<PAGE>   1
================================================================================

                                UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                  FORM 10-Q



[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996.


[  ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934
For the Transition Period From                      to                     .
                               ---------------------   --------------------

Commission file number 1-12175.



                         THE SABRE GROUP HOLDINGS, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

               Delaware                                  75-2662240
----------------------------------------   -------------------------------------
     (State or other jurisdiction           (I.R.S. Employer Identification No.)
   of incorporation or organization)            

          4255 Amon Carter Blvd.            
            Fort Worth, Texas                              76155
----------------------------------------   -------------------------------------
(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code (817) 931-7300


                                 Not Applicable
--------------------------------------------------------------------------------
  (Former name, former address and former fiscal year, if changed since last
                                    report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes     No  X .
                                        ---    ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.


Class A Common Stock, $.01 par value -  23,394,980 as of November 8, 1996

Class B Common Stock, $.01 par value - 107,374,000 as of November 8, 1996

================================================================================

<PAGE>   2

                                     INDEX

                         THE SABRE GROUP HOLDINGS, INC.




PART I:      FINANCIAL INFORMATION


Item 1.  Financial Statements
    
         Condensed Consolidated Balance Sheet -- September 30, 1996 and
         December 31, 1995
    
         Consolidated Statement of Income -- Three months ended September 30,
         1996 and 1995; Nine months ended September 30, 1996 and 1995

         Condensed Consolidated Statement of Stockholder's Equity

         Consolidated Statement of Cash Flows -- Nine months ended September 30,
         1996 and 1995

         Notes to Condensed Consolidated Financial Statements -- September 30,
         1996

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations


PART II:     OTHER INFORMATION


Item 1.  Legal Proceedings

Item 4.  Submission of Matters to a Vote of Security Holders

Item 5.  Other information

         Pro forma Condensed Consolidated Financial Information
         
         Pro forma Condensed Consolidated Balance Sheet -- September 30, 1996
         
         Pro forma Consolidated Statement of Income -- Three months ended
         September 30, 1996 and 1995; Nine months ended September 30, 1996 and
         1995

Item 6.  Exhibits and Reports on Form 8-K


SIGNATURE
<PAGE>   3
                         PART 1.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

THE SABRE GROUP HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share data)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                       September 30,            December 31,
                                                                           1996                    1995
                                                                       -------------            ------------
ASSETS                                                                  (Unaudited)
<S>                                                                   <C>                     <C>
CURRENT ASSETS                                                        
  Cash and cash equivalents                                            $      10,656            $     94,861 
  Short-term investments                                                     215,392                     --- 
  Accounts receivable, net                                                   220,775                 138,972 
  Receivable from AMR                                                         54,193                     --- 
  Prepaid expenses                                                            13,516                   5,851 
  Deferred income taxes                                                       39,858                  31,539 
                                                                       -------------            ------------
    Total current assets                                                     554,390                 271,223 
                                                                                                             
PROPERTY AND EQUIPMENT                                                                                       
  Buildings and leasehold improvements                                       292,886                  12,250 
  Furniture, fixtures and equipment                                           20,821                   6,049 
  Service contract equipment                                                 534,462                 529,918 
  Computer equipment                                                         327,942                 422,050 
                                                                       -------------            ------------
                                                                           1,176,111                 970,267 
  Less accumulated depreciation and amortization                           (642,404)               (589,549) 
                                                                       -------------            ------------
     Total property and equipment                                            533,707                 380,718 

Other assets, net                                                             70,237                  77,465 
                                                                       -------------            ------------
                                                                       $   1,158,334            $    729,406 
LIABILITIES AND STOCKHOLDER'S EQUITY                                                                         
                                                                                                             
CURRENT LIABILITIES                                                                                          
  Accounts payable                                                     $      75,213            $     53,716 
  Accrued compensation and related benefits                                   47,419                  33,696 
  Other accrued liabilities                                                  116,776                  77,071 
  Note payable to AMR                                                            ---                  54,102 
                                                                       -------------            ------------
    Total current liabilities                                                239,408                 218,585 
                                                                                                             
Deferred income taxes                                                         52,597                  30,943 
Other postretirement benefits                                                 47,509                  37,960 
Other liabilities                                                             14,777                   9,781 
Debenture payable to AMR                                                     850,000                     --- 
                                                                                                             
Commitments and contingencies                                                                                
                                                                                                             
STOCKHOLDER'S EQUITY                                                                                         
  Preferred Stock:  $0.01 par value; 20,000,000 shares authorized at                                         
      September 30, 1996; no shares issued                                                               --- 
                                                                                 ---                                      
  Common stock $0.01 par value; 1,000 shares authorized, issued                                              
     and outstanding at September 30, 1996                                                               --- 
                                                                                 ---                                      
  Stockholder's net investment                                                   ---                 432,137 
  Retained deficit                                                          (45,957)                     --- 
                                                                       -------------            ------------
                                                                            (45,957)                 432,137 
                                                                       -------------            ------------
                                                                                                             
                                                                       $   1,158,334            $    729,406 
                                                                       =============            ============
</TABLE>  

The accompanying notes are an integral part of these financial statements.





                                      -1-
<PAGE>   4
THE SABRE GROUP HOLDINGS, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited) (In thousands, except per share amounts)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                       Three Months Ended                    Nine Months Ended
                                                          September 30,                        September 30,
                                                 -------------------------------      -------------------------------
                                                     1996               1995              1996               1995
                                                 ------------       ------------      ------------       ------------
<S>                                              <C>                <C>               <C>                <C>
REVENUES
  Electronic travel distribution                 $    280,998       $    261,151      $    855,980       $    772,890
  Information technology solutions                    126,422            131,997           389,729            387,789
                                                 ------------       ------------      ------------       ------------
    Total operating revenues                          407,420            393,148         1,245,709          1,160,679

OPERATING EXPENSES
  Cost of sales                                       283,235            253,145           856,257            747,568
  Selling, general and administrative                  36,271             31,811           103,949             85,468
                                                 ------------       ------------      ------------       ------------
    Total operating expenses                          319,506            284,956           960,206            833,036
                                                 ------------       ------------      ------------       ------------
OPERATING INCOME                                       87,914            108,192           285,503            327,643

OTHER INCOME (EXPENSE)
  Interest income                                       2,155              1,579             7,774              5,462
  Interest expense                                    (15,340)            (1,639)          (20,019)            (4,408)
  Other - net                                            (783)               825            (4,121)           (10,703)
                                                 ------------       ------------      ------------       ------------
                                                      (13,968)               765           (16,366)            (9,649)
                                                 ------------       ------------      ------------       ------------
                                           
EARNINGS BEFORE PROVISION FOR INCOME TAXES             73,946            108,957           269,137            317,994
Provision for income taxes                             28,795             42,102           104,936            124,080
                                                 ------------       ------------      ------------       ------------
NET EARNINGS                                     $     45,151       $     66,855      $    164,201       $    193,914
                                                 ============       ============      ============       ============


PRO FORMA EARNINGS PER COMMON SHARE DATA:
  Earnings per common share                      $        .35       $        .51      $       1.26       $       1.48
                                                 ============       ============      ============       ============
  Average common and common
    equivalent shares outstanding                     130,604            130,604           130,604            130,604
                                                 ============       ============      ============       ============
</TABLE>

The accompanying notes are an integral part of these financial statements.





                                      -2-
<PAGE>   5
THE SABRE GROUP HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1996
(Unaudited) (In thousands)
--------------------------------------------------------------------------------

<TABLE>
                                                         Common                                   Stockholder's Net
                                                          Stock           Retained Deficit            Investment
                                                    --------------        ----------------        -----------------
 <S>                                                 <C>                  <C>                    <C>
Balance December 31, 1995                           $          ---        $         ---           $         432,137
Net earnings prior to the Reorganization                       ---                  ---                     119,050
Capitalization of the Company in connection
   with the Reorganization:
   Reclassification of stockholder's net                                                     
      investment                                               ---                 551,187                 (551,187)
   Issuance of Debenture                                       ---                (850,000)                     ---
   Transfer of fixed assets                                    ---                 159,451                      ---
   Other                                                       ---                  48,254                      ---
                                                    --------------        ----------------        -----------------
                                                               ---                 (91,108)                (551,187) 
Net earnings subsequent to the Reorganization                  ---                  45,151                      ---
                                                    --------------        ----------------        -----------------

Balance September 30, 1996                          $          ---        $        (45,957)       $             ---
                                                    ==============        ================        =================
</TABLE>


The accompanying notes are an integral part of these financial statements.





