs. For the year ended December 31, 2018 we recorded $4 million inimpairments associated with unrecoverable amounts in capitalized implementation costs. Further, during the year ended December 31, 2017, given thesubstantial amount of uncertainty of reaching an agreement regarding the implementation of services pursuant to the contract with a customer in our AirlineSolutions business, we assessed recoverability of all balances with the customer which resulted in an impairment charge totaling $81 million, which includedrelated capitalized implementation costs. See Note 4. Impairment and Related Charges, to our consolidated financial statements for additional information.57Capitalized Software Developed for Internal UseWe capitalize certain costs related to our infrastructure, software applications and reservation systems under authoritative guidance on softwaredeveloped for internal use during the application development stage. Costs related to preliminary and post project development activities are expensed asincurred. When determining whether applicable costs qualify for capitalization, we use judgment in distinguishing between the preliminary project andapplication development stages of the project and in determining whether these costs result in additional functionality for existing internal use software. In2019, we expect our development teams to substantially complete the transition to utilizing the agile development methodology, which is characterized by amore dynamic development process with iterative activities that involve planning, design, coding and testing. This methodology requires additional review ofthe stages to ensure the applicable criteria are met for capitalization and may be less likely to meet the criteria for capitalization. As such, we expect thistransition towards implementing this methodology to reduce our capitalization of certain costs. Correspondingly, we expect that the maturity of our agileadoption and our implementation of processes and controls to reflect these changes in our business will result in an increase in our product and technologyoperating expenses with a corresponding reduction in capitalized software development expenditures. Costs that cannot be separated between maintenanceof, and relatively minor upgrades and enhancements to, internal use software are also expensed as incurred.During the years ended December 31, 2018, 2017 and 2016, we capitalized $252 million, $251 million, and $284 million, respectively, related tosoftware developed for internal use.Income and Non-Income TaxesWe recognize deferred tax assets and liabilities based on the temporary differences between the financial statement carrying amounts and the taxbases of assets and liabilities. We regularly review deferred tax assets by jurisdiction to assess their potential realization and establish a valuation allowancefor portions of such assets that we believe will not be ultimately realized. In performing this review, we make estimates and assumptions regarding projectedfuture taxable income, the expected timing of the reversals of existing temporary differences and the implementation of tax planning strategies. A change inthese assumptions could cause an increase or decrease to the valuation allowance resulting in an increase or decrease in the effective tax rate, which couldmaterially impact our results of operations. At year end, we had a valuation allowance on certain loss carryforwards based on our assessment that it is morelikely than not that the deferred tax asset will not be realized. We believe that our estimates for the valuation allowances against deferred tax assets areappropriate based on current facts and circumstances.We believe that it is more likely than not that the benefit from certain non-U.S. deferred tax assets will not be realized. As a result, we established andmaintain a valuation allowance on the non-U.S. deferred tax assets of our lastminute.com and other non-US subsidiaries of $55 million as of December 31,2018 and 2017. Also it is more likely than not that the benefit from certain U.S. state deferred tax assets will not be realized. As a result, we established andmaintain a valuation allowance on these U.S. state deferred tax assets of $4 million as of December 31, 2018 and 2017. We reassess these assumptionsregularly, which could cause an increase or decrease to the valuation allowance resulting in an increase or decrease in the effective tax rate, and couldmaterially impact our results of operations.We operate in numerous countries where our income tax returns are subject to audit and adjustment by local tax authorities. Because we operateglobally, the nature of the uncertain tax positions is often very complex and subject to change, and the amounts at issue can be substantial. It is inherentlydifficult and subjective to estimate such amounts, as we have to determine the probability of various possible outcomes. We re-evaluate uncertain taxpositions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law,effectively settled issues under audit and new audit activity. At December 31, 2018 and 2017, we had a liability, including interest and penalty, of $93 millionand $97 million, respectively, for unrecognized tax benefits, of which $74 million and $93 million, respectively, would affect our effective tax rate if recognized.Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the provision for income taxes fromcontinuing operations.Loss ContingenciesWhile certain legal proceedings and related indemnification obligations and certain tax matters to which we are a party specify the amounts claimed,these claims may not represent reasonably possible losses. Given the inherent uncertainties of litigation and tax claims, the ultimate outcome of these matterscannot be predicted, nor can the amount of possible loss or range of loss, if any, be reasonably estimated, except in circumstances where an aggregatelitigation accrual has been recorded for probable and reasonably estimable loss contingencies. A determination of the amount of accrual required, if any, forthese contingencies is made after careful analysis of each matter. The required accrual may change in the future due to new information or developments ineach matter or changes in approach such as a change in settlement strategy in dealing with these matters. Changes in these factors could materially impactour results of operations. 58ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKMarket Risk ManagementMarket risk is the potential loss from adverse changes in: (i) prevailing interest rates, (ii) foreign exchange rates, (iii) credit risk and (iv) inflation. Ourexposure to market risk relates to interest payments due on our long-term debt, Revolver, derivative instruments, income on cash and cash equivalents,accounts receivable and payable and travel supplier liabilities and related deferred revenue. We manage our exposure to these risks through establishedpolicies and procedures. We do not engage in trading, market making or other speculative activities in the derivatives markets. Our objective is to mitigatepotential income statement, cash flow and fair value exposures resulting from possible future adverse fluctuations in interest and foreign exchange rates.Interest Rate RiskAs of December 31, 2018, our exposure to interest rates relates primarily to our interest rate swaps, our senior secured debt and our borrowings on ourRevolver. Offsetting some of this exposure is interest income received from our money market funds. The objectives of our investment in money market fundsare (i) preservation of principal, (ii) liquidity and (iii) yield. If future short-term interest rates averaged 10% lower than they were during the year endedDecember 31, 2018, the impact to our interest income from money market funds would not be material. This amount was determined by applying thehypothetical interest rate change to our average money market funds invested.In the fourth quarter of 2014, we entered into interest rate swaps that effectively converted $750 million of floating interest rate senior secured debt intoa fixed rate obligation for 2016, 2017 and 2018. As a result of the 2017 Term Facility Amendment in the first quarter of 2017, we discontinued hedgeaccounting for our existing swap agreements as of February 22, 2017 and entered into offsetting interest rate swaps that are not designated as hedginginstruments. Additionally, in connection with the 2017 Term Facility Amendment, we entered into new forward starting interest rate swaps effective March 31,2017 through December 31, 2019 to hedge the interest payments associated with $750 million of the floating-rate Term Loan B. In September 2017, weentered into new forward starting interest rate swaps to hedge the interest payments associated with $750 million of the floating-rate Term Loan B for the fullyear 2020. In April 2018, we entered into new forward starting interest rate swaps to hedge the interest payments associated with $600 million, $300 millionand $450 million of the floating-rate Term Loan B related to full year 2019, 2020 and 2021, respectively. In December 2018, we entered into new forwardstarting interest rate swaps to hedge the interest payments associated with $150 million of the floating-rate Term Loan B for the full years 2020 and 2021.Interest rate swaps outstanding at December 31, 2018 and matured during the years ended December 31, 2018, 2017 and 2016 are as follows:Notional Amount Interest RateReceived Interest Rate Paid Effective Date Maturity DateDesignated as Hedging Instrument $750 million 1 month LIBOR(1) 1.48% December 31, 2015 December 30, 2016$750 million 1 month LIBOR(2) 1.15% March 31, 2017 December 31, 2017$750 million 1 month LIBOR(2) 1.65% December 29, 2017 December 31, 2018$1,350 million 1 month LIBOR(2) 2.27% December 31, 2018 December 31, 2019$1,200 million 1 month LIBOR(2) 2.19% December 31, 2019 December 31, 2020$600 million 1 month LIBOR(2) 2.81% December 31, 2020 December 31, 2021 Not Designated as Hedging Instrument(1) $750 million 1 month LIBOR(3) 2.19% December 30, 2016 December 29, 2017$750 million 1.18% 1 month LIBOR March 31, 2017 December 31, 2017$750 million 1 month LIBOR(3) 2.61% December 29, 2017 December 31, 2018$750 million 1.67% 1 month LIBOR December 29, 2017 December 31, 2018(1)Subject to a 1% floor.(2)Subject to a 0% floor.(3)As of February 22, 2017.Since outstanding balances under our senior secured credit facilities incur interest at rates based on LIBOR, subject to a 0% floor, increases in short-term interest rates would impact our interest expense. If our mix of interest rate-sensitive assets and liabilities changes significantly, we may enter intoadditional derivative transactions to manage our net interest rate exposure. The fair value of these interest rate swaps was an asset of $4 million and aliability of $3 million at December 31, 2018 and 2017, respectively.59Foreign Currency RiskWe conduct various operations outside the United States, primarily in Asia Pacific, Europe and Latin America. Our foreign currency risk is primarilyassociated with operating expenses. During the year ended December 31, 2018, foreign currency operations included $264 million of revenue and $583million of operating expenses, representing approximately 7% and 18% of our total revenue and operating expenses, respectively. During the year endedDecember 31, 2017, foreign currency operations included $256 million of revenue and $595 million of operating expenses, representing approximately 7%and 20% of our total revenue and operating expenses, respectively.The principal foreign currencies involved include the Euro, the Singapore Dollar, the British Pound Sterling, the Polish Zloty, the Indian Rupee, theAustralian Dollar, the Brazilian Real, and the Swedish Krona. Our most significant foreign currency denominated operating expenses is in the Euro, whichcomprised approximately 7% and 8% of our operating expenses for each of the years ended December 31, 2018 and 2017, respectively. In recent years,exchange rates between these currencies and the U.S. dollar have fluctuated significantly and may continue to do so in the future. During times of volatilecurrency movements, this risk can impact our earnings. To reduce the impact of this earnings volatility, we hedge a portion of our foreign currency exposure inour operating expenses by entering into foreign currency forward contracts on several of our largest exposures, including the Singaporean Dollar, the BritishPound Sterling, the Polish Zloty, the Australian Dollar, the Indian Rupee, the Brazilian Real, and the Swedish Krona. In 2018, we hedged approximately 18%of our exposure in foreign currency operating expenses. In addition, approximately 44% of our exposure in foreign currency operating expenses is naturallyhedged by foreign currency cash receipts associated with foreign currency revenue.The notional amounts of our forward contracts totaled $202 million at December 31, 2018. The forward contracts represent obligations to purchaseforeign currencies at a predetermined exchange rate to fund a portion of our expenses that are denominated in foreign currencies. The fair value of theseforward contracts is $4 million in other accrued liabilities and $6 million included in prepaid expenses and other current assets as of December 31, 2018 andDecember 31, 2017, respectively, in our consolidated balance sheets.We are also exposed to foreign currency fluctuations through the translation of the financial condition and results of operations of our foreignoperations into U.S. dollars in consolidation. These gains and losses are recognized as a component of accumulated other comprehensive income (loss) andis included in stockholders’ equity. Net translation gains (losses) recognized as other comprehensive income (loss) were $(4) million, $13 million and $(1)million for the years ended December 31, 2018, 2017 and 2016, respectively.Credit RiskOur customers are primarily located in the United States, Canada, Europe, Latin America and Asia, and are concentrated in the travel industry.We generate a significant portion of our revenues and corresponding accounts receivable from services provided to the commercial air travel industry.As of December 31, 2018 and 2017, approximately $334 million, or 81%, and $357 million, or 77%, respectively, of our trade accounts receivable wereattributable to these customers. Our other accounts receivable are generally due from other participants in the travel and transportation industry. Substantiallyall of our accounts receivable represents trade balances. We generally do not require security or collateral from our customers as a condition of sale. See“Risk Factors—Our travel supplier customers may experience financial instability or consolidation, pursue cost reductions, change their distribution model orundergo other changes.”We regularly monitor the financial condition of the air transportation industry. We believe the credit risk related to the air carriers’ difficulties issignificantly mitigated by the fact that we collect a significant portion of the receivables from these carriers through the Airline Clearing House and othersimilar clearing houses (“ACH”).As of December 31, 2018, 2017 and 2016, approximately 61%, 81%, and 69%, respectively, of our air customers make payments through the ACHwhich accounts for approximately 94%, 95% and 95%, respectively, of our air billings. ACH requires participants to deposit certain balances into theirdemand deposit accounts by certain deadlines, which facilitates a timely settlement process. For these carriers, we believe the use of ACH mitigates ourcredit risk with respect to airline bankruptcies. For those carriers from which we do not collect payments through the ACH or other similar clearing houses, ourcredit risk is higher. We monitor these carriers and account for the related credit risk through our normal reserve policies.InflationCompetitive market conditions and the general economic environment have minimized inflation’s impact on our results of operations in recent periods.There can be no assurance, however, that our operating results will not be affected by inflation in the future.60ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAIndex to Financial Statements and Supplementary DataConsolidated Financial Statements: Reports of Independent Registered Public Accounting Firm62Consolidated Statements of Operations for the Years Ended December 31, 2018, 2017 and 201664Consolidated Statements of Other Comprehensive Income for the Years Ended December 31, 2018, 2017 and 201665Consolidated Balance Sheets as of December 31, 2018 and 201766Consolidated Statements of Cash Flows for the Years Ended December 31, 2018, 2017 and 201667Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2018, 2017 and 201668Notes to Consolidated Financial Statements69 Financial Statement Schedules: Schedule II — Valuation and Qualifying Accounts as of December 31, 2018, 2017 and 201611961Report of Independent Registered Public Accounting FirmTo the Stockholders and the Board of Directors of Sabre CorporationOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Sabre Corporation (the Company) as of December 31, 2018 and 2017, the relatedconsolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the three years in the period endedDecember 31, 2018, and the related notes and financial statement schedule listed in the Index at Item 15 (collectively referred to as the “consolidatedfinancial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company atDecember 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, inconformity with U.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’sinternal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control-Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 15, 2019 expressed an unqualifiedopinion thereon.Adoption of ASU No. 2014-09As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for revenue from sales to customers in 2018due to the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606).Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financialstatements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Companyin accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing proceduresto assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also includedevaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financialstatements. We believe that our audits provide a reasonable basis for our opinion./s/ Ernst & Young LLPWe have served as the Company’s auditor since 1993.Dallas, TexasFebruary 15, 201962Report of Independent Registered Public Accounting FirmTo the Stockholders and the Board of Directors of Sabre CorporationOpinion on Internal Control over Financial ReportingWe have audited Sabre Corporation’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In ouropinion, Sabre Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018,based on the COSO criteria.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidatedbalance sheets of the Company as of December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive income, stockholders'equity and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial statement schedule listed in theIndex at Item 15, and our report dated February 15, 2019 expressed an unqualified opinion thereon.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness ofinternal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibilityis to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with thePCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting was maintained in all material respects.Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing andevaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considerednecessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.Definition and Limitations of Internal Control Over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the companyare being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financialstatements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate./s/ Ernst & Young LLPDallas, TexasFebruary 15, 201963SABRE CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share amounts) Year Ended December 31, 2018 2017 2016Revenue$3,866,956 $3,598,484 $3,373,387Cost of revenue2,791,414 2,513,857 2,287,662Selling, general and administrative513,526 510,075 626,153Impairment and related charges— 81,112 —Operating income562,016 493,440 459,572Other (expense) income: Interest expense, net(157,017) (153,925) (158,251)Loss on extinguishment of debt(633) (1,012) (3,683)Joint venture equity income2,556 2,580 2,780Other, net(8,509) 36,530 27,617Total other expense, net(163,603) (115,827) (131,537)Income from continuing operations before income taxes398,413 377,613 328,035Provision for income taxes57,492 128,037 86,645Income from continuing operations340,921 249,576 241,390Income (loss) from discontinued operations, net of tax1,739 (1,932) 5,549Net income342,660 247,644 246,939Net income attributable to noncontrolling interests5,129 5,113 4,377Net income attributable to common stockholders$337,531 $242,531 $242,562 Basic net income per share attributable to common stockholders: Income from continuing operations$1.22 $0.88 $0.85Income (loss) from discontinued operations0.01 (0.01) 0.02Net income per common share$1.23 $0.87 $0.87Diluted net income per share attributable to common stockholders: Income from continuing operations$1.21 $0.88 $0.84Income (loss) from discontinued operations0.01 (0.01) 0.02Net income per common share$1.22 $0.87 $0.86Weighted-average common shares outstanding: Basic275,235 276,893 277,546Diluted277,518 278,320 282,752 Dividend per common share$0.56 $0.56 $0.52See Notes to Consolidated Financial Statements.64SABRE CORPORATIONCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In thousands) Year Ended December 31, 2018 2017 2016Net income$342,660 $247,644 $246,939Other comprehensive income (loss), net of tax: Foreign currency translation adjustments (“CTA”): Foreign CTA gains (losses), net of tax(3,651) 13,136 (1,265)Reclassification adjustment for realized losses on foreign CTA, net of tax— — (198)Net change in foreign CTA gains (losses), net of tax(3,651) 13,136 (1,463)Retirement-related benefit plans: Net actuarial loss, net of taxes of $6,223, $386 and $9,701(19,143) (852) (17,223)Amortization of prior service credits, net of taxes of $321, $517 and $518(1,112) (915) (914)Amortization of actuarial losses, net of taxes of $(1,624), $(2,336) and $(2,123)5,739 4,181 3,748Net change in retirement-related benefit plans, net of tax(14,516) 2,414 (14,389)Derivatives and available-for-sale securities: Unrealized gains (losses), net of taxes of $1,474, $(5,989) and $2,214(6,842) 16,068 4,307Reclassification adjustment for realized gains (losses), net of taxes of $(1,248), $(1,005) and$1,1703,677 2,082 (13,422)Net change in derivatives and available for sale securities, net of tax(3,165) 18,150 (9,115)Share of other comprehensive income (loss) of joint venture(635) 615 (697)Other comprehensive income (loss)(21,967) 34,315 (25,664)Comprehensive income320,693 281,959 221,275Less: Comprehensive income attributable to noncontrolling interests(5,129) (5,113) (4,377)Comprehensive income attributable to Sabre Corporation$315,564 $276,846 $216,898See Notes to Consolidated Financial Statements.65SABRE CORPORATIONCONSOLIDATED BALANCE SHEETS(In thousands) December 31, 2018 2017Assets Current assets Cash and cash equivalents$509,265 $361,381Accounts receivable, net508,122 490,558Prepaid expenses and other current assets170,243 108,753Total current assets1,187,630 960,692Property and equipment, net790,372 799,194Investments in joint ventures27,769 27,527Goodwill2,552,369 2,554,987Acquired customer relationships, net323,731 351,034Other intangible assets, net289,517 332,171Deferred income taxes24,322 31,817Other assets, net610,671 591,942Total assets$5,806,381 $5,649,364 Liabilities and stockholders’ equity Current liabilities Accounts payable$165,227 $162,755Accrued compensation and related benefits112,866 112,343Accrued subscriber incentives301,530 271,200Deferred revenues80,902 110,532Other accrued liabilities185,178 198,353Current portion of debt68,435 57,138Tax Receivable Agreement104,257 59,826Total current liabilities1,018,395 972,147Deferred income taxes135,753 99,801Other noncurrent liabilities340,495 480,185Long-term debt3,337,467 3,398,731Commitments and contingencies (Note 15) Stockholders’ equity Common stock: $0.01 par value; 450,000 authorized shares; 291,664 and 289,138 shares issued, 275,352 and274,342 shares outstanding at December 31, 2018 and 2017, respectively2,917 2,891Additional paid-in capital2,243,419 2,174,187Treasury stock, at cost, 16,312 and 14,796 shares at December 31, 2018 and 2017, respectively(377,980) (341,846)Retained deficit(768,566) (1,053,446)Accumulated other comprehensive loss(132,724) (88,484)Noncontrolling interest7,205 5,198Total stockholders’ equity974,271 698,500Total liabilities and stockholders’ equity$5,806,381 $5,649,364See Notes to Consolidated Financial Statements.66SABRE CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) Year Ended December 31, 2018 2017 2016Operating Activities Net income$342,660 $247,644 $246,939Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization413,344 400,871 413,986Amortization of upfront incentive consideration77,622 67,411 55,724Stock-based compensation expense57,263 44,689 48,524Deferred income taxes43,099 48,760 48,454Allowance for doubtful accounts7,749 9,459 10,567Tax Receivable Agreement4,852 (59,603) —Amortization of debt issuance costs3,981 5,923 9,611Joint venture equity income(2,556) (2,580) (2,780)(Income) loss from discontinued operations(1,739) 1,932 (5,549)Debt modification costs1,558 14,758 —Dividends received from joint venture investments1,411 1,088 640Loss on extinguishment of debt633 1,012 3,683Impairment and related charges— 81,112 —Litigation-related credits— — (25,527)Other(2,349) 13,284 (5,426)Changes in operating assets and liabilities: Accounts and other receivables(45,586) (108,596) (12,949)Prepaid expenses and other current assets14,362 109 (11,809)Capitalized implementation costs(39,168) (60,766) (83,405)Upfront incentive consideration(88,735) (94,296) (70,702)Other assets(29,607) (21,111) (2,799)Accounts payable and other accrued liabilities(27,080) 67,034 56,787Accrued compensation and related benefits(15,044) 6,038 2,768Deferred revenue including upfront solution fees8,127 13,861 22,663Cash provided by operating activities724,797 678,033 699,400Investing Activities Additions to property and equipment(283,940) (316,436) (327,647)Acquisitions, net of cash acquired— — (164,120)Proceeds from sale of marketable securities— — 45,959Other investing activities8,681 (1,089) —Cash used in investing activities(275,259) (317,525) (445,808)Financing Activities Cash dividends paid to common stockholders(154,080) (154,861) (144,355)Repurchase of common stock(26,281) (109,100) (100,000)Payments on Tax Receivable Agreement(58,908) (99,241) —Payments on borrowings from lenders(47,310) (1,880,506) (999,868)Debt issuance and modification costs(1,567) (19,052) (11,377)Net receipts on the settlement of equity-based awards2,040 12,647 27,344Proceeds of borrowings from lenders— 1,897,625 1,055,000Other financing activities(20,400) (4,292) (16,769)Cash used in financing activities(306,506) (356,780) (190,025)Cash Flows from Discontinued Operations Cash provided by (used in) operating activities(1,895) (4,848) (19,478)Cash provided by (used in) discontinued operations(1,895) (4,848) (19,478)Effect of exchange rate changes on cash and cash equivalents6,747 (1,613) (1,107)Increase (decrease) in cash and cash equivalents147,884 (2,733) 42,982Cash and cash equivalents at beginning of period361,381 364,114 321,132Cash and cash equivalents at end of period$509,265 $361,381 $364,114Cash payments for income taxes$57,629 $40,211 $39,032Cash payments for interest$156,041 $149,572 $151,495Capitalized interest$8,823 $11,142 $13,887See Notes to Consolidated Financial Statements.67SABRE CORPORATIONCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY(In thousands, except share data) Stockholders’ Equity (Deficit) Common Stock AdditionalPaid inCapital Treasury Stock RetainedEarnings(Deficit) AccumulatedOtherComprehensiveIncome (Loss) NoncontrollingInterest TotalStockholders'Equity Shares Amount Shares Amount 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 $484,140Comprehensive income — — — — — 242,562 (25,664) 4,377 221,275Common stock dividends — — — — — (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) — — — 27,468Stock-based compensation expense — — 48,524 — — — — — 48,524Dividends paid to non-controlling interest onsubsidiary common stock — — — — — — — (3,236) (3,236)Adoption of New Accounting Standard ——2,392——89,359——91,751Balance at December 31, 2016 285,461,125 2,854 2,105,843 8,511,323 (221,746) (1,141,116) (122,799) 2,579 625,615Comprehensive income — — — — — 242,531 34,315 5,113 281,959Common stock dividends — — — — — (154,861) — — (154,861)Repurchase of common stock — — — 5,779,769 (109,100) — — — (109,100)Settlement of stock-based awards 3,676,776 37 23,655 504,634 (11,000) — — — 12,692Stock-based compensation expense — — 44,689 — — — — — 44,689Dividends paid to non-controlling interest onsubsidiary common stock — — — — — — — (2,494) (2,494)Balance at December 31, 2017 289,137,901 2,891 2,174,187 14,795,726 (341,846) (1,053,446) (88,484) 5,198 698,500Comprehensive income — — — — — 337,531 (44,240) 5,129 298,420Common stock dividends — — — — — (154,080) — — (154,080)Repurchase of common stock — — — 1,075,255 (26,281) — — — (26,281)Settlement of stock-based awards 2,526,053 26 11,969 440,557 (9,853) — — — 2,142Stock-based compensation expense — — 57,263 — — — — — 57,263Adoption of New Accounting Standards — — — — — 101,429 — — 101,429Dividends paid to non-controlling interest onsubsidiary common stock — — — — — — — (3,122) (3,122)Balance at December 31, 2018 291,663,954 $2,917 $2,243,419 16,311,538 $(377,980) $(768,566) $(132,724) $7,205 $974,271See Notes to Consolidated Financial Statements.68SABRE CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS1. Summary of Business and Significant Accounting PoliciesDescription of BusinessSabre Corporation is a Delaware corporation formed in December 2006. On March 30, 2007, Sabre Corporation acquired Sabre Holdings Corporation(“Sabre Holdings”). Sabre Holdings is the sole subsidiary of Sabre Corporation. Sabre GLBL Inc. (“Sabre GLBL”) is the principal operating subsidiary andsole direct subsidiary of Sabre Holdings. Sabre GLBL or its direct or indirect subsidiaries conduct all of our businesses. In these consolidated financialstatements, references to “Sabre,” the “Company,” “we,” “our,” “ours,” and “us” refer to Sabre Corporation and its consolidated subsidiaries unless otherwisestated or the context otherwise requires.We connect people and places with technology that reimagines the business of travel. Effective the first quarter of 2018, we operate through threebusiness segments: (i) Travel Network, our global travel marketplace for travel suppliers and travel buyers, (ii) Airline Solutions, a broad portfolio of softwaretechnology products and solutions for airlines and other travel suppliers, and (iii) Hospitality Solutions, an extensive suite of leading software solutions forhoteliers.Basis of PresentationThe consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States(“GAAP”). We consolidate all majority-owned subsidiaries and companies over which we exercise control through majority voting rights. No entities areconsolidated due to control through operating agreements, financing agreements or as the primary beneficiary of a variable interest entity. The consolidatedfinancial statements include our accounts after elimination of all significant intercompany balances and transactions. All dollar amounts in the financialstatements and the tables in the notes, except per share amounts, are stated in thousands of U.S. dollars unless otherwise indicated. All amounts in the notesreference results from continuing operations unless otherwise indicated.The preparation of these annual financial statements in conformity with GAAP requires that certain amounts be recorded based on estimates andassumptions made by management. Actual results could differ from these estimates and assumptions. Our accounting policies, which include significantestimates and assumptions, include, among other things, estimation of the collectability of accounts receivable, estimation of future cancellations of bookingsprocessed through the Sabre global distribution system ("GDS"), revenue recognition for software arrangements, determination of the fair value of assets andliabilities acquired in a business combination, determination of the fair value of derivatives, the evaluation of the recoverability of the carrying value ofintangible assets and goodwill, assumptions utilized in the determination of pension and other postretirement benefit liabilities, the evaluation of therecoverability of capitalized implementation costs, assumptions utilized to evaluate the recoverability of deferred customer advance and discounts, estimationof loss contingencies, and evaluation of uncertainties surrounding the calculation of our tax assets and liabilities.In the first quarter of 2018, we adopted the comprehensive update to revenue recognition guidance Revenue from Contracts with Customers ("ASC606"), which replaced the previous standard ("ASC 605"), using the modified retrospective approach, applied to contracts that were not completed as of theadoption date. Our 2018 results are reported under ASC 606, while results prior to 2018 are reported under ASC 605. Under ASC 606, revenue is recognizedwhen a company transfers the promised goods or services to customers in an amount that reflects the consideration that is expected to be received for thosegoods and services. See Note 2. Revenue from Contracts with Customers.Revenue RecognitionTravel Network and Hospitality Solutions’ revenue recognition is primarily driven by GDS and central reservation system ("CRS") transactions,respectively. Airline Solutions’ revenue recognition is primarily driven by passengers boarded or other variable metrics relevant to the software serviceprovided. Timing of revenue recognition is primarily based on the consistent provision of services in a stand-ready series SaaS environment and the amountof revenue recognized varies with the volume of transactions processed.69Performance ObligationsA stand-ready series is a performance obligation, which is a promise in a contract to transfer a distinct good or service to the customer and is the unit ofaccount under ASC 606. The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performanceobligation is satisfied. Most of our contracts in the Travel Network and Hospitality Solutions businesses have a single performance obligation. In the AirlineSolutions business, many of our contracts may have multiple performance obligations, which generally include software and product solutions through SaaSand hosted delivery, and other service fees. In addition, at times we enter into agreements with customers to provide access to Travel Network’s GDS and, ator near the same time, enter into a separate agreement to provide Airline Solutions' software solutions through SaaS and hosted delivery, resulting in multipleperformance obligations within a combined agreement.Our significant product and services and methods of recognition are as follows:Stand-ready series revenue recognitionTravel Network—Travel Network's service offering is a GDS or GDS services linking and engaging transactions between travel agents (those that seektravel on behalf of travelers) and travel suppliers (such as airlines, hotels, car rental companies and cruise lines). Revenue is generated from contracts withthe travel suppliers as each booking is made or transaction occurs and represents a stand-ready performance obligation where our systems perform thesame service each day for the customer, based on the customer’s level of usage. Variability in the amounts billed to the customer and revenue recognizedcoincides with the customer’s level of usage or value received by the customer. Travel Network's revenue for air transactions is recognized at the time ofbooking of the reservation, net of estimated future cancellations. Travel Network's revenue for car rental, hotel transactions and other travel providers isrecognized at the time the reservation is used by the customer.Airline Solutions and Hospitality Solutions—Airline Solutions and Hospitality Solutions provide technology solutions and other professional services toairlines, hotels and other business consumers in the travel industry. The technology solutions are primarily provided in a SaaS or hosted environment.Customers are normally charged an upfront solutions fee and a recurring usage-based fee for the use of the software, which represents a stand-readyperformance obligation where our systems perform the same service each day for the customer, based on the customer’s level of usage. Upfront solutionsfees are recognized primarily on a straight-line basis over the relevant contract term, upon cut-over of the primary SaaS solution. Variability in the usage-based fee that does not align with the value provided to the customer can result in a difference between billings to the customer and the timing of contractperformance and revenue recognition, which may result in the recognition of a contract asset. This can result in a requirement to forecast expected usage-based fees and volumes over the contract term in order to determine the rate for revenue recognition. This variable consideration is constrained if there is aninability to reliably forecast this revenue.Contract AssetsOur contract assets include deferred customer advances and discounts, which are capitalized and amortized in future periods as the related revenueis earned. The contract assets also include revenue recognized for services already transferred to a customer, for which the fulfillment of another contractualperformance obligation is required, before we have the unconditional right to bill and collect based on contract terms. These assets are reviewed forrecoverability on a periodic basis based on a review of impairment indicators. Deferred advances to customers and customer discounts are reviewed forrecoverability based on future contracted revenues and estimated direct costs of the contract. For the year ended December 31, 2018, we did not impair anyof our contract assets as a result of the related contract becoming uncollectable, modified or canceled. See Note 4. Impairments and Related Chargesregarding 2017 impairments. Contracts are priced to generate total revenues over the life of the contract that exceed any discounts or advances provided andany upfront costs incurred to implement the customer contract.Other revenue recognition patternsAirline Solutions also provides other services including development labor or professional consulting. These services can be sold separately or withother products and services, and Airline Solutions may bundle multiple technology solutions in one arrangement with these other services. Revenue fromother services consisting of development services that represent minor configuration or professional consulting is generally recognized over the period theservices are performed or upon completed delivery.Airline Solutions also directly licenses certain software to its customers where the customer obtains control of the license. Revenue from softwarelicense fees is recognized when the customer gains control of the software enabling them to directly use the software and obtain substantially all of theremaining benefits. Fees for ongoing software maintenance are recognized ratably over the life of the contract. Under these arrangements, often we areentitled to minimum fees which are collected over the term of the agreement, while the revenue from the license is recognized at the point when the customergains control, which results in current and long-term unbilled receivables for these arrangements.Variability in the amounts billed to the customer and revenue recognized coincides with the customer’s level of usage with the exception of upfrontsolution fees, variable consideration, license and maintenance agreements and other services including development labor and professional consulting.Contracts with the same customer which are entered into at or around the same period are analyzed for revenue recognition purposes on a combined basisacross our businesses which can impact our revenue recognized.70For contracts with multiple performance obligations where the contracted price differs from the standalone selling price ("SSP") for any distinct good orservice, we may be required to allocate the contract’s transaction price to each performance obligation using our best estimate for the SSP. SSP is assessedannually using a historical analysis of contracts with customers executed in the most recently completed calendar year to determine the range of sellingprices applicable to distinct good or service. In making these judgments, we analyze various factors, including value differentiators, customer segmentationand overall market and economic conditions. Based on these results, the estimated SSP is set for each distinct product or service delivered to customers.Revenue recognition from our Airline Solutions business requires significant judgments such as identifying distinct performance obligations includingmaterial rights within an agreement, estimation of SSP, determination of whether variable pricing within a contract meets the allocation objective andforecasting future volumes. For a small subset of our contracts, we are required to forecast volumes as a result of pricing variability within the contract in orderto calculate the rate for revenue recognition. Any changes in these judgments and estimates could have an impact on the revenue recognized in futureperiods.We evaluate whether it is appropriate to record the gross amount of our revenues and related costs by considering whether the entity is a principal(gross presentation) or an agent (net presentation) by evaluating the nature of our promise to the customer. We report revenue net of any revenue basedtaxes assessed by governmental authorities that are imposed on and concurrent with specific revenue producing transactions.Incentive ConsiderationCertain service contracts with significant travel agency customers contain booking productivity clauses and other provisions that allow travel agencycustomers to receive cash payments or other consideration. We establish liabilities for these commitments and recognize the related expense as these travelagencies earn incentive consideration based on the applicable contractual terms. Periodically, we make cash payments to these travel agencies at inceptionor modification of a service contract which are capitalized and amortized to cost of revenue over the expected life of the service contract, which is generallythree to five years. Deferred charges related to such contracts are recorded in other assets, net on the consolidated balance sheets. The service contracts arepriced so that the additional airline and other booking fees generated over the life of the contract will exceed the cost of the incentive consideration provided.Incentive consideration paid to the travel agency represents a commission paid to the travel agency for booking travel on our GDS.Advertising CostsAdvertising costs are expensed as incurred. Advertising costs incurred by our continuing operations totaled $19 million, $18 million and $24 million forthe years ended December 31, 2018, 2017 and 2016, respectively.Cash and Cash Equivalents and Restricted CashWe classify all highly liquid instruments, including money market funds and money market securities with original maturities of three months or less, ascash equivalents.Allowance for Doubtful Accounts and Concentration of Credit RiskWe evaluate the collectability of our accounts receivable based on a combination of factors. In circumstances where we are aware of a specificcustomer’s inability to meet its financial obligations to us, such as bankruptcy filings or failure to pay amounts due to us or others, we record a specific reservefor bad debts against amounts due to reduce the recorded receivable to the amount we reasonably believe will be collected. For all other customers, werecord reserves for bad debts based on historical experience and the length of time the receivables are past due. We maintained an allowance for doubtfulaccounts of approximately $45 million and $43 million at December 31, 2018 and 2017, respectively.Our customers are primarily located in the United States, Canada, Europe, Latin America and Asia, and are concentrated in the travel industry. Wegenerate a significant portion of our revenues and corresponding accounts receivable from services provided to the commercial air travel industry. As ofDecember 31, 2018 and 2017, approximately $334 million, or 81%, and $357 million, or 77%, respectively, of our trade accounts receivable were attributableto these customers. Our other accounts receivable are generally due from other participants in the travel and transportation industry. Substantially all of ouraccounts receivable represents trade balances. We generally do not require security or collateral from our customers as a condition of sale.We regularly monitor the financial condition of the air transportation industry. We believe the credit risk related to the air carriers’ difficulties issignificantly mitigated by the fact that we collect a significant portion of the receivables from these carriers through the Airline Clearing House and othersimilar clearing houses (“ACH”). As of December 31, 2018, approximately 61% of our air customers make payments through the ACH which accounts forapproximately 94% of our air revenue. For these carriers, we believe the use of ACH mitigates our credit risk with respect to airline bankruptcies. For thosecarriers from which we do not collect payments through the ACH or other similar clearing houses, our credit risk is higher. We monitor these carriers andaccount for the related credit risk through our normal reserve policies.71Derivative Financial InstrumentsWe recognize all derivatives on the consolidated balance sheets at fair value. If the derivative is designated as a hedge, depending on the nature ofthe hedge, changes in the fair value of derivatives are offset against the change in fair value of the hedged item through earnings (a “fair value hedge”) orrecognized in other comprehensive income until the hedged item is recognized in earnings (a “cash flow hedge”). For derivative instruments not designatedas hedging instruments, the gain or loss resulting from the change in fair value is recognized in current earnings during the period of change. No hedgingineffectiveness was recorded in earnings during the periods presented.Property and EquipmentProperty and equipment are stated at cost less accumulated depreciation and amortization, which is calculated on the straight-line basis. Ourdepreciation and amortization policies are as follows:BuildingsLesser of lease term or 35 yearsLeasehold improvementsLesser of lease term or useful lifeFurniture and fixtures5 to 15 yearsEquipment, general office and computer3 to 5 yearsSoftware developed for internal use3 to 5 yearsWe capitalize certain costs related to our infrastructure, software applications and reservation systems under authoritative guidance on softwaredeveloped for internal use. Capitalizable costs consist of (a) certain external direct costs of materials and services incurred in developing or obtaining internaluse computer software and (b) payroll and payroll related costs for employees who are directly associated with and who devote time to our GDS and web-related development projects. Costs incurred during the preliminary project stage or costs incurred for data conversion activities and training, maintenanceand general and administrative or overhead costs are expensed as incurred. Costs that cannot be separated between maintenance of, and relatively minorupgrades and enhancements to, internal use software are also expensed as incurred. See Note 6. Balance Sheet Components, for amounts capitalized asproperty and equipment in our consolidated balance sheets. Depreciation and amortization of property and equipment totaled $288 million, $256 million and$226 million for the years ended December 31, 2018, 2017 and 2016, respectively. Amortization of software developed for internal use, included indepreciation and amortization, totaled $236 million, $203 million and $176 million for the years ended December 31, 2018, 2017 and 2016, respectively.We also evaluate the useful lives of these assets on an annual basis and test for impairment whenever events or changes in circumstances indicatethat the carrying amount of the assets used in combination to generate cash flows largely independent of other assets may not be recoverable. We did notrecord any property and equipment impairment charges for the years ended December 31, 2018, 2017 and 2016.Business CombinationsBusiness combinations are accounted for under the acquisition method of accounting. Under this method, the assets acquired and liabilities assumedare recognized at their respective fair values as of the date of acquisition. The excess, if any, of the acquisition price over the fair values of the assets acquiredand liabilities assumed is recorded as goodwill. For significant acquisitions, we utilize third-party appraisal firms to assist us in determining the fair values forcertain assets acquired and liabilities assumed. The measurement of these fair values requires us to make significant estimates and assumptions which areinherently uncertain.Adjustments to the fair values of assets acquired and liabilities assumed are made until we obtain all relevant information regarding the facts andcircumstances that existed as of the acquisition date (the “measurement period”), not to exceed one year from the date of the acquisition. We recognizerecognize measurement-period adjustments in the period in which we determine the amounts, including the effect on earnings of any amounts we wouldhave recorded in previous periods if the accounting had been completed at the acquisition date.Goodwill and Intangible AssetsGoodwill is the excess of the purchase price over the fair value of identifiable tangible and intangible assets acquired in business combinations.Goodwill is not amortized but is reviewed for impairment on an annual basis or more frequently if events and circumstances indicate the carrying amount maynot be recoverable. Definite-lived intangible assets are amortized on a straight-line basis and assigned useful economic lives of two to thirty years,depending on classification. The useful economic lives are evaluated on an annual basis.72We perform our annual assessment of possible impairment of goodwill as of October 1 of each year. We begin with the qualitative assessment ofwhether it is more likely than not that a reporting unit’s fair value is less than its carrying value before applying the quantitative assessment described below. Ifit is determined through the evaluation of events or circumstances that the carrying value may not be recoverable, we perform a comparison of the estimatedfair value of the reporting unit to which the goodwill has been assigned to the sum of the carrying value of the assets and liabilities of that unit. If the sum of thecarrying value of the assets and liabilities of a reporting unit exceeds the estimated fair value of that reporting unit, the carrying value of the reporting unit’sgoodwill is reduced to its fair value through an adjustment to the goodwill balance, resulting in an impairment charge. We have three reporting unitsassociated with our continuing operations: Travel Network, Airline Solutions and Hospitality Solutions. We did not record any goodwill impairment charges forthe years ended December 31, 2018, 2017 and 2016. See Note 5. Goodwill and Intangible Assets, for additional information.Definite-lived intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount ofdefinite lived intangible assets used in combination to generate cash flows largely independent of other assets may not be recoverable. If impairmentindicators exist for definite-lived intangible assets, the undiscounted future cash flows associated with the expected service potential of the assets arecompared to the carrying value of the assets. If our projection of undiscounted future cash flows is in excess of the carrying value of the intangible assets, noimpairment charge is recorded. If our projection of undiscounted cash flows is less than the carrying value, the intangible assets are measured at fair valueand an impairment charge is recorded based on the excess of the carrying value of the assets to its fair value. We did not record material intangible assetimpairment charges for the years ended December 31, 2018, 2017 and 2016. See Note 5. Goodwill and Intangible Assets, for additional information.Equity Method InvestmentsWe utilize the equity method to account for our interests in joint ventures and investments in stock of other companies that we do not control but overwhich we exert significant influence. We periodically evaluate equity and debt investments in entities accounted for under the equity method for impairmentby reviewing updated financial information provided by the investee, including valuation information from new financing transactions by the investee andinformation relating to competitors of investees when available. We own voting interests in various national marketing companies ranging from 20% to 49%, avoting interest of 40% in ESS Elektroniczne Systemy Spzedazy Sp. zo.o, and a voting interest of 20% in Asiana Sabre, Inc. The carrying value of theseinvestments in joint venture amounts to $24 million as of December 31, 2018 and 2017.Contract Acquisition Costs and Capitalized Implementation CostsWe incur contract acquisition costs related to new contracts with our customers in the form of sales commissions based on estimated contract value forour Airline Solutions and Hospitality Solutions businesses. These costs are capitalized and reviewed for impairment on an annual basis. We generallyamortize these costs, and those for renewals, over the average contract term for those businesses, excluding commissions on contracts with a term of oneyear or less, which are generally expensed in the period earned and recorded within selling, general and administrative expenses.We incur upfront costs to implement new customer contracts under our SaaS revenue model. We capitalize these costs, including (a) certain externaldirect costs of materials and services incurred to implement a customer contract and (b) payroll and payroll related costs for employees who are directlyassociated with and devote time to implementation activities. Capitalized implementation costs are amortized on a straight-line basis over the related contractterm, ranging from three to ten years, as they are recoverable through deferred or future revenues associated with the relevant contract. These assets arereviewed for recoverability on a periodic basis or when an event occurs that could impact the recoverability of the assets, such as a significant contractmodification or early renewal of contract terms. Recoverability is measured based on the future estimated revenue and direct costs of the contract comparedto the capitalized implementation costs. See Note 6. Balance Sheet Components and Note 2. Revenue from Contracts with Customers, for amountscapitalized within other assets, net in our consolidated balance sheets. Amortization of capitalized implementation costs, included in depreciation andamortization, totaled $38 million, $40 million and $37 million for the years ended December 31, 2018, 2017 and 2016, respectively. See Note 4. Impairmentand Related Charges.Income TaxesDeferred income tax assets and liabilities are determined based on differences between financial reporting and income tax basis of assets andliabilities and are measured using the tax rates and laws in effect at the time of such determination. We regularly review our deferred tax assets forrecoverability and a valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Inassessing the need for a valuation allowance, we make estimates and assumptions regarding projected future taxable income, our ability to carry backoperating losses to prior periods, the reversal of deferred tax liabilities and implementation of tax planning strategies. We reassess these assumptionsregularly which could cause an increase or decrease to the valuation allowance resulting in an increase or decrease in the effective tax rate, and couldmaterially impact our results of operations.73We recognize liabilities when we believe that an uncertain tax position may not be fully sustained upon examination by the tax authorities. Liabilitiesare recognized for uncertain tax positions that do not pass a two-step approach for recognition and measurement. First, we evaluate the tax position forrecognition by determining if based solely on its technical merits, it is more likely than not to be sustained upon examination. Secondly, for positions that passthe