Good morning and welcome to the Sabre First Quarter 2016 Earnings Conference Call. Please note that today's call is being recorded and is also being broadcast live over the Internet on the Sabre corporate website. This broadcast is the property of Sabre. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of the company is strictly prohibited. I will now turn the call over to the Senior Vice President of Investor Relations, Mr. Barry Sievert. Please go ahead, sir.

Thank you, Kayla, and good morning, everyone. Thanks for joining us for our first quarter 2016 earnings call. This morning, we issued an earnings press release, which is available on our website at investors.sabre.com. A slide presentation, which accompanies today's prepared remarks, is also available during this call on the Sabre IR webpage. A replay of today's call along with the slide presentation will be available on our website beginning this afternoon. Throughout today's call, we will be presenting certain non-GAAP financial measures, which have been adjusted to exclude expenses and other gains or losses related to restructurings, litigation and tax matters, and certain other items. All references during today's call to EBITDA, operating income, EPS, and net income have been adjusted for these items. The most directly comparable GAAP measures and reconciliations are available in the earnings release and other documents posted on our website at investors.sabre.com. We would like to advise you that our comments contain forward-looking statements. These statements include, among others, disclosure of our outlook, including revenue, EBITDA, net income, cash flow, interest expense, tax rate, CapEx, and earnings guidance. Our expected segment results, the effects of acquisitions, implementations, agreements and products, our expectations of industry trends and various other forward-looking statements regarding our business. These statements involve risks and uncertainties that may cause actual results to differ materially from the statements made on today's conference call. Information concerning the risks and uncertainties that could affect our financial results is contained in our SEC filings, including our Form 10-K for the year ended September 31, 2015. Participating with me on today's call are Tom Klein, our President and Chief Executive Officer; Rick Simonson, Executive Vice President and Chief Financial Officer; and Chris Nester, our Treasurer and SVP of Finance. Tom will start us off with a…

Thank you. We'll take our first from David Togut with Evercore ISI.

Good morning. This is Anthony Cyganovich on for David. I was hoping you could update us on market share gains by major geographies served in the Travel Network? Richard A. Simonson - Chief Financial Officer & Executive Vice President: Yeah. So we had terrific gain in Europe, Middle East, Africa, again, as I mentioned. And that continues our string of how we've invested to improve, what we thought was a very underweight position in Europe, Middle East, Africa over the last years to get it up to a more representative rate that's closer to our 37%-ish rate globally, and we had great success there growing more than 5 times the market. So we see in the Europe, Middle East, Africa, again, we were right around that range of a 1.5% of market share increase. In APAC, again, as I mentioned, Tom mentioned, I reiterated, the return to growth. There again, we see about the same level of increase in market share. And in Latin America, while the overall market was down in bookings and orders were down slightly as well, we actually saw very modest slight increase in market share gain by our calculations. In North America, we continue to power along like we have recently with low-single digit market share gain in North America market. So hopefully, Anthony, that gives you a good color by the four regions. Thomas Klein - President, Chief Executive Officer & Director: And Anthony, I think – this is Tom. The other thing that, I keep saying on these calls is, as we increase the pace of innovation and as this technology changes that are available to us to take advantage of and really we feel like we do that faster than anybody in the market, that just creates opportunities for us everywhere. So it's very much driven by our ability to bring things to market that are different from our competitors and we think we've been doing that consistently for a long time. But the current technology environment, we believe, gives us a chance to accelerate that.

Great. I appreciate the color. Just as a follow-up, what is your outlook for airline traffic growth in each of your geographies this year? Thomas Klein - President, Chief Executive Officer & Director: Yeah. I think we'll rely on the airline analyst on your side to decide where the forecasts are. We don't think it's whole lot different from where we started the year, but there is some movement in some of the numbers from the earnings calls that we've been hearing from the airlines, but we don't have enough insight to redo our whole forecast at this point. Richard A. Simonson - Chief Financial Officer & Executive Vice President: Yeah. The fundamentals, important to remind that, as we set our plan and our expectations for 2016, have remained largely intact and you've seen that as we said, the first half capacities with airlines does lock in early and they don't change real quickly. You've seen that, that's been the case so far this year. We played well into that. And also the airlines are keeping their planes full by using price around the edge to do that. You've seen them report on that. Again, that's good for our business because we get paid on a transaction basis. And the little bit of pullback that some of the North American carriers were talking about and capacity plans for the second half versus the beginning of the year, again, I think plays well into our model because we expect them to keep those planes full and therefore very consistent and allowing us to reiterate our full year guidance.