                                      -3-
<PAGE>   6
THE SABRE GROUP HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) (In thousands)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                 Nine Months Ended September 30,
                                                                               -----------------------------------
                                                                                   1996                   1995
                                                                               ------------           ------------
<S>                                                                            <C>                    <C>
OPERATING ACTIVITIES
Net earnings                                                                   $    164,201           $    193,914
Adjustments to reconcile net earnings to net cash provided by
  operating activities:
  Depreciation and amortization                                                     126,986                129,542
  Deferred income taxes                                                             (17,738)                ---
  Other                                                                               4,444                  6,712
  Changes in operating assets and liabilities:
    Accounts receivable                                                             (81,803)               (39,845)
    Receivable from AMR                                                             (54,193)                ---
    Prepaid expenses                                                                 (7,665)                (5,072)
    Other assets                                                                      5,276                 (6,924)
    Accrued compensation and related benefits                                        13,723                 (2,575)
    Accounts payable and other accrued liabilities                                   61,202                 26,680
    Postretirement benefits                                                           1,749                  3,585
    Other liabilities                                                                 7,436                 (1,840)
                                                                               ------------           ------------
      Net cash provided by operating activities                                     223,618                304,177

INVESTING ACTIVITIES:
  Additions to property and equipment                                              (126,345)              (133,372)
  Increase in short-term investments                                               (215,392)                   ---
  Proceeds from sale of equipment                                                    41,331                  4,886
  Acquisitions of other investments                                                  (7,417)                (9,508)
                                                                               ------------           ------------
        Net cash used for investing activities                                     (307,823)              (137,994)

FINANCING ACTIVITIES:
  Net cash advances to affiliates                                                       ---               (237,722)
  Contributions from affiliates                                                         ---                244,666
  Contributions to affiliates                                                           ---               (369,076)
                                                                               ------------           ------------
        Net cash used for financing activities                                          ---               (362,132)
                                                                               ------------           ------------

Net decrease in cash or cash equivalents                                            (84,205)              (195,949)
Cash and cash equivalents at beginning of period                                     94,861                262,956
                                                                               ------------           ------------

Cash and cash equivalents at end of period                                     $     10,656           $     67,007
                                                                               ============           ============

SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest payments to affiliates                                              $     20,019           $      4,408
                                                                               ============           ============
  Income tax payments to affiliates
                                                                               $    116,336           $    124,080
                                                                               ============           ============
</TABLE>


The accompanying notes are an integral part of these financial statements.





                                      -4-
<PAGE>   7
THE SABRE GROUP HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
--------------------------------------------------------------------------------

1.  GENERAL INFORMATION

    The SABRE Group Holdings, Inc. is a holding company.  Its sole direct
    subsidiary is The SABRE Group, Inc., which, pursuant to the Reorganization
    (defined below), is the successor to the businesses of The SABRE Group
    which were previously operated as subsidiaries or divisions of American
    Airlines, Inc. ("American") or AMR Corporation ("AMR").  The SABRE Group
    was formed by AMR to capitalize on synergies of combining AMR's information
    technology businesses under common management. Unless otherwise indicated,
    references herein to the "Company" include The SABRE Group Holdings, Inc.
    and its consolidated subsidiaries and, for the period prior to the
    Reorganization (defined below) of the businesses of AMR, the businesses of
    AMR constituting The SABRE Group, an operating unit of AMR.

    On July 2, 1996, AMR completed a reorganization of the businesses of The
    SABRE Group (the "Reorganization").  As part of the Reorganization, the
    Company was formed as a subsidiary of American, the businesses of The SABRE
    Group formerly operated as divisions and subsidiaries of American or AMR
    were combined under the Company and the Company and its subsidiaries were
    dividended by American to AMR.  See Note 3.


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    BASIS OF PRESENTATION - The accompanying unaudited condensed consolidated
    financial statements have been prepared in accordance with generally
    accepted accounting principles for interim financial information and with
    the instructions to Form 10-Q and Article 10 of Regulation S-X.
    Accordingly, they do not include all of the information and footnotes
    required by generally accepted accounting principles for complete financial
    statements.  In the opinion of management, these financial statements
    contain all adjustments, consisting of normal recurring accruals, necessary
    to present fairly the financial position, results of operations and cash
    flows for the periods indicated. The preparation of financial statements in
    accordance with generally accepted accounting principles requires
    management to make estimates and assumptions that affect the amounts
    reported in the financial statements and accompanying notes.  Actual
    results may differ from these estimates.  Certain reclassifications have
    been made to conform with the current presentation.  The Company's
    quarterly financial data should be read in conjunction with the
    consolidated financial statements of the Company for the year ended
    December 31, 1995 (including the notes thereto), set forth in The SABRE
    Group Holdings, Inc. Registration Statement on Form S-1 (No. 333-09747)
    (the "Registration Statement").

    INCOME TAXES - The Company and AMR have entered into a tax sharing
    agreement, effective July 1, 1996 (the "Tax Sharing Agreement"), which
    provides for the allocation of tax liabilities during the tax periods the
    Company is part of the consolidated federal, state and local income tax
    returns filed by AMR.  In addition, the Tax Sharing Agreement sets out
    certain benefits and obligations of the Company and AMR for tax matters
    relating to periods before the Reorganization and for certain benefits and
    obligations that would affect the Company or AMR in the future if the
    Company ceased to be a member of AMR's consolidated group for federal
    income tax purposes.  The Tax Sharing Agreement generally requires the
    Company to pay to AMR the amount of federal, state and local income taxes
    that the Company would have paid had it ceased to be a member of the AMR
    consolidated tax group for periods after the Reorganization.  The Company
    is jointly and severally liable for the federal income tax of AMR and the
    other companies included in the consolidated return for all periods in
    which the Company is included in the AMR consolidated group.  AMR has
    agreed, however, to indemnify the Company for any liability for taxes
    reported or required to be reported on a consolidated return.

    Except for certain items specified in the Tax Sharing Agreement, AMR
    generally retains any potential tax benefit carryforwards, and remains
    obligated to pay all taxes, attributable to periods before the
    Reorganization.  The Tax Sharing Agreement also grants the Company certain
    limited participation rights in any disputes with tax authorities.





                                      -5-
<PAGE>   8
THE SABRE GROUP HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



    SHORT-TERM INVESTMENTS - Short-term investments consist primarily of short-
    term marketable securities such as certificates of deposit, bankers'
    acceptances, commercial paper, corporate notes and government notes.
    Short-term investments are carried at cost plus accrued interest which
    approximates fair value.  American manages the Company's cash balances
    under the terms of the Management Services Agreement (See Note 3.)


3.  REORGANIZATION, AFFILIATE AGREEMENTS AND INITIAL PUBLIC OFFERING

    CAPITALIZATION AND INITIAL PUBLIC OFFERING - The Company was incorporated
    as a Delaware corporation and a direct wholly-owned subsidiary of American,
    which subsequently dividended capital stock of the Company to AMR.  At the
    time of the Reorganization the Company had 1,000 authorized shares of
    Common Stock with a par value of $0.01 per share, of which 1,000 shares of
    Common Stock were issued to American and dividended to AMR.  The Company
    completed its initial public offering (the "Offering") of 23,230,000 shares
    of Class A Common Stock, par value $.01 per share on October 17, 1996. The
    offering price of $27 per share resulted in net proceeds to the Company of
    approximately $593 million, after deducting underwriting discounts and
    commissions.  The Company used approximately $532 million of the net
    proceeds to repay a portion of a debenture payable to AMR.

    In anticipation of the Offering, AMR converted its existing 1,000 shares of
    Common Stock into 107,374,000 shares of Class B Common Stock, par value
    $.01 per share, of the Company. These shares constitute 82.2% of the total
    shares outstanding and 97.9% of the combined voting power of the Company's
    outstanding Common Stock.  The Company also has 20,000,000 authorized
    shares of preferred stock with a par value of $.01 per share.  No preferred
    shares have been issued.  

    LONG-TERM DEBT-- On July 2, 1996, in connection with the Reorganization,
    American transferred to the Company certain divisions and subsidiaries of
    American through which AMR previously conducted its information technology
    businesses, and in return the Company issued to American a floating rate
    subordinated debenture due September 30, 2004 with a principal amount of
    $850 million (the "Debenture") and common stock representing 100% of the
    equity ownership interest in the Company. American subsequently exchanged
    the Debenture for retirement of a portion of a note payable by American to
    AMR.  Because the assets and liabilities of the divisions and subsidiaries
    of American transferred to the Company are included in the historical
    financial statements of the Company, this transaction resulted in a
    reduction of Stockholder's Equity.  

    The interest rate on the Debenture was 7.2% through September 30, 1996
    and thereafter is based on the sum of the London Interbank Offered Rate
    (LIBOR rate) plus a margin determined based upon the Company's senior
    unsecured long-term debt rating or, if such debt rating is not available,
    upon the Company's ratio of net debt to total capital.  The interest rate is
    determined monthly beginning October 1 and accrued interest is payable each
    September 30 and March 31.  For October and November 1996, the interest rate
    is 7.35%.  The Company may prepay the principal balance in whole or in part
    at any time prior to December 31, 1996 and thereafter at any interest 
    payment date.

    The Company used approximately $532 million of the net proceeds from the
    Offering to repay a portion of the Debenture.

    CASH AND CASH EQUIVALENTS-- Effective with the Reorganization, the Company
    began maintaining a separate cash management system and separate cash and
    investment accounts from American.  Transactions with American no longer
    result in immediate charges and credits to the Company's cash equivalents,
    but are settled through intercompany billings with payment due in 30 days.
    American manages the Company's cash management system under the Management
    Services Agreement discussed below.  

    NOTE PAYABLE TO AMR--  On July 1, 1996 a note payable to AMR at June 30,
    1996 of approximately $54 million was capitalized.





                                      -6-
<PAGE>   9
THE SABRE GROUP HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

    PROPERTY AND EQUIPMENT-- On July 1, 1996 American contributed buildings,
    furniture and fixtures to the Company with a cost value of approximately
    $298 million and a net book value of $193 million. 

    AFFILIATE AGREEMENTS-- In connection with the Reorganization, the Company
    has entered into certain agreements with AMR and its affiliates (the
    "Affiliate Agreements"), which are discussed below.