first step, we measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We recognizepenalties and interest accrued related to income taxes as a component of the provision for income taxes.The Tax Cuts and Jobs Act (the “TCJA”), which was enacted on December 22, 2017, imposes a tax on global low-taxed intangible income (“GILTI”) intax years beginning after December 31, 2017. GILTI provisions are applicable to certain profits of a controlled foreign corporation that exceed the U.S.stockholder's deemed “routine” investment return under the TCJA and results in income includable in the return of U.S. shareholders. We recognize liabilities,if any, related to this provision of the TCJA in the year in which the liability arises and not as a deferred tax liability.Pension and Other Postretirement BenefitsWe recognize the funded status of our defined benefit pension plans and other postretirement benefit plans in our consolidated balance sheets. Thefunded status is the difference between the fair value of plan assets and the benefit obligation as of the balance sheet date. The fair value of plan assetsrepresents the cumulative contributions made to fund the pension and other postretirement benefit plans which are invested primarily in domestic and foreignequities and fixed income securities. The benefit obligation of our pension and other postretirement benefit plans are actuarially determined using certainassumptions approved by us. The benefit obligation is adjusted annually in the fourth quarter to reflect actuarial changes and may also be adjusted upon theadoption of plan amendments. These adjustments are initially recorded in accumulated other comprehensive income (loss) and are subsequently amortizedover the life expectancy of the plan participants as a component of net periodic benefit costs.Equity-Based CompensationWe account for our stock awards and options by recognizing compensation expense, measured at the grant date based on the fair value of the award,on a straight-line basis over the award vesting period, giving consideration as to whether the amount of compensation cost recognized at any date is equal tothe portion of grant date value that is vested at that date. We recognize equity-based compensation expense net of any actual forfeitures.We measure the grant date fair value of stock option awards as calculated by the Black-Scholes option-pricing model which requires certain subjectiveassumptions, including the expected term of the option, the expected volatility of our common stock, risk-free interest rates and expected dividend yield. Theexpected term is estimated by using the “simplified method” which is based on the midpoint between the vesting date and the expiration of the contractualterm. We utilized the simplified method due to the lack of sufficient historical experience under our current grant terms. The expected volatility is based on thehistorical volatility of our stock price. The expected risk-free interest rates are based on the yields of U.S. Treasury securities with maturities appropriate for theexpected term of the stock options. The expected dividend yield was based on the calculated yield on our common stock at the time of grant assuming annualdividends totaling $0.56 per share for awards granted in 2018.Foreign CurrencyWe remeasure foreign currency transactions into the relevant functional currency and record the foreign currency transaction gains or losses as acomponent of other, net in our consolidated statements of operations. We translate the financial statements of our non-U.S. dollar functional currency foreignsubsidiaries into U.S. dollars in consolidation and record the translation gains or losses as a component of other comprehensive income (loss). Translationgains or losses of foreign subsidiaries related to divested businesses are reclassified into earnings as a component of other, net in our consolidatedstatements of operations once the liquidation of the respective foreign subsidiaries is substantially complete.Adoption of New Accounting StandardsIn August 2018, the Financial Accounting Standards Board ("FASB") issued updated guidance that eliminates, modifies and adds certain disclosurerequirements related to defined benefit pension and other post-retirement plans. The updated standard is effective for public companies for fiscal years, andinterim periods within those fiscal years, ending after December 15, 2020, with early adoption permitted, and is required to be applied retrospectively. Weadopted this standard in the fourth quarter of 2018, which did not have a material impact on our consolidated financial statements.In August 2018, the FASB issued updated guidance that eliminates, modifies and adds certain disclosure requirements related to fair valuemeasurements. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning afterDecember 15, 2019. Early adoption is permitted for the eliminated or modified disclosures, while delaying the adoption of the additional disclosures until theireffective date. We adopted this standard in the fourth quarter of 2018, which did not have a material impact on our consolidated financial statements.74In June 2018, the FASB issued updated guidance for share-based payment awards issued to non-employees. The updated standard aligns theaccounting for share-based payment awards for non-employees with employees, except for guidance related to the attribution of compensation costs for non-employees. The Accounting Standards Update ("ASU") is effective for fiscal years beginning after December 15, 2018, including interim periods within thoseannual periods for public business entities, with early adoption permitted. We early adopted this standard in the second quarter of 2018, which did not have amaterial impact on our consolidated financial statements.In February 2018, the FASB issued updated guidance to give entities the option to reclassify to retained earnings the tax effects of items withinaccumulated other comprehensive income ("stranded tax effects") resulting from a reduction of the federal corporate income tax rate from 35% to 21% underthe Tax Cuts and Jobs Act (“TCJA”) signed into law in December 2017. The ASU is effective for annual periods beginning after December 15, 2018, with earlyadoption permitted. See Note 7. Income Taxes for additional information on certain impacts related to the enactment of the TCJA. We early adopted theupdated standard in the second quarter of 2018 and elected to reclassify the stranded income tax effects related to the enactment of the TCJA to retainedearnings. The adoption of this ASU resulted in a decrease in our retained deficit of $22 million with a corresponding increase to accumulated othercomprehensive income primarily as a result of reclassifying stranded tax effects for our retirement-related benefit plans. The adoption of this updatedstandard did not have a material impact on our consolidated results of operations and statement of cash flows.In August 2017, the FASB issued updated guidance to expand and simplify the application of hedge accounting. The updated standard eliminates therequirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to bepresented in the same income statement line as the hedged item. The guidance also eases certain documentation and assessment requirements andmodifies the accounting for components excluded from the assessment of hedge effectiveness. The ASU is effective for annual periods beginning afterDecember 15, 2018, with early adoption permitted. We early adopted this standard in the second quarter of 2018, which did not have a material impact on ourconsolidated financial statements.In March 2017, the FASB issued updated guidance improving the presentation requirements related to reporting the service cost component of netbenefit costs to require that the service cost component be reported in the same line item or items as other compensation costs arising from services renderedby the pertinent employees during the period, disaggregating the component from other net benefit costs. Net benefit cost is composed of several items,which reflect different aspects of an employer's financial arrangements as well as the cost of benefits earned by employees. The updated guidance iseffective for fiscal years beginning after December 15, 2017, including interim periods within those annual periods for public business entities. We adoptedthis standard in the first quarter of 2018, which did not have a material impact on our consolidated financial statements.In February 2017, the FASB issued updated guidance on gains and losses from the derecognition of non-financial assets. The updated guidance iseffective for fiscal years beginning after December 15, 2017, including interim periods within those annual periods for public business entities. We adoptedthis standard in the first quarter of 2018, which did not have a material impact on our consolidated financial statements.In January 2016, the FASB issued updated guidance on accounting for equity investments, financial liabilities under the fair value option, and thepresentation and disclosure for financial instruments. Under this updated standard, entities must measure equity investments at fair value and recognizechanges in fair value in net income. For equity investments without readily determinable fair values, entities have the option to either measure theseinvestments at fair value or at cost adjusted for changes in observable prices less impairment. The updated guidance does not apply to equity methodinvestments or investments in consolidated subsidiaries. This new standard is effective for public companies for annual periods, including interim periods,beginning after December 15, 2017. We adopted this standard in the first quarter of 2018, which did not have a material impact on our consolidated financialstatements.Recent Accounting PronouncementsIn August 2018, the FASB issued updated guidance on customer's accounting for implementation costs incurred in a cloud computing arrangementthat is a service contract. Under this updated standard, when the arrangement includes a license to software developed for internal use, implementation costsare capitalized and amortized on a straight-line basis over the related contract terms, and a liability is also recognized to the extent the payments attributableto the software license are made over time. When the cloud computing arrangement does not include a software license, implementation costs are to beexpensed as incurred. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning afterDecember 15, 2019, with early adoption permitted. We do not expect the adoption of this updated standard will have a material impact on our consolidatedfinancial statements.In June 2016, the FASB issued updated guidance for the measurement of credit losses for most financial assets and certain other instruments that arenot measured at fair value through net income. Under this updated standard, the current "incurred loss" approach is replaced with an "expected loss" modelfor instruments measured at amortized cost. For available-for-sale debt securities, allowances for losses will now be required rather than reducing theinstruments carrying value. The updated standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginningafter December 15, 2019, with early adoption permitted. We are currently evaluating the impact of this standard on our consolidated financial statements.75In February 2016, the FASB issued updated guidance requiring organizations that lease assets—referred to as "lessees"—to recognize on the balancesheet the assets and liabilities for the rights and obligations created by those leases, when the lease has a term of more than 12 months. The updatedstandard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We plan to adoptthe new standard using the cumulative-effect adjustment transition method on its effective date of January 1, 2019, and we expect to elect the package ofpractical expedients and the hindsight practical expedient upon adoption. We are in the process of implementing changes to our processes and systems. Wepreliminarily estimate our other non-current assets and total liabilities may be increased on our consolidated balance sheets by approximately $70 million to$80 million, with an immaterial impact to retained earnings, as a result of recognizing the right of use assets and corresponding lease liabilities in connectionwith the adoption of the updated standard. Our assessment is ongoing and subject to finalization such that the actual impact of the adoption may differmaterially from this estimated range. We do not expect that the adoption of this updated standard will have a material impact on our consolidated results ofoperations and cash flows.2. Revenue from Contracts with CustomersIn the first quarter of 2018, we adopted the comprehensive update to revenue recognition guidance ASC 606, which replaced ASC 605, using themodified retrospective approach, applied to contracts that were not completed as of the adoption date. Under ASC 606, revenue is recognized when acompany transfers the promised goods or services to customers in an amount that reflects the consideration that is expected to be received for those goodsand services. The key areas of impact on our financials include:• Revenue recognition for our Travel Network and Hospitality Solutions businesses did not change significantly. The definition of a performanceobligation for Travel Network under the new guidance impacts the calculation for our booking fee cancellation reserve, which resulted in a beginningbalance sheet adjustment.• Our Airline Solutions business is primarily impacted by ASC 606 due to the following:–Under ASC 605, we recognized revenue related to license fee and maintenance agreements ratably over the life of the contract. Under ASC 606,revenue for license fees is recognized upon delivery of the license and ongoing maintenance services are to be recognized ratably over the life ofthe contract. For existing open agreements, this change resulted in a beginning balance sheet adjustment and reduced revenue in subsequentyears from these agreements.–Allocation of contract revenues among various products and solutions, and the timing of the recognition of those revenues, are impacted byagreements with tiered pricing or variable rate structures that do not correspond with the goods or services delivered to the customer. For existingopen agreements, this change resulted in a beginning balance sheet adjustment and reduced revenue in subsequent years from theseagreements.• Capitalization of incremental contract acquisition costs (such as sales commissions), and recognition of these costs over the customer benefit periodresulted in the recognition of an asset on our balance sheet and impacted our Airline Solutions and Hospitality Solutions businesses.Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts have not been adjusted andcontinue to be reported in accordance with ASC 605. The impacts described above resulted in a net reduction to our opening retained deficit as of January 1,2018 of approximately $102 million (net of tax, $78 million) with a corresponding increase primarily in current and long-term unbilled receivables, contractassets, other assets and other accrued liabilities.The following tables set forth the impact of the adoption of the revenue recognition standard to our reported results on our consolidated statement ofoperations and consolidated balance sheet, respectively (in thousands): Year Ended December 31, 2018 As reportedASC 606AdjustmentsAs adjustedASC 605Revenue$3,866,956$22,637$3,889,593Cost of revenue2,791,4146,7282,798,142Selling, general and administrative513,526(222)513,304Operating income562,01616,131578,147Income from continuing operations before income taxes398,41316,131414,544Provision for income taxes57,4923,52461,016Income from continuing operations340,92112,607353,528Net income342,66012,607355,267Net income attributable to common stockholders337,53112,607350,13876 December 31, 2018 As reportedASC 606AdjustmentsAs adjustedASC 605Accounts receivable, net$508,122$(31,141)$476,981Prepaid expenses and other current assets170,243(22,379)147,864Total current assets1,187,630(53,520)1,134,110Other assets, net610,6715,478616,149Total assets5,806,381(48,042)5,758,339Accrued subscriber incentives301,5304,130305,660Deferred revenues80,90253,752134,654Other accrued liabilities185,178(20,057)165,121Total current liabilities1,018,39537,8251,056,220Deferred income taxes135,753(19,575)116,178Other noncurrent liabilities340,495(254)340,241Retained deficit(768,566)(66,038)(834,604)Total stockholders' equity974,271(66,038)908,233Total liabilities and stockholders' equity5,806,381(48,042)5,758,339Contract BalancesRevenue recognition for a significant portion of our revenue coincides with normal billing terms, including Travel Network's transactional revenues,and Airline Solutions' and Hospitality Solutions' Software-as-a-Service ("SaaS") and hosted revenues. Timing differences among revenue recognition,unconditional rights to bill, and receipt of contract consideration may result in a net contract asset or contract liability. Contract liabilities are included withindeferred revenues and other noncurrent liabilities on the consolidated balance sheet. Contract liabilities totaled $166 million and $158 million as ofDecember 31, 2018 and January 1, 2018, respectively. During the year ended December 31, 2018, we recognized revenue of approximately $40 million fromcontract liabilities that existed as of January 1, 2018.Contract assets are included within prepaid expenses and other current assets and other assets, net on the consolidated balance sheet. The followingtable presents the changes in our contract assets balance (in thousands):Contract assets as of January 1, 2018$75,624Additions41,704Deductions(38,029)Other(31)Contract assets as of December 31, 2018$79,268Our trade accounts receivable, net recorded in accounts receivable, net on the consolidated balance sheet as of December 31, 2018 and January 1,2018 was $501 million and $506 million, respectively. Our long-term trade unbilled receivables, net recorded in other assets, net on the consolidated balancesheet as of December 31, 2018 and January 1, 2018 was $50 million and $54 million, respectively. These balances relate to license fees billed ratably overthe contractual period and recognized when the customer gains control of the software. We evaluate collectability of our accounts receivable based on acombination of factors and record reserves as reflected in Note 1. Summary of Business and Significant Accounting Policies.77RevenueThe following table presents our revenues disaggregated by business (in thousands): Year Ended December 31,2018Air$2,284,419Lodging, Ground and Sea350,152Other171,623Total Travel Network2,806,194SabreSonic Passenger Reservation System501,085Commercial and Operations Solutions(1)312,751Other8,911Total Airline Solutions822,747SynXis Software and Services240,583Other32,496Total Hospitality Solutions273,079Eliminations(35,064)Total Sabre Revenue$3,866,956 (1) Includes $27 million of license fee revenue recognized upon delivery to the customer for the year ended December 31, 2018. We may occasionally recognize revenue in the current period for performance obligations partially or fully satisfied in the previous periods resultingfrom changes in estimates for the transaction price, including any changes to our assessment of whether an estimate of variable consideration is constrained.For the year ended December 31, 2018, the impact on revenue recognized in the current period, from performance obligations partially or fully satisfied in theprevious period, is immaterial.We recognize revenue under long-term contracts that primarily includes variable consideration based on transactions processed. A majority of ourconsolidated revenue is recognized as a stand-ready performance obligation with the amount recognized based on the invoiced amounts for servicesperformed, known as right to invoice revenue recognition. Certain of our contracts, primarily in the Airlines Solutions business, contain minimum transactionvolumes, which in many instances are not considered substantive as the customer is expected to exceed the minimum in the contract. Unearned performanceobligations primarily consist of deferred revenue for fixed implementation fees and future product implementations, which are included in deferred revenueand other noncurrent liabilities in our consolidated balance sheet. We have not disclosed the performance obligation related to contracts containing minimumtransaction volume, as it represents a subset of our business, and therefore would not be meaningful in understanding the total future revenues expected tobe earned from our long-term contracts. See 1. Summary of Business and Significant Accounting Policies regarding revenue recognition of our variousrevenue streams for more information.Contract Acquisition Costs and Capitalized Implementation CostsWe incur contract costs in the form of acquisition costs and implementation costs. Contract acquisition costs are related to new contracts with ourcustomers in the form of sales commissions based on the estimated contract value. We incur contract implementation costs to implement new customercontracts under our SaaS revenue model. We periodically assess contract costs for recoverability, and our assessment resulted in impairments ofapproximately $4 million, recorded in cost of revenue, for the year ended December 31, 2018. See Note 1. Summary of Business and Significant AccountingPolicies for an overview of our policy for capitalization of acquisition and implementation costs. The following table presents the changes in contractacquisition costs and capitalized implementation costs (in thousands): December 31, 2018Contract acquisition costs: Beginning balance (1/1/2018)$19,353Additions7,924Amortization(6,404)Other425Ending balance$21,298 Capitalized implementation costs: Beginning balance (1/1/2018)$194,501Additions39,168Amortization(37,904)Impairment(4,013)Other(2,304)Ending balance$189,44878Practical Expedients and ExemptionsThere are several practical expedients and exemptions allowed under ASC 606 that impact timing of revenue recognition and our disclosures. Belowis a list of practical expedients we applied in the adoption and application of ASC 606:Application•When we have a right to receive consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’sperformance completed to date, we recognize revenue in the amount to which we have a right to invoice.•We apply the allocation objective expedient where applicable, which precludes the requirement to allocate revenue across multiple performanceobligations based on total transaction price.•We do not evaluate a contract for a significant financing component if payment is expected within one year or less from the transfer of the promiseditems to the customer.•We generally expense sales commissions when incurred when the amortization period would have been one year or less. These costs arerecorded within selling, general and administrative expenses. We also used the practical expedient to calculate contract acquisition costs based ona portfolio of contracts with similar characteristics instead of a contract by contract analysis.Modified Retrospective Transition Adjustments•For contract modifications, we reflected the aggregate effect of all modifications that occurred prior to the adoption date when identifying thesatisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price to satisfied and unsatisfiedperformance obligations for the modified contract at transition.3. AcquisitionsFarelogixWe announced on November 14, 2018 that we have entered into an agreement to acquire Farelogix, a recognized innovator in the travel industry withoffer management and NDC order delivery technology used by many of the world’s leading airlines. At closing, Sabre will purchase Farelogix for $360million, funded by cash on hand and Revolver borrowing. The acquisition is subject to customary closing conditions and regulatory approvals and isexpected to close in 2019. Regulatory reviews are ongoing. There can be no assurance that the acquisition will occur on these terms or at all.Airpas AviationIn April 2016, we completed the acquisition of Airpas Aviation, a software provider and consultancy company which offers route profitability and costmanagement software solutions. We acquired all of the outstanding stock and ownership interest of Airpas Aviation for net cash consideration of $9 million.Assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The allocation of purchase price includes $12million of assets acquired, primarily consisting of $5 million of goodwill, not deductible for tax purposes, and $5 million of intangible assets. The intangibleassets consist mainly of $4 million of acquired customer relationships with a useful life of 10 years and $1 million of purchased technology with a useful life of5 years. Airpas Aviation is integrated and managed as part of our Airline Solutions segment. The acquisition of Airpas Aviation did not have a material impactto our consolidated financial statements, and therefore pro forma information is not presented.79Trust GroupIn January 2016, we completed the acquisition of the Trust Group, a central reservations, revenue management and hotelmarketing provider, expanding our presence in Europe, the Middle East, and Africa ("EMEA") and Asia Pacific ("APAC"). The net cash consideration for theTrust Group was $156 million. The acquisition was funded using proceeds from our 5.25% senior secured notes due in 2023 and cash on hand. The TrustGroup has been integrated and is managed as part of our Hospitality Solutions segment.Purchase Price AllocationA summary of the acquisition price and estimated fair values of assets acquired and liabilities assumed as of the date of acquisition is as follows (inthousands):Cash and cash equivalents$4,209Accounts receivable10,564Other current assets917Goodwill98,930Intangible assets: Customer relationships52,292Purchased technology23,362Trademarks and brand names2,183Property and equipment, net1,556Current liabilities(11,091)Deferred income taxes(22,548)Total acquisition price$160,374The goodwill recognized reflects expected synergies from combined operations and also the acquired assembled workforce of the Trust Group inEMEA and APAC. The goodwill recognized is assigned to our Hospitality Solutions segment and is not deductible for tax purposes. The weighted-averageuseful lives of the intangible assets acquired are 13 years for customer relationships, 2 years for purchased technology and 2 years for trademarks and brandnames.The acquisition of the Trust Group did not have a material impact to our consolidated financial statements, and therefore pro forma information is notpresented.4. Impairment and Related ChargesCapitalized implementation costs and deferred customer advances and discounts are reviewed for impairment if events and circumstances indicatethat their carrying amounts may not be recoverable. See Note 1. Summary of Business and Significant Accounting Policies for more information. Given thesubstantial amount of uncertainty of reaching an agreement regarding the implementation of services pursuant to the contract with an Airline Solutions'customer, we evaluated the recoverability of net capitalized contract costs related to the customer and recorded a charge of $81 million during the year endedDecember 31, 2017. This charge was estimated based on a review of all balances with the customer including capitalized implementation costs, deferredcustomer advances and discounts, deferred revenue, contract liabilities, and other deferred charges. We will continue to monitor our position through theinsolvency proceedings; however, there is no further exposure to our consolidated balance sheet as of December 31, 2018. Given the uncertainty associatedwith the ultimate resolution of this dispute, there could be further impacts to our consolidated statement of operations. This impairment charge was primarilynon-cash and was recorded to Impairment and related charges in our consolidated statement of operations for the year ended December 31, 2017. See Note15. Commitments and Contingencies—Other for additional information.805. Goodwill and Intangible AssetsChanges in the carrying amount of goodwill during the years ended December 31, 2018 and 2017 are as follows (in thousands): Travel Network Airline Solutions HospitalitySolutions TotalGoodwillBalance as of December 31, 2016$2,104,542 $290,003 $153,902 $2,548,447Acquired439 — — 439Adjustments(1)(159) 982 5,278 6,101Balance as of December 31, 20172,104,822 290,985 