Sabre Corp

Previous wording

A significant portion of our revenue is generated through transaction-based fees that we charge to our customers. We generate revenue from our distribution activities through transaction fees for bookings on our GDS, and from our IT solutions through recurring usage-based fees for the use of our SaaS and hosted systems, as well as upfront fees and professional services fees.

Current wording

A significant portion of our revenue is generated through transaction-based fees that we charge to our customers. We generate revenue from our distribution activities through transaction fees for bookings on our Sabre Mosaic TM Marketplace ("Marketplace"), as well as product revenue from agency solutions offerings such as payments and media, and from our Sabre Mosaic TM Airline Technology ("Airline Technology") through recurring usage-based fees for the use of our SaaS and hosted systems, as well as upfront fees and professional services fees.

Previous wording

On April 27, 2025, we entered into a definitive purchase agreement with an affiliate of TPG (the “Buyer") pursuant to which the Buyer agreed to purchase our Hospitality Solutions business, an extensive suite of leading software solutions for hoteliers. On July 3, 2025, we closed the transaction (the “Hospitality Solutions Sale”), resulting in cash proceeds of $965 million, net, which was used primarily to repay our outstanding indebtedness. See "Liquidity and Capital Resources—Capital Resources." Cash proceeds are net of estimated taxes and fees, cash acquired by the Buyer and customary closing adjustments. The assets and liabilities associated with the Hospitality Solutions business are presented as discontinued operations on our consolidated balance sheets as of December 31, 2024, and the operating results of our Hospitality Solutions business are presented as discontinued operations on our consolidated statements of operations for all periods presented. The presentation of discontinued operations excludes general corporate overhead and other costs that do not meet the requirements to be presented as discontinued operations. In addition to the purchase agreement described above, we entered into transition services agreements ("TSA") with the Buyer, under which we will provide transition services following closing to help provide for an orderly transition and facilitate the ongoing operations of the Hospitality Solutions business following the close in return for compensation from the Buyer with respect to costs incurred. Additionally, at the time of sale, Hospitality Solutions entered into certain long-term agreements with us to continue to utilize our GDS for bookings which generates revenue for us. See Note 3. Discontinued Operations and Dispositions for further details. All amounts reference results from continuing operations unless otherwise indicated.

Current wording

On April 27, 2025, we entered into a definitive agreement with an affiliate of TPG (the “Buyer") pursuant to which the Buyer agreed to purchase our Hospitality Solutions business, an extensive suite of leading software solutions for hoteliers. On July 3, 2025, we closed the transaction (the “Hospitality Solutions Sale”), resulting in cash proceeds of $969 million, net, which was used primarily to repay our outstanding indebtedness. See "Liquidity and Capital Resources—Capital Resources." Cash proceeds are net of estimated taxes and fees, cash acquired by the Buyer and customary closing adjustments. The operating results of our Hospitality Solutions business are presented as discontinued operations on our consolidated statements of operations for all periods presented. The presentation of discontinued operations excludes general corporate overhead and other costs that do not meet the requirements to be presented as discontinued operations. In addition to the sale agreement described above, we entered into transition services agreements with the Buyer, under which we are providing transition services to help provide for an orderly transition and facilitate the ongoing operations of the Hospitality Solutions business following the close in return for compensation from the Buyer with respect to costs incurred. Additionally, at the time of sale, Hospitality Solutions entered into certain long-term agreements with us to continue to utilize our Marketplace for bookings which generates revenue for us. See Note 3. Discontinued Operations and Dispositions to our consolidated financial statements for further details. All amounts reference results from continuing operations unless otherwise indicated.

Previous wording

We believe that we have resources to sufficiently fund our liquidity requirements over at least the next twelve months; however, given the uncertain economic environment and the leveling off of industry air distribution volume growth, we are currently evaluating measures to enhance our financial position. See “—Recent Events Impacting Our Liquidity and Capital Resources” and “—Senior Secured Credit Facilities.” During 2023, 2024 and 2025, we refinanced portions of our debt which resulted in higher interest rates than prior years, increasing our current and future interest expense. Currently approximately 13% of our debt, net of cash and hedging impacts from interest rates swaps, is variable and impacted by changes in interest rates. See “Risk Factors—We are exposed to interest rate fluctuations.”

Current wording

We believe that we have resources to sufficiently fund our liquidity requirements over at least the next twelve months; however, given the uncertain economic environment and the recent impacts on air distribution volume growth, we will continue to monitor our liquidity levels and take additional steps should we determine they are necessary. See “—Recent Events Impacting Our Liquidity and Capital Resources” and “—Senior Secured Credit Facilities.” During recent years, we refinanced portions of our debt which resulted in higher interest rates than prior years, increasing our current and future interest expense.

