---

---

UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|ý                                             | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 
|--------------------------------------------- | ----------------------------------------------------------------------------------------
|For the Quarterly Period Ended June 30, 2003.
|OR                                           
|o                                             | 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.

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GRAPHICSABRE HOLDINGS CORPORATION(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of incorporation or organization)

75-2662240(I.R.S. Employer Identification No.)3150 Sabre Drive, Southlake, Texas(Address of principal executive offices)

76092(Zip Code)


Registrant's telephone number, including area code(682) 605-1000

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 ý    No o

Indicate
by checkmark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act). Yes ý    No o

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143,590,655 as of August 8, 2003

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INDEX  SABRE HOLDINGS CORPORATION

|PART I:   | FINANCIAL INFORMATION                                                                   |    | 3 
|--------- | --------------------------------------------------------------------------------------- | -- | --
|Item 1.   | Financial Statements (Unaudited)                                                        |    | 3 
|          | Consolidated Balance SheetsJune 30, 2003 and December 31, 2002                         |    | 3 
|          | Consolidated Statements of IncomeThree and six months ended June 30, 2003 and 2002     |    | 4 
|          | Condensed Consolidated Statement of Stockholders' EquitySix months ended June 30, 2003 |    | 5 
|          | Consolidated Statements of Cash FlowsSix months ended June 30, 2003 and 2002           |    | 6 
|          | Notes to Consolidated Financial Statements                                              |    | 7 
|Item 2.   | Management's Discussion and Analysis of Financial Condition and Results of Operations   |    | 30
|Item 3.   | Quantitative and Qualitative Disclosures About Market Risk                              |    | 49
|Item 4.   | Controls and Procedures                                                                 |    | 49
|PART II:  | OTHER INFORMATION                                                                       |    | 50
|Item 1.   | Legal Proceedings                                                                       |    | 50
|Item 4.   | Submission of Matters to a Vote of Security Holders                                     |    | 50
|Item 6.   | Exhibits and Reports on Form 8-K                                                        |    | 51
|SIGNATURE |                                                                                         | 53

2

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SABRE HOLDINGS CORPORATION  CONSOLIDATED BALANCE SHEETS  (Unaudited) (In thousands)