Great. Thanks a lot.

We'll take our next question from Ashish Sabadra, Deutsche Bank.

Solid quarter. Congrats. Very solid quarter across all segments. My questions are much broader, like when I look at the solutions segment, I was just wondering if you can talk about the prospect pipeline there. You had talked about potential opportunities not just in the pipeline but more about the prospect pipeline? Thanks. Thomas Klein - President, Chief Executive Officer & Director: Yeah, Ashish, first of all thanks for the question. Look, we haven't changed our view of the robustness of the pipeline and we generally are talking about the SabreSonic pipeline and we've talked about this notion that there's about 650 million passengers boarded out there, that we think will be up for bid and hopefully making decisions here in a relatively kind of the mid-term over the next 24 months, 36 months. And we again continue to feel good about our ability to capture a fair share of that part of the market. I think the more – the thing that we're looking at a lot more closely these days is again our – as we released the number of solutions, 21 new solutions specifically in the airline business over the last 24 months, watching the revenue pipeline still for those solutions. And a solution that we're very excited about, Intelligence Exchange, really has terrific traction in the market and it's a relatively high-ticket item, very versatile, we have airlines that have done over 100 different used cases on top of Intelligence Exchange across their commercial areas, their operational areas. We're doing some, and I talked yesterday or earlier this week in Las Vegas about how we're using Intelligence Exchange to create a baggage tracking service that can be consumed by mobile devices by our customers. So, really flexible platform and we're seeing really good update from it and it was really the topic of the conference that I just came back from. So, we – good, strong pipeline as always in the SabreSonic side of the business, but as we look at the other solutions, and I mentioned we'll show off Revenue Optimizer at our upcoming investor conference. We have a new crew solution rolling out, that we're selling into already. So just really a traction across the whole portfolio. And again, as I mentioned earlier, we don't view it as just an opportunity to capture current spend. As we release some of these solutions and bring innovations to the market, we think we will increase the size of the spend in the whole industry. So, again, increasing TAM and then capturing greater share of the TAM.

So, thanks for the color. This was very helpful. And just maybe going to the Travel Network segment, the bookings growth there was pretty solid, but also positively, the booking fee was up, by my math, it was up like 1.6% year-on-year. So I was just wondering, if you can talk about what drove the increase in booking fee and how should we think about bookings – the sustainability of the increase in booking fee going forward? Richard A. Simonson - Chief Financial Officer & Executive Vice President: Yeah. Ashish, this is Rick. Again, it varies quarter-to-quarter and Q1 is exactly as you said. So thanks for the good math there, but as we've said this year, we expect actually bookings to be up a bit more than revenue. So you shouldn't extrapolate that out. No change, no difference there, but don't extrapolate that out, quarters can be a little bit lumpy, depending on what comes in, in terms of deals. So, all to plan.

Thanks for the color, Rick. And maybe, if I can sneak in one last question, this is regarding free cash flow. So you've reiterated your guidance for the free cash flow for the full year, but just as we think about the cadence, how should we think about it, because free cash flow can be lumpy quarter-to-quarter. So just at a very high level, how should we think about the cadence for the free cash flow? Richard A. Simonson - Chief Financial Officer & Executive Vice President: Good, good thanks and we did have a modest decline in free cash flow in the quarter, but again per plan and it still allows us to reiterate approaching $400 million for the year. We increased CapEx and timing kind of associated with some of our working capital. Our GAAP capital expenditures increased about $14 million over the prior year. There is some incremental T&A spend (26:01), that's work we're finalizing for instance Sabre Red Workstation (sic) [Workspace] (26:06) 3.0. We had an increase in the capitalized implementation cost, as we're working on Alitalia, airberlin and others as I mentioned. And we had some of the Abacus stiff up spend that we talked about at the acquisition there. So we expect then, obviously, to get to the approaching $400 million, that we really have the bulk of this coming in, in the back half, right? So, again, Q2, you're not going to see any acceleration, it will be down a bit and then we really power up in Q3 and Q4 to get there. So lumpy in the quarters, good on the year as we see it now.