Previous wording

In addition to the “—Recent Developments Affecting our Results of Operations” above, a discussion of trends that we believe are the most significant opportunities and challenges currently impacting our business and industry is included in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting our Results” in our Annual Report on Form 10-K filed with the SEC on February 20, 2025. The discussion also includes management’s assessment of the effects these trends have had and are expected to have on our results of continuing operations. 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 referred to in the sections entitled “Risk Factors” and “Forward-Looking Statements” included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K filed with the SEC on February 20, 2025.

Current wording

In addition to “—Recent Developments Affecting our Results of Operations” above, a discussion of trends that we believe are the most significant opportunities and challenges currently impacting our business and industry is included in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting our Results” in our Annual Report on Form 10-K filed with the SEC on February 18, 2026. The discussion also includes management’s assessment of the effects these trends have had and are expected to have on our results of continuing operations. 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 referred to in the sections entitled “Risk Factors” and “Forward-Looking Statements” included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K filed with the SEC on February 18, 2026.

Previous wording

We generate revenue from distribution activities through direct billable bookings processed on our GDS, adjusted for estimated cancellations of those bookings. We also generate revenue from IT solutions activities from our product offerings including reservation systems for full-service and low-cost carriers, commercial and operations products, professional services, agency solutions and booking data. Additionally, we generate revenue through software licensing and maintenance fees. Recognition of license fees upon delivery has previously resulted and will continue to result in periodic fluctuations in revenue recognized.

Current wording

We generate revenue through direct billable bookings processed through our Marketplace, adjusted for estimated cancellations of those bookings. Other Marketplace revenue includes product revenue from agency solutions offerings such as payments and media. We also generate revenue from Airline Technology activities from our product offerings including platform product offerings across the full retailing lifecycle from network planning and offer creation to payments, servicing, and disruption recovery. Additionally, we generate revenue through software licensing and maintenance fees. Recognition of license fees upon delivery has previously resulted and will continue to result in periodic fluctuations in revenue recognized.

Previous wording

Cost of revenue, excluding technology costs, consists primarily of costs associated with the delivery and distribution of our products and services and includes employee-related costs for our delivery, customer operations and call center teams as well as allocated overhead such as facilities and other support costs. Cost of revenue, excluding technology costs, also includes incentive consideration expense representing payments or other consideration to travel agencies for reservations made on our GDS which accrue on a monthly basis, amortization of upfront incentive consideration representing upfront payments or other consideration provided to travel agencies for reservations made on our GDS which are capitalized and amortized over the expected life of the contract and costs such as stock-based compensation and restructuring charges (in applicable periods). Depreciation and amortization included in cost of revenue, excluding technology costs, is associated with capitalized implementation costs and intangible assets associated with contracts, supplier and distributor agreements acquired through acquisitions. The technology costs excluded from Cost of revenue, excluding technology costs, are presented separately below.

Current wording

Cost of revenue, excluding technology costs, consists primarily of incentive consideration expense representing payments or other consideration to travel agencies for reservations made on our Marketplace which accrue on a monthly basis, amortization of upfront incentive consideration representing upfront payments or other consideration provided to travel agencies for reservations made on our Marketplace which are capitalized and amortized over the expected life of the contract. Cost of revenue, excluding technology costs, also includes costs associated with the delivery and distribution of our products and services and includes employee-related costs for our delivery and customer operations as well as allocated overhead such as facilities and other support costs and costs such as stock-based compensation and restructuring charges (in applicable periods). Depreciation and amortization included in cost of revenue, excluding technology costs, is associated with capitalized implementation costs and intangible assets associated with contracts, supplier and distributor agreements acquired through acquisitions. The technology costs excluded from cost of revenue, excluding technology costs, are presented separately below.

Previous wording

Selling, general and administrative expenses consist of professional service fees, certain settlement charges or reimbursements, costs to defend legal disputes, provision for expected credit losses, non-recoverable taxes, indirect taxes, other overhead costs, and personnel-related expenses, including stock-based compensation, for employees engaged in sales, sales support, account management and who administratively support the business in finance, legal, human resources, information technology and communications. Depreciation and amortization included in selling, general and administrative expenses is associated with property and equipment, acquired customer relationships, trademarks and brand names purchased through acquisitions or established through the take private transaction in 2007, which includes a remaining useful life of 12 years as of September 30, 2025 for trademarks and brand names.