|                                           |                                                                                                                                                          | June 30,
2003                              |         | December 31,
2002 |          
|------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ----------------- | ---------
|Assets                                     |                                                                                                                                                          |                                            |         |                   |          
|Current assets                             |                                                                                                                                                          |                                            |         |                   |          
|                                           | Cash                                                                                                                                                     |                                            | $       | 28,935            |          
|                                           | Marketable securities                                                                                                                                    |                                            |         | 937,373           |          
|                                           | Accounts receivable, net                                                                                                                                 |                                            |         | 364,812           |          
|                                           | Prepaid expenses and other current assets                                                                                                                |                                            |         | 89,449            |          
|                                           | Deferred income taxes                                                                                                                                    |                                            |         | 10,686            |          
|                                           |                                                                                                                                                          |                                            |         |                   |          
|                                           |                                                                                                                                                          | Total current assets                       |         |                   | 1,431,255
|Property and equipment                     |                                                                                                                                                          |                                            |         |                   |          
|                                           | Buildings and leasehold improvements                                                                                                                     |                                            |         | 318,816           |          
|                                           | Furniture, fixtures and equipment                                                                                                                        |                                            |         | 44,809            |          
|                                           | Computer software and equipment                                                                                                                          |                                            |         | 261,893           |          
|                                           |                                                                                                                                                          |                                            |         |                   |          
|                                           |                                                                                                                                                          |                                            | 625,518 |                   |          
|                                           | Less accumulated depreciation and amortization                                                                                                           |                                            |         | (222,987          | )        
|                                           |                                                                                                                                                          |                                            |         |                   |          
|                                           |                                                                                                                                                          | Total property and equipment               |         |                   | 402,531  
|Investments in joint ventures              |                                                                                                                                                          |                                            | 176,223 |                   |          
|Goodwill and intangible assets, net        |                                                                                                                                                          |                                            | 833,217 |                   |          
|Other assets, net                          |                                                                                                                                                          |                                            | 165,405 |                   |          
|                                           |                                                                                                                                                          |                                            |         |                   |          
|                                           |                                                                                                                                                          | Total assets                               |         | $                 | 3,008,631
|                                           |                                                                                                                                                          |                                            |         |                   |          
|Liabilities and stockholders' equity       |                                                                                                                                                          |                                            |         |                   |          
|Current liabilities                        |                                                                                                                                                          |                                            |         |                   |          
|                                           | Accounts payable                                                                                                                                         |                                            | $       | 180,225           |          
|                                           | Accrued compensation and related benefits                                                                                                                |                                            |         | 38,059            |          
|                                           | Accrued subscriber incentives                                                                                                                            |                                            |         | 66,338            |          
|                                           | Deferred revenues                                                                                                                                        |                                            |         | 52,204            |          
|                                           | Other accrued liabilities                                                                                                                                |                                            |         | 182,542           |          
|                                           |                                                                                                                                                          |                                            |         |                   |          
|                                           |                                                                                                                                                          | Total current liabilities                  |         |                   | 519,368  
|Deferred income taxes                      |                                                                                                                                                          |                                            | 2,764   |                   |          
|Pensions and other postretirement benefits |                                                                                                                                                          |                                            | 114,589 |                   |          
|Other liabilities                          |                                                                                                                                                          |                                            | 35,257  |                   |          
|Minority interests                         |                                                                                                                                                          |                                            | 10,891  |                   |          
|Notes payable                              |                                                                                                                                                          |                                            | 444,856 |                   |          
|Obligation under capital lease             |                                                                                                                                                          |                                            | 167,126 |                   |          
|Commitments and contingencies              |                                                                                                                                                          |                                            |         |                   |          
|Stockholders' equity                       |                                                                                                                                                          |                                            |         |                   |          
|                                           | Preferred stock: $0.01 par value; 20,000 shares authorized; no shares issued                                                                             |                                            |         |                  |          
|                                           | Class A common stock, $0.01 par value; 250,000 shares authorized; 145,728 and 145,164 shares issued at June 30, 2003 and December 31, 2002, respectively |                                            |         | 1,458             |          
|                                           | Additional paid-in capital                                                                                                                               |                                            |         | 1,285,254         |          
|                                           | Retained earnings                                                                                                                                        |                                            |         | 503,796           |          
|                                           | Accumulated other comprehensive loss                                                                                                                     |                                            |         | (15,718           | )        
|                                           | Less treasury stock at cost: 2,419 and 2,480 shares, respectively                                                                                        |                                            |         | (61,010           | )        
|                                           |                                                                                                                                                          |                                            |         |                   |          
|                                           |                                                                                                                                                          | Total stockholders' equity                 |         |                   | 1,713,780
|                                           |                                                                                                                                                          |                                            |         |                   |          
|                                           |                                                                                                                                                          | Total liabilities and stockholders' equity |         | $                 | 3,008,631
|                                           |                                                                                                                                                          |                                            |         |                   |          

See Notes to Consolidated Financial Statements

3

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SABRE HOLDINGS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (In thousands, except per share amounts)

|                                         |                                     | Three Months Ended
June 30,  |         | Six Months Ended
June 30, |        
|---------------------------------------- | ----------------------------------- | ---------------------------- | ------- | ------------------------- | -------
|
|Revenues                                 |                                     | $                            | 507,189 |                           | $      
|Operating expenses                       |                                     |                              |         |                           |        
|                                         | Cost of revenues                    |                              |         | 324,622                   |        
|                                         | Selling, general and administrative |                              |         | 130,081                   |        
|                                         | Amortization of intangible assets   |                              |         | 12,094                    |        
|                                         |                                     |                              |         |                           |        
|                                         |                                     | Total operating expenses     |         |                           | 466,797
|Operating income                         |                                     |                              | 40,392  |                           |        
|Other income (expense)                   |                                     |                              |         |                           |        
|                                         | Interest income                     |                              |         | 3,973                     |        
|                                         | Interest expense                    |                              |         | (5,300                    | )      
|                                         | Other, net                          |                              |         | (29,945                   | )      
|                                         |                                     |                              |         |                           |        
|                                         |                                     | Total other income (expense) |         |                           | (31,272
|Minority interests                       |                                     |                              | 36      |                           |        
|                                         |                                     |                              |         |                           |        
|Income before provision for income taxes |                                     |                              | 9,156   |                           |        
|Provision for income taxes               |                                     |                              | 2,340   |                           |        
|                                         |                                     |                              |         |                           |        
|Net earnings                             |                                     | $                            | 6,816   |                           | $      
|                                         |                                     |                              |         |                           |        
|Earnings per common share                |                                     |                              |         |                           |        
|                                         | Basic                               |                              | $       | .05                       |        
|                                         |                                     |                              |         |                           |        
|                                         | Diluted                             |                              | $       | .05                       |        
|                                         |                                     |                              |         |                           |        
|Dividends per common share               |                                     | $                            | .07     |                           |        
|                                         |                                     |                              |         |                           |        