Congrats once again and thanks for the color.

We'll take our next question from James Schneider with Goldman Sachs. Richard A. Simonson - Chief Financial Officer & Executive Vice President: Jim, you there? James Schneider - Goldman Sachs & Co.: Yeah, I'm here, sorry. Excuse me. Thanks for taking my question. I just wanted to be maybe ask first of all, in terms of the quarter itself, good margin performance there. Can you maybe comment on your objectives and plans relative to incremental investments as we go throughout the year, and then maybe talk about what we should expect in terms of incremental OpEx versus letting that fall to the bottom line and specifically any initiatives you're working on, on the solutions side that will kind of push that OpEx up? Thomas Klein - President, Chief Executive Officer & Director: Let's talk about, Jim, a few of the things that we think are important to invest in, and then, I want to make sure that we're – I'll let Rick talk to what you described as incremental, because I think it's incremental and how we think about our business, but it's not incremental to what we've laid out there in the full year guidance. I think, a couple of big categories, as I mentioned, some of bigger new solutions in the Airline Solutions business are a crew system, which is a big need in the industry, we're talking virtually a big group of carriers in every region in the world, because this is an area where we believe this very big refresh coming and we're going to be – we're going to lead on that refresh with our new crew product. So big area of investment, and it's a very complex system for airlines and it involves their labor contracts, the local laws, the FAA rules, et cetera.…

We'll go next to Brian Essex with Morgan Stanley. Brian L. Essex - Morgan Stanley & Co. LLC: Good morning and thank you for taking the question. I was wondering, if you could talk on Abacus real quick. We know that deal is done and we see little bit of year-on-year pressure in the EBITDA margins for the Travel Network. I mean, any incremental cost saves there or should we just kind of extrapolate the difficult seasonality that you tend to see in the margins going forward to get to your kind of guidance of 40%-ish margins there? Richard A. Simonson - Chief Financial Officer & Executive Vice President: Yeah, Jim (sic) [Brian] (35:48). This is Rick. Really nothing new from the day we announced the deal and said that we're spending in the areas that we said we'd spend that are kind of one time. It's more additional CapEx to tune the platform there, where we have direct control now, where we didn't as minority board member on that side. And then operating side, again, as we said from the time of the acquisition, we expected that all else equal to put about 2 points of pressure on the Travel Network margins and we're seeing that come to bear as we said, as we roll out that year and that's why we step down from 42% to 40%. So nothing different there and we are recognizing and on track to get the run rate savings that are about $10 million per year by the end of this year. That's one we expect to have achieved the full run rate, so that next year we would see that at the 10%, can't identify anything above that. But, obviously, we'll continue to work there. I think we got the balance of…