    TECHNOLOGY SERVICES AGREEMENT-- The Company is party to the Information
    Technology Services Agreement with American, dated July 1, 1996 (the
    "Technology Services Agreement"), to provide American with certain
    information technology services.  The parties have agreed to apply the
    financial terms of the Technology Services Agreement as of January 1, 1996.
    The base term of the Technology Services Agreement expires June 30, 2006.
    The terms of the services to be provided by the Company to American,
    however, vary.  The Company will provide: (1) Data Center services, data
    network services, application development and existing application
    maintenance enhancement services until June 30, 2006; (ii) services
    relating to existing client server operations until June 30, 2001; and
    (iii) device support, distributed systems services, radio services and
    reservations and flight information network services until June 30, 1999.

    The Technology Services Agreement provides for annual price adjustments.
    For certain prices, adjustments are made according to formulas which,
    commencing in 1998, are reset every two years and which may take into
    account the market for similar services provided by other companies.  The
    resulting rates may reflect an increase or decrease over the previous
    rates.

    With limited exceptions, under the Technology Services Agreement, the
    Company will continue to be the exclusive provider of all information
    technology services provided by the Company to American immediately prior
    to the execution of the Technology Services Agreement.  Any new information
    technology services, including most new application development services,
    requested by American can be outsourced pursuant to competitive bidding by
    American or performed by American on its own behalf.  With limited
    exceptions, the Company has the right to bid on all new services for which
    American solicits bids.  Additionally, American may continue to perform
    development and enhancement work that it is currently performing on its own
    behalf.

    After July 1, 2000, American may terminate the Technology Services
    Agreement for convenience if American determines the agreement is no longer
    advantageous for any reason.  If it does so, American will be required to
    pay a termination fee equal to the sum of all amounts then due under the
    Technology Services Agreement, including wind-down costs, book value of
    dedicated assets and a significant percentage of estimated lost profits.
    American may also terminate the Technology Services Agreement without
    penalty, in whole or in part depending upon circumstances, for egregious
    breach by the Company of its obligations or for serious failure to perform
    critical or significant services.  If the Company is acquired by another
    Company other than AMR or American with more than $1 billion in annual
    airline transportation revenue, then American may terminate the Technology
    Services Agreement without paying any termination fee.  Additionally, if
    American were to dispose of any portion of its businesses or any affiliate
    accounting for more than 10% of the Company's fees from American, then
    American shall either cause such divested business or affiliate to be
    obligated to use the Company's services in accordance with the Technology
    Services Agreement or pay a proportionate termination fee.

    The Company provides data processing and network and distributed systems
    services to Canadian Airlines International ("Canadian") through
    subcontracting arrangements with American which are scheduled to expire in
    2006 (the "Canadian Subcontract").  On November 1, 1996, Canadian announced
    that it was taking certain actions to improve its cash flow.  See
    Management's Discussion and Analysis of Financial Condition and Results of
    Operations - Other.





                                      -7-
<PAGE>   10
THE SABRE GROUP HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


    MANAGEMENT SERVICES AGREEMENT-- The Company and American are parties to a
    Management Services Agreement, dated July 1, 1996 (the "Management Services
    Agreement"), pursuant to which American performs various management
    services for the Company, including treasury, risk management and tax, and
    similar administrative services that American has historically provided to
    the Company.  The Management Services Agreement will expire on June 30,
    1999 unless terminated earlier if American and the Company are no longer
    under common control or if the Technology Services Agreement is terminated
    early.  Amounts charged to the Company under this agreement approximate
    American's cost of providing the services plus a margin.  The parties have
    agreed to apply the financial terms of the Management Services Agreement as
    of January 1, 1996.

    MARKETING COOPERATION AGREEMENT-- The Company and American are parties to
    the Marketing Cooperation Agreement, dated as of July 1, 1996 (the
    "Marketing Cooperation Agreement"), pursuant to which American will provide
    marketing support for 10 years for the Company's Professional SABRE
    products targeted to travel agencies and for five years for Business Travel
    Solutions ("BTS"), Travelocity and easySABRE.  The parties have agreed to
    apply the financial terms of the Marketing Cooperation Agreement as of
    January 1, 1996.  The Marketing Cooperation Agreement may be terminated by
    either party prior to June 30, 2006 only if the other party fails to
    perform its obligations thereunder.

    Under the Marketing Cooperation Agreement, American's marketing efforts
    will include ongoing promotional programs to assist in the sale of those
    SABRE products, development with the Company of an annual sales plan,
    sponsorship of sales/promotional events and the targeting of potential
    customers.  For calendar year 1996, the Company will pay American for its
    marketing support for Professional SABRE a fee, the amount of which may
    increase or decrease, depending on total SABRE booking volumes generated by
    certain Professional SABRE subscribers in the U.S. and the Caribbean on
    SABRE's market share of travel agency bookings in those areas.  That fee
    will range between $20 million and $30 million for 1996 and between $10
    million and $30 million thereafter.  As payment for American's support of
    the Company's promotion of BTS, Travelocity and easySABRE, the Company will
    pay American a marketing fee based upon booking volume.  Additionally, the
    Company has guaranteed to American certain cost savings in the fifth year
    of the Marketing Cooperation Agreement.  If American does not achieve those
    savings, the Company will pay American any shortfall, up to a maximum of
    $50 million.

    NON-COMPETITION AGREEMENT-- The Company, AMR and American have entered into
    a Non-Competition Agreement, dated July 1, 1996 (the "Non-Competition
    Agreement"), pursuant to which AMR and American, on behalf of themselves
    and certain of their subsidiaries, have agreed to limit their competition
    with the Company's businesses of (i) electronic travel distribution, (ii)
    development, maintenance, marketing and licensing of software for travel
    agency, travel, transportation and logistics management, (iii) computer
    system integration, (iv) development, maintenance and operation of a data
    processing center providing data processing services to third parties and
    (v) travel industry, transportation and logistics consulting services
    relating primarily to computer technology and automation.  Under the Non-
    Competition Agreement, American and AMR may develop, operate, market and
    provide in compliance with all applicable laws an American Airlines branded
    electronic travel distribution system that gives a display preference to
    American's flights.  The Non-Competition Agreement prohibits American or
    AMR, however, from providing such system to any travel agency that
    generated 25% or more of its bookings through SABRE during the preceding
    six calendar months.  Additionally, in the event any airline competing with
    American engages in an activity in connection with such airline's
    transportation business, and if the restrictions imposed by the Non-
    Competition Agreement would prevent American from engaging in the same
    activity and place American at a disadvantage, then American may engage in
    such activity, subject to American and the Company negotiating means to
    mitigate the effect on the Company of American's engaging in such activity.
    American and AMR may also license to third parties any software that is
    owned by AMR, American or other AMR affiliates in response to a request or
    offer from such third parties.  The Non-Competition Agreement expires on
    December 31, 2001.  American may terminate the Non-Competition Agreement,
    however, as to the activities described in clauses (ii) through (v) of this
    paragraph upon 90 days notice to the Company if the Technology Services
    Agreement is terminated as a result of an egregious breach thereof by the
    Company.





                                      -8-
<PAGE>   11
THE SABRE GROUP HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


    TRAVEL AGREEMENTS-- The Company and American are parties to a Travel
    Privileges Agreement, dated July 1, 1996, (the "Travel Privileges
    Agreement"), pursuant to which the Company is entitled to purchase personal
    travel for its employees and retirees at reduced fares.  The Travel
    Privileges Agreement will expire on June 30, 2008.  To pay for the
    provision of flight privileges to certain of its future retired employees,
    the Company will make a lump sum payment to American beginning in 1997 for
    each employee retiring in that year.  The payment per retiree will be based
    on the number of years of service with the Company and AMR over the prior
    ten years of service.  Service years accrue for the Company beginning on
    January 1, 1993.  AMR will retain the obligation for the portion of
    benefits attributable to service years prior to January 1, 1993.  The
    accumulated benefit obligation for postretirement travel privileges at July
    1, 1996 of approximately $8 million, net of deferred taxes of approximately
    $3 million, has been recorded as a reduction to Stockholder's Equity.  The
    remaining cost of providing this privilege will be accrued over the
    estimated service lives of the employees eligible for the privilege.

    The Company and American are also parties to a Corporate Travel Agreement,
    dated July 1, 1996 and ending June 30, 1998, (the "Corporate Travel
    Agreement"), pursuant to which the Company receives discounts for certain
    flights purchased on American.  In exchange, the Company must fly a certain
    percentage of its travel on American as compared to all other air carriers
    combined.  If the Company fails to meet the applicable percentage on an
    average basis over any calendar quarter, American may terminate the
    agreement upon 60 days' notice.

    The parties have agreed to apply the financial terms of the Travel
    Privileges Agreement and the Corporate Travel Agreement as of January 1,
    1996.

