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v3.20.1

Segment Information (Tables) | 3 Months Ended
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Mar. 31, 2020
Segment Reporting [Abstract] |
Summary of Segment Information | Segment information for the three months ended March 31, 2020 and 2019 is as follows (in thousands):
| Three Months Ended March 31, |  |  |  |  |  |  |  |  |
| 2020 |  | 2019 |  |  |  |  |  |  |
Revenue |  |  |  |  |  |  |  |  |  |
Travel Network | $ | 427,703 |  |  | $ | 773,968 |  |  |  |  |  |  |  |
Airline Solutions | 179,885 |  |  | 212,927 |  |  |  |  |  |  |  |
Hospitality Solutions | 59,237 |  |  | 72,831 |  |  |  |  |  |  |  |
Eliminations | (7,848) |  |  | (10,365) |  |  |  |  |  |  |  |
Total revenue | $ | 658,977 |  |  | $ | 1,049,361 |  |  |  |  |  |  |  |
Adjusted Gross Profit(a) |  |  |  |  |  |  |  |  |  |
Travel Network | $ | 112,169 |  |  | $ | 282,680 |  |  |  |  |  |  |  |
Airline Solutions | 52,027 |  |  | 78,131 |  |  |  |  |  |  |  |
Hospitality Solutions | 5,694 |  |  | 15,710 |  |  |  |  |  |  |  |
Corporate | (2,790) |  |  | (3,431) |  |  |  |  |  |  |  |
Total | $ | 167,100 |  |  | $ | 373,090 |  |  |  |  |  |  |  |
Adjusted Operating (Loss) Income(b) |  |  |  |  |  |  |  |  |  |
Travel Network | $ | 21,972 |  |  | $ | 193,172 |  |  |  |  |  |  |  |
Airline Solutions | (32,579) |  |  | 15,424 |  |  |  |  |  |  |  |
Hospitality Solutions | (16,457) |  |  | (5,717) |  |  |  |  |  |  |  |
Corporate | (45,806) |  |  | (47,117) |  |  |  |  |  |  |  |
Total | $ | (72,870) |  |  | $ | 155,762 |  |  |  |  |  |  |  |
Adjusted EBITDA(c) |  |  |  |  |  |  |  |  |  |
Travel Network | $ | 65,452 |  |  | $ | 242,855 |  |  |  |  |  |  |  |
Airline Solutions | 8,369 |  |  | 58,394 |  |  |  |  |  |  |  |
Hospitality Solutions | (4,855) |  |  | 7,005 |  |  |  |  |  |  |  |
Total segments | 68,966 |  |  | 308,254 |  |  |  |  |  |  |  |
Corporate | (44,563) |  |  | (45,905) |  |  |  |  |  |  |  |
Total | $ | 24,403 |  |  | $ | 262,349 |  |  |  |  |  |  |  |
Depreciation and amortization |  |  |  |  |  |  |  |  |  |
Travel Network | $ | 25,267 |  |  | $ | 30,555 |  |  |  |  |  |  |  |
Airline Solutions | 40,948 |  |  | 42,970 |  |  |  |  |  |  |  |
Hospitality Solutions | 11,602 |  |  | 12,723 |  |  |  |  |  |  |  |
Total segments | 77,817 |  |  | 86,248 |  |  |  |  |  |  |  |
Corporate | 18,044 |  |  | 17,195 |  |  |  |  |  |  |  |
Total | $ | 95,861 |  |  | $ | 103,443 |  |  |  |  |  |  |  |
Capital Expenditures |  |  |  |  |  |  |  |  |  |
Travel Network | $ | 2,329 |  |  | $ | 4,986 |  |  |  |  |  |  |  |
Airline Solutions | 6,392 |  |  | 12,490 |  |  |  |  |  |  |  |
Hospitality Solutions | 1,401 |  |  | 3,496 |  |  |  |  |  |  |  |
Total segments | 10,122 |  |  | 20,972 |  |  |  |  |  |  |  |
Corporate | 18,315 |  |  | 16,892 |  |  |  |  |  |  |  |
Total | $ | 28,437 |  |  | $ | 37,864 |  |  |  |  |  |  |  |
______________________________ (a)The following table sets forth the reconciliation of Adjusted Gross Profit to operating (loss) income in our statement of operations (in thousands):
| Three Months Ended March 31, |  |  |  |  |  |
| 2020 |  | 2019 |  |  |  |
Adjusted Gross Profit | $ | 167,100 |  |  | $ | 373,090 |  |  |  |  |
Less adjustments: |  |  |  |  |  |  |
Selling, general and administrative | 198,873 |  |  | 151,391 |  |  |  |  |
Cost of revenue adjustments: |  |  |  |  |  |  |
Depreciation and amortization(1) | 77,373 |  |  | 84,920 |  |  |  |  |
Amortization of upfront incentive consideration(2) | 18,213 |  |  | 19,128 |  |  |  |  |
Stock-based compensation | 7,357 |  |  | 7,244 |  |  |  |  |
Restructuring and other costs(6) | 16,695 |  |  | — |  |  |  |  |
Operating (loss) income | $ | (151,411) |  |  | $ | 110,407 |  |  |  |  |
(b)The following table sets forth the reconciliation of Adjusted Operating (Loss) Income to operating (loss) income in our statement of operations (in thousands):
| Three Months Ended March 31, |  |
| 2020 |  | 2019
Adjusted Operating (Loss) Income | $ | (72,870) |  |  | $ | 155,762 |
Less adjustments: |  |  |
Equity method (loss) income | (686) |  |  | 533 |
Acquisition-related amortization(1c) | 16,801 |  |  | 15,984 |
