Sabre CorpSABR
Sabre Corp Income Taxes Disclosure
8. Income 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, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Components of pre-tax loss: | |||||||||||||||||
| Domestic | $ | (373,099) | $ | (363,329) | $ | (542,089) | |||||||||||
| Foreign | 133,865 | 95,888 | 84,196 | ||||||||||||||
| $ | (239,234) | $ | (267,441) | $ | (457,893) | ||||||||||||
The provision for income taxes relating to continuing operations consists of the following:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current portion: | |||||||||||||||||
| Federal | $ | 539 | $ | 6,804 | $ | 115 | |||||||||||
| State and Local | 2,995 | 1,746 | 1,024 | ||||||||||||||
| Non U.S. | 7,588 | (2,641) | 13,430 | ||||||||||||||
| Total current | 11,122 | 5,909 | 14,569 | ||||||||||||||
| Deferred portion: | |||||||||||||||||
| Federal | 3,405 | 1,746 | (1,315) | ||||||||||||||
| State and Local | (953) | (722) | 18,332 | ||||||||||||||
| Non U.S. | 2,682 | (2,826) | 2,059 | ||||||||||||||
| Total deferred | 5,134 | (1,802) | 19,076 | ||||||||||||||
| Total provision for income taxes | $ | 16,256 | $ | 4,107 | $ | 33,645 | |||||||||||
The provision for income taxes relating to continuing operations differs from amounts computed at the statutory federal income tax rate for the year ended December 31, 2025 as follows (in thousands, except percentages):
| Year Ended December 31, 2025 | |||||||||||
| U.S. federal statutory tax rate | $ | (50,239) | 21.0% | ||||||||
State and local income tax, net of federal (national) income tax effect(1) | 1,859 | (0.8)% | |||||||||
| Foreign tax effects | |||||||||||
| United Kingdom | 7,180 | (3.0)% | |||||||||
| Uruguay | |||||||||||
| Free trade zone incentives | (12,326) | 5.2% | |||||||||
| Other | 2,148 | (0.9)% | |||||||||
| Other foreign jurisdictions | (9,551) | 4.0% | |||||||||
| Effect of cross-border tax laws | |||||||||||
| Branch income or loss | 7,111 | (3.0)% | |||||||||
| Global intangible low-tax income | 12,929 | (5.4)% | |||||||||
| Subpart F income inclusion | 10,209 | (4.3)% | |||||||||
| Dividend received deduction | (5,611) | 2.3% | |||||||||
| Other | 943 | (0.4)% | |||||||||
| Tax credits | |||||||||||
| Research tax credit | (10,794) | 4.5% | |||||||||
| Changes in valuation allowances | 73,071 | (30.5)% | |||||||||
| Changes in unrecognized tax benefits | (4,674) | 2.0% | |||||||||
| Other adjustments | (5,999) | 2.5% | |||||||||
| Effective tax rate | $ | 16,256 | (6.8)% | ||||||||
______________________
(1)Florida, Massachusetts, Oklahoma, and Illinois represent the majority (greater than 50%) of the tax effect in this category.
The provision for income taxes relating to continuing operations differs from amounts computed at the statutory federal income tax rate for the years ended December 31, 2024 and 2023 is as follows:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Income tax provision at statutory federal income tax rate | $ | (56,163) | $ | (96,157) | |||||||
| State income taxes, net of federal benefit | (4,736) | (6,465) | |||||||||
| Impact of non U.S. taxing jurisdictions, net | (6,783) | (4,823) | |||||||||
| Base erosion and anti-abuse tax | 5,310 | 9,818 | |||||||||
| Employee stock based compensation | 8,178 | 8,965 | |||||||||
| Research tax credit | (11,261) | (31,296) | |||||||||
| Valuation Allowance | 70,487 | 154,392 | |||||||||
| Other, net | (925) | (789) | |||||||||
| Total (benefit) provision for income taxes | $ | 4,107 | $ | 33,645 | |||||||
Cash paid for income taxes, net of refunds received, by jurisdiction for the year ended December 31, 2025 is as follows (in thousands):
| Year Ended December 31, 2025 | |||||
| Federal | $ | 5,200 | |||
| State | 5,029 | ||||
| Foreign | |||||
| India | 2,075 | ||||
| Other Foreign Jurisdictions | 2,602 | ||||
| Cash paid for income taxes, net of refunds received | $ | 14,906 | |||
Cash paid for income taxes was $18 million and $24 million for the years ended December 31, 2024 and 2023, respectively.
The components of our deferred tax assets and liabilities are as follows:
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Interest expense carryforwards | $ | 355,202 | $ | 251,985 | |||||||
| Software developed for internal use | 159,172 | 198,354 | |||||||||
| Tax loss carryforwards | 140,844 | 188,202 | |||||||||
| Tax credit carryforwards | 103,103 | 96,135 | |||||||||
| Employee benefits other than pension | 22,393 | 31,874 | |||||||||
| Deferred revenue | 19,509 | 27,320 | |||||||||
| Lease liabilities | 13,057 | 14,803 | |||||||||
| Suspended loss | 14,723 | 14,737 | |||||||||
| Pension obligations | 7,389 | 11,087 | |||||||||
| Accrued expenses | 6,413 | 10,901 | |||||||||
| Incentive consideration | 3,067 | 4,223 | |||||||||
| Other | 1,751 | 1,324 | |||||||||
| Total deferred tax assets | 846,623 | 850,945 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Intangible assets | (67,193) | (81,467) | |||||||||
| Non U.S. operations | (22,588) | (24,982) | |||||||||
| Right of use assets | (12,033) | (14,126) | |||||||||
| Unrealized gains and losses | (15,792) | (16,016) | |||||||||
| Investment in partnership | (10,632) | (10,345) | |||||||||
| Bond discounts | (10,346) | (2,078) | |||||||||
| Depreciation and amortization | (3,388) | (3,255) | |||||||||
| Total deferred tax liabilities | (141,972) | (152,269) | |||||||||
Valuation allowance(1) | (737,391) | (727,805) | |||||||||
Net deferred tax liability(2) | $ | (32,740) | $ | (29,129) | |||||||
______________________
(1)The change in the valuation allowance includes movement for both continuing operations and discontinued operations.