    CREDIT AGREEMENT-- On July 1, 1996, the Company and American entered into a
    Credit Agreement pursuant to which the Company is required to borrow from
    American, and American is required to lend to the Company, amounts required
    by the Company to fund its daily cash requirements.  In addition, American
    may, but is not required to, borrow from the Company to fund its daily cash
    requirements.  The maximum amount the Company may borrow at any time from
    American under the Credit Agreement is $300 million.  The maximum amount
    that American may borrow at any time from the Company under the Credit
    Agreement is $100 million.  Loans under the Credit Agreement are not
    intended as long-term financing.  If the Company's credit rating is better
    than "B" on the Standard & Poor's Rating Services scale (or an equivalent
    thereof) or American has excess cash to lend the Company, the interest rate
    to be charged to the Company is the sum of (a) the higher of (i) American's
    average rate of return on short-term investments for the month in which the
    borrowing occurred or (ii) the actual rate of interest paid by American to
    borrow funds to make the loan to the Company under the Credit Agreement,
    plus (b) an additional spread based upon the Company's credit risk.  If the
    Company's credit rating is "B" or below on the Standard & Poor's Rating
    Service Scale (or an equivalent thereof) and American does not have excess
    cash to lend to the Company, the interest rate to be charged to the Company
    is the lower of (a) the sum of (i) the borrowing cost incurred by American
    to draw on its revolving credit facility to make the advance plus (ii) an
    additional spread based on the Company's credit risk or (b) the sum of (i)
    the cost at which the Company could borrow Funds from an independent party
    plus (ii) one half of the margin American pays to borrow under its
    revolving credit facility.  The Company believes that the interest rate it
    will be charged by American could, at times, be slightly above the rate at
    which the Company could borrow externally; however, no standby fees for the
    line of credit will be required to be paid by either party.  The interest
    rate to be charged to American is the Company's average portfolio rate for
    the months in which borrowing occurred plus an additional spread based upon
    American's credit risk.  At the end of each quarter, American must pay all
    amounts owing under the Credit Agreement to the Company.





                                      -9-
<PAGE>   12
THE SABRE GROUP HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


    COMMITMENTS-- On July 1, 1996 the Company entered into an operating lease
    agreement with AMR for certain facilities and AMR assigned its rights and
    obligations under certain leases to the Company.  Also on July 1, 1996 the
    Company entered into an operating lease agreement with a third party for
    the lease of other facilities.  At October 1, 1996, the future minimum
    lease payments required under these operating lease agreements along with
    various other operating lease agreements with terms in excess of one year
    for facilities and equipment were as follows:

<TABLE>
<CAPTION>
                                     Affiliates             Third Parties
                                     ----------             -------------
     <S>                             <C>                     <C>
     Three months ending         
       December 31, 1996             $  488,000              $  5,802,000
     Year ending December 31,    
                                 
     1997                             1,540,000                11,942,000
                                 
     1998                             1,370,000                 9,278,000
                                 
     1999                             1,416,000                 7,513,000
                                 
     2000                             1,173,000                 5,938,000
                                 
     2001                               647,000                 6,119,000
                                 
     Thereafter                       7,368,000                31,898,000
</TABLE>
                                 


    PENSION BENEFITS-- The Company and AMR have entered into an agreement which
    permits the employees of the Company to continue to participate in the
    benefit plans and programs sponsored by AMR until the Company establishes
    separate plans and programs for employees.  The current intent of the
    Company is to spin-off the portion of the AMR sponsored defined benefit
    pension plan applicable to the Company's employees from the AMR pension
    plan to a new pension plan to be sponsored by the Company on January 1,
    1997.  At the date of the spin-off, the unrecognized net obligation
    attributable to the Company's employees participating in the plan,
    estimated to be a liability of approximately $50 million at December 31,
    1995, will be charged to Stockholders' Equity, net of deferred income taxes
    of approximately $19 million.

    STOCK AWARDS AND OPTIONS-- Effective with the Offering, the Company has
    established the 1996 Long Term Incentive Plan (the "LTIP"), whereby
    officers and other key employees of the Company may be granted stock
    options, stock appreciation rights, restricted stock, deferred stock, stock
    purchase rights and/or other stock based awards.  Initially 13,000,000
    shares of Class A Common Stock are authorized to be issued under the LTIP.
    The LTIP will terminate no later than ten years from the date of its
    establishment.

    For stock-based awards, a committee established by the Board of Directors
    will determine the eligible persons to whom awards will be made, the times
    at which awards will be made, the number of shares to be awarded, the
    price, if any, to be paid by the recipient and all other terms and
    conditions of the award under the terms of the LTIP at the time of grant.

    Options granted under the LTIP will be exercisable at a price which is not
    less than the market value of Class A Common Stock upon grant, except as
    otherwise determined by a committee appointed by the Board of Directors,
    and no such options are exercisable more than 10 years after the date of
    grant.

    Stock appreciation rights may be granted in conjunction with all or part of
    any stock option granted under the LTIP.  All appreciation rights will
    terminate upon termination or exercise of the related option and will be
    exercisable only during the time that the related option is exercisable.
    If an appreciation right is exercised, the related stock option will be
    deemed to have been exercised.

    In connection with the Offering, options to purchase shares of AMR Common
    Stock ("AMR Options") granted to officers and key employees of the Company
    have been exchanged for approximately 730,000 options to purchase shares of
    Class A Common Stock of the Company.  The exercise prices of the options to
    purchase Class A Common Stock were computed as the initial offering price
    of Class A Common Stock multiplied by the ratio of the exercise prices of
    the AMR Options to the previous day's closing price of AMR Common Stock at
    the date of the Offerings.  The number of options was increased to maintain
    the option holders' aggregate spread value between the exercise price of
    the option and the previous day's closing price of AMR common stock.  These
    options will continue to vest in equal annual installments over five years
    following the date of AMR's grant.





                                      -10-
<PAGE>   13
THE SABRE GROUP HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


    In connection with the Offering, certain deferred $1 par value AMR Common
    Stock ("AMR Performance Shares") awarded to certain officers and key
    employees of the Company at no cost to them, were converted into
    approximately 270,000 deferred Class A Common Stock performance shares
    ("Company Performance Shares") based on the initial offering price of
    shares of Class A Common Stock and the previous day's closing price of the
    AMR Common Stock on the date of the Offerings.  The Company Performance
    Shares will continue to vest over a three year period ending December 31,
    1997 based on the Company's average change in business value and free cash
    flow generated.

    In connection with the Offering, shares of deferred AMR Common Stock ("AMR
    Career Equity Shares") awarded to certain officers and key employees of the
    Company at no cost to them, to be issued upon the individual's retirement
    from AMR, were exchanged for approximately 140,000 shares of restricted
    shares of Class A Common Stock, approximately 850,000 options to purchase
    shares of Class A Common Stock and approximately 75,000 deferred shares of
    Class A Common Shares ("Company Career Equity").  The number of restricted
    shares, stock options and deferred shares issued was dependent on, among
    other things, election by the individuals as to the mix of restricted
    shares, stock options and deferred shares to be received, the previous
    day's closing price of AMR Common Stock at the date of the Offerings and
    the initial offering price of Class A Common Stock.  The restricted shares
    will vest over a three year period.  The stock options, which have an
    exercise price equal to the initial offering price of the Class A Common
    Stock, will vest over five years following the date of grant and will
    expire ten years from the date of grant.  The Company Career Equity shares
    will be issued upon the individual's retirement from the Company.

    The Board of Directors has adopted a Director's Stock Incentive Plan which
    provides for an annual award of options to purchase 3,000 shares of the
    Company's Class A Common Stock to each non-employee director.  The plan
    provides for a one time award of options to purchase 10,000 shares of the
    Company's Class A Common Stock to a new non-employee director upon his or
    her initial election to the Board of Directors.  The options, which will
    have an exercise price equal to the Class A Common Stock on the date of
    grant, will vest pro rata over a five-year period.  Each option will expire
    on the earlier of (i) the date the non-employee director ceases to be a
    director of the Company, if for any reason other than due to death,
    disability or retirement or (ii) three years from the date the non-employee
    director ceases to be a director of the Company due to death, disability or
    retirement.


4.   PRO FORMA EARNINGS PER COMMON SHARE

    Pro forma earnings per common share data is calculated as though there were
    130,604,000 shares (the number of common shares of the Company outstanding
    after the Offering) outstanding throughout the periods presented.  The
    dilutive impact of common equivalent shares related to stock awards and
    options outstanding under the LTIP is not significant for the periods
    presented.





                                      -11-
<PAGE>   14
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

THE SABRE GROUP HOLDINGS, INC.
RESULTS OF OPERATIONS

SUMMARY   The Company generates its revenue from providing electronic travel
distribution services and information technology solutions services.  During
the nine months ended September 30, 1996, the Company generated approximately
68.7% of its revenue from electronic travel distribution services and
approximately 31.3% of its revenue from information technology solution
services.  The following table sets forth revenues by affiliation and
geographic location as a percent of total revenues:

<TABLE>
<CAPTION>
                                       Three months ended                          Nine months ended
                                         September 30,                               September 30,
                                     -----------------------                     ----------------------
                                       1996          1995                          1996         1995
                                     ----------   ----------                    ----------   ----------
 <S>                                 <C>               <C>                     <C>              <C>
 Affiliation:                                    
 ------------                                                                            
   Non-affiliated Customers             70.2%         64.6%                        69.3%         64.5%
   Affiliated Customers                 29.8          35.4                         30.7          35.5
                                       -----         -----                        -----         -----
       Total                           100.0%        100.0%                       100.0%        100.0%
                                       =====         =====                        =====         =====
                                                                                         
 Geographical:                                                                           
 -------------                                                                           
   United States                        80.5%         83.3%                        82.1%         83.7%
   International                        19.5          16.7                         17.9          16.3
                                       -----         -----                        -----         -----
      Total                            100.0%        100.0%                       100.0%        100.0%
                                       =====         =====                        =====         =====
</TABLE>                                                    

The Company's operating income as a percentage of revenue was 22.9% and 28.2%
for the nine months ended September 30, 1996 as compared to 1995. Operating
income as a percentage of revenue for both electronic travel distribution
services and information technology solutions was approximately the same as the
combined percentage for the nine months ended September 30, 1995.  However, for
the nine months ended September 30, 1996, operating income as a percentage of
revenue for information technology solutions declined to approximately 20.0% of
revenues principally as a result of the Technology Services Agreement with
American, while operating income as a percentage of revenue for electronic
travel distribution services was at approximately 24.0%.