See
Notes to Consolidated Financial Statements

4

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SABRE HOLDINGS CORPORATION  CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY  SIX MONTHS ENDED JUNE 30, 2003  (Unaudited) (In thousands)

|                                                                                                                                         |                                                                                             | Class A
Common
Stock |       | Additional
Paid-in
Capital |   | Retained
Earnings |   | Accumulated
Other
Comprehensive
Loss |         | Treasury
Stock |   | Total   |     
|---------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | -------------------- | ----- | -------------------------- | - | ----------------- | - | ------------------------------------ | ------- | -------------- | - | ------- | ----
|Balance at December 31, 2002                                                                                                             |                                                                                             | $                    | 1,451 |                            | $ | 1,276,662         |   | $                                    | 442,130 |                | $ | (16,024 | )   
|Issuance of 698 shares of Class A
    common stock pursuant to stock
    option, restricted stock incentive
    and stock purchase plans |                                                                                             |                      | 7     |                            |   | (932              | ) |                                      |        |                |   |        |     
|Tax benefit from exercise of employee
    stock options                                                                                  |                                                                                             |                      |      |                            |   | 265               |   |                                      |        |                |   |        |     
|Stock based compensation for
    employees                                                                                               |                                                                                             |                      |      |                            |   | 9,259             |   |                                      |        |                |   |        |     
|Dividends                                                                                                                                |                                                                                             |                      |      |                            |   |                  |   |                                      | (10,029 | )              |   |        |     
|Comprehensive income:                                                                                                                    |                                                                                             |                      |       |                            |   |                   |   |                                      |         |                |   |         |     
|                                                                                                                                         | Net earnings                                                                                |                      |       |                           |   |                   |  |                                      |         | 71,695         |   |         |    
|                                                                                                                                         | Unrealized loss on foreign currency
    forward contracts, net of deferred
    income taxes |                      |       |                           |   |                   |  |                                      |         |               |   |         | (283
|                                                                                                                                         | Unrealized gain on investments, net
    of deferred income taxes                            |                      |       |                           |   |                   |  |                                      |         |               |   |         | 278 
|                                                                                                                                         | Unrealized foreign currency
    translation gain                                            |                      |       |                           |   |                   |  |                                      |         |               |   |         | 311 
|                                                                                                                                         |                                                                                             |                      |       |                            |   |                   |   |                                      |         |                |   |         |     
|Total comprehensive income                                                                                                               |                                                                                             |                      |       |                            |   |                   |   |                                      |         |                |   |         |     
|                                                                                                                                         |                                                                                             |                      |       |                            |   |                   |   |                                      |         |                |   |         |     
|Balance at June 30, 2003                                                                                                                 |                                                                                             | $                    | 1,458 |                            | $ | 1,285,254         |   | $                                    | 503,796 |                | $ | (15,718 | )   
|                                                                                                                                         |                                                                                             |                      |       |                            |   |                   |   |                                      |         |                |   |         |     

See Notes to Consolidated Financial Statements.

5

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SABRE HOLDINGS CORPORATION  CONSOLIDATED STATEMENTS OF CASH FLOWS  (Unaudited) (In thousands)