(2)The deferred balances as of the year ended December 31, 2024 are inclusive of the discontinued operations net deferred tax liability of $7 million.
We do not consider undistributed foreign earnings to be indefinitely reinvested as of December 31, 2025, with certain limited exceptions and have not, in those cases, recorded corresponding deferred taxes. We consider the undistributed capital investments in most of our foreign subsidiaries to be indefinitely reinvested as of December 31, 2025, and have not provided deferred taxes on any outside basis differences. The determination of the liability for the undistributed capital investments is not practicable.
As of December 31, 2025, we have U.S. federal research tax credit carryforwards of approximately $73 million, which will expire between 2038 and 2045. U.S federal NOL carryforwards are forecast to be utilized with the filing of the 2025 U.S. federal tax return. There are no U.S. federal NOLs subject to the annual limit on the ability of a corporation to use certain tax attributes (as defined in Section 382 of the Internal Revenue Code). We have state NOLs of $7 million which will expire primarily between 2028 and 2045 and state research tax credit carryforwards of $28 million which will expire between 2035 and 2045. We have $585 million of non-U.S. NOL carryforwards and $8 million of foreign tax credits related to certain non-U.S. taxing jurisdictions that are primarily from countries with indefinite carryforward periods.
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 or all 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 in which those temporary differences become deductible. When assessing the need for a valuation allowance, all positive and negative evidence is analyzed, including our ability to carry back NOLs to prior periods, the reversal of deferred tax liabilities, tax planning strategies and projected future taxable income. Significant losses related to COVID-19 resulted in a three-year cumulative loss in certain jurisdictions, which represents significant negative evidence regarding the ability to realize deferred tax assets. As a result, we maintain a cumulative valuation allowance on our U.S. federal and state deferred tax assets of $547 million and $57 million, respectively as of December 31, 2025. For non-U.S. deferred tax assets of certain subsidiaries, we maintained a cumulative valuation allowance on current year losses and other deferred tax assets of $134 million as of December 31, 2025. We reassess these assumptions regularly, which could cause an increase or decrease to the valuation allowance resulting in an increase or decrease in the effective tax rate and 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 continuing operations. During the year ended December 31, 2025, we recognized a benefit of $2 million, and
during the years ended December 31, 2024, and 2023, we recognized an expense of $4 million, and $12 million, respectively, related to interest and penalties. As of December 31, 2025 and 2024, we had a liability, including interest and penalties, of $48 million and $53 million, respectively, for uncertain tax positions, including cumulative accrued interest and penalties of approximately $8 million and $10 million, respectively.
A reconciliation of the beginning and ending amount of uncertain tax positions, excluding interest and penalties, is as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance at beginning of year | $ | 42,510 | $ | 52,850 | $ | 88,162 | |||||||||||
| Additions for tax positions taken in the current year | 1,444 | 4,022 | 6,275 | ||||||||||||||
| Additions for tax positions of prior years | 3,091 | 3,340 | 1,737 | ||||||||||||||
| Reductions for tax positions of prior years | (3,128) | (16,265) | (19,900) | ||||||||||||||
| Reductions for tax positions of expired statute of limitations | (3,227) | (1,134) | (18,485) | ||||||||||||||
| Settlements | (358) | (303) | (4,939) | ||||||||||||||
| Balance at end of year | $ | 40,332 | $ | 42,510 | $ | 52,850 | |||||||||||
We present uncertain tax positions as a reduction to deferred tax assets for NOLs, similar tax loss or a tax credit carryforward that is available to settle additional income taxes that would result from the disallowance of a tax position, presuming disallowance at the reporting date. The amount of uncertain tax positions that were offset against deferred tax assets on our balance sheets was $19 million, $19 million, and $27 million as of December 31, 2025, 2024, and 2023 respectively, with remaining amounts recorded as a liability.
As of December 31, 2025, 2024, and 2023, the amount of uncertain tax positions that, if recognized, would impact the effective tax rate was $40 million, $25 million, and $37 million, respectively.
In the normal course of business, we are subject to examination by taxing authorities throughout the world. The following table summarizes, by major tax jurisdiction, our tax years that remain subject to examination by taxing authorities:
| Tax Jurisdiction | Years Subject to Examination | ||||
| United Kingdom | 2023 - forward | ||||
| Singapore | 2021 - forward | ||||
| India | 2003 - forward | ||||
| U.S. Federal | 2020 - forward | ||||
| Texas | 2016 - forward | ||||
We currently have ongoing audits in India and various other jurisdictions. We do not expect that the results of these examinations will have a material effect on our financial condition or results of operations. With few exceptions, we are no longer subject to income tax examinations by tax authorities for years prior to 2016.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 15, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 17, 2017 | |
| 2015 | Feb 19, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.