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

Revenues.  Revenues for the three months ended September 30, 1996 compared to
the three months ended September 30, 1995 increased approximately $15 million,
3.8%, from $393 million to $408 million.

Electronic travel distribution revenues increased approximately $20 million,
7.7%, from $261 million to $281 million primarily due to growth in booking fees
from associates from $207 million to $225 million.  This growth was driven by
an increase in booking volumes worldwide, an overall increase in the price per
booking charged to associates and a migration of associates to higher
participation levels within the Company's proprietary computer reservation
system, SABRE.

Revenue from information technology solutions decreased approximately $5
million, 4.5%, from $132 million to $127 million.  Revenues from AMR decreased
approximately $12 million primarily due to the application of the financial
terms of the Technology Services Agreement effective January 1, 1996, offset by
an increase in revenues from non-affiliated customers of approximately $6
million.

Operating expenses.  Operating expenses increased $34 million, 11.9%, from $285
million to $319 million during the three months ended September 30, 1996 as
compared to the three months ended September 30, 1995.  This increase was
primarily attributable to an increase in salaries and benefits, the application
of the financial terms of the Affiliate Agreements and customer incentive
expenses.  Salaries and benefits increased due to an increase of approximately
5% in the average number of employees necessary to support the Company's
revenue growth and new product development.





                                      -12-
<PAGE>   15
THE SABRE GROUP HOLDINGS, INC.
RESULTS OF OPERATIONS (CONTINUED)

The Affiliate Agreements, including the Marketing Cooperation Agreement, Travel
Privileges Agreement and Corporate Travel Agreement, entered into with
American, resulted in an increase in operating expenses of approximately $11
million for the three months ended September 30, 1996.  Customer incentive
expenses increased in order to maintain and grow the Company's customer base.

Operating Income.  Operating income decreased $20 million, 18.7%, from $108
million to $88 million.  Operating margins decreased from 27.5% to 21.6% due to
the impact of the Affiliate Agreements.

Other Expenses.  Other expenses increased $15 million due to interest expense
incurred on the Debenture.

Income Taxes.  The provision for income taxes was $29 million and $42 million
for the three months ended September 30, 1996 and 1995, respectively.  The
decrease in the provision for income taxes corresponds with the decrease in net
income before the provision for income taxes.

Net Earnings.  Net earnings decreased $22 million, 32.8%, from $67 million to
$45 million due to the decrease in operating income and the increase in
interest expense.


FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

Revenues.  Revenues for the nine months ended September 30, 1996 compared to
the nine months ended September 30, 1995 increased approximately $85 million,
7.3%, from $1,161 million to $1,246 million.

Electronic travel distribution revenues increased approximately $83 million,
10.7%, from $773 million to $856 million primarily due to growth in booking
fees from associates from $620 million to $715 million.  This growth was driven
by an increase in booking volumes worldwide, an overall increase in the price
per booking charged to associates and a migration of associates to higher
participation levels within SABRE.

Revenue from information technology solutions increased approximately $2
million, 0.5%, from $388 million to $390 million.  Revenues from non-affiliated
customers increased approximately $18 million, offset by a decrease in revenues
from AMR of approximately $16 million primarily due to the application of the
financial terms of the Technology Services Agreement.

Operating expenses.  Operating expenses increased $127 million, 15.2%, from
$833 million to $960 million during the nine months ended September 30, 1996 as
compared to the nine months ended September 30, 1995.  This increase was
primarily attributable to an increase in salaries and benefits, the Affiliate
Agreements and customer incentive expenses.  Salaries and benefits increased
due to an increase of approximately 8% in the average number of employees
necessary to support the Company's revenue growth and new product development.

The Affiliate Agreements, including the Marketing Cooperation Agreement, Travel
Privileges Agreement and Corporate Travel Agreement, entered into with
American, resulted in an increase in operating expenses of approximately $30
million for the nine months ended September 30, 1996.  Customer incentive
expenses increased in order to maintain and grow the Company's customer base.

Operating Income.  Operating income decreased $42 million, 12.8%, from $328
million to $286 million.  Operating margins decreased from 28.2% to 22.9%
primarily due to the impact of the Affiliate Agreements.  Other Expenses.
Other expenses increased $7 million due to interest expense incurred on the
Debenture, offset by a reduction in the losses from joint ventures in which the
Company owns an interest accounted for under the equity method.





                                      -13-
<PAGE>   16
THE SABRE GROUP HOLDINGS, INC.
RESULTS OF OPERATIONS (CONTINUED)

Income Taxes.  The provision for income taxes was $105 million and $124 million
for the nine months ended September 30, 1996 and 1995, respectively.  The
decrease in the provision for income taxes corresponds with the decrease in net
income before the provision for income taxes.  

Net Earnings.  Net earnings decreased $30 million, 15.5%, from $194 million to 
$164 million due to the decrease in operating income and the increase in 
interest expense.


PRO FORMA RESULTS OF OPERATIONS

The discussion of pro forma results of operations is based on the pro forma
condensed consolidated financial information presented in Part II:  Other
Information, Item 5.  Other Information. These financial statements assume the
Reorganization, Affiliate Agreements and Offering were consummated on January
1, 1995 with respect to the unaudited pro forma condensed consolidated
statements of income.


PRO FORMA FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

Revenues.  Pro forma revenues for the three months ended September 30, 1996
compared to the three months ended September 30, 1995 increased approximately
$32 million, 8.4%, from $376 million to $408 million.

Electronic travel distribution pro forma revenues increased approximately $25
million, 9.8%, from $256 million to $281 million primarily due to growth in
booking fees from associates from $207 million to $225 million.  This growth
was driven by an increase in booking volumes worldwide, an overall increase in
the price per booking charged to associates and a migration of associates to
higher participation levels within SABRE.

Pro forma revenue from information technology solutions increased approximately
$6 million, 5.4%, from $120 million to $126 million due to an increase in
revenues from non-affiliated customers.

Operating expenses.  Pro forma operating expenses increased $27 million, 9.1%,
from $293 million to $319 million during the three months ended September 30,
1996 as compared to the three months ended September 30, 1995.  This increase
was primarily attributable to an increase in salaries and benefits and customer
incentive expenses.  Salaries and benefits increased due to an increase of
approximately 5% in the average number of employees necessary to support the
Company's revenue growth and new product development.  Customer incentive
expenses increased in order to maintain and grow the Company's customer base.

Operating Income.  Pro forma operating income increased $5 million, 5.9%, from
$83 million to $88 million.  Operating margins decreased from 22.1% to 21.6%
due to the increase in pro forma revenues of 5.4%, while pro forma operating
expenses increased 9.1%.

Income Taxes.  The pro forma provision for income taxes was $33 million and $31
million for the three months ended September 30, 1996 and 1995, respectively.
The increase in the provision for income taxes corresponds with the increase in
net income before the provision for income taxes.

Net Earnings.  Pro forma net earnings increased $2 million, 4.4%, from $49
million to $51 million due to the increase in operating income.





                                      -14-
<PAGE>   17
THE SABRE GROUP HOLDINGS, INC.
RESULTS OF OPERATIONS (CONTINUED)


PRO FORMA FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

Revenues.  Pro forma revenues for the nine months ended September 30, 1996
compared to the nine months ended September 30, 1995 increased approximately
$127 million, 11.4%, from $1,113 million to $1,240 million.  

Electronic travel distribution pro forma revenues increased approximately $99
million, 13.1%, from $757 million to $856 million primarily due to growth in
booking fees from associates from $620 million to $715 million.  This growth was
driven by an increase in booking volumes worldwide, an overall increase in the
price per booking charged to associates and a migration of associates to higher
participation levels within SABRE.

Pro forma revenue from information technology solutions increased approximately
$29 million, 8.2%, from $355 million to $384 million.  Revenues from non-
affiliated customers increased approximately $18 million and revenues from AMR
increased approximately $10 million.

Operating expenses.  Pro forma operating expenses increased $101 million,
11.8%, from $854 million to $955 million during the nine months ended September
30, 1996 as compared to the nine months ended September 30, 1995.  This
increase was primarily attributable to an increase in salaries and benefits and
customer incentive expenses.  Salaries and benefits increased due to an
increase of approximately 8% in the average number of employees necessary to
support the Company's revenue growth and new product development.  Customer
incentive expenses increased in order to maintain and grow the Company's
customer base.

Operating Income.  Pro forma operating income increased $26 million, 10.3%,
from $259 million to $285 million.  Operating margins decreased from 23.2% to
23.0% due to the increase in pro forma revenues of 11.4%, while pro forma
operating expenses increased 11.8%.

Other Expenses.  Pro forma other expenses decreased $7 million due to a
reduction in the losses from joint ventures in which the Company owns an
interest accounted for under the equity method.