Current wording

Selling, general and administrative expenses consist of professional service fees, costs to defend legal disputes, provision for expected credit losses, non-recoverable taxes, indirect taxes, other overhead costs, and personnel-related expenses, including stock-based compensation, for employees engaged in sales, sales support, account management and who administratively support the business in finance, legal, human resources, information technology and communications. Depreciation and amortization included in selling, general and administrative expenses is associated with property and equipment, acquired customer relationships, trademarks and brand names purchased through acquisitions or established through the take private transaction in 2007, which includes a remaining useful life of 11 years as of March 31, 2026 for trademarks and brand names.

Previous wording

“Direct billable bookings” and “passengers boarded” are the primary metrics we utilize to measure operating performance. We generate distribution revenue for each direct billable booking, which includes bookings made through our GDS (e.g., Air, and Lodging, Ground and Sea (“LGS”)) and through our equity method investments in cases where we are paid directly by the travel supplier. Air bookings are presented net of bookings cancelled within the period presented. We also recognize IT solutions revenue from recurring usage-based fees for passengers boarded. These key metrics allow management to analyze customer volume over time for each of our product lines to monitor industry trends and analyze performance. We believe that these key metrics are useful for investors and other third parties as indicators of our financial performance and industry trends. While these metrics are based on what we believe to be reasonable estimates of our transaction counts for the applicable period of measurement, there are inherent challenges associated with their measurement. In addition, we are continually seeking to improve our estimates of these metrics, and these estimates may change due to improvements or changes in our methodology.

Current wording

“Direct billable bookings” and “passengers boarded” are the primary metrics we utilize to measure operating performance. We generate revenue for each direct billable booking, which includes bookings made through our Marketplace (e.g., Air, Lodging, Car, Rail and Tour) and through our equity method investments in cases where we are paid directly by the travel supplier. Air bookings are presented net of bookings cancelled within the period presented. We also recognize Airline Technology revenue from recurring usage-based fees for passengers boarded. These key metrics allow management to analyze customer volume over time for each of our product lines to monitor industry trends and analyze performance. We believe that these key metrics are useful for investors and other third parties as indicators of our financial performance and industry trends. While these metrics are based on what we believe to be reasonable estimates of our transaction counts for the applicable period of measurement, there are inherent challenges associated with their measurement. In addition, we are continually seeking to improve our estimates of these metrics, and these estimates may change due to improvements or changes in our methodology.

Previous wording

We define Adjusted Net Loss as net income (loss) attributable to common stockholders adjusted for (income) loss from discontinued operations, net of tax, net (loss) income attributable to noncontrolling interests, acquisition-related amortization, restructuring and other costs, loss on extinguishment of debt, other, net, disposition-related costs, litigation costs, net, indirect tax matters, stock-based compensation, and the tax impact of adjustments.

Current wording

Adjusted Net Income is defined as income (loss) from continuing operations adjusted to exclude acquisition‑related amortization; restructuring and other costs; loss on extinguishment of debt; other, net; disposition‑related costs; litigation costs, net; indirect tax matters; stock‑based compensation; and the related tax impacts of these adjustments.

Previous wording

We define Adjusted EBITDA as income (loss) from continuing operations adjusted for depreciation and amortization of property and equipment, amortization of capitalized implementation costs, acquisition-related amortization, restructuring and other costs, interest expense, net, other, net, loss on extinguishment of debt, disposition-related costs, litigation costs, net, indirect tax matters, stock-based compensation and the provision for income taxes.

Current wording

Adjusted EBITDA is defined as income (loss) from continuing operations adjusted to exclude depreciation and amortization of property and equipment; amortization of capitalized implementation costs; acquisition‑related amortization; restructuring and other costs; interest expense, net; other, net; loss on extinguishment of debt; disposition‑related costs; litigation costs, net; indirect tax matters; stock‑based compensation; and the provision for income taxes.

Previous wording

We define Free Cash Flow as cash used in operating activities less cash used in additions to property and equipment.

Current wording

Free Cash Flow is defined as cash (used in) provided by operating activities, less cash used for additions to property and equipment.

Previous wording

We define Adjusted Net Loss from continuing operations per share as Adjusted Net Loss divided by diluted weighted-average common shares outstanding.

Current wording

Adjusted Net Income from continuing operations per share is defined as Adjusted Net Income divided by diluted weighted‑average common shares outstanding.

Previous wording

Definitions of Non-GAAP Financial Measures

Current wording

Limitations of Non‑GAAP Financial Measures

Previous wording

•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash requirements for such replacements;

Current wording

•Although depreciation and amortization are non‑cash expenses, the assets being depreciated and amortized may require replacement in the future, and Adjusted EBITDA does not reflect the capital expenditures required for these replacements.