159,180 2,554,987Acquired— — — —Adjustments(1)(33) 378 (2,963) (2,618)Balance as of December 31, 2018$2,104,789 $291,363 $156,217 $2,552,369________________________(1)Includes net foreign currency effects during the year. The following table presents our intangible assets as of December 31, 2018 and 2017 (in thousands): December 31, 2018 December 31, 2017 GrossCarryingAmount AccumulatedAmortization NetCarryingAmount GrossCarryingAmount AccumulatedAmortization NetCarryingAmountAcquired customer relationships$1,033,555 $(709,824) $323,731 $1,038,106 $(687,072) $351,034Trademarks and brand names332,239 (137,009) 195,230 332,238 (126,312) 205,926Reacquired rights113,500 (56,910) 56,590 113,500 (40,695) 72,805Purchased technology426,488 (400,750) 25,738 427,823 (390,139) 37,684Acquired contracts, supplier and distributoragreements37,600 (25,867) 11,733 37,600 (22,410) 15,190Non-compete agreements14,686 (14,460) 226 15,025 (14,459) 566Total intangible assets$1,958,068 $(1,344,820) $613,248 $1,964,292 $(1,281,087) $683,205Amortization expense relating to intangible assets subject to amortization totaled $68 million, $96 million and $143 million for the years endedDecember 31, 2018, 2017 and 2016, respectively. Estimated amortization expense related to intangible assets subject to amortization for each of the fivesucceeding years and beyond is as follows (in thousands): 2019$63,866202062,256202160,725202247,144202333,4382024 and thereafter345,819Total$613,248 6. Balance Sheet ComponentsPrepaid Expenses and Other Current AssetsPrepaid expenses and other current assets consist of the following (in thousands): December 31, 2018 2017Prepaid Expenses$80,049 $69,650Value added tax receivable, net57,486 35,556Other32,708 3,547Prepaid expenses and other current assets$170,243 $108,75381Property and Equipment, NetProperty and equipment, net consists of the following (in thousands): December 31, 2018 2017Buildings and leasehold improvements$156,357 $151,843Furniture, fixtures and equipment38,049 38,155Computer equipment349,454 323,818Software developed for internal use1,771,306 1,521,901Property and equipment2,315,166 2,035,717Accumulated depreciation and amortization(1,524,794) (1,236,523)Property and equipment, net$790,372 $799,194Other Assets, NetOther assets, net consist of the following (in thousands): December 31, 2018 2017Capitalized implementation costs, net$189,447 $208,415Deferred upfront incentive consideration162,893 151,693Long-term contract assets(1)60,075 92,373Long-term trade unbilled receivables(1)50,467 —Other147,789 139,461Other assets, net$610,671 $591,942________________________________(1) Refer to Note 2. Revenue from Contracts with Customers that sets forth the impact of the adoption of ASC 606 on Other Assets, net.Other Noncurrent LiabilitiesOther noncurrent liabilities consist of the following (in thousands): December 31, 2018 2017 Pension and other postretirement benefits$118,919 $115,114Deferred revenue75,685 99,044Tax receivable agreement72,939 170,067Other72,952 95,960Other noncurrent liabilities$340,495 $480,185Accumulated Other Comprehensive LossAccumulated other comprehensive loss consists of the following (in thousands): December 31, 2018 2017Defined benefit pension and other postretirement benefit plans$(139,430) $(102,623)Unrealized foreign currency translation gain7,201 11,488Unrealized (loss) gain on foreign currency forward contracts, interest rate swaps and available-for-salesecurities(495) 2,651Total accumulated other comprehensive loss, net of tax$(132,724) $(88,484)The amortization of actuarial losses and periodic service credits associated with our retirement-related benefit plans is included in Other, net. See Note9. Derivatives, for information on the income statement line items affected as the result of reclassification adjustments associated with derivatives.827. Income TaxesOn December 22, 2017, the TCJA was signed into law. The TCJA contains significant changes to the U.S. corporate income tax system, including areduction of the federal corporate income tax rate from 35% to 21%, a limitation of the tax deduction for interest expense to 30% of adjusted taxable income(as defined in the TCJA), base erosion and anti-avoidance tax (“BEAT”), foreign-derived intangible income (“FDII”) and global intangible low-taxed income(“GILTI”), one-time taxation of offshore earnings at reduced rates in connection with the transition of U.S. international taxation from a worldwide tax system toa territorial tax system (“transition tax”), elimination of U.S. tax on foreign earnings (subject to certain important exceptions), and modifying or repealing manybusiness deductions and credits.We are required to recognize the effect of the tax law changes in the period of enactment, such as remeasuring our U.S. deferred tax assets andliabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the 2017 Tax Cuts and Jobs Act(“SAB 118”), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As ofDecember 31, 2018, we have completed our accounting for the TCJA and have recorded the following adjustments:Deferred tax assets and liabilities: At December 31, 2017, we remeasured certain deferred tax assets and liabilities based on the rates at which theyare expected to reverse in the future, which is generally 21%, the impact of which was not material to the provision for income taxes from continuingoperations for the year then ended. Upon further analysis of certain aspects of the TCJA and refinement of our calculations during the year ended December31, 2018, including the impact of the election to utilize our net operating losses ("NOLs") against the one-time transition tax income, we reduced ourprovisional amount by $41 million, which is reflected in our provision for income taxes from continuing operations for the year then ended. This adjustmentrelates primarily to the remeasurement of our NOLs to the appropriate tax rate applicable in the period of expected utilization.Foreign tax effects: At December 31, 2017, we recorded a provisional amount for our one-time transition tax liability for the previously untaxed post-1986 earnings and profits of our foreign subsidiaries, resulting in an increase in the provision for income taxes of $48 million. Upon further analyses of theTCJA and subsequently published administrative guidance, we finalized our calculations and, in 2018, increased our provisional amount by $14 million,which is reflected in the provision for income taxes from continuing operations. In addition, because of our decision during 2018 to utilize NOLs against theone-time transition tax income, we reversed the current and noncurrent liability accrued for transition tax at December 31, 2017 and recorded acorresponding reduction to the NOL deferred tax asset.Tax Receivable Agreement (“TRA”): The TRA provides for future payments to Pre-IPO Existing Stockholders (as defined below) for cash savings forU.S. federal income tax realized as a result of the utilization of Pre-IPO Tax Assets (as defined below). These cash savings would be realized at the enactedstatutory tax rate effective in the year of utilization. Primarily as a result of the reduction in the U.S. corporate income tax rate, we recorded a $58 millionprovisional reduction to the liability at December 31, 2017. In 2018, we finalized the 2017 U.S. federal income tax return and utilized additional Pre-IPO TaxAssets in the return, primarily as a result of electing to utilize our NOLs against our one-time transition tax income. As a result of the change in estimated NOLutilization at the higher corporate income tax rate in 2017 we recorded an increase to our liability of $5 million related to the TRA, which is reflected in ourincome from continuing operations before taxes.The components of pretax income from continuing operations, generally based on the jurisdiction of the legal entity, were as follows: Year Ended December 31, 2018 2017 2016Components of pre-tax income: Domestic$190,291 $199,685 $206,182Foreign208,122 177,928 121,853 $398,413 $377,613 $328,03583The provision for income taxes relating to continuing operations consists of the following: Year Ended December 31, 2018 2017 2016Current portion: Federal$(49,518) $50,829 $8,357State and Local4,168 2,388 1,346Non U.S.59,743 26,060 28,488Total current14,393 79,277 38,191Deferred portion: Federal55,502 47,372 60,372State and Local(4,812) (6,178) (4,352)Non U.S.(7,591) 7,566 (7,566)Total deferred43,099 48,760 48,454Total provision for income taxes$57,492 $128,037 $86,645The provision for income taxes relating to continuing operations differs from amounts computed at the statutory federal income tax rate as follows: Year Ended December 31, 2018 2017 2016Income tax provision at statutory federal income tax rate$83,667 $132,165 $114,812State income taxes, net of federal benefit(42) (1,727) (1,964)Impact of non U.S. taxing jurisdictions, net5,591 (13,492) 11,482Impact of U.S. TCJA(1)(26,730) 46,563 —Employee stock based compensation2,260 (4,977) (34,789)Research tax credit(9,818) (8,777) (9,817)Tax receivable agreement (TRA)(2)1,019 (20,861) —Valuation allowance— — 8Other, net1,545 (857) 6,913Total provision for income taxes$57,492 $128,037 $86,645(1)In 2018, amount includes SAB 118 adjustments for deferred taxes and foreign tax effects. In 2017, amount includes $48 million of transition tax expense, and the remainderis the net benefit on cumulative deferred taxes.(2)Amount includes adjustments to the TRA, which are not taxable.84The components of our deferred tax assets and liabilities are as follows: As of December 31, 2018 2017Deferred tax assets: Accrued expenses$8,638 $13,716Employee benefits other than pension34,147 22,829Deferred revenue22,351 51,151Pension obligations26,821 24,989Tax loss carryforwards70,340 156,327Non-U.S. operations— 14,565Incentive consideration9,456 5,381Tax credit carryforwards31,467 58,848Suspended loss14,474 14,478Other8,008 243Total deferred tax assets225,702 362,527Deferred tax liabilities: Depreciation and amortization(13,298) (21,317)Software developed for internal use(103,631) (180,108)Intangible assets(122,921) (134,484)Unrealized gains and losses(21,840) (29,669)Non U.S. operations(9,355) —Investment in partnership(6,794) (5,932)Total deferred tax liabilities(277,839) (371,510)Valuation allowance(59,294) (59,001)Net deferred tax (liability)$(111,431) $(67,984)In the first quarter of 2018, we adopted ASC 606, which replaced ASC 605, using the modified retrospective approach. As a result of the adoption ofASC 606, we recorded a cumulative effect adjustment as of January 1, 2018 to decrease our opening retained deficit as of January 1, 2018 by approximately$102 million with a corresponding increase to deferred tax liabilities of $24 million to recognize the increase to income taxes payable in the future related torevenue recognition.As a result of the enactment of the TCJA, we recorded a one-time transition tax on the undistributed earnings of our foreign subsidiaries. We do notconsider these undistributed earnings to be indefinitely reinvested as of December 31, 2018, with certain limited exceptions. We consider the undistributedcapital investments in our foreign subsidiaries to be indefinitely reinvested as of December 31, 2018, and have not provided deferred taxes on any outsidebasis differences. Determination of the amount of unrecognized deferred tax liability, if any, related to indefinitely reinvested capital investments is notpracticable.As of December 31, 2018, we have U.S. federal net operating loss carryforwards ("NOLs") of approximately $8 million, which will expire between 2022and 2035. Additionally, we have research tax credit carryforwards of approximately $6 million, which will expire between 2037 and 2038 and $10 millionAlternative Minimum Tax (“AMT”) credit carry forward that does not expire. As a result of ownership changes during 2007 and 2015 (as defined in Section 382of the Code, which imposes an annual limit on the ability of a corporation to use certain tax attributes), all of the U.S. federal NOLs and credit carryforwardsare subject to an annual limitation on their ability to be utilized. However, we expect that Section 382 will not limit our ability to fully realize the tax benefits. Wehave state NOLs of $9 million which will expire between 2020 and 2037 and state research tax credit carryforwards of $17 million which will expire between2023 and 2038. We have $252 million of NOL carryforwards related to certain non U.S. taxing jurisdictions that are primarily from countries with indefinitecarryforward periods.85We regularly review our deferred tax assets for realizability and a valuation allowance is provided when it is more likely than not that some portion orall of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon future taxable income during the periods inwhich those temporary differences become deductible. In assessing the need for a valuation allowance for our deferred tax assets, we considered allavailable positive and negative evidence, including our ability to carry back NOLs to prior periods, the reversal of deferred tax liabilities, tax planningstrategies and projected future taxable income. We maintained a state NOL valuation allowance of $4 million million as of December 31, 2018 and 2017. Fornon-U.S. deferred tax assets of our lastminute.com and other subsidiaries, we maintained a valuation allowance of $55 million as of December 31, 2018 and2017. We reassess these assumptions regularly which could cause an increase or decrease to the valuation allowance. This assessment could result in anincrease or decrease in the effective tax rate which could materially impact our results of operations.It is our policy to recognize penalties and interest accrued related to income taxes as a component of the provision for income taxes from continuingoperations. During the years ended December 31, 2018, 2017 and 2016, we recognized expense of $1 million, $1 million and $5 million, respectively. As ofDecember 31, 2018 and 2017, we had cumulative accrued interest and penalties of approximately $23 million and $22 million, respectively.A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows: Year Ended December 31, 2018 2017 2016Balance at beginning of year$74,388 $49,331 $68,746Additions for tax positions taken in the current year4,450 5,279 538Additions for tax positions of prior years1,649 21,669 2,096Additions for tax positions from acquisitions— — —Reductions for tax positions of prior years(5,831) — (17,706)Reductions for tax positions of expired statute of limitations(3,143) (1,891) (3,743)Settlements(2,149) — (600)Balance at end of year$69,364 $74,388 $49,331We present unrecognized tax benefits as a reduction to deferred tax assets for NOLs, similar tax loss or a tax credit carryforward that is available tosettle additional income taxes that would result from the disallowance of a tax position, presuming disallowance at the reporting date. The amount ofunrecognized tax benefits that were offset against deferred tax assets was $55 million, $53 million and $32 million as of December 31, 2018, 2017, and 2016respectively.As of December 31, 2018, 2017, and 2016, the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $51million, $70 million and $49 million, respectively. We believe that it is reasonably possible that $20 million million in unrecognized tax benefits may beresolved in the next twelve months.In the normal course of business, we are subject to examination by taxing authorities throughout the world. The following table summarizes, by majortax jurisdiction, our tax years that remain subject to examination by taxing authorities:Tax JurisdictionYears Subject to ExaminationUnited Kingdom2013 - forwardSingapore2014 - forwardTexas2014 - forwardUruguay2013 - forwardU.S. Federal2007 - forwardWe currently have ongoing audits in the United States (2011-2013), India (2003-2016) and various other jurisdictions. We do not expect that the resultsof these examinations will have a material effect on our financial condition or results of operations. With few exceptions, we are no longer subject to incometax examinations by tax authorities for years prior to 2007.86Tax Receivable AgreementImmediately prior to the closing of our initial public offering in April 2014, we entered into a TRA that provides the right toreceive future payments from us to stockholders and equity award holders that were our stockholders and equity award holders,respectively, immediately prior to the closing of our initial public offering (collectively, the “Pre-IPO Existing Stockholders”). The future payments will equal85% of the amount of cash savings, if any, in U.S. federal income tax that we and our subsidiaries realize as a result of the utilization of certain tax assetsattributable to periods prior to our initial public offering, including federal NOLs, capital losses and the ability to realize tax amortization of certain intangibleassets (collectively, the “Pre-IPO Tax Assets”). Consequently, stockholders who are not Pre-IPO Existing Stockholders will only be entitled to the economicbenefit of the Pre-IPO Tax Assets to the extent of our continuing 15% interest in those assets. These payment obligations are our obligations and notobligations of any of our subsidiaries. The actual utilization of the Pre-IPO Tax Assets, as well as the timing of any payments under the TRA, will varydepending upon a number of factors, including the amount, character and timing of our and our subsidiaries’ taxable income in the future.Based on current tax laws and assuming that we and our subsidiaries earn sufficient taxable income to realize the full tax benefits subject to the TRA,we estimate that payments under the TRA relating to the Pre-IPO Tax Assets total $333 million, excluding interest. This total includes a reduction recorded inthe fourth quarter of 2017 with the enactment of the TCJA, which reduced the U.S. corporate income tax rate. We recorded a net reduction of $55 million in theTRA liability across the years ended December 31, 2018 and 2017. The TRA payments accrue interest in accordance with the terms of the TRA. The estimateof future payments considers the impact of Section 382 of the Code, which imposes an annual limit on the ability of a corporation that undergoes anownership change to use its NOLs to reduce its liability. We do not anticipate any material limitations on our ability to utilize NOLs under Section 382 of theCode. We expect a majority of the future payments under the TRA to be made over the next two years. No payments occurred in years 2014 to 2016. Wemade payments of $74 million, $60 million and $101 million, which included accrued interest of approximately $2 million in January 2019 and approximately$1 million in each of January 2018 and 2017. We expect to make a payment of $30 million in April 2019, including approximately $1 million of accruedinterest. As of December 31, 2018 and 2017 the current portion of our TRA liability totaled $104 million and $60 million, respectively, including approximately$3 million and $1 million of accrued interest, respectively. As of December 31, 2018 and 2017, $73 million and $170 million is included in other noncurrentliabilities in our consolidated balance sheets, respectively. Payments under the TRA are not conditioned upon the parties’ continuing ownership of thecompany. Changes in the utility of the Pre-IPO Tax Assets will impact the amount of the liability recorded in respect of the TRA. Changes in the utility of thesePre-IPO Tax Assets are recorded in income tax expense and any changes in the obligation under the TRA are recorded in other expense.878. DebtAs of December 31, 2018 and 2017, our outstanding debt included in our consolidated balance sheets totaled $3,406 million and $3,456 million,respectively, which are net of debt issuance costs of $18 million and $23 million, respectively, and unamortized discounts of $7 million and $9 million,respectively. The following table sets forth the face values of our outstanding debt as of December 31, 2018 and 2017 (in thousands): December 31, Rate Maturity 2018 2017Senior secured credit facilities: Term Loan AL + 2.00% July 2022 $527,250 $555,750Term Loan B(1)L + 2.00% February 2024 1,862,237 1,881,048Revolver, $400 millionL + 2.00% July 2022 — —5.375% senior secured notes due 20235.375% April 2023 530,000 530,0005.25% senior secured notes due 20235.25% November 2023 500,000 500,000Capital lease obligations 12,368 21,235Face value of total debt outstanding 3,431,855 3,488,033Less current portion of debt outstanding (68,435) (57,138)Face value of long-term debt outstanding $3,363,420 $3,430,895______________________________(1)Pursuant to the March 2, 2018 refinancing, the interest rate on Term Loan B was reduced from L+2.25% to L+2.00%.Senior Secured Credit FacilitiesIn February 2013, Sabre GLBL entered into the Amended and Restated Credit Agreement. The agreement replaced (i) the existing term loans withnew classes of term loans of $1,775 million (the “2013 Term Loan B”) and $425 million (the “2013 Term Loan C”) and (ii) the existing revolving credit facilitywith a new revolving credit facility of $352 million (the “2013 Revolver”). In September 2013, Sabre GLBL entered into an agreement to amend the Amendedand Restated Credit Agreement to add a new class of term loans in the amount of $350 million (the “2013 Incremental Term Loan Facility”).In July 2016, Sabre GLBL entered into a series of amendments (the “Credit Agreement Amendments”) to our Amended and Restated CreditAgreement to provide for an incremental term loan under a new class with an aggregate principal amount of $600 million (the “2016 Term Loan A”) and toreplace the 2013 Revolver with a new revolving credit facility totaling $400 million (the “2016 Revolver”). The proceeds of $597 million, net of $3 milliondiscount, from the 2016 Term Loan A were used to repay $350 million of outstanding principal on our 2013 Term Loan B and 2013 Incremental Term LoanFacility, on a pro rata basis, repay the $120 million then-outstanding balance on the 2016 Revolver, and pay $11 million in associated financing fees. Werecognized a $4 million loss on extinguishment of debt in connection with these transactions during the year ended December 31, 2016.On February 22, 2017, Sabre GLBL entered into a Third Incremental Term Facility Amendment to our Amended and Restated Credit Agreement (the“2017 Term Facility Amendment”). The new agreement replaced the 2013 Term Loan B, 2013 Incremental Term Loan Facility and 2013 Term Loan C with asingle class of term loan (the "2017 Term Loan B") with an aggregate principal amount of $1,900 million maturing on February 22, 2024. The proceeds of$1,898 million, net of $2 million discount on the 2017 Term Loan B, were used to pay off approximately $1,761 million of all existing classes of outstandingterm loans (other than the 2016 Term Loan A), pay related accrued interest and pay $12 million in associated financing fees, which were recorded as debtmodification costs in Other, net in the consolidated statement of operations during the three months ended March 31, 2017. The remaining proceeds of the2017 Term Loan B were used to pay off approximately $80 million of Sabre’s outstanding mortgage on its corporate headquarters on March 31, 2017 and forother general corporate purposes. Unamortized debt issuance costs and discount related to existing classes of outstanding term loans prior to the 2017 TermFacility Amendment of $9 million and $3 million, respectively, will continue to be amortized over the remaining term of the Term Loan B along with the TermLoan B discount of $2 million. See Note 9. Derivatives for information regarding the discontinuation of hedge accounting related to our existing interest rateswaps as a result of the 2017 Term Facility Amendment.88On August 23, 2017, Sabre GLBL entered into a Fourth Incremental Term Facility Amendment to our Amended and Restated Credit Agreement, TermLoan A Refinancing Amendment to the Credit Agreement, and Second Revolving Facility Refinancing Amendment to the Credit Agreement to refinance andmodify the terms of the 2017 Term Loan B, the 2016 Term Loan A, and the 2016 Revolver, resulting in a reduction of the applicable margins for each of theseinstruments and approximately a one-year extension of the maturity of the 2016 Term Loan A and 2016 Revolver (the “2017 Refinancing”). We incurred noadditional indebtedness as a result of the 2017 Refinancing. The 2017 Refinancing included a $400 million revolving credit facility ("Revolver") that replacedthe 2016 Revolver, as well as the application of the proceeds of the approximately $1,891 million incremental Term Loan B facility (“Term Loan B”) and $570million Term Loan A facility (“Term Loan A”) to replace the 2017 Term Loan B and the 2016 Term Loan A. The maturity of the Revolver and the Term Loan Awas extended from July 18, 2021 to July 1, 2022. The applicable margins for the Term Loan B were reduced to 2.25% per annum for Eurocurrency rate loansand 1.25% per annum for base rate loans. The applicable margins for the Term Loan A and the Revolver were reduced to (i) between 2.50% and 1.75% perannum for Eurocurrency rate loans and (ii) between 1.50% and 0.75% per annum for base rate loans, in each case with the applicable margin for any quarterreduced by 25 basis points (up to 75 basis points total) if the Senior Secured First-Lien Net Leverage Ratio (as defined in the Amended and Restated CreditAgreement) is less than 3.75 to 1.0, 3.00 to 1.0, or 2.25 to 1.0, respectively.On March 2, 2018, Sabre GLBL entered into a Fifth Incremental Term Facility Amendment to our Amended and Restated Credit Agreement to refinanceand modify the terms of the Term Loan B, resulting in a reduction of the applicable margins for the Term Loan B to 2.00% per annum for Eurocurrency rateloans and 1.00% per annum for base rate loans. We incurred no additional indebtedness as a result of this transaction and incurred $2 million in financingfees recorded within Other, net and a $1 million loss on extinguishment of debt, in our consolidated results of operations year ended December 31, 2018.Under the Amended and Restated Credit Agreement, the loan parties are subject to certain customary non-financial covenants, including certainrestrictions on incurring certain types of indebtedness, creation of liens on certain assets, making of certain investments, and payment of dividends, as well asa maximum leverage ratio. Pursuant to Credit Agreement Amendments, effective July 18, 2016, the maximum leverage ratio has been adjusted to be basedon the Total Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement) and we are required, at all times (no longer solely when athreshold amount of revolving loans or letters of credit were outstanding), to maintain a Total Net Leverage Ratio of less than 4.5 to 1.0. As of December 31,2018 we are in compliance with all covenants under the Amended and Restated Credit Agreement.We had no balance outstanding under the Revolver as of December 31, 2018 or under the 2016 Revolver as of December 31, 2017. We hadoutstanding letters of credit totaling $15 million and $21 million as of December 31, 2018 and 2017, respectively, which reduced our overall credit capacityunder the Revolver and 2016 Revolver.Principal PaymentsPrincipal payments on the Term Loan A are due on a quarterly basis equal to 1.25% of its initial aggregate principal amount during the first two yearsof its term and 2.50% of its initial aggregate principal amount during the next three years of its term. Term Loan B matures on February 22, 2024, and requiredprincipal payments in equal quarterly installments of 0.25% through to the maturity date of which the remaining balance is due. For the year ended December31, 2018, we made $47 million of scheduled principal payments.89We are also required to pay down the term loans by an amount equal to 50% of annual excess cash flow, as defined in our Amended and RestatedCredit Agreement. This percentage requirement may decrease or be eliminated if certain leverage ratios are achieved. Based on our results for the yearended December 31, 2017, we were not required to make an excess cash flow payment in 2018, and no excess cash flow payment is required in 2019 withrespect to our results for the year ended December 31, 2018. We are further required to pay down the term loan with proceeds from certain asset sales orborrowings as defined in the Amended and Restated Credit Agreement.InterestBorrowings under the Amended and Restated Credit Agreement bear interest at a rate equal to either, at our option: (i) the Eurocurrency rate plus anapplicable margin for Eurocurrency borrowings as set forth below, or (ii) a base rate determined by the highest of (1) the prime rate of Bank of America, (2) thefederal funds effective rate plus 1/2% or (3) LIBOR plus 1.00%, plus an applicable margin for base rate borrowings as set forth below. The Eurocurrency rateis based on LIBOR for all U.S. dollar borrowings and has a floor. We have elected the one-month LIBOR as the floating interest rate on all of our outstandingterm loans. Interest payments are due on the last day of each month as a result of electing one-month LIBOR. Interest on a portion of the outstanding loan ishedged with interest rate swaps (see Note 9. Derivatives). Eurocurrency borrowings Base rate borrowings Applicable Margin(1)(2) Applicable MarginTerm Loan A2.00% 1.00%Term Loan B2.00% 1.00%Revolver, $400 million2.00% 1.00%_____________________________(1)Applicable margins do not reflect potential step ups and downs of Term Loan A and Revolver, $400 million, which are determined by the Senior Secured Leverage Ratio. See below for additionalinformation.