|                                                                                |                                                  | Six Months Ended June 30,                      |           
|------------------------------------------------------------------------------- | ------------------------------------------------ | ---------------------------------------------- | ----------
|
|Operating Activities                                                            |                                                  |                                                |           
|Net earnings                                                                    |                                                  | $                                              | 71,695    
|Adjustments to reconcile net earnings to cash provided by operating activities: |                                                  |                                                |           
|                                                                                | Depreciation and amortization                    |                                                |           
|                                                                                | Stock compensation                               |                                                |           
|                                                                                | Deferred income taxes                            |                                                |           
|                                                                                | Tax benefit from exercise of stock options       |                                                |           
|                                                                                | Minority interests                               |                                                |           
|                                                                                | Gain on sale of former headquarters building     |                                                |           
|                                                                                | Loss on refinancing of building                  |                                                |           
|                                                                                | Other                                            |                                                |           
|                                                                                | Changes in operating assets and liabilities:     |                                                |           
|                                                                                |                                                  | Accounts receivable                            |           
|                                                                                |                                                  | Prepaid expenses                               |           
|                                                                                |                                                  | Other assets                                   |           
|                                                                                |                                                  | Accrued compensation and related benefits      |           
|                                                                                |                                                  | Accounts payable and other accrued liabilities |           
|                                                                                |                                                  | Pensions and other postretirement benefits     |           
|                                                                                |                                                  | Other liabilities                              |           
|                                                                                |                                                  |                                                |           
|                                                                                | Cash provided by operating activities            |                                                |           
|Investing Activities                                                            |                                                  |                                                |           
|Additions to property and equipment                                             |                                                  |                                                | (39,589   
|Business combinations, net of cash acquired                                     |                                                  |                                                | (11,868   
|Proceeds from sale of former headquarters building                              |                                                  |                                                |          
|Proceeds from sale of minority interest in Sabre Pacific                        |                                                  |                                                |          
|Proceeds from exercise of Travelocity.com stock options                         |                                                  |                                                |          
|Purchases of marketable securities                                              |                                                  |                                                | (4,460,154
|Sales of marketable securities                                                  |                                                  |                                                | 4,414,602 
|Other investing activities, net                                                 |                                                  |                                                | 13,141    
|                                                                                |                                                  |                                                |           
|                                                                                | Cash used for investing activities               |                                                |           
|Financing Activities                                                            |                                                  |                                                |           
|Proceeds from issuance of common stock                                          |                                                  |                                                | 706       
|Dividends paid                                                                  |                                                  |                                                | (10,029   
|Payment to refinance building                                                   |                                                  |                                                | (27,947   
|Other financing activities, net                                                 |                                                  |                                                | (2,030    
|                                                                                |                                                  |                                                |           
|                                                                                | Cash provided by (used for) financing activities |                                                |           
|                                                                                |                                                  |                                                |           
|Increase in cash                                                                |                                                  |                                                | 7,759     
|Cash at beginning of period                                                     |                                                  |                                                | 21,176    
|                                                                                |                                                  |                                                |           
|Cash at end of period                                                           |                                                  | $                                              | 28,935    
|                                                                                |                                                  |                                                |           

See Notes to Consolidated Financial Statements

6

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SABRE HOLDINGS CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Unaudited)

1.     General Information



2.     Summary of Significant Accounting Policies



7

---



8

---



9

---



Three Months Ended
June 30,

Six Months Ended
June 30,2003

2002

2003

2002Denominator for basic earnings per commonshareweighted-average shares

142,367

142,595

142,339

138,068Dilutive effect of stock awards and options

741

2,711

480

2,933Denominator for diluted earnings per commonshareadjusted weighted-average shares

143,108

145,306

142,819

141,001




10

---



Three Months Ended
June 30,

Six Months Ended
June 30,2003

2002

2003

2002Net earnings as reported

$
6,816

$
67,965

$
71,695

$
155,352Add stock compensation expense determinedunder intrinsic value method, net of incometaxes


2,849


12,825


5,719


14,545Less total stock-based employee compensationexpense determined under fair value basedmethod for all awards, net of income taxes


10,062


20,783


21,616


32,815Pro forma net earnings

$
(397
)
$
60,007

$
55,798

$
137,082Net earnings per common share, as reported:Basic

$
.05

$
.48

$
.50

$
1.13Diluted

$
.05

$
.47

$
.50

$
1.10Net earnings per common share, pro forma:Basic

$
(.00
)
$
.42

$
.39

$
.99Diluted

$
(.00
)
$
.41

$
.39

$
.97




11

---



12

---



Year Ending December 31,2003

$
4,8032004


9,6072005


9,6072006


9,6072007


9,6072008 and thereafter


212,138Amounts representing interest


(87,363
)Total

$
168,006


3.     Significant Events



Minority interest assumed

$
252,597Deferred income tax asset, net


21,665Distributor agreements (weighted average life of 3 years)


18,016Supplier agreements (weighted average life of 3 years)


2,192Proprietary software (weighted average life of 3 years)


2,256Customer database (weighted average life of 7 years)


3,739Trademark, tradename and domain name (indefinite life)


13,698Goodwill


160,146Total purchase price

$
474,309




13

---



Working capital acquired

$
1,770Property and equipment and other non-current assets


824Software


1,352Non-current liabilities


(75
)Supplier agreements (weighted average life of 1.5 years)


900Trademark, tradename and domain name (indefinite life)