Previous wording

•Adjusted EBITDA does not reflect amortization of capitalized implementation costs associated with our revenue contracts, which may require future working capital or cash needs in the future;

Current wording

•Adjusted EBITDA excludes amortization of capitalized implementation costs related to revenue contracts, which may result in future working capital or cash requirements.

Previous wording

•Adjusted Net Loss and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

Current wording

•Adjusted Net Income and Adjusted EBITDA do not reflect changes in, or cash requirements associated with, working capital.

Previous wording

•Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness;

Current wording

•Adjusted EBITDA does not reflect interest expense, principal repayments, or other cash requirements necessary to service our indebtedness.

Previous wording

•Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;

Current wording

•Adjusted EBITDA does not reflect income tax payments that could reduce cash available to us.

Previous wording

The following table sets forth the reconciliation of Net loss attributable to common stockholders to Adjusted Net Loss from continuing operations and Income (loss) from continuing operations to Adjusted EBITDA (in thousands):

Current wording

The following table sets forth the reconciliation of Loss from continuing operations to Adjusted Net Loss from continuing operations and Loss from continuing operations to Adjusted EBITDA (in thousands):

Previous wording

The following tables present information from our statements of cash flows and set forth the reconciliation of Free Cash Flow to cash used in operating activities, the most directly comparable GAAP measure (in thousands):

Current wording

The following tables present information from our statements of cash flows and set forth the reconciliation of cash used in operating activities, the most directly comparable GAAP measure, to Free Cash Flow (in thousands):

Previous wording

(3) Other, net includes $10 million of TSA income, net, in the current year period, a gain on the sale of assets of $5 million recognized in the current year period and a fair value loss from our investments in securities of $3 million recognized in the prior year period. In addition, all periods presented include non-operating gains and losses as well as foreign exchange gains and losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into the relevant functional currency.

Current wording

(3) Other, net includes $10 million of transition services agreement income, net, in the current year period and a gain on the sale of assets of $5 million recognized in the prior year period. In addition, all periods presented include non-operating gains and losses as well as foreign exchange gains and losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into the relevant functional currency.

Previous wording

(7) Indirect tax matters represents charges associated with certain digital services taxes ("DST") related to historical periods, which may ultimately be settled in cash, and certain foreign non-income tax litigation matters. See detailed disclosures regarding these matters included in the Liquidity and Capital Resources and Risk Factors sections as well as Note 13. Contingencies, to our consolidated financial statements.

Current wording

(5) Indirect tax matters represents charges and adjustments to charges associated with certain digital services taxes ("DST") and other indirect tax matters related to historical periods, which may ultimately be settled in cash, and certain foreign non-income tax litigation matters. See detailed disclosures regarding these matters included in the Liquidity and Capital Resources and Risk Factors sections as well as Note 13. Contingencies, to our consolidated financial statements.

Previous wording

(9) The Adjusted diluted weighted-average common shares outstanding calculation excludes 1 million of dilutive stock options and restricted stock awards and approximately 33 million resulting common shares related to the Exchangeable Notes for the three months ended September 30, 2025, as their effect would be anti-dilutive given the net loss incurred in the period.

Current wording

(9) The Adjusted diluted weighted-average common shares outstanding calculation includes approximately 33 million resulting common shares related to the Exchangeable Notes for the three months ended March 31, 2026. The Adjusted diluted weighted-average common shares outstanding calculation includes 12 million of dilutive restricted stock awards and approximately 57 million resulting common shares related to the Exchangeable Notes for the three months ended March 31, 2025.

Previous wording

Selling, general and administrative expenses decreased $34 million, or 8%, for the nine months ended September 30, 2025 compared to the same period in the prior year primarily due to a $12 million decrease in tax litigation reserves as a result of final settlement, a $10 million decrease in indirect taxes, a $7 million decrease primarily due to a sales tax refund in 2025 related to prior tax periods, a $6 million decrease due to savings related to our cloud migration, and a $1 million decrease in other ongoing business expenses. These decreases were partially offset by a $6 million increase in labor and professional services primarily to support our growth initiatives, partially offset by a reduction in variable-based compensation.

Current wording

Revenue increased $58 million, or 8%, for the three months ended March 31, 2026 compared to the same period in the prior year, primarily due to:

Previous wording

•a $24 million, or 4% increase in distribution revenue driven by a $16 million increase in transaction-based revenue primarily due to a 3% increase in direct billable bookings to 95 million and favorable travel supplier mix and rate impacts as well as an $8 million increase in product-based revenue; and

Current wording

•a $49 million, or 9% increase in Marketplace revenue driven by a $42 million increase in transaction-based revenue primarily due to a 5% increase in direct billable bookings to 101 million and favorable rate impacts, and a $7 million increase in other revenue; and

Previous wording

Cost of revenue, excluding technology costs, increased $18 million, or 6% for the three months ended September 30, 2025 compared to the same period in the prior year primarily due to a $19 million increase in incentive consideration primarily due to an increase in rates, transaction mix and volume.