(2)Term Loan A, Term Loan B, and Revolver, $400 million, are subject to a 0% floor.Applicable margins for the Term Loan B are 2.00% per annum for Eurocurrency rate loans and 1.00% per annum for base rate loans over the life of theloan and are not dependent on the Senior Secured Leverage Ratio. Applicable margins for the Term Loan A and the Revolver step up by 25 basis points forany quarter if the Senior Secured Leverage Ratio is greater than or equal to 3.00 to 1.0. Applicable margins for the Term Loan A and the Revolver under theAmended and Restated Credit Agreement step down 25 basis points for any quarter if the Senior Secured Leverage Ratio is less than 2.25 to 1.0. In addition,we are required to pay a quarterly commitment fee of 0.250% per annum for unused Revolver commitments. The commitment fee may increase to0.375% per annum if the Senior Secured Leverage Ratio is greater than or equal to 3.00 to 1.0.Our effective interest rates on borrowings under the Amended and Restated Credit Agreement for the years ended December 31, 2018, 2017 and2016, inclusive of amounts charged to interest expense, are as follows: Year Ended December 31, 2018 2017 2016Including the impact of interest rate swaps4.57% 4.35% 4.72%Excluding the impact of interest rate swaps4.36% 4.03% 4.55%Senior Secured Notes due 2023In April 2015, we issued $530 million senior secured notes due in April 2023 with a stated interest rate of 5.375% and received proceeds of $522million, net of underwriting fees and commissions. We used the proceeds to redeem all of the $480 million principal of the senior secured notes due 2019,pay the 6.375% redemption premium of $31 million and a make whole premium of $2 million, resulting in an extinguishment loss of $33 million during theyear ended December 31, 2015. The remaining proceeds, combined with cash on hand, were used to pay accrued but unpaid interest of $19 million.In November 2015, we issued $500 million senior secured notes due in 2023 with a stated interest rate of 5.25%. The net proceeds of $494 million, netof underwriting fees and commissions, were used to repay $235 million of the $400 million 2016 Notes (as defined below), pay a $5 million make-wholepremium on the 2016 Notes and pay $5 million of accrued but unpaid interest. In addition, we used the net proceeds to repurchase 3,400,000 shares of ourcommon stock totaling $99 million. The excess net proceeds, together with cash on hand, were applied to fund the acquisition of the Trust Group, which wascompleted in January 2016. As a result of the prepayment on the 2016 Notes, we recorded an extinguishment loss of $6 million, which includes $1 million ofunamortized discount and the make-whole premium during the year ended December 31, 2015.The senior secured notes due 2023 were issued by Sabre GLBL and are guaranteed by Sabre Holdings and each of Sabre GLBL’s existing andsubsequently acquired or organized subsidiaries that are borrowers under or guarantors of our senior secured credit facilities. The senior secured notes due2023 are secured by a first priority security interest in substantially all present and after acquired property and assets of Sabre GLBL and the guarantors of thenotes, which also constitutes collateral securing indebtedness under our senior secured facilities on a first priority basis.90Aggregate MaturitiesAs of December 31, 2018, aggregate maturities of our long-term debt were as follows (in thousands): AmountYears Ending December 31, 2019$68,435202081,304202175,8102022389,31020231,048,810Thereafter1,768,186Total$3,431,8559. DerivativesHedging Objectives-We are exposed to certain risks relating to ongoing business operations. The primary risks managed by using derivativeinstruments are foreign currency exchange rate risk and interest rate risk. Forward contracts on various foreign currencies are entered into to manage theforeign currency exchange rate risk on operational expenditures' exposure denominated in foreign currencies. Interest rate swaps are entered into to manageinterest rate risk associated with our floating-rate borrowings.In accordance with authoritative guidance on accounting for derivatives and hedging, we designate foreign currency forward contracts as cash flowhedges on operational exposure and certain interest rate swaps as cash flow hedges of floating-rate borrowings.Cash Flow Hedging Strategy-To protect against the reduction in value of forecasted foreign currency cash flows, we hedge portions of our revenuesand expenses denominated in foreign currencies with forward contracts. For example, when the dollar strengthens significantly against the foreigncurrencies, the decline in present value of future foreign currency expense is offset by losses in the fair value of the forward contracts designated as hedges.Conversely, when the dollar weakens, the increase in the present value of future foreign currency expense is offset by gains in the fair value of the forwardcontracts.We enter into interest rate swap agreements to manage interest rate risk exposure. The interest rate swap agreements modify our exposure to interestrate risk by converting floating-rate debt to a fixed rate basis, thus reducing the impact of interest rate changes on future interest expense and net earnings.These agreements involve the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreements without anexchange of the underlying principal amount.For derivative instruments that are designated and qualify as cash flow hedges, the effective portion and ineffective portions of the gain or loss on thederivative instruments, and the hedge components excluded from the assessment of effectiveness, are reported as a component of other comprehensiveincome (loss) (“OCI”) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods duringwhich the hedged transaction affects earnings. Derivatives not designated as hedging instruments are carried at fair value with changes in fair value reflectedin Other, net in the consolidated statement of operations.Forward Contracts- In order to hedge our operational expenditures' exposure to foreign currency movements, we are a party to certain foreigncurrency forward contracts that extend until December 2019. We have designated these instruments as cash flow hedges. No hedging ineffectiveness wasrecorded in earnings relating to the forward contracts during the years ended December 31, 2018, 2017 and 2016. As of December 31, 2018, we estimatethat $4 million in losses will be reclassified from other comprehensive income (loss) to earnings over the next 12 months.As of December 31, 2018 and 2017, we had the following unsettled purchased foreign currency forward contracts that were entered into to hedge ouroperational exposure to foreign currency movements (in thousands, except for average contract rates):Outstanding Notional Amounts as of December 31, 2018Buy Currency Sell Currency Foreign Amount USD Amount Average ContractRatePolish Zloty US Dollar 232,500 64,281 0.2765Singapore Dollar US Dollar 59,800 44,504 0.7442Indian Rupee US Dollar 2,880,000 39,956 0.0139British Pound Sterling US Dollar 19,600 26,525 1.3533Australian Dollar US Dollar 23,950 17,674 0.7379Swedish Krona US Dollar 48,250 5,678 0.1177Brazilian Real US Dollar 14,300 3,753 0.261591Outstanding Notional Amount as of December 31, 2017Buy Currency Sell Currency Foreign Amount USD Amount Average ContractRatePolish Zloty US Dollar 225,000 61,016 0.2712Singapore Dollar US Dollar 70,750 52,065 0.7359British Pound Sterling US Dollar 25,900 34,307 1.3246Indian Rupee US Dollar 1,720,000 25,939 0.0151Australian Dollar US Dollar 20,750 15,932 0.7678Swedish Krona US Dollar 44,100 5,353 0.1214Brazilian Real US Dollar 16,800 4,976 0.2962 Interest Rate Swap Contracts—Interest rate swaps outstanding at December 31, 2018 and matured during the years ended December 31, 2018,2017 and 2016 are as follows:Notional Amount Interest RateReceived Interest Rate Paid Effective Date Maturity DateDesignated as Hedging Instrument $750 million 1 month LIBOR(1) 1.48% December 31, 2015 December 30, 2016$750 million 1 month LIBOR(2) 1.15% March 31, 2017 December 31, 2017$750 million 1 month LIBOR(2) 1.65% December 29, 2017 December 31, 2018$1,350 million 1 month LIBOR(2) 2.27% December 31, 2018 December 31, 2019$1,200 million 1 month LIBOR(2) 2.19% December 31, 2019 December 31, 2020$600 million 1 month LIBOR(2) 2.81% December 31, 2020 December 31, 2021 Not Designated as Hedging Instrument(1) $750 million 1 month LIBOR(3) 2.19% December 30, 2016 December 29, 2017$750 million 1.18% 1 month LIBOR March 31, 2017 December 31, 2017$750 million 1 month LIBOR(3) 2.61% December 29, 2017 December 31, 2018$750 million 1.67% 1 month LIBOR December 29, 2017 December 31, 2018(1)Subject to a 1% floor.(2)Subject to a 0% floor.(3)As of February 22, 2017.As a result of the 2017 Term Facility Amendment in the first quarter of 2017, we discontinued hedge accounting for our existing swap agreements asof February 22, 2017. Accumulated losses of $14 million in other comprehensive income as of the date hedge accounting was discontinued is amortized intointerest expense through the maturity date of the respective swap agreements, and interest rate swap payments made are recorded in Other, net in theconsolidated statement of operations. Losses reclassified from other comprehensive income to interest expense related to the derivatives that no longerqualified for hedge accounting were fully amortized as of December 31, 2018 and were amortized $7 million for each of the years ended December 31, 2018and 2017. We also entered into new interest rate swaps with offsetting terms that are not designated as hedging instruments. Adjustments to the fair value ofinterest rate swaps not designated as hedging instruments did not have a material impact to our consolidated results of operations for the years endedDecember 31, 2018 and 2017. We had no undesignated derivatives as of December 31, 2016.In connection with the 2017 Term Facility Amendment, we entered into new forward starting interest rate swaps effective March 31, 2017 to hedge theinterest payments associated with $750 million of the floating-rate 2017 Term Loan B. The total notional amount outstanding is $750 million for the full years2018 and 2019. In September 2017, we entered into new forward starting interest rate swaps to hedge the interest payments associated with $750 million ofthe floating-rate Term Loan B. The total notional outstanding of $750 million becomes effective December 31, 2019 and extends through the full year 2020. InApril 2018, we entered into new forward starting interest rate swaps to hedge the interest payments associated with $600 million, $300 million and $450million of the floating-rate Term Loan B related to full year 2019, 2020 and 2021, respectively. In December 2018, we entered into new forward startinginterest rate swaps to hedge the interest payments associated with $150 million of the floating-rate Term Loan B for the full years 2020 and 2021. We havedesignated these swaps as cash flow hedges.The estimated fair values of our derivatives designated as hedging instruments as of December 31, 2018 and 2017 are as follows (in thousands):92 Derivative Assets (Liabilities) Fair Value as of December 31,Derivatives Designated as Hedging Instruments Consolidated Balance Sheet Location 2018 2017Foreign exchange contracts Prepaid expenses and other current assets — $6,213Foreign exchange contracts Other accrued liabilities (4,285) —Interest rate swaps Prepaid expenses and other current assets 3,674 856Interest rate swaps Other assets, net 295 3,093Total $(316) $10,162 Derivative Assets (Liabilities) Fair Value as of December 31,Derivatives Not Designated as Hedging Instruments Consolidated Balance Sheet Location 2018 2017Interest rate swaps Other accrued liabilities $— $(7,119)Total $— $(7,119)The effects of derivative instruments, net of taxes, on OCI for the years ended December 31, 2018, 2017 and 2016 are as follows (in thousands): Amount of (Loss) GainRecognized in OCI on Derivative, Effective Portion Year Ended December 31,Derivatives in Cash Flow Hedging Relationships 2018 2017 2016Foreign exchange contracts $(8,250) $13,205 $(6,413)Interest rate swaps 1,907 2,583 (3,446)Total $(6,343) $15,788 $(9,859) Amount of Loss (Gain) Reclassified from AccumulatedOCI into Income, Effective Portion Year Ended December 31,Derivatives in Cash Flow Hedging Relationships Income Statement Location 2018 2017 2016Foreign exchange contracts Cost of revenue $(322) $(3,001) $1,991Interest rate swaps Interest Expense, net 3,999 5,083 2,336Total $3,677 $2,082 $4,32710. Fair Value MeasurementsFair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between marketparticipants at the measurement date in the principal or most advantageous market for that asset or liability. Guidance on fair value measurements anddisclosures establishes a valuation hierarchy for disclosure of inputs used in measuring fair value defined as follows:Level 1—Inputs are unadjusted quoted prices that are available in active markets for identical assets or liabilities.Level 2—Inputs include quoted prices for similar assets and liabilities in active markets and quoted prices in non-active markets, inputs other thanquoted prices that are observable, and inputs that are not directly observable, but are corroborated by observable market data.Level 3—Inputs that are unobservable and are supported by little or no market activity and reflect the use of significant management judgment.The classification of a financial asset or liability within the hierarchy is determined based on the least reliable level of input that is significant to the fairvalue measurement. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use ofunobservable inputs to the extent possible. We also consider the counterparty and our own non-performance risk in our assessment of fair value.Assets and Liabilities that are Measured at Fair Value on a Recurring BasisForeign Currency Forward Contracts—The fair value of the foreign currency forward contracts was estimated based upon pricing models that utilizeLevel 2 inputs derived from or corroborated by observable market data such as currency spot and forward rates.93Interest Rate Swaps—The fair value of our interest rate swaps are estimated using a combined income and market-based valuation methodologybased upon Level 2 inputs, including credit ratings and forward interest rate yield curves obtained from independent pricing services reflecting broker marketquotes.Pension Plan Assets—See Note 14. Pension and Other Postretirement Benefit Plans, for fair value information on our pension plan assets.The following tables present the fair value of our assets (liabilities) that are required to be measured at fair value on a recurring basis as ofDecember 31, 2018 and 2017 (in thousands): Fair Value at Reporting Date Using December 31, 2018 Level 1 Level 2 Level 3Derivatives: Foreign currency forward contracts$(4,285) $— $(4,285) $—Interest rate swap contracts3,969 — 3,969 —Total$(316) $— $(316) $— Fair Value at Reporting Date Using December 31, 2017 Level 1 Level 2 Level 3Derivatives: Foreign currency forward contracts6,213 — 6,213 —Interest rate swap contracts(3,170) — (3,170) —Total$3,043 $— $3,043 $—There were no transfers between Levels 1 and 2 within the fair value hierarchy for the years ended December 31, 2018 and 2017.Assets that are Measured at Fair Value on a Nonrecurring BasisAs described in Note 1. Summary of Business and Significant Accounting Policies, our impairment review of goodwill is performed annually, as ofOctober 1 of each year. In addition, goodwill, property and equipment and intangible assets are reviewed for impairment if events and circumstances indicatethat their carrying amounts may not be recoverable.We perform our annual assessment of possible impairment of goodwill as of October 1 of each year. We begin with the qualitative assessment ofwhether it is more likely than not that a reporting unit’s fair value is less than its carrying value before applying the quantitative goodwill impairment model. If itis determined through the evaluation of events or circumstances that a reporting unit’s fair value is more likely than not greater than its carrying value, theremaining impairment steps are unnecessary. If it is determined that a reporting unit’s fair value is less than its carrying value, the fair values used in ourgoodwill impairment analysis are estimated using a combined approach based upon discounted future cash flow projections and observed market multiplesfor comparable businesses. The cash flow projections are based upon Level 3 inputs, including risk adjusted discount rates, future booking and transactionvolume levels, future price levels, rates of increase in operating expenses, cost of revenue and taxes. Additionally, in accordance with authoritative guidanceon fair value measurements, we make a number of assumptions, including market participants, the principal markets and highest and best use of thereporting units.Other Financial InstrumentsThe carrying value of our financial instruments including cash and cash equivalents, and accounts receivable approximates their fair values. The fairvalues of our senior secured notes due 2023 and term loans under our Amended and Restated Credit Agreement are determined based on quoted marketprices for a similar liability when traded as an asset in an active market, a Level 2 input.The following table presents the fair value and carrying value of all our notes and term loans under our Amended and Restated Credit Agreement as ofDecember 31, 2018 and 2017 (in thousands): Fair Value at December 31, Carrying Value(4) at December 31,Financial Instrument 2018 2017 2018 2017Term Loan A $520,000 $559,223 $525,514 $553,444Term Loan B $1,798,233 1,890,453 1,856,496 1,873,993Revolver, $400 million(3) — — — —5.375 % Senior Secured Notes Due 2023 529,799 546,563 530,000 530,0005.25% Senior Secured Notes Due 2023 495,248 512,500 500,000 500,000(1)Excludes net unamortized debt issuance costs.9411. Stock and Stockholders’ EquityInitial and Secondary Public OfferingsOn April 23, 2014, we closed our initial public offering of our common stock in which we sold 39,200,000 shares, and on April 25, 2014, theunderwriters exercised in full their overallotment option which resulted in the sale of an additional 5,880,000 shares of our common stock. Our shares ofcommon stock were sold at an initial public offering price of $16.00 per share, which generated $672 million of net proceeds from the offering after deductingunderwriting discounts and commissions and offering expenses.We used the net proceeds from this offering to repay (i) $296 million aggregate principal amount of our term loans and (ii) $320 million aggregateprincipal amount of our senior secured notes due in 2019 at a redemption price of 108.5% of the principal amount. We also used the net proceeds from ouroffering to pay the $27 million redemption premium and $13 million in accrued but unpaid interest on the senior secured notes due in 2019. We used theremaining portion of the net proceeds from our offering to pay a $21 million fee, in the aggregate, to TPG Global, LLC (“TPG”) and Silver Lake ManagementCompany (“Silver Lake”) pursuant to a management services agreement (the “MSA”), which was thereafter terminated.During the years ended December 31, 2016 and 2015, certain of our stockholders sold an aggregate of 20,000,000 and 103,970,000 shares,respectively, of our common stock through secondary public offerings. In connection with one of these offerings, we repurchased 3,400,000 shares totaling$99 million from the underwriter of the offering during the year ended December 31, 2015. We did not receive any proceeds from the secondary publicofferings. During the twelve months ended December 31, 2018, certain of our stockholders sold an aggregate of 69,304,636 shares of our common stockthrough secondary public offerings. We did not offer any shares or receive any proceeds from these secondary public offerings. Following the secondarypublic offering of approximately 23,304,636 shares of common stock during the fourth quarter of 2018, existing stockholders affiliated with TPG and SilverLake (the "Selling Stockholders") no longer held any shares of our common stock.In February 2017, we announced the approval of a multi-year share repurchase program to purchase up to $500 million of Sabre's common stockoutstanding. Repurchases under the program may take place in the open market or privately negotiated transactions.We repurchased 1,075,255 shares, totaling $26 million, and 5,779,769 shares, totaling $109 million, of our common stock during the years endedDecember 31, 2018 and 2017, respectively.Common Stock DividendsWe paid a quarterly cash dividend on our common stock of $0.14 per share, totaling $154 million, $0.14 per share, totaling $155 million, and $0.13 pershare, totaling $144 million, during the years ended December 31, 2018, 2017 and 2016, respectively.Our board of directors has declared a cash dividend of $0.14 per share of our common stock, which will be paid on March 29, 2019 to stockholders ofrecord as of March 21, 2019.12. Equity-Based AwardsAs of December 31, 2018, our outstanding equity-based compensation plans and agreements include the Sovereign Holdings, Inc. ManagementEquity Incentive Plan (“Sovereign MEIP”), the Sovereign Holdings, Inc. 2012 Management Equity Incentive Plan (“Sovereign 2012 MEIP”), the SabreCorporation 2014 Omnibus Incentive Compensation Plan (the “2014 Omnibus Plan”), and the Sabre Corporation 2016 Omnibus Incentive CompensationPlan (the “2016 Omnibus Plan”). Our 2016 Omnibus Plan serves as successor to the 2014 Omnibus Plan, the Sovereign MEIP and Sovereign 2012 MEIP andprovide for the issuance of stock options, restricted shares, restricted stock units (“RSUs”), performance-based RSU awards (“PSUs”), cash incentivecompensation and other stock-based awards. Outstanding awards under the 2014 Omnibus Plan, the Sovereign MEIP and Sovereign 2012 MEIP continue tobe subject to the terms and conditions of their respective plan.We initially reserved 10,000,000 shares and 13,500,000 shares of our common stock for issuance under our 2016 and 2014 Omnibus Plans,respectively. In addition, we added 2,956,465 shares that were reserved but not issued under the Sovereign MEIP and Sovereign 2012 MEIP plans to the2014 Omnibus Plan reserves, for a total of 16,456,465 authorized shares of common stock for issuance. Time-based options granted under the 2016 and2014 Omnibus Plans generally vest over a four year period with 25% vesting at the end of year one and the remaining vest quarterly thereafter. RSUsgenerally vest over a four year period with 25% vesting annually. PSUs generally vest over a four year period with 25% vesting annually dependent upon theachievement of certain company-based performance measures. Each reporting period, we assess the probability of achieving the performance measure and,if there is an adjustment, record the cumulative effect of the adjustment in the current reporting period. Options granted are exercisable for up to 10 years.Stock-based compensation expense totaled $57 million, $45 million and $49 million for the years ended December 31, 2018, 2017 and 2016, respectively.95Long-term cash incentive compensation is provided through the Long-Term Stretch Program (“LTSP”), which was initially adopted under the 2014Omnibus Plan, for certain senior executives and key employees. The LTSP provides for cash incentive compensation if certain company-based performancemeasures are achieved over the three-year period ending December 31, 2017. If these performance measures had been achieved, the cash incentive to bereceived by the participants would have been determined in part by the average closing price of our common stock in January 2018. As of December 31,2017, the performance measures were not achieved and no amounts were payable under the LTSP.The fair value of the stock options granted was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2018 2017 2016Exercise price$22.89 $21.33 $27.12Average risk-free interest rate2.72% 2.10% 1.81%Expected life (in years)6.11 6.11 6.11Implied volatility23.17% 22.02% 23.44%Dividend yield2.46% 2.64% 1.92%The following table summarizes the stock option award activities under our outstanding equity based compensation plans and agreements for the yearended December 31, 2018: Weighted-Average Quantity Exercise Price RemainingContractualTerm (years) AggregateIntrinsic Value(in thousands) (1)Outstanding at December 31, 20174,131,835 $19.50 7.6 $4,136Granted1,487,725 22.89 Exercised(789,970) 15.30 Cancelled(632,347) 22.98 Outstanding at December 31, 20184,197,243 $20.80 7.6 $3,542Vested and exercisable at December 31, 20181,879,291 $18.60 6.0 $5,713______________________(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$21.64 on December 31, 2018.For the years ended December 31, 2018, 2017 and 2016, the total intrinsic value of stock options exercised totaled $6 million, $19 million and $97million, respectively. The weighted-average fair values of options granted were $4.58, $3.67, and $5.45 during the years ended December 31, 2018, 2017and 2016, respectively. As of December 31, 2018, $9 million in unrecognized compensation expense associated with stock options will be recognized over aweighted-average period of 2.7 years.The following table summarizes the activities for our RSUs for the year ended December 31, 2018: Quantity Weighted-AverageGrant DateFair ValueUnvested at December 31, 20174,709,785 $23.77Granted2,948,187 22.56Vested(1,338,598) 22.98Cancelled(706,487) 23.04Unvested at December 31, 20185,612,887 $23.11The total fair value of RSUs vested, as of their respective vesting dates, was $30 million, $23 million, and $17 million during the years endedDecember 31, 2018, 2017 and 2016, respectively. As of December 31, 2018, approximately $91 million in unrecognized compensation expense associatedwith RSUs will be recognized over a weighted average period of 2.6 years.96The following table summarizes the activities for our PSUs for the year ended December 31, 2018: Quantity Weighted-AverageGrant DateFair ValueUnvested at December 31, 20171,414,221 $23.06Granted1,243,349 22.40Vested(397,485) 22.81Cancelled(541,315) 22.87Unvested at December 31, 20181,718,770 $22.60The total fair value of PSUs vested, as of their respective vesting dates, was $9 million, $14 million and $20 million during the years endedDecember 31, 2018, 2017 and 2016, respectively. The recognition of compensation expense associated with PSUs is contingent upon the achievement ofannual company-based performance measures. As of December 31, 2018, unrecognized compensation expense associated with PSUs totaled $11 million,$10 million and $6 million for the annual measurement periods ending December 31, 2019, 2020 and 2021, respectively.13. Earnings Per ShareThe following table reconciles the numerators and denominators used in the computations of basic and diluted earnings per share from continuingoperations (in thousands, expect per share data): Year Ended December 31, 2018 2017 2016Numerator: Income from continuing operations$340,921 $249,576 $241,390Net income attributable to noncontrolling interests5,129 5,113 4,377Net income from continuing operations available to common stockholders, basic and diluted$335,792 $244,463 $237,013Denominator: Basic weighted-average common shares outstanding275,235 276,893 277,546Dilutive effect of stock options and restricted stock awards2,283 1,427 5,206Diluted weighted-average common shares outstanding277,518 278,320 282,752Basic earnings per share$1.22 $0.88 $0.85Diluted earnings per share$1.21 $0.88 $0.84Basic earnings per share are based on the weighted-average number of