600Goodwill


38,232Total purchase price

$
43,603




Pro Forma Statement of Operations Data



14

---



Three Months Ended
June 30, 2002

Six Months Ended
June 30, 2002Revenues

$
536,748

$
1,086,105Net earnings

$
65,253

$
149,752Earnings per common shareBasic

$
.46

$
1.08Diluted

$
.45

$
1.06




Estimated cost of 2002 workforce reduction

$
15,791Amounts paid in 2002


(4,377
)Remaining liability at December 31, 2002


11,414Amounts paid in six months ended June 30, 2003


(10,101
)Revision of 2002 workforce reduction


(925
)Remaining liability at June 30, 2003

$
388




15

---



4.     Income Taxes



Three Months Ended
June 30,

Six Months Ended
June 30,2003

2002

2003

2002Income tax provision at statutory federal income
    tax rate

$
3,205

$
37,298

$
39,127

$
87,015State income taxes, net of federal benefit


(447
)

3,681


2,402


7,989Other, net


(418
)

(2,378
)

(1,433
)

(1,743
)Total provision for income taxes

$
2,340

$
38,601

$
40,096

$
93,261


5.     Derivatives



16

---



Assets atJune 30, 2003

December 31, 2002Warrants

$
4,758

$
2,213Foreign currency forwards


6,562


7,019Interest rate swaps


31,324


21,397$
42,644

$
30,629




17

---

6.     Segment Reporting



18

---



Three Months Ended
June 30,

Six Months Ended
June 30,2003

2002

2003

2002Revenues from external customers
    excluding special item:Sabre Travel Network

$
369,517

$
408,024

$
749,922

$
832,830Travelocity


72,096


59,960


134,778


118,140GetThere


11,865


12,917


23,847


24,547Sabre Airline Solutions


54,386


51,767


109,866


104,095Total

$
507,864

$
532,668

$
1,018,413

$
1,079,612Intersegment revenues:Sabre Travel Network

$
6,254

$
6,618

$
12,580

$
12,642Travelocity


22,538


17,723


45,154


34,039GetThere


460


238


776


399Sabre Airline Solutions











Total

$
29,252

$
24,579

$
58,510

$
47,080Equity in net income of equity method
    investees:Sabre Travel Network

$
2,761

$
5,463

$
4,878

$
8,707Travelocity


(3,436
)

(1,383
)

(8,727
)

(2,214
)Total

$
(675
)
$
4,080

$
(3,849
)
$
6,493Segment revenues, excluding special item:Sabre Travel Network

$
378,532

$
420,105

$
767,380

$
854,179Travelocity


91,198


76,300


171,205


149,965GetThere


12,325


13,155


24,623


24,946Sabre Airline Solutions


54,386


51,767


109,866


104,095Elimination of intersegment revenues


(29,252
)

(24,579
)

(58,510
)

(47,080
)Total

$
507,189

$
536,748

$
1,014,564

$
1,086,105Revenue special item:Sabre Travel Network:Settlement revenue from canceled subscriber contract







$
36,458


Consolidated revenues:Sabre Travel Network

$
378,532

$
420,105

$
803,838

$
854,179Travelocity


91,198


76,300


171,205


149,965GetThere


12,325


13,155


24,623


24,946Sabre Airline Solutions


54,386


51,767


109,866


104,095Elimination of intersegment revenues


(29,252
)

(24,579
)

(58,510
)

(47,080
)Total

$
507,189

$
536,748

$
1,051,022

$
1,086,105


19

---



Three Months Ended
June 30,

Six Months Ended
June 30,2003

2002

2003

2002Segment operating income (loss) excluding
    special items:Sabre Travel Network

$
61,986

$
139,648

$
151,725

$
276,060Travelocity


(5,933
)

(3,722
)

(11,410
)

2,309GetThere


(5,260
)

(7,106
)

(10,837
)

(16,279
)Sabre Airline Solutions


3,555


7,924


7,314


14,882Net corporate allocations


(67
)

(3,136
)

134


(2,859
)Total

$
54,281

$
133,608

$
136,926

$
274,113Impact of special items on operating
    income(increase)/decrease:Sabre Travel Network:Settlement revenue from canceled
    subscriber contract

$


$


$
(36,458
)
$
Other intangibles amortization


3,144


3,535


6,240


9,505Stock compensation


15


146


31


288Restructuring expenses


(288
)




(288
)

Total Sabre Travel Network


2,871


3,681


(30,475
)

9,793Travelocity:Other intangibles amortization


2,355


2,691


5,149


3,351Stock compensation


2,360


18,574


4,702


18,867Restructuring expenses


(37
)




(37
)

Tender offer expenses





335





7,111Total Travelocity


4,678


21,600


9,814


29,329GetThere:Other intangibles amortization


6,107


6,606


12,213


13,212Stock compensation


834


925


1,689


989Total GetThere


6,941


7,531


13,902


14,201Sabre Airline Solutions:Restructuring expenses


(231
)