We'll take our next question from Matthew Broome with Cowen and Company. Matthew Broome - Cowen & Co. LLC: Hi. Thanks for taking my call, great quarter. Earlier this month, you made some enhancements to your virtual payment solutions. Could you discuss changes and more broadly describe how your payment solution is differentiated from other offerings? Richard A. Simonson - Chief Financial Officer & Executive Vice President: Yes, on the payment solution, again, we offer what people call a virtual account number, right? Or in other words, you enable travel, purchasers of travel to when they have employees out on the road, not issue a credit card but actually have a virtual account number. And we integrate that into our offering so that the travel agents and the corporations can work that into their flow and it's important so it's not kind of a standalone offering. And it does a number of things, it obviously is convenient for the corporations because sometimes, you want people to have access to spend but not without, with issuing a credit card that kind of goes on forever. It also helps with fraud prevention, both for the corporations and for the agencies and the clearing there. And we've continued to build out our presence and the offering there for the customers. So, again, it's not a standalone payments business, we don't view it that way, we do it as a solution integrated into our offering through our GDS offering to the purchasers of travel, whether it be corporations or – and then the benefits also the agencies and the providers of travel, whether it be the hotels and now increasingly we announced ability to do that for air ticketing as well. We primarily started with this, was around hotel and T&E spend for people that were on the road, employees on the road, but now working that, and you saw a recent announcement, where we're working that into the airflow as well. Matthew Broome - Cowen & Co. LLC: Okay. Great. And have you seen any recent changes to the GDS competitive environment? Thomas Klein - President, Chief Executive Officer & Director: I don't think there has been any major changes, I mean we feel like we've continued to take share across the globe and we did this quarter, and feel like we can continue to do that. Matthew Broome - Cowen & Co. LLC: Okay. And just one last question. Is Sabre Red Workspace, is that still on track for, I think it was Q3? Thomas Klein - President, Chief Executive Officer & Director: Yes. And again, we'll be showing it at our Investor Day in New York, hope that you could join us. Matthew Broome - Cowen & Co. LLC: Definitely. Thanks very much. Thomas Klein - President, Chief Executive Officer & Director: All right. Richard A. Simonson - Chief Financial Officer & Executive Vice President: Thanks, Matthew.

We'll go next to John King with Bank of America.

Yeah. Thanks. Good morning guys. Just a couple on the Travel Network side. Thomas Klein - President, Chief Executive Officer & Director: Hey, John.

Hey, just a couple on the Travel Network side for me. If you look at the bookings growth, I mean, it's still pretty solid. But I guess, you did slow a little bit in North America from Q4 to Q1. I think Q4, you were more in the high-single digit range. So, I appreciate that comps sort of deferred as well. But was there anything specific there, that held you back in North America? Or, I guess, you should have benefited from the leap year as well. So just a bit of context around that. And maybe kind of how did that growth phased through the course of the quarter and perhaps what you've early, you've seen early in Q2, in terms of the bookings growth? And maybe kind of just round it off, what are you eventually baking in implicitly for the like-for-like bookings growth for the year? Thomas Klein - President, Chief Executive Officer & Director: Let me start with a little color on North America and we can talk about how we think about the rest of the year. But I think what we've seen John is, it picked up a little bit this year. But as Rick said in his comments, the corporate market has been generally flat. Leisure market is definitely stronger than corporate, airlines are pricing into that leisure demand and they've been talking about that and we see it with their PRASM results. So I think the biggest issue in North America, that's all then is back is this slow to no growth in corporate travel. And we haven't forecasted that – we're not economists, we haven't forecasted when that – when corporate travel is going to return to growth. But I do – I did feel like we saw a little bit…

That's very helpful. And just as a follow-up on that topic. Obviously, I guess to some extent that's a negative mix for you in terms of the profitability and the commission rates that you're going to see I guess on the average ledger booking, maybe somewhat higher than what you'd see in corporate. So what are you seeing perhaps like-for-like on the commission side of things and how are you offsetting that? Is there some level of – some of the synergies coming through from Abacus to offset that mix for you? Richard A. Simonson - Chief Financial Officer & Executive Vice President: Actually, the mix was pretty good, as I mentioned earlier on, and it was overall globally turned out for a positive mix for us, even though as I said don't extrapolate that out for the year. So, all the ins and outs, it really – you can't interpret anything and extrapolate anything different than what we've guided for, for the full year.

Got it. Thank you, guys. Richard A. Simonson - Chief Financial Officer & Executive Vice President: John, did you have another question we didn't answer, you had kind of like a three-part?

Yeah, right, yeah. Well, I guess the question was more kind of what the – on the incentive side rather than the actual absolute booking fee side, kind of what the trends were there and how that trended, because again, I guess, the ledger bookings would have had on average higher (46:32) fees than the corporate? Thomas Klein - President, Chief Executive Officer & Director: Yeah, I think, John, not much different than our forecast in aggregate that assumption isn't necessarily true on the effects of mix. So you're talking about the mix, not much different than we thought coming into the year on the incentive side Richard A. Simonson - Chief Financial Officer & Executive Vice President: Yeah, and over your all and year again, we expect bookings to grow greater than revenue. So don't extrapolate the Q1 mix out for the rest of the year in that regard.