common shares outstanding during each period. Diluted earnings per shareare based on the weighted-average number of common shares outstanding plus the effect of all dilutive common stock equivalents during each period. Thecalculation of diluted weighted-average shares excludes the impact of 3 million, 5 million and 1 million of anti-dilutive common stock equivalents for the yearsended December 31, 2018, 2017 and 2016, respectively.14. Pension and Other Postretirement Benefit PlansWe sponsor the Sabre Inc. 401(k) Savings Plan (“401(k) Plan”), which is a tax qualified defined contribution plan that allows tax deferred savings byeligible employees to provide funds for their retirement. We make a matching contribution equal to 100% of each pre-tax dollar contributed by the participanton the first 6% of eligible compensation. We recognized expenses related to the 401(k) Plan of approximately $22 million, $25 million and $23 million for theyears ended December 31, 2018, 2017 and 2016, respectively.We sponsor the Sabre Inc. Legacy Pension Plan (“LPP”), which is a tax qualified defined benefit pension plan for employees meeting certain eligibilityrequirements. The LPP was amended to freeze pension benefit accruals as of December 31, 2005, and as a result, no additional pension benefits have beenaccrued since that date. In April 2008, we amended the LPP to add a lump sum optional form of payment which participants may elect when their planbenefits commence. The effect of the amendment was to decrease the projected benefit obligation by $34 million, which is being amortized over 23.5 years,representing the weighted average of the lump sum benefit period and the life expectancy of all plan participants. We also sponsor postretirement benefitplans for certain employees in Canada and Hong Kong.97The following tables provide a reconciliation of the changes in the LPP’s benefit obligations and fair value of assets during the years endedDecember 31, 2018 and 2017, and the unfunded status as of December 31, 2018 and 2017 (in thousands): Year Ended December 31, 2018 2017Change in benefit obligation: Benefit obligation at January 1$(459,439) $(444,662)Service cost— —Interest cost(17,090) (18,731)Actuarial gain (loss), net18,529 (26,169)Benefits paid29,784 30,123Benefit obligation at December 31$(428,216) $(459,439)Change in plan assets: Fair value of assets at January 1$347,773 $324,471Actual return on plan assets(25,333) 46,425Employer contributions19,800 7,000Benefits paid(29,785) (30,123)Fair value of assets at December 31$312,455 $347,773Unfunded status at December 31$(115,761) $(111,666)The actuarial gains, net of $19 million for the year ended December 31, 2018 are attributable to an increase in the discount rate. The actuarial losses,net of $26 million for the year ended December 31, 2017, are attributable to a decrease in the discount rate, form of payment assumptions, and updates tocertain plan participant assumptions.The net benefit obligation of $116 million and $112 million as of December 31, 2018 and 2017, respectively, is included in other noncurrent liabilitiesin our consolidated balance sheets.The amounts recognized in accumulated other comprehensive income (loss) associated with the LPP, net of deferred taxes of $40 million and $58million as of December 31, 2018 and 2017, respectively, are as follows (in thousands): December 31, 2018 2017Net actuarial loss$(151,444) $(115,701)Prior service credit11,322 12,433Accumulated other comprehensive loss$(140,122) $(103,268)The following table provides the components of net periodic benefit costs associated with the LPP and the principal assumptions used in themeasurement of the LPP benefit obligations and net benefit costs for the three years ended December 31, 2018, 2017 and 2016 (in thousands): Year Ended December 31, 2018 2017 2016Interest cost$17,090 $18,731 $20,041Expected return on plan assets(18,790) (20,934) (20,803)Amortization of prior service credit(1,432) (1,432) (1,432)Amortization of actuarial loss7,362 6,517 5,871Net cost$4,230 $2,882 $3,677Weighted-average discount rate used to measure benefit obligations4.41% 3.81% 4.36%Weighted average assumptions used to determine net benefit cost: Discount rate3.81% 4.36% 4.86%Expected return on plan assets5.75% 6.50% 6.50%98The following table provides the pre-tax amounts recognized in OCI, including the amortization of the actuarial loss and prior service credit, associatedwith the LPP for the years ended December 31, 2018, 2017 and 2016 (in thousands):Obligations Recognized inYear Ended December 31,Other Comprehensive Income2018 2017 2016Net actuarial loss$25,595 $679 $27,023Amortization of actuarial loss(7,362) (6,517) (5,871)Amortization of prior service credit1,432 1,432 1,432Total (income) loss recognized in other comprehensive income$19,665 $(4,406) $22,584Total recognized in net periodic benefit cost and other comprehensive income$23,895 $(1,524) $26,261Our overall investment strategy for the LPP is to provide and maintain sufficient assets to meet pension obligations both as an ongoing business, aswell as in the event of termination, at the lowest cost consistent with prudent investment management, actuarial circumstances and economic risk, whileminimizing the earnings impact. Diversification is provided by using an asset allocation primarily between equity and debt securities in proportions expectedto provide opportunities for reasonable long term returns with acceptable levels of investment risk. Fair values of the applicable assets are determined asfollows:Mutual Fund—The fair value of our mutual funds are estimated by using market quotes as of the last day of the period.Common Collective Trusts—The fair value of our common collective trusts are estimated by using market quotes as of the last day of the period,quoted prices for similar securities and quoted prices in non-active markets.Real Estate—The fair value of our real estate funds are derived from the fair value of the underlying real estate assets held by the funds. These assetsare initially valued at cost and are reviewed periodically utilizing available market data to determine if the assets held should be adjusted.The basis for the selected target asset allocation included consideration of the demographic profile of plan participants, expected future benefitobligations and payments, projected funded status of the plan and other factors. The target allocations for LPP assets are 38% global equities, 58% longduration fixed income and 4% real estate. It is recognized that the investment management of the LPP assets has a direct effect on the achievement of itsgoal. As defined in Note 10. Fair Value Measurements, the following tables present the fair value of the LPP assets as of December 31, 2018, and 2017: Fair Value Measurements at December 31, 2018 Quoted Prices inActive Markets forIdentical Assets(Level 1) SignificantObservableInputs(Level 2) SignificantUnobservableInputs(Level 3) TotalCommon collective trusts: Fixed income securities$— $181,156 $— $181,156Global equity securities— 108,152 — 108,152Money market mutual fund2,311 — — 2,311Real estate— — 20,836 20,836Total assets at fair value$2,311 $289,308 $20,836 $312,455 Fair Value Measurements at December 31, 2017 Quoted Prices inActive Markets forIdentical Assets(Level 1) SignificantObservableInputs(Level 2) SignificantUnobservableInputs(Level 3) TotalCommon collective trusts: Fixed income securities$— $191,125 $— $191,125Global equity securities— 134,378 — 134,378Money market mutual fund2,815 — — 2,815Real estate— — 19,455 19,455Total assets at fair value$2,815 $325,503 $19,455 $347,77399The following table provides a rollforward of plan assets valued using significant unobservable inputs (level 3), in thousands: Real EstateEnding balance at December 31, 2016$18,519Contributions279Net distributions(279)Advisory fee(200)Net investment income820Unrealized gain253Net realized loss63Ending balance at December 31, 201719,455Contributions307Net distributions(307)Advisory fee(198)Net investment income845Unrealized gain717Net realized gain17Ending balance at December 31, 2018$20,836We contributed $20 million and $7 million to fund our defined benefit pension plans during the years ended December 31, 2018 and 2017,respectively. Annual contributions to our defined benefit pension plans in the United States, Canada and Hong Kong are based on several factors that mayvary from year to year. Our funding practice is to contribute the minimum required contribution as defined by law while also maintaining an 80% funded statusas defined by the Pension Protection Act of 2006. Thus, past contributions are not always indicative of future contributions. Based on current assumptions, weexpect to make $2 million in contributions to our defined benefit pension plans in 2019.The expected long term rate of return on plan assets for each measurement date was selected after giving consideration to historical returns on planassets, assessments of expected long term inflation and market returns for each asset class and the target asset allocation strategy. We do not anticipate thereturn of any plan assets to us in 2019.We expect the LPP to make the following estimated future benefit payments (in thousands): Amount2019$26,940202030,090202131,927202231,694202330,6272024-2028167,64015. Commitments and ContingenciesLease CommitmentsWe lease certain facilities under long term operating leases. Certain of our lease agreements contain renewal options, early termination options and/orpayment escalations based on fixed annual increases, local consumer price index changes or market rental reviews. We recognize rent expense with fixedrate increases and/or fixed rent reductions on a straight line basis over the term of the lease. We lease approximately 1.4 million square feet of office space in90 locations in 49 countries. For the years ended December 31, 2018, 2017 and 2016, we recognized rent expense of $30 million, $32 million and $26million, respectively. Future minimum lease payments under non-cancelable operating leases are as follows (in thousands): Amount2019$27,171202018,350202112,43820229,02920236,149Thereafter13,429Total$86,566100Legal ProceedingsWhile certain legal proceedings and related indemnification obligations to which we are a party specify the amounts claimed, these claims may notrepresent reasonably possible losses. Given the inherent uncertainties of litigation, the ultimate outcome of these matters cannot be predicted at this time, norcan the amount of possible loss or range of loss, if any, be reasonably estimated, except in circumstances where an aggregate litigation accrual has beenrecorded for probable and reasonably estimable loss contingencies. A determination of the amount of accrual required, if any, for these contingencies ismade after careful analysis of each matter. The required accrual may change in the future due to new information or developments in each matter or changesin approach such as a change in settlement strategy in dealing with these matters.Antitrust Litigation and InvestigationsUS Airways Antitrust LitigationIn April 2011, US Airways filed suit against us in federal court in the Southern District of New York, alleging violations of the Sherman Act Section 1(anticompetitive agreements) and Section 2 (monopolization). The complaint was filed fewer than two months after we entered into a new distributionagreement with US Airways. In September 2011, the court dismissed all claims relating to Section 2. The claims that were not dismissed are claims broughtunder Section 1 of the Sherman Act, relating to our contracts with US Airways, which US Airways claims contain anticompetitive provisions, and an allegedconspiracy with the other GDSs, allegedly to maintain the industry structure and not to compete for content. We strongly deny all of the allegations made byUS Airways.Sabre filed summary judgment motions in April 2014. In January 2015, the court issued an order granting Sabre's summary judgment motions in part,eliminating a majority of US Airways' alleged damages and rejecting its request for injunctive relief by which US Airways sought to bar Sabre from enforcingcertain provisions in our contracts. In September 2015, the court also dismissed US Airways' claim for declaratory relief. In February 2017, US Airways soughtreconsideration of the court's opinion dismissing the claim for declaratory relief, which the court denied in March 2017.The trial on the remaining claims commenced in October 2016. In December 2016, the jury issued a verdict in favor of US Airways with respect to itsclaim under Section 1 of the Sherman Act regarding Sabre's contract with US Airways and awarded it$5 million in single damages. The jury rejected USAirways' claim alleging a conspiracy with the other GDSs. We continue to believe that our business practices and contract terms are lawful. In January 2017,we filed a motion seeking judgment as a matter of law in favor of Sabre on the one claim on which the jury found for US Airways, which the court denied inMarch 2017.Based on the jury’s verdict, in March 2017 the court entered final judgment in favor of US Airways in the amount of $15 million, which is three times thejury’s award of $5 million as required by the Sherman Act.In April 2017, we filed an appeal with the United States Court of Appeals for the Second Circuit seeking a reversal of the judgment. US Airways alsofiled a counter-appeal challenging earlier court orders, including the above-referenced orders dismissing and/or issuing summary judgment as to portions ofits claims and damages. In connection with this appeal, we posted an appellate bond equal to the aggregate amount of the $15 million judgment entered plusinterest, which stayed the judgment pending the appeal. The Second Circuit heard oral arguments on this matter in December 2018.As a result of the jury's verdict, US Airways is also entitled to receive reasonable attorneys’ fees and costs under the Sherman Act. As such, it filed amotion seeking approximately $125 million in attorneys’ fees and costs, the amount of which we strongly dispute. In January 2018, the court denied USAirways' motion seeking attorneys' fees and costs, based on the fact that the appeal of the underlying judgment remains pending, as discussed above. Thecourt's denial of the motion was without prejudice, and US Airways may refile the motion if it prevails on the appeal.In the fourth quarter of 2016, we accrued a loss of $32 million, which represents the court's final judgment of $15 million, plus our estimate of $17million for US Airways' reasonable attorneys’ fees, expenses and costs. We are unable to estimate the exact amount of the loss associated with the verdict,but we estimate that there is a range of outcomes between $32 million and $65 million, inclusive of the trebled damage award of approximately $15 million.No amount within the range is considered a better estimate than any other amount within the range and therefore, the minimum within the range wasrecorded in selling, general and administrative expense during 2016. As noted above, the amount of attorneys' fees and costs to be awarded is subject toconclusion of the appellate process and, if US Airways ultimately prevails on the appeal, final decision by the trial court, which may itself be appealed. Theultimate resolution of this matter may be greater or less than the amount recorded and, if greater, could adversely affect our results of operations. We haveand will incur significant fees, costs and expenses for as long as the lawsuit, including any appeal, is ongoing. In addition, litigation by its nature is highlyuncertain and fraught with risk, and it is therefore difficult to predict the outcome of any particular matter, including any appeal or changes to our business thatmay be required as a result of the litigation. Depending on the outcome of the litigation, any of these consequences could have a material adverse effect onour business, financial condition and results of operations.101Lawsuit on Antitrust ClaimsIn July 2015, a putative class action lawsuit was filed against us and two other GDSs, in the United States District Court for the Southern District of NewYork. The plaintiffs, who are asserting claims on behalf of a putative class of consumers in various states, are generally alleging that the GDSs conspired tonegotiate for full content from the airlines, resulting in higher ticket prices for consumers, in violation of various federal and state laws. The plaintiffs sought anunspecified amount of damages in connection with their state law claims, and they requested injunctive relief in connection with their federal claim. In July2016, the court granted, in part, our motion to dismiss the lawsuit, finding that plaintiffs’ state law claims are preempted by federal law, thereby precludingtheir claims for damages. The court declined to dismiss plaintiffs’ claim seeking an injunction under federal antitrust law. The plaintiffs may appeal the court’sdismissal of their state law claims upon a final judgment. In August 2018, the plaintiffs sought leave from the court to withdraw their motion for classcertification. In October 2018, the court denied the plaintiffs’ motion for class certification with prejudice. The case is now proceeding on an individual basisonly. We believe that the losses associated with this case are neither probable nor estimable and therefore have not accrued any losses as of December 31,2018. We may incur significant fees, costs and expenses for as long as this litigation is ongoing. We intend to vigorously defend against the remaining claims.European Commission’s Directorate-General for Competition ("DG Comp") InvestigationOn November 23, 2018, the DG Comp announced that it has opened an investigation to assess whether our agreements with airlines and travelagents may restrict competition in breach of European Union antitrust rules. We intend to fully cooperate with the DG Comp’s investigation and are unable tomake any prediction regarding its outcome at this time. There is no legal deadline for the DG Comp to bring an antitrust investigation to an end, and theduration of the investigation is uncertain. Depending on the findings of the DG Comp, the outcome of the investigation could have a material adverse effect onour business, financial condition and results of operations. We may incur significant fees, costs and expenses for as long as this investigation is ongoing. Weintend to vigorously defend against any allegations of anticompetitive activity by the DG Comp.Department of Justice InvestigationOn May 19, 2011, we received a civil investigative demand (“CID”) from the U.S. Department of Justice (“DOJ”) investigating alleged anticompetitiveacts related to the airline distribution component of our business. We are fully cooperating with the DOJ investigation and are unable to make any predictionregarding its outcome. The DOJ is also investigating other companies that own GDSs, and has sent CIDs to other companies in the travel industry. Based onits findings in the investigation, the DOJ may (i) close the file, (ii) seek a consent decree to remedy issues it believes violate the antitrust laws, or (iii) file suitagainst us for violating the antitrust laws, seeking injunctive relief. If injunctive relief were granted, depending on its scope, it could affect the manner in whichour airline distribution business is operated and potentially force changes to the existing airline distribution business model. Any of these consequenceswould have a material adverse effect on our business, financial condition and results of operations. We have not received any communications from the DOJregarding this matter for several years; however, we have not been notified that this matter is closed.Indian Income Tax LitigationWe are currently a defendant in income tax litigation brought by the Indian Director of Income Tax (“DIT”) in the Supreme Court of India. The disputearose in 1999 when the DIT asserted that we have a permanent establishment within the meaning of the Income Tax Treaty between the United States andthe Republic of India and accordingly issued tax assessments for assessment years ending March 1998 and March 1999, and later issued further taxassessments for assessment years ending March 2000 through March 2006. The DIT has continued to issue further tax assessments on a similar basis forsubsequent years; however, the tax assessments for assessment years ending March 2007 and later are no longer material. We appealed the taxassessments for assessment years ending March 1998 through March 2006 and the Indian Commissioner of Income Tax Appeals returned a mixed verdict.We filed further appeals with the Income Tax Appellate Tribunal (“ITAT”). The ITAT ruled in our favor on June 19, 2009 and July 10, 2009, stating that noincome would be chargeable to tax for assessment years ending March 1998 and March 1999, and from March 2000 through March 2006. The DIT appealedthose decisions to the Delhi High Court, which found in our favor on July 19, 2010. The DIT has appealed the decision to the Supreme Court of India. Ourcase has been listed for hearing with the Supreme Court, and it has not yet been presented. We have appealed the tax assessments for the assessmentyears ended March 2013 to March 2016 with the ITAT and no trial date has been set for these subsequent years.In addition, SAPPL is currently a defendant in similar income tax litigation brought by the DIT. The dispute arose when the DIT asserted that SAPPLhas a permanent establishment within the meaning of the Income Tax Treaty between Singapore and India and accordingly issued tax assessments forassessment years ending March 2000 through March 2005. SAPPL appealed the tax assessments, and the Indian Commissioner of Income Tax (Appeals)returned a mixed verdict. SAPPL filed further appeals with the ITAT. The ITAT ruled in SAPPL’s favor, finding that no income would be chargeable to tax forassessment years ending March 2000 through March 2005. The DIT appealed those decisions to the Delhi High Court. No hearing date has been set. TheDIT also assessed taxes on a similar basis for assessment years ending March 2006 through March 2014 and appeals for assessment years ending March2006 through 2014 are pending before the ITAT.102If the DIT were to fully prevail on every claim against us, including SAPPL, we could be subject to taxes, interest and penalties of approximately $42million as of December 31, 2018. We intend to continue to aggressively defend against each of the foregoing claims. Although we do not believe that theoutcome of the proceedings will result in a material impact on our business or financial condition, litigation is by its nature uncertain. We do not believe thisoutcome is more likely than not and therefore have not made any provisions or recorded any liability for the potential resolution of any of these claims.Indian Service Tax LitigationSAPPL's Indian subsidiary is also subject to litigation by the India Director General (Service Tax) ("DGST"), which has assessed the subsidiary formultiple years related to its alleged failure to pay service tax on marketing fees and reimbursements of expenses. Indian courts have returned verdictsfavorable to the Indian subsidiary. The DGST has appealed the verdict to the Indian Supreme Court. We do not believe that an adverse outcome is probableand therefore have not made any provisions or recorded any liability for the potential resolution of any of these claims.Litigation Relating to Routine ProceedingsWe are also engaged from time to time in other routine legal and tax proceedings incidental to our business. We do not believe that any of theseroutine proceedings will have a material impact on the business or our financial condition.OtherAir BerlinIn November 2017, in connection with Air Berlin’s insolvency proceedings, we requested that Air Berlin make an election under the GermanInsolvency Act on whether to perform or terminate its contract with us. In January 2018, Air Berlin notified us by letter that it was exercising its right under theGerman Insolvency Act to terminate its contract with us. In addition, Air Berlin’s letter alleged various breaches by us of the contract and asserted that it hadsuffered a significant amount of damages associated with its claims. Air Berlin has not commenced any formal action with respect to its claims. We believethat losses associated with these claims are neither probable nor estimable and therefore have not accrued any losses as of December 31, 2018. We mayincur significant fees, costs and expenses for as long as this matter is ongoing. We intend to vigorously defend against these claims.SynXis Central Reservation SystemAs previously disclosed, we became aware of an incident involving unauthorized access to payment information contained in a subset of hotelreservations processed through the Sabre Hospitality Solutions SynXis Central Reservation System (the “HS Central Reservation System”). Our investigationwas supported by third party experts, including a leading cybersecurity firm. Our investigation determined that an unauthorized party obtained access toaccount credentials that permitted access to a subset of hotel reservations processed through the HS Central Reservation System; used the accountcredentials to view a credit card summary page on the HS Central Reservation System and access payment card information (although we use encryption,this credential had the right to see unencrypted card data); and first obtained access to payment card information and some other reservation information onAugust 10, 2016. The last access to payment card information was on March 9, 2017. The unauthorized party was able to access information for certain hotelreservations, including cardholder name; payment card number; card expiration date; and, for a subset of reservations, card security code. The unauthorizedparty was also able, in some cases, to access certain information such as guest name(s), email, phone number, address, and other information if provided tothe HS Central Reservation System. Information such as Social Security, passport, or driver’s license number was not accessed. The investigation did notuncover forensic evidence that the unauthorized party removed any information from the system, but it is a possibility. We took successful measures to ensurethis unauthorized access to the HS Central Reservation System was stopped and is no longer possible. There is no indication that any of our systems beyondthe HS Central Reservation System, such as Sabre’s Airline Solutions and Travel Network platforms, were affected or accessed by the unauthorized party.We notified law enforcement and the payment card brands and, engaged a PCI forensic investigator to investigate this incident at the payment card brands'request. We have notified customers and other companies that use or interact with, directly or indirectly, the HS Central Reservation System about theincident. We are also cooperating with various governmental authorities that are investigating this incident. Separately, in November 2017, Sabre HospitalitySolutions observed a pattern of activity that, after further investigation, led it to believe that an unauthorized party improperly obtained access to certain hoteluser credentials for purposes of accessing the HS Central Reservation System. We deactivated the compromised accounts and notified law enforcement ofthis activity. We also notified the payment card brands, and at their request, we have engaged a PCI forensic investigator to investigate this incident. We havenot found any evidence of a breach of the network security of the HS Central Reservation System, and we believe that the number of affected reservationsrepresents only a fraction of 1% of the bookings in the HS Central Reservation System. Although the costs related to these incidents, including anyassociated penalties assessed by any governmental authority or payment card brand or indemnification obligations to our customers, as well as any otherimpacts or remediation related to this incident, may be material, it is not possible at this time to determine whether we will incur, or to reasonably estimate theamount of, any liabilities in connection with them. We maintain insurance that covers certain aspects of cyber risks, and we continue to work with ourinsurance carriers in these matters.103Other Tax MattersWe pay and collect Value Added Tax (“VAT”) in most countries in which we operate related to the procurement of goods and services or the sale ofservices within the normal course of our business. We establish VAT receivables for the collection of refunds, which are subject to audit and collection risks invarious