(231
)

Corporate:Restructuring expenses


(370
)

(3,508
)

(370
)

(3,508
)Total operating income special items

$
13,889

$
29,304

$
(7,360
)
$
49,815Consolidated operating income (loss):Sabre Travel Network

$
59,115

$
135,967

$
182,200

$
266,267Travelocity


(10,611
)

(25,322
)

(21,224
)

(27,020
)GetThere


(12,201
)

(14,637
)

(24,739
)

(30,480
)Sabre Airline Solutions


3,786


7,924


7,545


14,882Corporate Allocations


303


372


504


649Total

$
40,392

$
104,304

$
144,286

$
224,298


20

---

7.     Supplemental Guarantor/Non-Guarantor Financial Information



21

---

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS
JUNE 30, 2003
(in thousands)

|                                               |                                                | Sabre
Holdings            |           | Sabre Inc. |           | Non-
Guarantor
Subsidiaries |            | Eliminating
Entries |           | Sabre
Consolidated
|---------------------------------------------- | ---------------------------------------------- | ------------------------- | --------- | ---------- | --------- | --------------------------- | ---------- | ------------------- | --------- | ------------------
|Assets                                         |                                                |                           |           |            |           |                             |            |                     |           |                   
|Current assets                                 |                                                |                           |           |            |           |                             |            |                     |           |                   
|                                               | Cash and marketable securities                 |                           | $         |           |           | $                           | 946,626    |                     | $         | 19,682            
|                                               | Accounts receivabletrade, net                 |                           |           |           |           |                             | 273,478    |                     |           | 91,334            
|                                               | Intercompany accounts
    receivable (payable) |                           |           | 1,559,050  |           |                             | (2,005,475 | )                   |           | 446,425           
|                                               | Prepaid expenses and other current
    assets  |                           |           |           |           |                             | 37,791     |                     |           | 51,658            
|                                               | Deferred income taxes                          |                           |           |           |           |                             | 9,334      |                     |           | 1,352             
|                                               |                                                |                           |           |            |           |                             |            |                     |           |                   
|                                               |                                                | Total current assets      |           |            | 1,559,050 |                             |            | (738,246            | )         |                   
|Property and equipment, net                    |                                                |                           |          |            |           | 351,334                     |            |                     | 51,197    |                   
|Investments in joint ventures                  |                                                |                           |          |            |           | 4,183                       |            |                     | 172,040   |                   
|Goodwill and intangible assets, net            |                                                |                           |          |            |           | 11,352                      |            |                     | 821,865   |                   
|Investments in subsidiaries                    |                                                |                           | 574,430   |            |           | 1,515,058                   |            |                     |          |                   
|Other assets, net                              |                                                |                           | 33,830    |            |           | 91,700                      |            |                     | 39,875    |                   
|                                               |                                                |                           |           |            |           |                             |            |                     |           |                   
|Total assets                                   |                                                | $                         | 2,167,310 |            | $         | 1,235,381                   |            | $                   | 1,695,428 |                   
|                                               |                                                |                           |           |            |           |                             |            |                     |           |                   
|Liabilities and stockholders' equity           |                                                |                           |           |            |           |                             |            |                     |           |                   
|Current liabilities                            |                                                |                           |           |            |           |                             |            |                     |           |                   
|                                               | Accounts payable                               |                           | $         | 57         |           | $                           | 143,606    |                     | $         | 36,562            
|                                               | Accrued compensation and related
    benefits  |                           |           |           |           |                             | 24,691     |                     |           | 13,368            
|                                               | Other accrued liabilities                      |                           |           | 7,577      |           |                             | 178,538    |                     |           | 114,969           
|                                               |                                                |                           |           |            |           |                             |            |                     |           |                   
|                                               |                                                | Total current liabilities |           |            | 7,634     |                             |            | 346,835             |           |                   
|Deferred income taxes                          |                                                |                           |          |            |           | 23,490                      |            |                     | (20,726   | )                 
|Pensions and other
    postretirement benefits |                                                |                           |          |            |           | 113,554                     |            |                     | 1,035     |                   
|Other liabilities                              |                                                |                           | 1,040     |            |           | 9,946                       |            |                     | 24,271    |                   
|Minority interests                             |                                                |                           |          |            |           |                            |            |                     | 10,891    |                   
|Notes payable                                  |                                                |                           | 444,856   |            |           |                            |            |                     |          |                   
|Obligation under capital lease                 |                                                |                           |          |            |           | 167,126                     |            |                     |          |                   
|Stockholders' equity                           |                                                |                           | 1,713,780 |            |           | 574,430                     |            |                     | 1,515,058 |                   
|                                               |                                                |                           |           |            |           |                             |            |                     |           |                   
|Total liabilities and stockholders'
    equity |                                                | $                         | 2,167,310 |            | $         | 1,235,381                   |            | $                   | 1,695,428 |                   
|                                               |                                                |                           |           |            |           |                             |            |                     |           |                   