Got it, very helpful. Richard A. Simonson - Chief Financial Officer & Executive Vice President: Thanks.

We'll go next to Abhey Lamba with Mizuho Securities.

Yeah, thank you. Tom, can you please discuss specific items that drove share gains in EMEA? Was it adding more airlines to the menu or more travel agents using your product? Or was it something on the pricing front here that you've been doing? It would be helpful to get some more color on that. Thomas Klein - President, Chief Executive Officer & Director: Yes, it's all – I mean share growth in EMEA has been driven by acquiring travel agency customers. So it's we're selling well into travel agents. We've said before that we've done a combination of things. One is we've invested in products very aggressively across the board, really globally with the product. And as the technology landscape rapidly changes, we just think that they create opportunities for us. We put the new products like Sabre Red Workspace 3.0 and the prospect of that has gotten customers' attention, gives us confidence that we'll continue to grow share in the market, as we lever changes like that. And then finally, we've invested in new markets, and that's starting to payoff. So there were number of markets that we've talked about before, places like Turkey and South Africa, some of the CIS countries, where we didn't have much of a presence at all. And we've opened sales offices in some of those places. And we're starting to see some benefit with that. So it's really across the board and it's – but it is agency – travel agency share acquisitions. So we're taking share away from our two competitors in both the online and offline business in EMEA. Richard A. Simonson - Chief Financial Officer & Executive Vice President: Abhey, I know we sound like a broken record, but it's a pretty good sound actually if you continue to take market share in a sustainable way that way. And we think the ingredients are set for it. But in the couple years forward, it's important to note what Tom's talking about, couple times here, of how this continuing investment in our technology, and it evidenced by Sabre Red Workstation (sic) [Workspace] (49:07) 3.0 and other things, will continue to allow us to have that discussion with agencies of why they ought to consider Sabre where they haven't before or bring us higher up in the mix. So we don't see anything but a continuation of this. Thomas Klein - President, Chief Executive Officer & Director: Yeah. And just to be clear, I mean as Rick said, a little bit of broken record, but the way we think about it is, as a mid-teens player and a global leader, we should be growing share. And it should be matter of fact that we're growing share in EMEA. And we plan to continue to do so.

Got it. Very helpful. Thank you, guys.

We'll go next to Jason Kupferberg with Jefferies.

Good morning. This is Ryan Cary on for Jason. Nice job on the quarter. Building a little bit on an earlier question. Can you speak to maybe what drove the share gains in Asia-Pac? We've been thinking it might take a little bit longer to ramp. But it seems like you're seeing some great growth there already. Do you expect this to be sustainable going forward? Or was there some one time benefits in the quarter? Thomas Klein - President, Chief Executive Officer & Director: Thanks for the question, Ryan. Look, we grew share in Asia-Pac. It wasn't leaps and bounds. We feel good about stabilizing the business there. We knew that, as Rick said, we had go-to-market inefficiencies that we had a clear line of sight to as board members. We've gotten underneath those. And again, I just think we have a great team out there. We're increasing our capability on the go-to-market side. And again, we expect it to be an upward trend over time, not a – not big grabs of share in short periods of time. So... Richard A. Simonson - Chief Financial Officer & Executive Vice President: It's important just to remember the absolute math, when Europe, Middle East, Africa, we started closer to 10% a number of years ago. And therefore, with what we've been doing, this point, point and a half a year, we've proved to be quite sustainable. And we feel good about that. In the Asia-Pacific region, remember we're up around 40% market share. So you can't add-on math at a point and a half every quarter for multiple years there.