Income Taxes.  The pro forma provision for income taxes was $105 million and
$92 million for the nine months ended September 30, 1996 and 1995,
respectively.  The increase in the provision for income taxes corresponds with
the increase in net income before the provision for income taxes.

Net Earnings.  Pro forma net earnings increased $20 million, 13.9%, from $144
million to $164 million primarily due to the increase in operating income .


LIQUIDITY AND CAPITAL RESOURCES


The Company had substantial liquidity at September 30, 1996, with approximately
$226 million in cash and cash equivalents and short-term investments and $315
million in working capital.  At December 31, 1995, cash and cash equivalents
and working capital were $95 million and $53 million, respectively.  Prior to
July 2, 1996, the Company's cash and cash equivalents were held for the Company
by American.  Cash and cash equivalents were immediately charged or credited to
the Company upon recording certain transactions, including transactions with
American for airline booking fees and purchases of goods and services.

Effective with the Reorganization on July 2, 1996, the Company began
maintaining a separate cash management system and cash and investment accounts
separate from American.  Transactions with American no longer result in the
recording of cash equivalents, but are settled through intercompany billings,
with payment due in 30 days.  American performs cash management services for
the Company under the Management Services Agreement.  The Company invests the
cash in short-term marketable securities, consisting primarily of certificates
of deposit, bankers' acceptances, commercial paper, corporate notes and
government notes.





                                      -15-
<PAGE>   18
THE SABRE GROUP HOLDINGS, INC.
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

The Company has financed its operations through cash generated from operations.
The Company's net cash provided by operating activities of $224 million for the
nine months ended September 30, 1996 was primarily attributable to net
earnings, offset by the impact of the change in the method of recording and
settling of transactions with American described above.  The Company's net cash
provided by operating activities for the nine months ended September 30, 1995
of $304 million was primarily attributable to net earnings.

Investing activities have primarily been related to purchases of computer
equipment to be provided to subscribers of SABRE and for use in data processing
services.  Capital expenditures for the nine months ended September 30, 1996
were $126 million and in 1995 were $133 million.

In the nine months ended September 30, 1995, certain of The SABRE Group
entities from which the Company was formed distributed $369 million to
American, in their capacity as divisions or subsidiaries of American or AMR.
Also during 1995, AMR contributed $245 million to the Company in order to
adequately capitalize certain of The SABRE Group entities from which the
Company was formed.  In addition, a note payable to AMR of $54 million was
established during 1995, which was capitalized in 1996 in connection with the
Reorganization.  Proceeds from the contribution and note payable were used to
reduce cash advances from AMR.


OTHER

The Company completed its Offering of 23,230,000 shares of Class A common
stock, par value $.01 per share on October 17, 1996.  The offering price of $27
per share resulted in net proceeds to the Company of approximately $593 million
after deducting underwriting discounts and commissions.  The Company used
approximately $532 million of the net proceeds to repay a portion of the
Debenture payable to AMR.

The Company provides data processing and network and distributed systems
services to Canadian through subcontracting arrangements with American which
are scheduled to expire in 2006.  On November 1, 1996, Canadian announced that
it was taking certain actions to improve its cash flow.  Among other things,
Canadian has asked its vendors to reduce the pricing of the services they
provide. American is considering Canadian's request.

Regardless of any decision by American about its pricing, American has
guaranteed to the Company full payment under the terms of the Canadian
Subcontract for services actually performed.  There is, however, no guarantee
of revenues in the event of the termination of the Canadian Subcontract.
Revenues under the Canadian Subcontract for the nine months ended September 30,
1996 were approximately $39 million.

The Company currently has approximately $41 million of deferred costs
associated with the installation and implementation of certain systems under
the Canadian Subcontract.  Those deferred costs were to be recovered over the
next eight years.  American has agreed to reimburse the Company for unrecovered
deferred costs in the event of the termination or expiration of the Canadian
Subcontract or the write-down of those deferred costs.





                                      -16-
<PAGE>   19
THE SABRE GROUP HOLDINGS, INC.
CAUTIONARY STATEMENT

Statements in this report which are not purely historical facts, including
statements regarding the Company's anticipations, beliefs, expectations, hopes,
intentions or strategies for the future, may be forward looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended.  All forward looking statements in this report are based upon
information available to the Company on the date of this report.  The Company
undertakes no obligation to publicly update or revise any forward looking
statements, whether as a result of new information, future events or otherwise.
Any forward looking statements involve risks and uncertainties that could cause
actual events or results to differ materially from the events or results
described in the forward looking statements.  Readers are cautioned not to
place undue reliance on these forward looking statements.

Risks associated with the Company's forward looking statements include, but are
not limited to: risks related to the Company's relationships with American and
its affiliates, including risks that American may terminate any of the
agreements with the Company, or fail or otherwise become unable to fulfill its
principal obligations thereunder, or determine not to renew certain of the
agreements;  risks associated with competition, and technological innovation by
competitors, which could require the Company to reduce prices, to change
billing practices, to increase spending on marketing or product development or
otherwise to take actions that might adversely affect its operations or
earnings; risks related to seasonality of the travel industry and booking
revenues; risks of the Company's sensitivity to general economic conditions and
events that affect airline travel and the airlines that participate in the
SABRE system; risks of a natural disaster or other calamity that may cause
significant damage to the Company's data center facility; risks of failure or
inability of telecommunications suppliers to provide and maintain network
access; risks associated with the Company's international operations, such as
currency fluctuations, governmental approvals, tariffs and trade barriers;
risks of new or different legal and regulatory requirements; and risks
associated with the Company's growth strategy, including investments in
emerging markets and the ability to sucessfully conclude alliances.  For a more
detailed discussion of these factors, please consult the Risk Factors section
in the Registration Statement.





                                      -17-
<PAGE>   20
                          PART II:  OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

In June 1996, American Trans Air, Inc. filed a lawsuit against American in the
U.S. District Court for the Southern District of Indiana, Indianapolis
Division, seeking a refund of $400,000 in SABRE booking fees it claimed were
charged for illegitimate bookings.  Prior to the filing, America West Airlines
Inc., using a similar claim of illegitimate bookings, had withheld over $1.0
million in booking fees payable to American.  In June 1996, American and SABRE
Associates, Inc. filed a lawsuit against America West in the District Court of
Tarrant County, Texas, 153rd Judicial District, seeking to recover the unpaid
booking fees.  Following the Reorganization, the Company is the successor to
American and SABRE Associates in both of these lawsuits.  The claims of both
American Trans Air and America West relate to booking fees charged by the
Company, and commonly charged by other providers in the electronic travel
distribution industry, for "passive bookings," which are bookings initially
made directly with a travel provider (rather than through a travel agent) and
subsequently ticketed through SABRE or another global distribution system.  If
America Trans Air and America West prevail on their claims, other carriers
participating in SABRE may make similar claims.  The Company believes, however,
that passive booking fees are properly charged pursuant to its contracts with
SABRE participants.  The Company intends to vigorously defend its actions in
this regard and believes that the claims of American Trans Air and America West
can be successfully defended or resolved without any material adverse effect on
the Company's financial position or results of operations.

In 1994, Alaska Airlines filed a Petition for Rulemaking with the United States
Department of Transportation ("DOT") seeking a rule that would ban the use of
"parity clauses" contractually requiring an airline to participate in a global
distribution system at the same level of functionality as the airline
participates in other global distribution systems, unless the airline is
affiliated with a global distribution system.  The Company believes that the
Petition for Rulemaking was motivated by a lawsuit brought in 1994 by American
against Alaska Airlines in the U.S. District Court for the Northern District of
Texas.  In its complaint, American alleged that Alaska Airlines breached its
SABRE participating carrier agreement by obtaining greater functionality from
other global distribution systems than it obtained from SABRE.  American sought
declaratory relief.  Following the Reorganization, the Company is the successor
to American in that lawsuit. On September 19, 1996, the U.S. District Court for
the Northern District of Texas dismissed the lawsuit on grounds that the
Company's claims, because they were based on state law, were preempted by
federal law.  The Company currently plans to appeal the dismissal.  On August
14, 1996, the DOT issued a notice of proposed rulemaking proposing to ban the
use of parity clauses, but suggesting that such clauses could still be enforced
against airlines that own or market a global distribution system.  The Company
has filed comments with the DOT in which the Company states its opposition to
the ban on parity clauses.





                                      -18-
<PAGE>   21
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


On July 2, 1996, AMR Corporation, as sole stockholder of the Company, consented
to the appointment of Robert L. Crandall, Gerard J. Arpey, and Michael J.
Durham to the Company's Board of Directors.

On August 5, 1996, AMR Corporation, as sole stockholder of the Company,
consented to an amendment to the Company's certificate of incorporation
changing the name of the Company to The SABRE Group Holdings, Inc.  The
certificate of amendment of the Company's certificate of incorporation was
filed with the Secretary of State of Delaware on August 6, 1996.

On October 3, 1996, AMR Corporation, as sole stockholder of the Company,
consented to amendments to the Company's certificate of incorporation and to a
restated certificate of incorporation that included those amendments.  The
restated certificate of incorporation was filed with the Secretary of State of
Delaware on October 8, 1996.

On October 3, 1996, AMR Corporation, as sole stockholder of the Company,
consented to the adoption of the Company's 1996 Long-Term Incentive Plan and
Directors' Stock Incentive Plan and approved the creation of an employees'
stock purchase plan.