22

---

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS
DECEMBER 31, 2002
(in thousands)

|                                     |                                                | Sabre
Holdings                                 |         | Sabre Inc. |           | Non-
Guarantor
Subsidiaries |            | Eliminating
Entries |         | Sabre
Consolidated
|------------------------------------ | ---------------------------------------------- | ---------------------------------------------- | ------- | ---------- | --------- | --------------------------- | ---------- | ------------------- | ------- | ------------------
|Assets                               |                                                |                                                |         |            |           |                             |            |                     |         |                   
|Current assets                       |                                                |                                                |         |            |           |                             |            |                     |         |                   
|                                     | Cash and marketable securities                 |                                                | $       |           |           | $                           | 898,958    |                     | $       | 12,802            
|                                     | Accounts receivabletrade, net                 |                                                |         |           |           |                             | 223,216    |                     |         | 75,282            
|                                     | Intercompany accounts
    receivable (payable) |                                                |         | 1,532,426  |           |                             | (2,094,913 | )                   |         | 562,487           
|                                     | Prepaid expenses and other current
    assets  |                                                |         |           |           |                             | 38,994     |                     |         | 46,663            
|                                     | Deferred income taxes                          |                                                |         |           |           |                             | 15,678     |                     |         | 50                
|                                     |                                                |                                                |         |            |           |                             |            |                     |         |                   
|                                     |                                                | Total current assets                           |         |            | 1,532,426 |                             |            | (918,067            | )       |                   
|Property and equipment, net          |                                                |                                                |        |            |           | 187,783                     |            |                     | 52,289  |                   
|Investments in joint ventures        |                                                |                                                |        |            |           | 4,169                       |            |                     | 184,833 |                   
|Goodwill and intangible assets, net  |                                                |                                                |        |            |           | 10,605                      |            |                     | 845,078 |                   
|Investments in subsidiaries          |                                                |                                                | 529,892 |            |           | 1,675,167                   |            |                     |        |                   
|Other assets, net                    |                                                |                                                | 24,058  |            |           | 96,783                      |            |                     | 39,290  |                   
|                                     |                                                |                                                |         |            |           |                             |            |                     |         |                   
|                                     |                                                | Total assets                                   |         | $          | 2,086,376 |                             | $          | 1,056,440           |         | $                 
|                                     |                                                |                                                |         |            |           |                             |            |                     |         |                   
|Liabilities and stockholders' equity |                                                |                                                |         |            |           |                             |            |                     |         |                   
|Current liabilities                  |                                                |                                                |         |            |           |                             |            |                     |         |                   
|                                     | Accounts payable                               |                                                | $       | 88         |           | $                           | 163,071    |                     | $       | 18,775            
|                                     | Accrued compensation and related
    benefits  |                                                |         |           |           |                             | 44,752     |                     |         | 10,018            
|                                     | Other accrued liabilities                      |                                                |         | 8,381      |           |                             | 169,783    |                     |         | 85,046            
|                                     |                                                |                                                |         |            |           |                             |            |                     |         |                   
|                                     |                                                | Total current liabilities                      |         |            | 8,469     |                             |            | 377,606             |         |                   
|                                     | Deferred income taxes                          |                                                |         |           |           |                             | 24,863     |                     |         | (11,108           
|                                     | Pensions and other postretirement
    benefits |                                                |         |           |           |                             | 115,400    |                     |         | 905               
|                                     | Other liabilities                              |                                                |         | 564        |           |                             | 8,679      |                     |         | 29,671            
|                                     | Minority interests                             |                                                |         |           |           |                             |           |                     |         | 10,300            
|                                     | Notes payable                                  |                                                |         | 435,765    |           |                             |           |                     |         |                  
|                                     | Stockholders' equity                           |                                                |         | 1,641,578  |           |                             | 529,892    |                     |         | 1,675,167         
|                                     |                                                |                                                |         |            |           |                             |            |                     |         |                   
|                                     |                                                | Total liabilities and stockholders'
    equity |         | $          | 2,086,376 |                             | $          | 1,056,440           |         | $                 
|                                     |                                                |                                                |         |            |           |                             |            |                     |         |                   