countries. As of December 31, 2018, we have approximately $20 million in VAT receivables resulting from claims with the Greek governmentbeginning in 2014, which we have paid and are entitled to recover as a refund. The Greek tax authorities have audited our refund claims for 2014 and 2015totaling $8 million. Their audit reports issued in October 2018 rejected the recoverability of these refund claims and instead claimed additional tax, penaltiesand interest due of $4 million, which we were required to pay in November 2018. We intend to vigorously defend our positions including litigation, ifnecessary. In the event our appeals result in an adverse ruling, claims for years subsequent to 2015 may not be collectible and any prior refunds receivedmay potentially be reversed to the extent the applicable statute of limitations has not expired. We do not believe that an adverse outcome is probable withrespect to Greek tax authorities’ claims for the amounts recently assessed and therefore have not accrued any losses for the potential resolution of any ofthese claims; however, we may incur expenses in future periods including litigation costs and pre-payment of a portion of the tax amount in order to defendour position.We operate in a number of jurisdictions in which the taxing authorities may challenge our tax positions including both income and non-income basedtaxes. We routinely receive inquires, and may receive tax assessments in these additional foreign jurisdictions and we recognize liabilities with respect tonon-income based taxes when we believe it’s probable that amounts will be owed to the taxing authorities and such amounts are estimable. We continue todefend against any and all such material claims as presented and may be required to prepay assessed amounts. As of December 31, 2018, we have notaccrued any material amounts for probable exposure related to such contingencies. If our positions are ultimately rejected it could have a material impact toour results of operations.16. Segment InformationOur reportable segments are based upon our internal organizational structure; the manner in which our operations are managed; the criteria used byour Chief Executive Officer, who is our Chief Operating Decision Maker ("CODM"), to evaluate segment performance; the availability of separate financialinformation; and overall materiality considerations. Effective the first quarter of 2018, our business has three reportable segments: (i) Travel Network, (ii)Airline Solutions and (iii) Hospitality Solutions. In conjunction with this change, we have modified the methodology we have historically used to allocateshared corporate technology costs. Each segment now reflects a portion of our shared corporate costs that historically were not allocated to a business unit,based on relative consumption of shared technology infrastructure costs and defined revenue metrics. These changes have no impact on our consolidatedresults of operations, but result in a decrease of individual segment profitability only.Our CODM utilizes Adjusted Gross Profit, Adjusted Operating Income and Adjusted EBITDA as the measures of profitability to evaluate performance ofour segments and allocate resources. Corporate includes a technology organization that provides development and support activities to our segments. Themajority of costs associated with our technology organization are allocated to the segments primarily based on the segments' usage of resources. Benefitexpenses, facility costs and depreciation expense on the corporate headquarters building are allocated to the segments based on headcount. Unallocatedcorporate costs include certain shared expenses such as accounting, finance, human resources, legal, corporate systems, amortization of acquired intangibleassets, impairment and related charges, stock-based compensation, restructuring charges, legal reserves and other items not identifiable with one of oursegments.We account for significant intersegment transactions as if the transactions were with third parties, that is, at estimated current market prices. Themajority of the intersegment revenues and cost of revenues are fees charged by Travel Network to Hospitality Solutions for airline trips booked through ourGDS.Our CODM does not review total assets by segment as operating evaluations and resource allocation decisions are not made on the basis of totalassets by segment.The performance of our segments is evaluated primarily on Adjusted Gross Profit, Adjusted Operating Income and Adjusted EBITDA which are notrecognized terms under GAAP. Our uses of Adjusted Gross Profit, Adjusted Operating Income and Adjusted EBITDA have limitations as analytical tools, andshould not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.We define Adjusted Gross Profit as operating income adjusted for selling, general and administrative expenses, impairment and related charges, thecost of revenue portion of depreciation and amortization, restructuring and other costs, amortization of upfront incentive compensation, and stock-basedcompensation included in cost of revenue.We define Adjusted Operating Income as operating income adjusted for joint venture equity income, impairment and related charges, acquisition-related amortization, restructuring and other costs, acquisition-related costs, litigation (reimbursements) costs and stock-based compensation.104We define Adjusted EBITDA as income from continuing operations adjusted for impairment and related charges, depreciation and amortization ofproperty and equipment, amortization of capitalized implementation costs, acquisition-related amortization, amortization of upfront incentive consideration,interest expense, net, loss on extinguishment of debt, other, net, restructuring and other costs, acquisition-related costs, litigation costs (reimbursements), net,stock-based compensation and provision for income taxes.Segment information for the years ended December 31, 2018, 2017 and 2016 is as follows (in thousands): Year Ended December 31, 2018 2017 2016Revenue Travel Network$2,806,194 $2,550,470 $2,374,849Airline Solutions822,747 816,008 794,637Hospitality Solutions273,079 258,352 224,669Eliminations(35,064) (26,346) (20,768)Total revenue$3,866,956 $3,598,484 $3,373,387Adjusted Gross Profit(a) Travel Network$1,098,052 $1,071,249 $1,039,561Airline Solutions355,079 366,255 354,922Hospitality Solutions83,333 88,477 72,497Corporate(15,056) (25,795) (6,305)Total$1,521,408 $1,500,186 $1,460,675Adjusted Operating Income(b) Travel Network$755,811 $746,625 $738,134Airline Solutions111,146 137,932 136,177Hospitality Solutions12,881 9,670 16,807Corporate(178,406) (188,078) (170,757)Total$701,432$706,149$720,361Adjusted EBITDA(c) Travel Network$951,709 $923,615 $886,630Airline Solutions293,577 296,437 286,362Hospitality Solutions52,824 42,784 39,964Total segments1,298,110 1,262,836 1,212,956Corporate(173,720) (184,265) (166,310)Total$1,124,390 $1,078,571 $1,046,646Depreciation and amortization Travel Network$118,276 $109,579 $92,772Airline Solutions182,431 158,505 150,185Hospitality Solutions39,943 33,114 23,157Total segments340,650 301,198 266,114Corporate72,694 99,673 147,872Total$413,344 $400,871 $413,986Capital Expenditures Travel Network$64,943 $90,881 $97,798Airline Solutions98,374 116,948 126,558Hospitality Solutions39,160 43,443 42,404Total segments202,477 251,272 266,760Corporate81,463 65,165 60,887Total$283,940 $316,437 $327,647105(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, 2018 2017 2016Adjusted Gross Profit$1,521,408 $1,500,186 $1,460,675Less adjustments: Selling, general and administrative513,526 510,075 626,153Impairment and related charges(7)— 81,112 —Cost of revenue adjustments: Depreciation and amortization (1)341,653 317,812 287,353Amortization of upfront incentive consideration (2)77,622 67,411 55,724Restructuring and other costs (4)— 12,604 12,660Stock-based compensation26,591 17,732 19,213Operating income$562,016 $493,440 $459,572(b)The following table sets forth the reconciliation of Adjusted Operating Income to operating income in our statement of operations (in thousands): Year Ended December 31, 2018 2017 2016Adjusted Operating income$701,432 $706,149 $720,361Less adjustments: Joint venture equity income2,556 2,580 2,780 Impairment and related charges(7)— 81,112 —Acquisition-related amortization(1c)68,008 95,860 143,425Restructuring and other costs (4)— 23,975 18,286Acquisition-related costs(5)3,266 — 779Litigation (reimbursements) costs(6)8,323 (35,507) 46,995Stock-based compensation57,263 44,689 48,524Operating income$562,016 $493,440 $459,572(c)The following table sets forth the reconciliation of Adjusted EBITDA to income from continuing operations in our statement of operations (in thousands): Year Ended December 31, 2018 2017 2016Adjusted EBITDA$1,124,390 $1,078,571 $1,046,646Less adjustments: Impairment and related charges(7)— 81,112 —Depreciation and amortization of property and equipment(1a)303,612 264,880 233,303Amortization of capitalized implementation costs(1b)41,724 40,131 37,258Acquisition-related amortization(1c)68,008 95,860 143,425Amortization of upfront incentive consideration(2)77,622 67,411 55,724Interest expense, net157,017 153,925 158,251Loss on extinguishment of debt633 1,012 3,683Other, net(3)8,509 (36,530) (27,617)Restructuring and other costs(4)— 23,975 18,286Acquisition-related costs(5)3,266 — 779Litigation (reimbursements) costs(6)8,323 (35,507) 46,995Stock-based compensation57,263 44,689 48,524Provision for income taxes(8)57,492 128,037 86,645Income from continuing operations$340,921 $249,576 $241,390________________________106(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 andhosted revenue model.c.Acquisition-related amortization represents amortization of intangible assets from the take-private transaction in 2007 as well as intangibles associatedwith acquisitions since that date. (2)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. Thisconsideration is made with the objective of increasing the number of clients or to ensure or improve customer loyalty. These service contract terms areestablished 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 termsrequiring repayment of the upfront incentive consideration if those objectives are not met. (3)In 2018, Other, net, includes an expense of $5 million related to our liability under the Tax Receivable Agreement ("TRA") offset by a gain of $8 million on the saleof an investment. In 2017, we recognized a benefit of $60 million due to a reduction to our liability under the TRA primarily due to a provisional adjustment resultingfrom the enactment of TCJA which reduced the U.S. corporate income tax rate (see Note 7. Income Taxes), offset by a loss of $15 million related to debtmodification costs associated with a debt refinancing. In 2016, we recognized a gain of $15 million from the sale of our available-for-sale marketable securities,and a $6 million gain associated with the receipt of an earn-out payment from the sale of a business in 2013. In addition, all periods presented include foreignexchange gains and losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into therelevant functional currency.(4)Restructuring and other costs represents charges associated with business restructuring and associated changes implemented which resulted in severancebenefits related to employee terminations, integration and facility opening or closing costs and other business reorganization costs. We recorded $25 million and$20 million in charges associated with an announced action to reduce our workforce in 2017 and 2016, respectively. These reductions aligned our operationswith business needs and implemented an ongoing cost and organizational structure consistent with our expected growth needs and opportunities. In 2015, werecognized a restructuring charge of $9 million associated with the integration of Abacus, and reduced that estimate by $4 million in 2016, as a result of thereevaluation of our plan derived from a shift in timing and strategy of originally contemplated actions. As of December 31, 2018, our actions under these activitieshave been substantially completed and payments under the plan have been made.(5)Acquisition-related costs represent fees and expenses incurred associated with the 2018 agreement to acquire Farelogix, which is anticipated to close in 2019,and in 2016, the acquisition of the Trust Group and Airpas Aviation. See Note 3. Acquisitions.(6)Litigation costs (reimbursements), net represent charges associated with antitrust and other foreign non-income tax contingency matters. In 2018, we recordednon-income tax expense of $5 million for tax, penalties and interest associated with certain non-income tax claims for historical periods regarding permanentestablishment in a foreign jurisdiction. In 2017, we recorded a $43 million reimbursement, net of accrued legal and related expenses, from a settlement with ourinsurance carriers with respect to the American Airlines litigation. In 2016, we recorded an accrual of $32 million representing the trebling of the jury award plusour estimate of attorneys’ fees, expenses and costs in the US Airways litigation. See Note 15. Commitments and Contingencies.(7)Impairment and related charges represents an $81 million impairment charge recorded in 2017 associated with net capitalized contract costs related to an AirlineSolutions' customer based on our analysis of the recoverability of such amounts. See Note 4. Impairment and Related Charges for additional information.(8)The tax impact on net income adjustments includes the tax effect of each separate adjustment based on the statutory tax rate for the jurisdiction(s) in which theadjustment was taxable or deductible, and the tax effect of items that relate to tax specific financial transactions, tax law changes, uncertain tax positions andother items. In 2018, the provision for income taxes includes a benefit of $27 million related to the enactment of the TCJA for deferred taxes and foreign taxeffects. In 2017, provision for income taxes includes a provisional impact of $47 million recognized as a result of the enactment of the TCJA in December 2017.See Note 7. Income Taxes.A significant portion of our revenue is generated through transaction-based fees that we charge to our customers. For Travel Network, this fee is in theform of a transaction fee for bookings on our GDS; for Airline Solutions and Hospitality Solutions, this fee is a recurring usage-based fee for the use of ourSaaS and hosted systems, as well as implementation fees and professional service fees. Transaction-based revenue accounted for approximately 95% ofour Travel Network revenue for each of the years ended December 31, 2018, 2017 and 2016. Transaction-based revenue accounted for approximately 81%,74% and 70% for the years ended December 31, 2018, 2017 and 2016, respectively, of our Airline Solutions revenue. Transaction-based revenue accountedfor approximately 81%, 83% and 79% for the years ended December 31, 2018, 2017 and 2016, respectively, of our Hospitality Solutions revenue.All joint venture equity income relates to Travel Network. 107Our revenues and long-lived assets, excluding goodwill and intangible assets, by geographic region are summarized below. Revenue of our TravelNetwork business is attributed to countries based on the location of the travel supplier. For Airline Solutions and Hospitality Solutions, revenue is attributed tocountries based on the location of the customer. Year Ended December 31, 2018 2017 2016Revenue: United States$1,346,895 $1,340,893 $1,257,685Europe928,533 777,406 699,168APAC820,711 715,740 657,465All other770,817 764,445 759,069Total$3,866,956 $3,598,484 $3,373,387 As of December 31, 2018 2017Long-lived assets United States$773,739 $776,102APAC7,254 11,468Europe3,735 3,939All other5,644 7,685Total$790,372 $799,19417. Quarterly Financial Information (Unaudited)A summary of our quarterly financial results for the years ended December 31, 2018 and 2017 is presented below (in thousands): Year Ended December 31, 2018 First Quarter Second Quarter Third Quarter Fourth QuarterRevenue$988,369 $984,376 $970,283 $923,928Operating income165,401 138,833 136,763 121,019Income (loss) from continuing operations90,449 92,565 70,879 87,028(Loss) income from discontinued operations, net of tax(1,207) 760 3,664 (1,478)Net income (loss)89,242 93,325 74,543 85,550Net income (loss) attributable to common stockholders87,880 92,246 73,005 84,400Net income (loss) per share attributable to common stockholders: Basic0.32 0.33 0.26 0.31Diluted0.32 0.33 0.26 0.30 Year Ended December 31, 2017 First Quarter Second Quarter Third Quarter Fourth QuarterRevenue$915,353 $900,663 $900,606 $881,862Operating income163,326 18,718 176,796 134,600Income from continuing operations77,722 (4,152) 92,825 83,181Income (loss) from discontinued operations, net of tax(477) (1,222) (529) 296Net income77,245 (5,374) 92,296 83,477Net income attributable to common stockholders75,939 (6,487) 90,989 82,090Net income per share attributable to common stockholders: Basic0.28 (0.02) 0.33 0.30Diluted0.27 (0.02) 0.33 0.30ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENot applicable.108ITEM 9A.CONTROLS AND PROCEDURESDisclosure Controls and ProceduresUnder the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we haveevaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the endof the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of theperiod covered by this report, our disclosure controls and procedures are effective.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule13a-15(f)). Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we haveconducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on our evaluation, weconcluded that our internal control over financial reporting is effective as of December 31, 2018.Our independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report on the effectiveness of our internal control overfinancial reporting as of December 31, 2018, which is included in Item 8 of this Annual Report on Form 10-K.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluationof effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate.Internal Control Over Financial ReportingThere have been no changes in our internal control over financial reporting (as this term is defined in Exchange Act Rule 13a-15(f)) during the yearended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.ITEM 9B.OTHER INFORMATIONNot applicable.109PART IIIITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe information set forth under the following headings of our definitive Proxy Statement for our 2019 annual meeting of stockholders (the “2019 ProxyStatement”) is incorporated in this Item 10 by reference:•“Certain Information Regarding Nominees for Director” under “Proposal 1. Election of Directors,” which identifies our directors and nominees forour Board of Directors, and "Other Corporate Governance Practices and Matters—Stockholders’ Agreement” under “Corporate Governance.”•"Other Information—“Section 16(a) Beneficial Ownership Reporting Compliance.”•“Corporate Governance—Other Corporate Governance Practices and Policies—Code of Business Ethics,” which describes our Code of BusinessEthics.•“Corporate Governance—Stockholder Nominations for Directors,” which describes the procedures by which stockholders may nominatecandidates 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 andaudit committee financial experts.Information regarding our executive officers is reported under the caption “Executive Officers of the Registrant” in Part I of this Annual Report on Form 10-K.ITEM 11.EXECUTIVE COMPENSATIONThe information set forth under the headings “Compensation Discussion and Analysis,” “Executive Compensation,” “Proposal 1. Election of Directors—Director Compensation Program” and “Corporate Governance—Compensation Committee Interlocks and Insider Participation” of the 2019 Proxy Statementis incorporated in this Item 11 by reference.ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSThe information set forth under the heading “Security Ownership of Certain Beneficial Owners and Management” of the 2019 Proxy Statement isincorporated in this Item 12 by reference.Equity Compensation Plan InformationThe following table gives information about our common stock that may be issued upon the exercise of options, warrants and rights under all of ourequity compensation plans as of December 31, 2018. Number of securities to beissued upon exercise ofoutstanding options (a) Weighted average exerciseprice of outstanding options(b) Number of securitiesremaining available forfuture issuance under equitycompensation plansEquity compensation plans approved by stockholders11,528,900 $20.80 10,357,631________________________(a)Includes shares of common stock to be issued upon the exercise of outstanding options under our 2016 Omnibus Plan, 2014 Omnibus Plan, theSovereign 2012 MEIP and the Sovereign MEIP. Also includes 7,331,657 restricted share units under our 2016 Omnibus Plan and 2014 Omnibus Plan(including shares that may be issued pursuant to outstanding performance-based restricted share units, assuming the target award is met; actual sharesmay vary, depending on actual performance).(b)Excludes restricted share units which do not have an exercise price.Sabre Corporation 2016 Omnibus Incentive Compensation Plan. The 2016 Omnibus Plan serves as a successor to the 2014 Omnibus Plan andprovides for the issuance of stock options, restricted shares, restricted stock units ("RSUs") performance-based RSU awards ("PSUs"), cash incentivecompensation and other stock-based awards.Sabre Corporation 2014 Omnibus Incentive Compensation Plan. The 2014 Omnibus Plan serves as successor to the Sovereign MEIP and Sovereign2012 MEIP and provides for the issuance of stock options, restricted shares, RSUs, PSUs, cash incentive compensation and other stock-based awards. Allshares available for future grants, along with shares that were covered by prior awards of stock options granted under the 2014 Omnibus Plan that wereforfeited or otherwise expire unexercised or without issuance of Sabre Corporation common stock, have been transferred to the 2016 Omnibus Plan.Therefore, as of December 31, 2018, no shares remained available for future grants under the 2014 Omnibus Plan.110Sovereign Holdings, Inc. Management Equity Incentive Plan. Under the Sovereign MEIP, key employees and, in certain circumstances, the directors,service providers and consultants, of Sabre and its affiliates may be granted stock options. All shares available for future grants, along with shares that werecovered by prior awards of stock options granted under the Sovereign MEIP that were forfeited or otherwise expire unexercised or without the issuance ofshares of Sabre Corporation common stock, have been transferred to the Sovereign 2012 MEIP, which have subsequently been transferred to the 2014Omnibus Plan and then to the 2016 Omnibus Plan. Therefore, as of December 31, 2018, no shares remained available for future grants under the SovereignMEIP.Sovereign Holdings, Inc. 2012 Management Equity Incentive Plan. Under the Sovereign 2012 MEIP, key employees and, in certain circumstances, thedirectors, service providers and consultants, of Sabre and its affiliates may be granted stock options, restricted shares, RSUs, PSUs and other stock-basedawards. All shares available for future grants, along with shares that were covered by prior awards of stock options granted under the Sovereign MEIP thatwere forfeited or otherwise expire unexercised or without the issuance of shares of Sabre Corporation common stock, have been transferred to the 2014Omnibus Plan and then to the 2016 Omnibus Plan. Therefore, as of December 31, 2018, no shares remained available for future grants under the Sovereign2012 MEIP.ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information set forth under the headings “Certain Relationships and Related Party Transactions” and “Corporate Governance—BoardComposition and Director Independence” of the 2019 Proxy Statement is incorporated in this Item 13 by reference.ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information set forth under the headings “Principal Accounting Firm Fees” and “Audit Committee Approval of Audit and Non-Audit Services” under“Proposal 2. Ratification of Independent Auditors” of the 2019 Proxy Statement is incorporated in this Item 14 by reference.111PART IVITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULESThe following documents are filed as part of this report.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 beread in conjunction with the financial statements and notes thereto contained in Item 8.All other financial statements and financial statement schedules for which provision is made in the applicable accounting regulations of the SEC arenot required under the related instruction, are not material or are not applicable and, therefore, have been omitted.3.Exhibits.ExhibitNumber Description of Exhibits2.1 Asset Purchase Agreement, dated as of January 23, 2015 by and among Expedia Inc., Sabre GLBL Inc., Travelocity.com LP and certainaffiliates of Sabre GLBL Inc. and Travelocity.com LP (incorporated by reference to Exhibit 2.1 of Sabre Corporation’s Current Report onForm 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 TechnologyEnterprises II Ltd. (incorporated by reference to Exhibit 2.1 of Sabre’s Corporation Current Report on Form 8-K filed with the Securitiesand 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’sCorporation Current Report on Form 8-K filed with the Securities and Exchange Commission on April 22, 2014).3.2 Certificate of Amendment to Third Amended and Restated Certificate of Incorporation of Sabre Corporation (incorporated by reference toExhibit 3.1 of Sabre's Corporation Current Report on Form 8-K filed with the Securities and Exchange Commission on May 25, 2017).3.43 Certificate of Amendment to Third Amended and Restated Certificate of Incorporation of Sabre Corporation (incorporated by reference toExhibit 3.1 of Sabre Corporation's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 24, 2018).3.54 Fourth Amended and Restated Bylaws of Sabre Corporation (incorporated by reference to Exhibit 3.2 of Sabre Corporation's CurrentReport on Form 8-K filed with the Securities and Exchange Commission on May 25, 2018).4.1 Amended and Restated Registration Rights Agreement, dated as of April 23, 2014 by and among Sabre Corporation and thestockholders party thereto (incorporated by reference to Exhibit 4.1 of Sabre’s Corporation Current Report on Form 8-K filed with theSecurities 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, NationalAssociation, as trustee and collateral agent. (incorporated by reference to Exhibit 4.1 of Sabre’s Corporation Current Report on Form 8-Kfiled with the Securities and Exchange Commission on April 15, 2015).4.3 Form of 5.375% Senior Secured Notes due 2023 (included in Exhibit 4.2).4.4 Indenture, dated as of November 9, 2015, among Sabre GLBL Inc., each of the guarantors party thereto and Wells Fargo Bank, NationalAssociation, as trustee and collateral agent. (incorporated by reference to Exhibit 4.1 of Sabre’s Corporation Current Report on Form 8-Kfiled with the Securities and Exchange Commission on November 9 2015).4.5 Form of 5.250% Senior Secured Notes due 2023 (included in Exhibit 4.4).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 andExchange Commission on January 21, 2014).10.2 Amendment and Restatement Agreement, dated as of February 19, 2013, among Sabre Inc., Sabre Holdings Corporation, the subsidiaryguarantors 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 theRegistration Statement on Form S-1 filed with the Securities and Exchange Commission on March 10, 2014).112ExhibitNumber Description of Exhibits10.3 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 SabreCorporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 21, 2014).