                                      -19-
<PAGE>   22
ITEM 5.  OTHER INFORMATION

THE SABRE GROUP HOLDINGS, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
     (In thousands)

The accompanying pro forma condensed consolidated financial statements are
based upon the historical financial statements of the Company and assume the
Offering was consummated at September 30, 1996, with respect to the unaudited
pro forma condensed consolidated balance sheet and assume the Reorganization,
Affiliate Agreements and Offering were consummated on January 1, 1995 with
respect to the unaudited pro forma condensed consolidated statements of income.

The pro forma information is presented for illustrative purposes only and is
not necessarily indicative of the operating results or financial position that
would have occurred if the transactions had been consummated as presented in
the accompanying pro forma condensed consolidated financial statements, nor is
it necessarily indicative of future results of operations.

The pro forma condensed consolidated financial statements should be read in
conjunction with the Consolidated Financial Statements and related notes
thereto of the Company included elsewhere herein as well as the Consolidated
Financial Statements and related notes thereto and Pro forma Condensed
Consolidated Financial Information included in the Registration Statement.





                                      -20-
<PAGE>   23
THE SABRE GROUP HOLDINGS, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited) (In thousands)                                   
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                             September 30,
                                                                                  1996   
                                                                             -------------
<S>                                                                         <C>
ASSETS                                                             
                                                                   
CURRENT ASSETS                                                                               
  Cash and cash equivalents                                                  $      69,780   
  Short-term investments                                                           215,392   
  Accounts receivable, net                                                         220,775   
  Receivable from AMR                                                               54,193   
  Prepaid expenses                                                                  13,516   
  Deferred income taxes                                                             39,858   
                                                                             -------------
    Total current assets                                                           613,514   
                                                                                             
PROPERTY AND EQUIPMENT                                                                       
  Buildings and leasehold improvements                                             292,886   
  Furniture, fixtures and equipment                                                 20,821   
  Service contract equipment                                                       534,462   
  Computer equipment                                                               327,942   
                                                                             -------------
                                                                                 1,176,111   
  Less accumulated depreciation and amortization                                  (642,404)  
                                                                             -------------
     Total property and equipment                                                  533,707   
                                                                                             
Other assets, net                                                                   70,237   
                                                                             -------------
                                                                             $   1,217,458   
                                                                             =============
                                                                                             
LIABILITIES AND STOCKHOLDERS' EQUITY                                                         
                                                                                             
CURRENT LIABILITIES                                                                          
  Accounts payable                                                           $      75,213   
  Accrued compensation and related benefits                                         47,419   
  Other accrued liabilities                                                        116,776   
                                                                             -------------
    Total current liabilities                                                      239,408   
                                                                                             
Deferred income taxes                                                               33,097   
Other postretirement benefits                                                       97,509   
Other liabilities                                                                   14,777   
Debenture payable to AMR                                                           317,877   
                                                                                             
Commitments and contingencies                                                                
                                                                                             
STOCKHOLDERS' EQUITY                                                                         
  Preferred Stock:  $0.01 par value; 20,000,000 shares authorized;                           
      no shares issued                                                                 ---   
  Common stock                                                                               
    Class A:  $0.01 par value; 250,000,000 shares authorized;                                
      23,230,000 shares issued and outstanding                                               
                                                                                       232   
    Class B:  $0.01 par value; 107,374,000 shares authorized;                        1,074   
      107,374,000 shares issued and outstanding                                              
  Additional paid-in capital                                                       589,941   
  Retained deficit                                                                 (76,457)  
                                                                             -------------
         Total stockholders' equity                                                514,790   
                                                                             -------------
                                                                             $   1,217,458   
                                                                             =============

</TABLE>                                                           





                                      -21-
<PAGE>   24
THE SABRE GROUP HOLDINGS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(Unaudited) (In thousands, except per share amounts)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                        Three Months Ended                    Nine Months Ended
                                                           September 30,                        September 30,
                                                     ---------------------------        -----------------------------
                                                       1996               1995             1996               1995
                                                     --------           --------        ----------         ----------
<S>                                                  <C>                <C>             <C>                <C>
REVENUES                                            
  Electronic travel distribution                     $280,998           $255,838        $  855,980         $  757,313
  Information technology solutions                    126,422            119,998           383,631            355,259
                                                     --------           --------        ----------         ----------
    Total operating revenues                          407,420            375,836         1,239,611          1,112,572
                                                                                                            
OPERATING EXPENSES                                                                                          
  Cost of sales                                       283,235            259,809           850,567            765,862
  Selling, general and administrative                  36,271             32,991           103,994             88,182
                                                     --------           --------        ----------         ----------
    Total operating expenses                          319,506            292,800           954,561            854,044
                                                                                                                     
OPERATING INCOME                                       87,914             83,036           285,050            258,528
                                                                                                            
OTHER INCOME (EXPENSE)                                                                                      
  Interest income                                       2,155              1,579             7,774              5,462
  Interest expense                                     (5,769)            (6,028)          (19,396)           (17,552)
  Other - net                                            (783)               825            (4,121)           (10,703)
                                                     --------           --------        ----------         ----------
                                                       (4,397)            (3,624)          (15,743)           (22,793)
                                                     --------           --------        ----------         ----------
                                                                                                                     
EARNINGS BEFORE PROVISION FOR INCOME TAXES                                                                  
                                                       83,517             79,412           269,307            235,735
Provision for income taxes                             32,543             30,579           105,017             92,017
                                                     --------           --------        ----------         ----------
NET EARNINGS                                         $ 50,974           $ 48,833        $  164,290         $  143,718
                                                     ========           ========        ==========         ==========
                                                                                                            
PRO FORMA EARNINGS PER COMMON SHARE DATA:                                                                   
  Earnings per common share                          $    .39           $    .37        $     1.26         $     1.10
                                                     ========           ========        ==========         ==========
  Average common and common                                                                                 
    equivalent shares outstanding                     130,604            130,604           130,604            130,604
                                                     ========           ========        ==========         ==========
                                 
</TABLE>





                                      -22-
<PAGE>   25
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

The following exhibits are included herein:

EXHIBIT
NUMBER  DESCRIPTION OF EXHIBIT
------  ----------------------

  3.1   Restated Certificate of Incorporation of The SABRE Group Holdings, 
        Inc. (1)

  3.2   Restated Bylaws of The SABRE Group Holdings, Inc. (1)

  4.1   Registration Rights Agreement between The SABRE Group Holdings, Inc. and
        AMR Corporation. (1)

  4.2   Specimen Certificate representing Class A Common Stock (1)

 10.1   Registration Rights Agreement between The SABRE Group Holdings, Inc. and
        AMR Corporation (See Exhibit 4.1).

 10.2   Intercompany Agreement, dated as of July 2, 1996, among The SABRE Group
        Holdings, Inc., The SABRE Group Inc., TSGL, Inc., TSGL Holding, Inc., 
        TSGL-SCS, Inc., SABRE International, Inc., SABRE Services Columbia, LTDA
        and American Airlines, Inc.(1)

 10.3   Management Services Agreement, dated as of July 1, 1996, between The
        SABRE Group, Inc. and American Airlines, Inc. (1)(2)

 10.4   Credit Agreement, dated as of July 1, 1996, between The SABRE Group
        Holdings, Inc., The SABRE Group, Inc., AMR Corporation and American 
        Airlines, Inc.(1)

 10.5   $850,000,000 Subordinated Debenture, dated July 2, 1996, executed by
        The SABRE Group Holdings, Inc. and payable to AMR Corporation.(1)

 10.6   Information Technology Services Agreement, dated July 1, 1996, between 
        The SABRE Group, Inc. and American Airlines, Inc. (1)(2)

 10.7   Non-competition Agreement, dated July 1, 1996, among The SABRE Group 
        Holdings, Inc., The SABRE Group, Inc., AMR Corporation and American
        Airlines, Inc. (1)
 
 10.8   Marketing Cooperation Agreement, dated as of July 1, 1996, between The
        SABRE Group, Inc. and American Airlines, Inc. (1)(2)

 10.9   Tax Sharing Agreement, dated July 1, 1996, between The SABRE Group, Inc.
        and American Airlines, Inc.(1)

 10.10  Travel Privileges Agreement, dated as of July 1, 1996, between The SABRE
        Group, Inc. and American Airlines, Inc. (1)(2)

 10.11  Corporate Travel Agreement, dated July 25, 1996, between The SABRE 
        Group, Inc. and American Airlines, Inc. (1)(2)

 10.12  Software Marketing Agreement, dated September 10, 1996, among The SABRE
        Group Holdings, Inc., The SABRE Group, Inc. and AMR Corporation. (1)(2)

 10.13  Canadian Technical Services Subcontract, dated as of July 1, 1996, 
        between The SABRE Group, Inc. and American Airlines, Inc. (1)(2)

 10.14  Form of Participating Carrier Agreement between The SABRE Group, Inc. 
        and American Airlines, Inc.(1)

 10.15  Investment Agreement, dated September 11, 1996, between The SABRE Group,
        Inc. and AMR Investment Services, Inc. (1)(2)

 10.16  Assignment and Amendment Agreement, dated as of July 1, 1996, among The
        SABRE Group, Inc., American Airlines, Inc. and the Dallas-Fort Worth
        International Airport Board. (1)
        