Current wording

Cost of revenue, excluding technology costs, increased $30 million, or 10% for the three months ended March 31, 2026 compared to the same period in the prior year primarily due to a $27 million increase in incentive consideration primarily due to an increase in volume, rates and transaction mix, and a $1 million increase in labor and professional services partially due to a restructuring charge associated with the inflation offset program in the current period.

Previous wording

Selling, general and administrative expenses decreased $9 million, or 6%, for the three months ended September 30, 2025 compared to the same period in the prior year due to an $11 million decrease in indirect taxes and a $5 million decrease in labor and professional services primarily due to a reduction in variable-based compensation, partially offset by a $5 million increase in the provision for credit losses primarily due to the reversal of bad debt expense in the prior period and a $2 million increase in other ongoing business expenses.

Current wording

Selling, general and administrative expenses increased $4 million, or 3%, for the three months ended March 31, 2026 compared to the same period in the prior year driven by a $7 million increase primarily due to a sales tax refund in the prior year related to prior tax periods, a $3 million increase in the provision for credit losses, a $5 million increase in labor and professional services due to a restructuring charge associated with the inflation offset program in the current period, a $3 million increase due to professional services costs associated with stockholder matters and a $3 million increase in other expenses. These increases were partially offset by a $9 million decrease in indirect taxes, primarily due to the reversal of a DST accrual, and a $9 million decrease in labor and professional services due to a reduction in employee bonus and stock compensation expense.

Previous wording

Interest expense decreased $2 million, or 2%, during the three months ended September 30, 2025 compared to the same period in the prior year primarily due to lower principal balances as a result of the payoff of debt at maturity and lower interest incurred in connection with our debt. See Note 7. Debt for further details. Interest expense, net from continuing operations excludes interest expense associated with the debt that was required to be repaid with the proceeds from the Hospitality Solutions Sale, in all periods presented.

Current wording

Interest expense increased $13 million, or 12%, during the three months ended March 31, 2026 compared to the same period in the prior year primarily due to additional interest incurred since the prior year period in connection with the financing activities that occurred during 2025. See Note 8. Debt for further details. Interest expense, net from continuing operations excludes interest expense associated with the debt that was required to be repaid with the proceeds from the Hospitality Solutions Sale, in the prior year period.

Previous wording

Other, net decreased $7 million for the nine months ended September 30, 2025 compared to the same period in the prior year primarily due to $10 million of TSA income, net, associated with the Hospitality Solutions disposition and a gain on the sale of assets of $5 million recognized in the current year period, partially offset by a $4 million change in other non-operating expense from prior year, a fair value gain from our investments in securities of $3 million recognized in the prior year period and a $1 million increase in realized and unrealized foreign currency exchange losses in the current period. See Note 9. Fair Value Measurements for further details regarding our investments in securities.

Current wording

Other, net decreased $4 million for the three months ended March 31, 2026 compared to the same period in the prior year primarily due to $10 million of transition services agreement income, net, associated with the Hospitality Solutions Sale, partially offset by a gain on the sale of assets of $5 million recognized in the prior year period.

Previous wording

For the three months ended September 30, 2025, we recognized $59 million of income tax benefit for continuing operations, compared to an income tax expense of $7 million for the three months ended September 30, 2024. The effective tax rate for the three months ended September 30, 2025 represents the rate expected for the year applied to year to date earnings before tax and the impact of certain discrete items in the quarter. The effective tax rate is primarily impacted by changes in the valuation allowance, tax permanent differences and tax credits. The difference between our effective tax rates and the U.S. federal statutory income tax rate primarily results fromthe impact of changes in the valuation allowance, our geographic mix of taxable income in various tax jurisdictions, tax permanent differences and tax credits.

Current wording

For the three months ended March 31, 2026, we recognized $11 million of income tax benefit for continuing operations, compared to an income tax benefit of $12 million for the three months ended March 31, 2025. The effective tax rate for the three months ended March 31, 2026 represents the rate expected for the year applied to year to date earnings before tax and the impact of certain discrete items in the quarter. The effective tax rate is primarily impacted by changes in the valuation allowance, tax permanent differences and tax credits plus the impact of the discrete recognition of withholding tax receivables and related interest.

Previous wording

(1)AR Facility (as defined below) does not include the FILO Facility (as defined below).