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 andExchange 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 partythereto, Deutsche Bank AG New York Branch, as administrative agent and authorized representative for the Credit Agreement securedparties, 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 ofSabre 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 SabreInc., Sabre Holdings Corporation, the subsidiary guarantors party thereto, and Bank of America, N.A., as incremental term lender andadministrative agent (incorporated by reference to Exhibit 10.7 of Sabre Corporation’s Registration Statement on Form S-1 filed with theSecurities 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 byreference to Exhibit 10.8 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commissionon January 21, 2014).10.8+ Form of Non Qualified Stock Option Grant Agreement under Sovereign Holdings, Inc. Management Equity Incentive Plan adopted June11, 2007, as amended April 22, 2010 (incorporated by reference to Exhibit 10.9 of Sabre Corporation’s Registration Statement on FormS-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 Exhibit10.16 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 andExchange 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 andExchange 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 EquityIncentive Plan (incorporated by reference to Exhibit 10.20 of Sabre Corporation’s Registration Statement on Form S-1 filed with theSecurities 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 ManagementEquity Incentive Plan (incorporated by reference to Exhibit 10.21 of Sabre Corporation’s Registration Statement on Form S-1 filed with theSecurities and Exchange Commission on January 21, 2014).10.14+ Employment Agreement by and between Sovereign Holdings, Inc. and Rick Simonson, dated March 5, 2013 (incorporated by referenceto Exhibit 10.33 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission onJanuary 21, 2014).10.15 Amendment No. 1 to Amended and Restated Credit Agreement, dated as of February 20, 2014, among Sabre GLBL Inc., Sabre HoldingsCorporation, each of the other Loan Parties, Bank of America, N.A., as administrative agent and the Lenders thereto (incorporated byreference to Exhibit 10.38 of Sabre Corporation’s Amendment No. 1 to the Registration Statement on Form S-1 filed with the Securitiesand Exchange Commission on March 10, 2014).10.16 First Revolver Extension Amendment to Amended and Restated Credit Agreement, dated as of February 20, 2014, among Sabre GLBLInc., Sabre Holdings Corporation, each of the other Loan Parties, Bank of America, N.A., as administrative agent and the Revolving CreditLenders thereto (incorporated by reference to Exhibit 10.39 of Sabre Corporation’s Amendment No. 1 to the Registration Statement onForm S-1 filed with the Securities and Exchange Commission on March 10, 2014).10.17 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 andthe Revolving Credit Lenders thereto (incorporated by reference to Exhibit 10.40 of Sabre Corporation’s Amendment No. 1 to theRegistration Statement on Form S-1 filed with the Securities and Exchange Commission on March 10, 2014).10.18 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 ExchangeCommission on April 23, 2014).113ExhibitNumber Description of Exhibits10.19 Amended and Restated Stockholders’ Agreement dated as of April 23, 2014 by and among Sabre Corporation and the stockholders partythereto (incorporated by reference to Exhibit 10.2 of Sabre’s Corporation Current Report on Form 8-K filed with the Securities andExchange Commission on April 23, 2014).10.20+ Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.20 of Sabre Corporation’s Annual Reporton Form 10-K filed with the Securities and Exchange Commission on February 16, 2018).10.21+ 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-1filed with the Securities and Exchange Commission on March 26, 2014).10.22+ Sabre Corporation 2014 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.48 of Sabre Corporation’sAmendment No. 3 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 26, 2014).10.23+ Form of Restricted Stock Unit Grant Agreement under the Sabre Corporation 2014 Omnibus Incentive Compensation Plan (incorporatedby reference to Exhibit 10.49 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commissionon May 5, 2015).10.24+ 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 ExchangeCommission on May 5, 2015).10.25+ Form of Restricted Stock Unit Annual Grant Agreement for Non Employee Directors under the Sabre Corporation 2014 Omnibus IncentiveCompensation Plan (incorporated by reference to Exhibit 10.51 of Sabre Corporation’s Amendment No. 3 to the Registration Statementon Form S-1 filed with the Securities and Exchange Commission on March 26, 2014).10.26+ Form of Restricted Stock Unit Initial Grant Agreement for Non Employee Directors under the Sabre Corporation 2014 Omnibus IncentiveCompensation Plan (incorporated by reference to Exhibit 10.52 of Sabre Corporation’s Amendment No. 3 to the Registration Statementon Form S-1 filed with the Securities and Exchange Commission on March 26, 2014).10.27 Supplement No. 1, dated as of December 31, 2012, to the Pledge and Security Agreement dated as of May 9, 2012, among SabreHoldings Corporation, Sabre Inc., the subsidiary guarantors and Wells Fargo Bank, National Association, as collateral agent for thesecured parties (incorporated by reference to Exhibit 10.53 of Sabre Corporation’s Amendment No. 4 to the Registration Statement onForm S-1 filed with the Securities and Exchange Commission on March 31, 2014).10.28+ Employment Agreement by and between Sabre Corporation and Rachel Gonzalez dated September 2, 2014 (incorporated by referenceto Exhibit 10.55 of Sabre’s Corporation Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November12, 2014).10.29+ Sabre Corporation Non-Employee Directors Compensation Deferral Plan dated October 29, 2014 (incorporated by reference to Exhibit10.57 of Sabre Corporation’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 26,2015).10.30 Second Amended and Restated Stockholders’ Agreement dated as of February 6, 2015 by and among Sabre Corporation and thestockholders party thereto (incorporated by reference to Exhibit 10.58 of Sabre Corporation's Annual Report on Form 10-K filed with theSecurities and Exchange Commission on March 3, 2015).10.31+ Form of Award Agreement for Long-Term Stretch Program (incorporated by reference to Exhibit 10.1 of Sabre’s Corporation CurrentReport on Form 8-K filed with the Securities and Exchange Commission on March 13, 2015).10.32 Pledge and Security Agreement, dated as of April 14, 2015, among Sabre GLBL Inc., Sabre Holdings Corporation, the subsidiaryguarantors party thereto and Wells Fargo Bank, National Association, as collateral agent (incorporated by reference to Exhibit 10.1 ofSabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 15, 2015).10.33 Pledge and Security Agreement, dated as of November 9, 2015, among Sabre GLBL Inc., Sabre Holdings Corporation, the subsidiaryguarantors party thereto and Wells Fargo Bank, National Association, as collateral agent (incorporated by reference to Exhibit 10.1 ofSabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 9, 2015).10.34+ Sabre Corporation Executive Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 of Sabre Corporation’s CurrentReport on Form 8-K filed with the Securities and Exchange Commission on November 16, 2015).10.35† Master Services Agreement dated as of November 1, 2015, between Sabre GLBL, Inc. and HP Enterprise Services, LLC, as provider(incorporated by reference to Exhibit 10.65 of Sabre Corporation’s Annual Report on Form 10-K filed with the Securities and ExchangeCommission on February 19, 2016).10.36+ Sabre Corporation 2016 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 of Sabre Corporation’sCurrent Report on Form 8-K filed with the Securities and Exchange Commission on May 26, 2016).10.37+ Form of Restricted Stock Unit Grant Agreement under the Sabre Corporation 2016 Omnibus Incentive Compensation Plan (incorporatedby reference to Exhibit 10.44 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commissionon May 2, 2017).114ExhibitNumber Description of Exhibits10.38+ Form of Non-Qualified Stock Option Grant Agreement under the Sabre Corporation 2016 Omnibus Incentive Compensation Plan(incorporated by reference to Exhibit 10.45 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and ExchangeCommission on May 2, 2017).10.39 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 ExchangeCommission on April 28, 2016).10.40 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 ExchangeCommission on April 28, 2016).10.41 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 theRevolving Credit Lenders party thereto (incorporated by reference to Exhibit 10.1 of Sabre Corporation’s Current Report on Form 8-Kfiled with the Securities and Exchange Commission on July 19, 2016).10.42 Amendment No. 2 to Amended and Restated Credit Agreement, dated July 18, 2016, among Sabre GLBL Inc., Sabre HoldingsCorporation, 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 ExchangeCommission on July 19, 2016).10.43 Second Incremental Term Facility Amendment to Amended and Restated Credit Agreement, dated July 18, 2016, among Sabre GLBLInc., Sabre Holdings Corporation, each of the other Loan Parties party thereto, Bank of America, N.A., as Administrative Agent and theIncremental Term A Lenders party thereto (incorporated by reference to Exhibit 10.3 of Sabre Corporation’s Current Report on Form 8-Kfiled with the Securities and Exchange Commission on July 19, 2016).10.44+ Employment Agreement by and between Sabre Corporation and Sean Menke, dated December 15, 2016 (incorporated by reference toExhibit 10.1 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16,2016).10.45+ Letter Agreement by and between Sabre Corporation and Lawrence W. Kellner, dated December 15, 2016 (incorporated by reference toExhibit 10.2 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16,2016).10.46 Amendment dated December 22, 2016, to that certain Master Services Agreement dated as of November 1, 2015 by and between HPEnterprise Services, LLC and Sabre GLBL Inc. (incorporated by reference to Exhibit 10.56 of Sabre Corporation's Annual Report on Form10-K filed with the Securities and Exchange Commission on February 17, 2017).10.47 Third Incremental Term Facility Amendment to Amended and Restated Credit Agreement, dated February 22, 2017, among Sabre GLBLInc., Sabre Holdings Corporation, each of the other Loan Parties party thereto, Bank of America, N.A., as Administrative Agent, the 2017Incremental Term Lenders party thereto and each other Lender party thereto (incorporated by reference to Exhibit 10.1 of SabreCorporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 24, 2017).10.48+ Letter Agreement by and between Sabre Corporation and David Shirk, dated April 5, 2017 (incorporated by reference to Exhibit 10.60 ofSabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 1, 2017).10.49+ Letter Agreement by and between Sabre Corporation and Wade Jones, dated April 24, 2017 (incorporated by reference to Exhibit 10.61of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 1, 2017).10.50 Amendment Number Two, dated May 1, 2017, to that certain Master Services Agreement dated as of November 1, 2015 by and betweenEnterprises Services, LLC (f/k/a HP Enterprise Services, LLC) and Sabre GLBL Inc. (incorporated by reference to Exhibit 10.62 of SabreCorporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 1, 2017).10.51 Fourth Incremental Term Facility Amendment to Amended and Restated Credit Agreement, dated August 23, 2017, among Sabre GLBLInc., Sabre Holdings Corporation, each of the other Loan Parties party thereto, Bank of America, N.A., as Administrative Agent and the2017 B-1 Incremental Term Lenders party thereto (incorporated by reference to Exhibit 10.1 of Sabre Corporation's Current Report onForm 8-K filed with the Securities and Exchange Commission on August 23, 2017).10.52 Term Loan A Refinancing Amendment to Amended and Restated Credit Agreement, dated August 23, 2017, 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 2017Other Term A Lenders party thereto (incorporated by reference to Exhibit 10.2 of Sabre Corporation's Current Report on Form 8-K filedwith the Securities and Exchange Commission on August 23, 2017).10.53 Second Revolving Facility Refinancing Amendment to Amended and Restated Credit Agreement, dated August 23, 2017, among SabreGLBL Inc., Sabre Holdings Corporation, each of the other Loan Parties party thereto, Bank of America, N.A., as Administrative Agent andLenders party thereto (incorporated by reference to Exhibit 10.3 of Sabre Corporation's Current Report on Form 8-K filed with theSecurities and Exchange Commission on August 23, 2017).115ExhibitNumber Description of Exhibits10.54+ Letter Agreement by and between Sabre Corporation and Clinton Anderson, dated July 25, 2017 (incorporated by reference to Exhibit10.66 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on October 31, 2017).10.55+ Sabre Corporation Executive Severance Plan (incorporated by reference to Exhibit 10.1 of Sabre Corporation’s Current Report on Form8-K filed with the Securities and Exchange Commission on November 8, 2017).10.56+ Amendment to Letter Agreement by and between Sabre GLBL, Inc. and Rick Simonson, dated January 11, 2018 (incorporated byreference to Exhibit 10.1 of Sabre Corporation's Current Report on Form 8-K filed with the Securities and Exchange Commission onJanuary 11, 2018).10.57 Fifth Term Loan B Refinancing Amendment to Amended and Restated Credit Agreement, dated March 2, 2018, 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 2018Other Term B Lenders party thereto (incorporated by reference to Exhibit 10.1 of Sabre Corporation's Current Report on Form 8-K filedwith the Securities and Exchange Commission on March 2, 2018).10.58+ Amendment to Employment Agreement by and between Sabre Corporation and Rachel Gonzalez, dated March 27, 2018 (incorporatedby reference to Exhibit 10.1 of Sabre Corporation's Current Report on Form 8-K/A filed with the Securities and Exchange Commission onMarch 27, 2018).10.59+ Form of Executive Officer Restricted Stock Unit Grant Agreement under the Sabre Corporation 2016 Omnibus Incentive CompensationPlan (incorporated by reference to Exhibit 10.37 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities andExchange Commission on May 1, 2018).10.60+ Form of Non-Qualified Stock Option Grant Agreement under the Sabre Corporation 2016 Omnibus Incentive Compensation Plan(incorporated by reference to Exhibit 10.38 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and ExchangeCommission on May 1, 2018).10.61+ Form of Chairman of the Board Restricted Stock Unit Agreement under the Sabre Corporation 2016 Omnibus Incentive CompensationPlan (incorporated by reference to Exhibit 10.58 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities andExchange Commission on May 1, 2018).10.62+ Offer Letter by and between Sabre Corporation and Douglas E. Barnett, dated June 26, 2018 (incorporated by reference to Exhibit 10.1 ofSabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 2, 2018).10.63+ Amendment to Employment Agreement, by and between Sabre Corporation and David Shirk, dated July 23, 2018 (incorporated byreference to Exhibit 10.1 of Sabre Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July18, 2018).10.64+ Form of Global Form of Restricted Stock Unit Agreement under the Sabre Corporation 2016 Omnibus Incentive Compensation Plan(incorporated by reference to Exhibit 10.61 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and ExchangeCommission on July 31, 2018).10.65+ Form of Global Form of Stock Option Grant Agreement under the Sabre Corporation 2016 Omnibus Incentive Compensation Plan(incorporated by reference to Exhibit 10.62 of Sabre Corporation’s Quarterly Report on Form 10-Q filed with the Securities and ExchangeCommission on July 31, 2018).10.66+ Offer Letter by and between Sabre Corporation and Kimberly Warmbier, dated June 22, 2018 (incorporated by reference to Exhibit 10.64of Sabre’s Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on October 30, 2018).10.67+ Offer Letter by and between Sabre Corporation and Cem Tanyel, dated September 4, 2018 (incorporated by reference to Exhibit 10.65 ofSabre’s Corporation’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on October 30, 2018).21.1* List of Subsidiaries23.1* Consent of Ernst & Young LLP24.1* Powers of Attorney (included on signature page)31.1* Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2* Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1* Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2* Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002101.INS* XBRL Instance Document101.SCH* XBRL Taxonomy Extension Schema101.CAL* XBRL Taxonomy Extension Calculation Linkbase101.DEF* XBRL Taxonomy Extension Definition Linkbase101.LAB* XBRL Taxonomy Extension Label Linkbase_____________________116+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 SUMMARYNot applicable.117SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized. SABRE CORPORATION Date:February 15, 2019By:/s/ Douglas E. Barnett Douglas E. Barnett Executive Vice President and Chief Financial OfficerKNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Sean Menke, Douglas E.Barnett, and Aimee Williams-Ramey, and each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution, for him or her andin his or her name, place and stead, in any and all capacities, to execute any or all amendments to this Annual Report on Form 10-K and to file the same, withall exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent,and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, asfully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agents or any ofthem, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated./s/ Sean Menke President and Chief Executive Officer and DirectorFebruary 15, 2019Sean Menke (Principal Executive Officer) /s/ Douglas E. Barnett Executive Vice President and Chief Financial OfficerFebruary 15, 2019Douglas E. Barnett (Principal Financial Officer) /s/ Jami B. Kindle Vice President and Corporate ControllerFebruary 15, 2019Jami B. Kindle (Principal Accounting Officer) /s/ Lawrence W. Kellner Chairman of the Board and DirectorFebruary 15, 2019Lawrence W. Kellner /s/ George Bravante, Jr. DirectorFebruary 15, 2019George Bravante, Jr. /s/ Hervé Couturier DirectorFebruary 15, 2019Hervé Couturier /s/ Renée James DirectorFebruary 15, 2019Renée James /s/ Gary Kusin DirectorFebruary 15, 2019Gary Kusin /s/ Judy Odom DirectorFebruary 15, 2019Judy Odom /s/ Joseph Osnoss DirectorFebruary 15, 2019Joseph Osnoss /s/ Karl Peterson DirectorFebruary 15, 2019Karl Peterson /s/ Zane Rowe DirectorFebruary 15, 2019Zane Rowe 118SABRE CORPORATIONSCHEDULE II — VALUATION AND QUALIFYING ACCOUNTSDECEMBER 31, 2018, 2017 AND 2016(In millions) Balance atBeginning Charged toExpense orOther Accounts Write-offs andOther Adjustments Balance atEnd of PeriodAllowance for Doubtful Accounts Year Ended December 31, 2018$43.0 $7.7 $(5.4) $45.3Year ended December 31, 2017$37.1 $9.5 $(3.6) $43.0Year ended December 31, 2016$32.3 $10.6 $(5.8) $37.1Valuation Allowance for Deferred Tax Assets Year Ended December 31, 2018$59.0 $4.7 $(4.4) $59.3Year ended December 31, 2017$74.5 $(8.8) $(6.7) $59.0Year ended December 31, 2016$80.7 $1.1 $(7.3) $74.5Reserve for Value-Added Tax Receivables Year Ended December 31, 2018$— $— $— $—Year ended December 31, 2017$0.3 $— $(0.3) $—Year ended December 31, 2016$1.8 $(1.6) $0.1 $0.3119Sabre Corporation Exhibit 21.12018 ANNUAL REPORTList of SubsidiariesThe following are subsidiaries of Sabre Corporation as of December 31, 2018 and the states or jurisdictions in which they are organized. Except as otherwisespecified, in each case Sabre Corporation owns, directly or indirectly, all of the voting securities of each subsidiary.Legal Name of Subsidiary Jurisdiction ofIncorporation orOrganization % of VotingInterest Directlyor IndirectlyHeld (If Not Wholly-owned)Abacus Distribution Systems (Cambodia) Pte Ltd Cambodia Airline Technology Services Mauritius Ltd. Mauritius Airpas Aviation GmbH Germany Asiana Sabre Inc. Korea, Republic of 20%EB2 Limited United Kingdom E-Beam Limited United Kingdom Elektroniczne Systemy Sprzedazy Sp. ZO.O. Poland 40%Excellent Management Limited Hong Kong 20%FlightLine Data Services, Inc. Georgia GetThere Inc. Delaware GetThere L.P. Delaware Holiday Service GmbH i.L. Germany IHS GmbH Germany IHS US Inc. Florida Innlink, LLC Delaware Laser Holdings Limited United Kingdom Lastminute (Cyprus) Limited Cyprus lastminute.com Holdings, Inc. Delaware lastminute.com LLC Delaware Lastminute.com GmbH i.L. Germany Last Minute Network Limited United Kingdom Leisure Cars Broker S.L. Spain Leisure Cars European Services GmbH Switzerland Leisure Cars GmbH i.L. Germany Leisure Cars Group Limited United Kingdom Leisure Cars Holdings Limited United Kingdom Leisure Cars International Limited United Kingdom Leisure Cars UK & Ireland Limited United Kingdom Marlins Acquisition Corp Delaware Nexus World Services, Inc. Delaware PRISM Group, Inc. Maryland PRISM Technologies, LLC New Mexico PT Sabre Travel Network Indonesia Indonesia 5%Sabre (Australia) Pty Ltd Australia Sabre (Thailand) Holdings LLC Delaware Sabre Airline Solutions GmbH Germany Sabre AS (Luxembourg) S.a r.l. Luxembourg Sabre Asia Pacific Pte. Ltd. Singapore Sabre Australia Technologies I Pty. Ltd. Australia Sabre Austria GmbH Austria Sabre Belgium SA Belgium Sabre Bulgaria AD Bulgaria 60%Sabre Canada Inc. Canada Sabre China Sea Technologies Ltd. Labuan Sabre Colombia Ltda. Colombia Legal Name of Subsidiary Jurisdiction ofIncorporation orOrganization % of VotingInterest Directlyor IndirectlyHeld (If Not Wholly-owned)Sabre Computer Reservierungssystem GmbH Austria Sabre Danmark ApS Denmark Sabre Decision Technologies International, LLC Delaware Sabre Deutschland Marketing GmbH Germany Sabre Digital Limited United Kingdom Sabre Dynamic Argentina SRL Argentina Sabre EMEA Marketing Limited United Kingdom Sabre Espana Marketing, S.A. Spain Sabre Finance (Luxembourg) S.a.r.l. Luxembourg Sabre France Sarl France Sabre GLBL Inc. Delaware Sabre Global Services S.A. Uruguay Sabre Global Technologies, Limited United Kingdom Sabre Headquarters, LLC Delaware Sabre Hellas Computer Reservation Systems Services Societe Anonyme Greece Sabre Holdings (Luxembourg) S.a.r.l. Luxembourg Sabre Holdings Corporation Delaware Sabre Holdings GmbH Germany Sabre Hospitality Solutions GmbH Germany Sabre Iceland ehf. Iceland Sabre Informacion S.A. de C.V. Mexico Sabre International (Bahrain) W.L.L. Bahrain Sabre International (Luxembourg) S.a.r.l. Luxembourg Sabre International B.V. Luxembourg Sabre International Holdings, LLC Delaware Sabre International Newco, Inc. Delaware Sabre International, LLC Delaware Sabre Ireland Limited Ireland Sabre Israel Travel Technologies LTD. Israel Sabre Italia S.r.l. Italy Sabre Limited New Zealand Sabre Marketing Nederland B.V. Netherlands Sabre Marketing Pte. Ltd. Singapore Sabre Mexico LLC Delaware Sabre Netherlands Holdings B.V. Netherlands Sabre Norge AS Norway Sabre Pakistan (Private) Limited Pakistan Sabre Polska Sp. Z.o.o. Poland Sabre Portugal Servicios Lda Portugal Sabre Rocade AB Sweden Sabre Rocade Assist Sweden Sabre Seyahat Dagitim Sisternleri A.S. Turkey 60%Sabre Sociedad Technologica S de RL de CV Mexico Sabre South Pacific I Australia Sabre Suomi Oy Finland Sabre Sverige AB Sweden Sabre Technology Enterprises II, Ltd. Cayman Islands Sabre Technology Enterprises, Ltd. Cayman Islands Sabre Technology Holdings Pte. Ltd. Singapore Sabre Technology Holland II B.V. Netherlands Legal Name of Subsidiary Jurisdiction ofIncorporation orOrganization % of VotingInterest Directlyor IndirectlyHeld (If Not Wholly-owned)Sabre Travel International Limited Ireland Sabre Travel Network Asia Pacific Singapore Sabre Travel Network (Australia) Pty Ltd. Australia Sabre Travel Network (Bangladesh) Limited Bangladesh 49%Sabre Travel Network (Brunei) Sdn Bhd Brunei Darussalam 15%Sabre Travel Network (Central Asia) LLP Kazakhstan Sabre Travel Network (Hong Kong) Limited Hong Kong Sabre Travel Network (India) Private Limited India Sabre Travel Network (Lao) Co., Ltd. Lao People's DemocraticRepublic 40%Sabre Travel Network (Malaysia) Sdn. Bhd. Malaysia Sabre Travel Network (New Zealand) Limited New Zealand Sabre Travel Network (Pakistan) Private Limited Pakistan 30%Sabre Travel Network (Philippines) Inc. Philippines 17%Sabre Travel Network (Thailand) Ltd. Thailand Sabre Travel Network Eqypt LLC Egypt 60%Sabre Travel Network Lanka (Private) Limited Sri Lanka 60%Sabre Travel Network Middle East W.L.L. Bahrain 60%Sabre Travel Network Romania S.R.L. Romania Sabre Travel Network Southern Africa (Proprietary) Limited South Africa Sabre Travel Network Taiwan Ltd. Taiwan 4.39%Sabre Travel Technologies (Private) Limited India Sabre UK Marketing Ltd. United Kingdom Sabre Ukraine Limited United Kingdom 30%Sabre Ukraine Limited, LLC Ukraine Sabre Vietnam JSC Vietnam 24%Sabre Zenon Cyprus Limited Cyprus SabreMark G.P., LLC Delaware SabreMark Limited Partnership Delaware Switch Automated Booking Services Co WLL Kuwait 49%TG India Holdings Company Cayman Islands TG India Management Company Cayman Islands Travelocity Global Technologies Private Limited India TravLynx LLC Florida TVL GmbH Germany TVL Australia Pty Ltd Australia TVL Common, Inc. Delaware TVL Europe United Kingdom TVL Holdings I, LLC Delaware TVL Holdings, Inc. Delaware TVL International B.V. Netherlands TVL LLC Delaware TVL LP Delaware TVL Sabre GmbH Germany TVL Travel Limited United Kingdom Zuji Holdings Ltd. Cayman Islands Exhibit 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the following Registration Statements:(1)Registration Statement (Form S-8 No. 333-211661) pertaining to the Sabre Corporation 2016 Omnibus Incentive Compensation Plan,(2)Registration Statement (Form S-3 No. 333-204267) and related Prospectus of Sabre Corporation, and(3)Registration Statement (Form S-8 No. 333-196056) pertaining to the Sovereign Holdings, Inc. Management Equity Incentive Plan, Sovereign Holdings,Inc. 2012 Management Equity Incentive Plan, and the Sabre Corporation 2014 Omnibus Incentive Compensation Planof our report dated February 15, 2019, with respect to the consolidated financial statements and schedule of Sabre Corporation, and the effectiveness ofinternal control over financial reporting of Sabre Corporation, included in this Annual Report (Form 10-K) for the year ended December 31, 2018./s/ Ernst & Young LLPDallas, TexasFebruary 15, 2019Exhibit 31.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICERPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Sean Menke, certify that:1.I have reviewed this annual report on Form 10-K of Sabre Corporation;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting.Date:February 15, 2019By: /s/ Sean Menke Sean Menke Chief Executive Officer (principal executive officer of the registrant)Exhibit 31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICERPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Douglas Barnett, certify that:1.I have reviewed this annual report on Form 10-K of Sabre Corporation;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us byothers within those entities, particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's mostrecent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting.Date:February 15, 2019By: /s/ Douglas Barnett Douglas Barnett Chief Financial Officer (principal financial officer of the registrant)Exhibit 32.1CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906OF THE SARBANES-OXLEY ACT OF 2002The undersigned, the Chief Executive Officer of Sabre Corporation, hereby certifies that to his knowledge, on the date hereof:a.The Form 10-K of Sabre Corporation for the year ended December 31, 2018 (the “Report”), filed on the date hereof with the Securities and ExchangeCommission fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; andb.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of SabreCorporation.Date:February 15, 2019By: /s/ Sean Menke Sean Menke Chief Executive Officer (principal executive officer of the registrant)This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to beincorporated by reference into any filing of Sabre Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, asamended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.Exhibit 32.2CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906OF THE SARBANES-OXLEY ACT OF 2002The undersigned, the Chief Financial Officer of Sabre Corporation, hereby certifies that to his knowledge, on the date hereof:a.The Form 10-K of Sabre Corporation for the year ended December 31, 2018 (the “Report”), filed on the date hereof with the Securities and ExchangeCommission fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; andb.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of SabreCorporation.Date:February 15, 2019By: /s/ Douglas Barnett Douglas Barnett Chief Financial Officer (principal financial officer of the registrant)This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to beincorporated by reference into any filing of Sabre Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, asamended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

Continue reading text version or see original annual report in PDF format above