Acquisition-related costs(5) | 17,827 |  |  | 11,706 |
Litigation costs, net(4) | 1,741 |  |  | 1,438 |
Stock-based compensation | 17,577 |  |  | 15,694 |
Restructuring and other costs(6) | 25,281 |  |  |  | — |
Operating (loss) income | $ | (151,411) |  |  | $ | 110,407 |
(c)The following table sets forth the reconciliation of Adjusted EBITDA to (loss) income from continuing operations in our statement of operations (in thousands):
| Three Months Ended March 31, |  |  |  |  |  |
| 2020 |  | 2019 |  |  |  |
Adjusted EBITDA | $ | 24,403 |  |  | $ | 262,349 |  |  |  |  |
Less adjustments: |  |  |  |  |  |  |
Depreciation and amortization of property and equipment(1a) | 69,513 |  |  | 75,348 |  |  |  |  |
Amortization of capitalized implementation costs(1b) | 9,547 |  |  | 12,111 |  |  |  |  |
Acquisition-related amortization(1c) | 16,801 |  |  | 15,984 |  |  |  |  |
Amortization of upfront incentive consideration(2) | 18,213 |  |  | 19,128 |  |  |  |  |
Interest expense, net | 37,442 |  |  | 38,013 |  |  |  |  |
Other, net(3) | 47,486 |  |  | 1,870 |  |  |  |  |
Restructuring and other costs(6) | 25,281 |  |  | — |  |  |  |  |
Acquisition-related costs (5) | 17,827 |  |  | 11,706 |  |  |  |  |
Litigation costs, net(4) | 1,741 |  |  | 1,438 |  |  |  |  |
Stock-based compensation | 17,577 |  |  | 15,694 |  |  |  |  |
Provision for income taxes | (27,254) |  |  | 11,843 |  |  |  |  |
(Loss) income from continuing operations | $ | (209,771) |  |  | $ | 59,214 |  |  |  |  |
______________________________________________________ (1)Depreciation and amortization expenses: (a) Depreciation and amortization of property and equipment includes software developed for internal use as well as amortization of contract acquisition costs (b) Amortization of capitalized implementation costs represents amortization of upfront costs to implement new customer contracts under our SaaS and hosted revenue model. (c) Acquisition-related amortization represents amortization of intangible assets from the take-private transaction in 2007 as well as intangibles associated with acquisitions since that date. (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 ten years. This consideration is made with the objective of increasing the number of clients or to ensure or improve customer loyalty. These service contract terms are established such that the supplier and other fees generated over the life of the contract will exceed the cost of the incentive consideration provided up front. These service contracts with travel agency subscribers require that the customer commit to achieving certain economic objectives and generally have terms requiring repayment of the upfront incentive consideration if those objectives are not met. (3)Other, net primarily includes a $46 million charge in connection with our proposed acquisition of Farelogix, 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. See Note 3. Acquisitions for further detail regarding the Farelogix acquisition. (4)Litigation costs, net represent charges associated with antitrust and other foreign non-income tax contingency matters. See Note 12. Contingencies. (5)Acquisition-related costs represent fees and expenses incurred associated with the 2018 agreement to acquire Farelogix. (6)Restructuring and other costs represent charges associated with business restructuring and associated changes implemented which resulted in severance benefits related to employee terminations. In the first quarter of 2020, we recorded a $25 million charge associated with an announced action to reduce our workforce in connection with cost savings measures as a result of the market conditions caused by COVID-19.

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- Definition Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8736-108599 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 25 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8813-108599 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=108376223&loc=d3e13816-109267 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8721-108599 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8906-108599 + Details
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