Current wording

(1)AR Facility (as defined below) does not include the "first-in, last-out" term loan tranche (the "FILO Facility") under the accounts receivable securitization facility (the "Securitization Facility").

Previous wording

As of September 30, 2025, we had$78 million outstanding under the AR Facility. The AR Facility matures on March 29, 2027 and allows us the ability to prepay the principal amount prior to the maturity date without penalty. See Note 7. Debt.

Current wording

As of March 31, 2026, we had$83 million outstanding under therevolving tranche under the Securitization Facility (the "AR Facility"). The AR Facility matures on March 29, 2027 and allows us the ability to prepay the principal amount prior to the maturity date without penalty. See Note 8. Debt.

Previous wording

We consider cash equivalents to be highly liquid investments that are readily convertible into cash. Securities with contractual maturities of three months or less, when purchased, are considered cash equivalents. We record changes in a book overdraft position, in which our bank account is not overdrawn but recently issued and outstanding checks result in a negative general ledger balance, as cash flows from financing activities. We invest in a money market fund which is classified as cash and cash equivalents in our consolidated balance sheets and statements of cash flows. We held no short-term investments as of September 30, 2025 and December 31, 2024. We had $21 million held as cash collateral for standby letters of credit in restricted cash on our consolidated balance sheets as of September 30, 2025 and December 31, 2024.

Current wording

We consider cash equivalents to be highly liquid investments that are readily convertible into cash. Securities with contractual maturities of three months or less, when purchased, are considered cash equivalents. We record changes in a book overdraft position, in which our bank account is not overdrawn but recently issued and outstanding checks result in a negative general ledger balance, as cash flows from financing activities. We invest in a money market fund which is classified as cash and cash equivalents in our consolidated balance sheets and statements of cash flows. We held no short-term investments as of March 31, 2026 and December 31, 2025. We had $21 million held as cash collateral for standby letters of credit in restricted cash on our consolidated balance sheets as of March 31, 2026 and December 31, 2025 and $98 million in restricted cash for purposes of redeeming the 8.625% senior secured notes due 2027, in the first quarter of 2026, on our consolidated balance sheet as of December 31, 2025.

Previous wording

The travel ecosystem has shifted over the past few years, resulting in the changing needs of our airline, hotel and agency customers, for which we have established strategic priorities with the goal of achieving sustainable long-term growth. We have experienced volume growth that has generally leveled off, which may continue into the future and could impact our rate of growth. These changes have had, and we believe they will continue to have, a material negative impact on our financial results and liquidity, and this negative impact may continue. Given the uncertain economic environment, we cannot provide assurance that the assumptions used to estimate our liquidity requirements will be accurate. However, based on our assumptions and estimates with respect to our financial condition, we believe that we have resources to sufficiently fund our liquidity requirements over at least the next twelve months.

Current wording

The travel ecosystem has shifted over the past few years, resulting in the changing needs of our airline, hotel and agency customers, for which we have established strategic priorities with the goal of achieving sustainable long-term growth. Industry air distribution volume growth has recently come under pressure due to conflict in the Middle East, which may continue into the future and could impact our rate of growth. In the first quarter of 2026, we have experienced year-on-year bookings growth due to implementation of certain commercial wins from recent years. Towards the end of the quarter, however, the onset of the conflict in the Middle East and resulting increase in fuel prices created headwinds that impacted air distribution bookings, and those pressures have and may continue to have a negative impact on our bookings. In the near term, we expect these trends to continue into the second quarter of 2026 and anticipate low-to-mid-single-digit air bookings growth for the year. These changes have had, and we believe they will continue to have, a material negative impact on our financial results and liquidity, and this negative impact may continue. Given the uncertain economic environment, we cannot provide assurance that the assumptions used to estimate our liquidity requirements will be accurate. However, based on our assumptions and estimates with respect to our financial condition, we believe that we have resources to sufficiently fund our liquidity requirements over at least the next twelve months.

Previous wording

In 2024 and 2025, we refinanced and extended the maturity on portions of our debt, which increased our interest rates at the time of these transactions and reduced our liquidity due to our utilizing cash from our balance sheet. In that time frame, we repaid debt using cash from our balance sheet of $96 million. We used proceeds of $822 million from the sale of Hospitality Solutions to pay down debt and added approximately $135 million of cash to the balance sheet, in accordance with the terms of the Amended and Restated Credit Agreement. In 2023 and 2024, we implemented a cost reduction plan to reposition our business to the environment and to structurally reduce our cost base. We believe our cash position and the liquidity measures we have taken will provide additional flexibility as we manage through continued headwinds. We are currently evaluating measures to enhance our financial position, which may include implementing additional refinancings, profit improvement initiatives, and further AI and other operational efficiencies; these actions may result in the incurrence of initial upfront costs.