Great. And then just going back to the passengers boarded backlog and the solutions business. I believe there was generally an 18- to 24-month timeline at the end of last year for that 650 million PBs. But now it seems like it's moved more to 24 months to 36 months. Anything changed? Or is this just a difficult number to predict? Thomas Klein - President, Chief Executive Officer & Director: I think it's a difficult number to predict. I mean we can certainly – as in most businesses, we can make sales calls to people outside. This is a big decision. On the airline reservation side, it's a big decision. The short story is that airlines have to decide it's one of a couple priorities that they have for a year sometimes or a couple years. So it's not just a matter of wanting to do it, it's a matter of being able to slot it in as a priority. And then being able to assess your other business needs and deciding if it makes sense. So timelines move around. I think 36 months is on the outside. But I do think that the timeline on some of these deals has elongated. Not unusual. We haven't changed our forecast because of it. But it's a big decision for airlines. And they don't take it lightly and nor should they.

Great. Richard A. Simonson - Chief Financial Officer & Executive Vice President: We've got the balance of our other solution set as well. So that we don't – we aren't a slave to undue lumpiness. Thomas Klein - President, Chief Executive Officer & Director: That's right. Richard A. Simonson - Chief Financial Officer & Executive Vice President: Although there is some lumpiness in the rev side. Thomas Klein - President, Chief Executive Officer & Director: Thanks, Jason.

Great. Thanks for taking my question. Thomas Klein - President, Chief Executive Officer & Director: Or Ryan. Sorry, Ryan.

We'll go next to Jed Kelly with Oppenheimer. Jed Kelly - Oppenheimer & Co., Inc. (Broker): Great. Thanks for taking my question. What's been driving the stronger trends you're seeing with leisure travel given some of the recent events in Europe. Is it any geographies you can specifically call out in terms of domestic versus transcontinental flights or is it higher volumes from the OTAs? Thomas Klein - President, Chief Executive Officer & Director: Yeah. I mean, where we see it Jed is more North America. We just see more of a balance and again I think the overall traffic is okay. I think it's a – it is a mix issue and I wouldn't say it's necessarily significantly stronger leisure and just as I said the corporate market is flattish, and Rick said it in the two segments energy and financials, it's particularly impacted. So I think it's more an issue of corporate recovery would be a good boost for everybody, for our airline and hospitality customers as well as for us. It wouldn't be at the expense of leisure travel, I don't think. So it's really just a mix issue here in North America that's what we – at least for us in our business, I think that's what we're able to do. Jed Kelly - Oppenheimer & Co., Inc. (Broker): Thank you.

We'll take our next question from Brad Erickson with Pacific Crest Securities.

Great. Thanks for taking my questions. First on the ramp of the American business, I wanted to ask around the XML-based product you've introduced there and how it's going thus far and then how you think – how you kind of think about NDC and the XML-based products in the future is driving future opportunities? Thomas Klein - President, Chief Executive Officer & Director: Yes, Brad, thanks for the question. I think at American, the seats, basically, it's further paid seat product and that's gone quite well. I think they are pleased with the product and its uptake in the market. From a standpoint of that – XML is a decade old technology that we've been using for over a decade. So there is nothing new there. It's just an issue of how airlines want to connect and how they want to feed us content. And as far as the NDC standard, I've said before, we view it as a non-issue. It's a white paper, it's a suggestion, and innovators are going to innovate, and we're going to be leading that. If we need to write to that standard, that's fine, but I think these standards will evolve and emerge and will come out in innovative technologies that actually – innovative technology companies that actually deliver product to the airlines and we're at the forefront of that.

Got it. That's great. And then, regarding your pipeline in the solutions business, I guess, historically, have you ever talked about kind of close rates for that business, and how has that been trending lately? Thanks. Thomas Klein - President, Chief Executive Officer & Director: We haven't – we do track it. We've talked about being the number one or number two product in every area. And I'd say that, my guess is versus most software businesses, our close rates are very, very higher. Again, we have a couple competitors in each product set. We have the number one and number two product. They ought to be high. Kayla, any more questions?

With no further questions, I'd like to turn it back to Mr. Tom Klein for closing remarks. Mr. Klein? Thomas Klein - President, Chief Executive Officer & Director: Well, thanks again for joining us this morning. We, as always, we appreciate your interest in Sabre, and we very much look forward to seeing many of you in New York on May 17 and to speaking with you all again soon. Thanks a lot. Have a great day.

That concludes today's conference. We thank you for your participation. You may now disconnect.