 10.17  American Airlines Special Facilities Lease Agreement, dated October 1,
        1972, between American Airlines, Inc. and the Dallas-Fort Worth Regional
        Airport Board, as amended by Supplemental Agreements Nos. 1-5.(1)

 10.18  Assignment Agreement, dated as of July 1, 1996, between The SABRE Group,
        Inc. and American Airlines, Inc.(1)

 10.19  Sublease, dated June 1, 1958, between American Airlines, Inc. and The
        Trustees of the Tulsa Municipal Airport Trust, as amended by Amendments
        Nos. 1-12.(1)

 10.20  Assignment Agreement, dated as of July 1, 1996, between The SABRE Group,
        Inc. and American Airlines, Inc.(1)

 10.21  Amended and Restated Sublease Agreement, dated May, 1996, between
        American Airlines, Inc. and the Tulsa Airports Improvement Trust.(1)

 10.22  Assignment Agreement, dated as of July 1, 1996, between The SABRE Group,
        Inc. and American Airlines, Inc. (1)

 10.23  Office Lease Agreement, dated as of January 19, 1996, between American 
        Airlines, Inc. and Maguire/Thomas Partners - Westlake/Southlake 
        Partnership.(1)

 10.24  American Airlines, Inc. Supplemental Executive Retirement Plan dated 
        November 16, 1994.(3)

 10.25  The SABRE Group Holdings, Inc. 1996 Long-Term Incentive Plan.(1)

 10.26  The SABRE Group Holdings, Inc. 1996 Directors Stock Incentive Plan.(1)

 10.27  Form of Executive Termination Benefits Agreement.(1)

 10.28  Employment Agreement, dated August 30, 1996, between The SABRE Group, 
        Inc. and Michael J. Durham.(1)

 10.29  Employment Agreement, dated September 7, 1995, between American
        Airlines, Inc. and Thomas M. Cook.(1)

 10.30  Employment Agreement, dated May 7, 1996, between American Airlines, Inc.
        and Terrell B. Jones.(1)

 10.31  Letter Agreement, dated July 15, 1996, between The SABRE Group Holdings,
        Inc. and Thomas M. Cook.(1)

 10.32  Letter Agreement, dated July 15, 1996, between The SABRE Group Holdings,
        Inc. and Terrell B. Jones.(1)

 27.1   Financial Data Schedule.

(1)     Incorporated by reference to The SABRE Group Holdings, Inc.'s
Registration Statement on Form S-1 originally filed with the Securities and
Exchange Commission on August 8, 1996, File No. 333-09747.

(2)     Confidential treatment has been requested for portions of this 
agreement and the omitted information has been filed separately with the
Securities and Exchange Commission pursuant to an application for confidential
treatment.

(3)     Incorporated by reference to Exhibit 10(mmm) to AMR Corporation's Report
on Form 10-K for the year ended December 31, 1994, file number 1-8400.




                                      -23-
<PAGE>   26
SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
                                        
                                        
                                           THE SABRE GROUP HOLDINGS, INC.
                                        
                                        
                                        
                                        
Date:  November 21, 1996                BY:   /s/  T. Patrick Kelly 
                                        ----------------------------------------
                                           T. Patrick Kelly 
                                           Senior Vice President and Chief 
                                           Financial Officer and Treasurer    
                                                         




                                      -24-

<PAGE>   27
                               INDEX TO EXHIBITS

EXHIBIT
NUMBER  DESCRIPTION OF EXHIBIT
------  ----------------------

  3.1   Restated Certificate of Incorporation of The SABRE Group Holdings, 
        Inc. (1)

  3.2   Restated Bylaws of The SABRE Group Holdings, Inc. (1)

  4.1   Registration Rights Agreement between The SABRE Group Holdings, Inc. and
        AMR Corporation. (1)

  4.2   Specimen Certificate representing Class A Common Stock (1)

 10.1   Registration Rights Agreement between The SABRE Group Holdings, Inc. and
        AMR Corporation (See Exhibit 4.1).

 10.2   Intercompany Agreement, dated as of July 2, 1996, among The SABRE Group
        Holdings, Inc., The SABRE Group Inc., TSGL, Inc., TSGL Holding, Inc., 
        TSGL-SCS, Inc., SABRE International, Inc., SABRE Services Columbia, LTDA
        and American Airlines, Inc.(1)

 10.3   Management Services Agreement, dated as of July 1, 1996, between The
        SABRE Group, Inc. and American Airlines, Inc. (1)(2)

 10.4   Credit Agreement, dated as of July 1, 1996, between The SABRE Group
        Holdings, Inc., The SABRE Group, Inc., AMR Corporation and American 
        Airlines, Inc.(1)

 10.5   $850,000,000 Subordinated Debenture, dated July 2, 1996, executed by
        The SABRE Group Holdings, Inc. and payable to AMR Corporation.(1)

 10.6   Information Technology Services Agreement, dated July 1, 1996, between 
        The SABRE Group, Inc. and American Airlines, Inc. (1)(2)

 10.7   Non-competition Agreement, dated July 1, 1996, among The SABRE Group 
        Holdings, Inc., The SABRE Group, Inc., AMR Corporation and American
        Airlines, Inc. (1)
 
 10.8   Marketing Cooperation Agreement, dated as of July 1, 1996, between The
        SABRE Group, Inc. and American Airlines, Inc. (1)(2)

 10.9   Tax Sharing Agreement, dated July 1, 1996, between The SABRE Group, Inc.
        and American Airlines, Inc.(1)

 10.10  Travel Privileges Agreement, dated as of July 1, 1996, between The SABRE
        Group, Inc. and American Airlines, Inc. (1)(2)

 10.11  Corporate Travel Agreement, dated July 25, 1996, between The SABRE 
        Group, Inc. and American Airlines, Inc. (1)(2)

 10.12  Software Marketing Agreement, dated September 10, 1996, among The SABRE
        Group Holdings, Inc., The SABRE Group, Inc. and AMR Corporation. (1)(2)

 10.13  Canadian Technical Services Subcontract, dated as of July 1, 1996, 
        between The SABRE Group, Inc. and American Airlines, Inc. (1)(2)

 10.14  Form of Participating Carrier Agreement between The SABRE Group, Inc. 
        and American Airlines, Inc.(1)

 10.15  Investment Agreement, dated September 11, 1996, between The SABRE Group,
        Inc. and AMR Investment Services, Inc. (1)(2)

 10.16  Assignment and Amendment Agreement, dated as of July 1, 1996, among The
        SABRE Group, Inc., American Airlines, Inc. and the Dallas-Fort Worth
        International Airport Board. (1)
        
 10.17  American Airlines Special Facilities Lease Agreement, dated October 1,
        1972, between American Airlines, Inc. and the Dallas-Fort Worth Regional
        Airport Board, as amended by Supplemental Agreements Nos. 1-5.(1)

 10.18  Assignment Agreement, dated as of July 1, 1996, between The SABRE Group,
        Inc. and American Airlines, Inc.(1)

 10.19  Sublease, dated June 1, 1958, between American Airlines, Inc. and The
        Trustees of the Tulsa Municipal Airport Trust, as amended by Amendments
        Nos. 1-12.(1)

 10.20  Assignment Agreement, dated as of July 1, 1996, between The SABRE Group,
        Inc. and American Airlines, Inc.(1)

 10.21  Amended and Restated Sublease Agreement, dated May, 1996, between
        American Airlines, Inc. and the Tulsa Airports Improvement Trust.(1)

 10.22  Assignment Agreement, dated as of July 1, 1996, between The SABRE Group,
        Inc. and American Airlines, Inc. (1)

 10.23  Office Lease Agreement, dated as of January 19, 1996, between American 
        Airlines, Inc. and Maguire/Thomas Partners - Westlake/Southlake 
        Partnership.(1)

 10.24  American Airlines, Inc. Supplemental Executive Retirement Plan dated 
        November 16, 1994.(3)

 10.25  The SABRE Group Holdings, Inc. 1996 Long-Term Incentive Plan.(1)

 10.26  The SABRE Group Holdings, Inc. 1996 Directors Stock Incentive Plan.(1)

 10.27  Form of Executive Termination Benefits Agreement.(1)

 10.28  Employment Agreement, dated August 30, 1996, between The SABRE Group, 
        Inc. and Michael J. Durham.(1)

 10.29  Employment Agreement, dated September 7, 1995, between American
        Airlines, Inc. and Thomas M. Cook.(1)

 10.30  Employment Agreement, dated May 7, 1996, between American Airlines, Inc.
        and Terrell B. Jones.(1)

 10.31  Letter Agreement, dated July 15, 1996, between The SABRE Group Holdings,
        Inc. and Thomas M. Cook.(1)

 10.32  Letter Agreement, dated July 15, 1996, between The SABRE Group Holdings,
        Inc. and Terrell B. Jones.(1)

 27.1   Financial Data Schedule.

(1)     Incorporated by reference to The SABRE Group Holdings, Inc.'s
Registration Statement on Form S-1 originally filed with the Securities and
Exchange Commission on August 8, 1996, File No. 333-09747.

(2)     Confidential treatment has been requested for portions of this 
agreement and the omitted information has been filed separately with the
Securities and Exchange Commission pursuant to an application for confidential
treatment.

(3)     Incorporated by reference to Exhibit 10(mmm) to AMR Corporation's Report
on Form 10-K for the year ended December 31, 1994, file number 1-8400.