Current wording

In 2024 and 2025, we refinanced and extended the maturity on portions of our debt, which increased our interest rates at the time of these transactions and reduced our liquidity due to our utilizing cash from our balance sheet. In addition, during this period, we repaid debt using cash from our balance sheet of $96 million. Further, we used proceeds of $822 million from the sale of Hospitality Solutions to pay down debt and added approximately $135 million of cash to the balance sheet, in accordance with the terms of the Amended and Restated Credit Agreement, dated as of February 19, 2013 (the "Amended and Restated Credit Agreement"). We believe our cash position and the liquidity measures we have taken will provide additional flexibility as we manage through continued headwinds. The 2026 Exchangeable Notes (as defined below) of $150 million mature in August 2026 and the Securitization Facility (as defined below) of$203 million matures in March 2027. No further maturities occur until 2029.

Previous wording

We utilize cash and cash equivalents primarily to pay our operating expenses, make capital expenditures, invest in our information technology infrastructure, products and offerings, pay taxes, service our debt as it becomes due, and pay other long-term liabilities. Free cash flow is calculated as cash flow from operations reduced by additions to property and equipment. We expect the full year 2025 pro forma free cash flow to be approximately $70 million, which we expect to be impacted by normal seasonality on a quarterly basis. Pro forma free cash flow is calculated to give effect to the sale of the Hospitality Solutions business and we have removed the impact of the $227 million payment-in-kind interest that was recorded in conjunction with the refinancing activity in the second quarter of 2025, from pro forma Free Cash Flow.

Current wording

We utilize cash and cash equivalents primarily to pay our operating expenses, make capital expenditures, invest in our information technology infrastructure, products and offerings, pay taxes, service our debt as it becomes due, and pay other long-term liabilities. Free cash flow is calculated as cash flow from operations reduced by additions to property and equipment. Cash provided by operations for full year 2026 is expected to be approximately $10 million and free cash flow is expected to be approximately negative $70 million, driven primarily by the impact of restructuring costs associated with the inflation offset program.

Previous wording

We have regularly evaluated and considered, and in the future we will continue to evaluate and consider, strategic acquisitions, divestitures, joint ventures, equity method investments, refinancing our existing debt or repurchasing our outstanding debt obligations in open market or in privately negotiated transactions or otherwise, as well as other transactions we believe may create stockholder value or enhance financial performance. These transactions may require cash expenditures or generate proceeds and, to the extent they require cash expenditures, may be funded through a combination of cash on hand, debt or equity offerings, or asset sales.

Current wording

We have regularly evaluated and considered, and in the future we will continue to evaluate and consider, strategic acquisitions, divestitures, joint ventures, equity method investments, refinancing our existing debt or repurchasing our outstanding debt obligations in open market or in privately negotiated transactions or otherwise, as well as other transactions we believe may create stockholder value or enhance financial performance. As we continue to proactively manage our balance sheet and taking into consideration the macroeconomic environment and geopolitical uncertainty, including the conflict in the Middle East and resulting increase in fuel prices, we are considering refinancing some or all of the 2026 Exchangeable Notes depending on market conditions. These transactions may require cash expenditures or generate proceeds and, to the extent they require cash expenditures, may be funded through a combination of cash on hand, debt or equity offerings, or asset sales.

Previous wording

While our business has incurred net losses on a GAAP basis, we recognized federal taxable income in 2024 based on our operating and non-operating results pursuant to the provisions of the Tax Cuts and Jobs Act that limit interest expense deduction and the annual use of net operating loss (“NOL”) carryforwards and requires companies to capitalize and amortize research and development costs. On July 4, 2025, tax legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have accounted for the effects of the OBBBA in our consolidated financial statements, and certain provisions of OBBBA, such as the reinstatement of bonus depreciation, full expensing of R&D expenses, and increases in the limitation of interest deductibility, have provided a U.S. federal cash tax benefit for 2025. Additionally, several countries, primarily Canada and in Europe, have adopted DST on revenue earned by multinational companies from the provision of certain digital services, such as the use of an online marketplace, regardless of physical presence. As DSTs are proposed, enacted or changed in jurisdictions around the world, we monitor such legislation and determine its applicability to our operations in these jurisdictions. We record DST in selling, general and administrative costs in the consolidated statements of operations.

Current wording

On July 4, 2025, tax legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have accounted for the effects of the OBBBA in our consolidated financial statements, and certain provisions of OBBBA, such as the reinstatement of bonus depreciation, full expensing of R&D expenses, and increases in the limitation of interest deductibility, have provided a U.S. federal cash tax benefit for 2025. Countries primarily in Europe continue to propose DSTs in addition to countries that have already enacted DSTs. DSTs are assessed on revenue earned by multinational companies from the provision of certain digital services, such as the use of an online marketplace, regardless of physical presence. Canada repealed their DST on March 26, 2026, and we reversed our accrual for these taxes. As DSTs are proposed, enacted or changed in jurisdictions around the world, we monitor such legislation and determine its applicability to our operations in these jurisdictions. We record DST in selling, general and administrative costs in the consolidated statements of operations.

Previous wording

The global capital markets experienced periods of volatility throughout 2024, which has increased through the third quarter of 2025, in response to the geopolitical conflict, changes in the rate of inflation, uncertainty regarding the path of U.S. monetary policy, and more recently tariff-related policy. During 2024 and 2025, we refinanced portions of our debt which resulted in interest rates higher than prior years, increasing current and future interest expense. Through June 4, 2025, the 2023 Term Loan Agreement, as defined below, provided the ability for interest to be payable-in-kind, such that amounts due were capitalized into the note balance at the payment date rather than paid in cash, reducing our near-term cash payments for interest on this debt. On June 4, 2025, we repaid all outstanding borrowings under the Senior Secured Term Loan Due 2028. Subject to market conditions, we may opportunistically refinance portions of our debt in the near term which, at current interest rates and market conditions, may negatively impact our interest expense or result in higher dilution. In addition, from time to time, we may decide to repurchase or otherwise retire portions of our existing indebtedness through transactions in the open market, privately negotiated transactions, tender offers, exchange offers or otherwise, or we may redeem or prepay portions of our existing indebtedness. Any such action will depend on market conditions and various other factors existing at that time.

Current wording

From time to time, we review and consider opportunities to refinance or repurchase our existing debt, as well as conduct debt or equity offerings to support future strategic investments, support operational requirements, provide additional liquidity, or pay down debt. Global capital markets experienced sustained volatility throughout 2025, and have remained constrained through the first quarter of 2026, due to the expansion of regional conflicts in the Middle East into broader maritime and energy supply chain disruptions, ongoing trade frictions and tariff related disruptions, and continued ambiguity regarding inflation trends and the future path of U.S. monetary policy. Subject to these market conditions, we may opportunistically refinance portions of our debt in the near term, including some or all of the 2026 Exchangeable Notes due in August 2026, which, at current interest rates and market conditions, may negatively impact our interest expense or result in higher dilution. In addition, from time to time, we may decide to repurchase or otherwise retire portions of our existing indebtedness through transactions in the open market, privately negotiated transactions, tender offers, exchange offers or otherwise, or we may redeem or prepay portions of our existing indebtedness. Any such action will depend on market conditions and various other factors existing at that time.

Previous wording

Under the Amended and Restated Credit Agreement, dated as of February 19, 2013 (the "Amended and Restated Credit Agreement"), the loan parties are subject to certain customary non-financial covenants, including restrictions on incurring certain types of indebtedness, creation of liens on certain assets, making of certain investments, and payment of dividends. In the first quarter of 2023, we entered into the AR Facility of up to$200 million, and in the first quarter of 2024, we increased the overall size of the AR Facility through the FILO Facility, resulting in a Securitization Facility of$235 million (as each of such terms is defined below). As of September 30, 2025, we were in compliance with all covenants under the terms of the Amended and Restated Credit Agreement and the Securitization Facility (as defined below).

Current wording

Under the Amended and Restated Credit Agreement, the loan parties are subject to certain customary non-financial covenants, including restrictions on incurring certain types of indebtedness, creation of liens on certain assets, making of certain investments, and payment of dividends. The Securitization Facility (as defined below) also contains certain customary representations, warranties, affirmative covenants, and negative covenants, subject to certain cure periods in some cases, including the eligibility of the receivables being sold and securing the loans made by the lenders, as well as customary reserve requirements, events of default, termination events, and servicer defaults. The June 2029 Notes (as defined below) also include various non-financial covenants, including restrictions on making certain investments, disposition activities and affiliate transactions. In addition, the June 2029 Notes contain customary prepayment events and financial and negative covenants and other representations, covenants and events of default based on, but in certain instances more restrictive than, the Amended and Restated Credit Agreement. As of March 31, 2026, we were in compliance with all covenants under the terms of the Amended and Restated Credit Agreement, the Securitization Facility (as defined below), the June 2029 Notes and the 2025 Pari Passu Loan Agreement (as defined below).