23

---

UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(in thousands)

|                                                    |                                 | Sabre
Holdings               |        | Sabre Inc. |        | Non-
Guarantor
Subsidiaries |         | Eliminating
Entries |         | Sabre
Consolidated |      
|--------------------------------------------------- | ------------------------------- | ---------------------------- | ------ | ---------- | ------ | --------------------------- | ------- | ------------------- | ------- | ------------------ | -----
|Revenues                                            |                                 | $                            |       |            | $      | 786,115                     |         | $                   | 516,248 |                    | $    
|Operating expenses                                  |                                 |                              | 1,750  |            |        | 700,361                     |         |                     | 455,966 |                    |      
|                                                    |                                 |                              |        |            |        |                             |         |                     |         |                    |      
|Operating income (loss)                             |                                 |                              | (1,750 | )          |        | 85,754                      |         |                     | 60,282  |                    |      
|Other income (expense)                              |                                 |                              |        |            |        |                             |         |                     |         |                    |      
|                                                    | Interest income                 |                              |        | 37,304     |        |                             | 5,593   |                     |         | 9,103              |      
|                                                    | Interest expense                |                              |        | (8,654     | )      |                             | (44,145 | )                   |         | (1,594             | )    
|                                                    | Income (loss) from subsidiaries |                              |        | 53,975     |        |                             | 45,617  |                     |         |                   |      
|                                                    | Other, net                      |                              |        |           |        |                             | (27,133 | )                   |         | (2,378             | )    
|                                                    |                                 |                              |        |            |        |                             |         |                     |         |                    |      
|                                                    |                                 | Total other income (expense) |        |            | 82,625 |                             |         | (20,068             | )       |                    | 5,131
|Minority interests                                  |                                 |                              |       |            |        |                            |         |                     | (591    | )                  |      
|                                                    |                                 |                              |        |            |        |                             |         |                     |         |                    |      
|Income (loss) before provision for
    income taxes |                                 |                              | 80,875 |            |        | 65,686                      |         |                     | 64,822  |                    |      
|Provision for income taxes                          |                                 |                              | 9,180  |            |        | 11,711                      |         |                     | 19,205  |                    |      
|                                                    |                                 |                              |        |            |        |                             |         |                     |         |                    |      
|Net income (loss)                                   |                                 | $                            | 71,695 |            | $      | 53,975                      |         | $                   | 45,617  |                    | $    
|                                                    |                                 |                              |        |            |        |                             |         |                     |         |                    |      

24

---

UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2002
(in thousands)

|                                                    |                                 | Sabre
Holdings               |         | Sabre Inc. |         | Non-
Guarantor
Subsidiaries |         | Eliminating
Entries |         | Sabre
Consolidated |       
|--------------------------------------------------- | ------------------------------- | ---------------------------- | ------- | ---------- | ------- | --------------------------- | ------- | ------------------- | ------- | ------------------ | ------
|Revenues                                            |                                 | $                            |        |            | $       | 857,429                     |         | $                   | 439,236 |                    | $     
|Operating expenses                                  |                                 |                              | 1,198   |            |         | 666,485                     |         |                     | 404,684 |                    |       
|                                                    |                                 |                              |         |            |         |                             |         |                     |         |                    |       
|Operating income (loss)                             |                                 |                              | (1,198  | )          |         | 190,944                     |         |                     | 34,552  |                    |       
|Other income (expense)                              |                                 |                              |         |            |         |                             |         |                     |         |                    |       
|                                                    | Interest income                 |                              |         | 22,981     |         |                             | 11,623  |                     |         | 11,663             |       
|                                                    | Interest expense                |                              |         | (9,664     | )       |                             | (32,110 | )                   |         | (1,190             | )     
|                                                    | Income (loss) from subsidiaries |                              |         | 147,369    |         |                             | 33,314  |                     |         |                   |       
|                                                    | Other, net                      |                              |         |           |         |                             | 17,382  |                     |         | 3,671              |       
|                                                    |                                 |                              |         |            |         |                             |         |                     |         |                    |       
|                                                    |                                 | Total other income (expense) |         |            | 160,686 |                             |         | 30,209              |         |                    | 14,144
|Minority interests                                  |                                 |                              |        |            |         |                            |         |                     | (41     | )                  |       
|                                                    |                                 |                              |         |            |         |                             |         |                     |         |                    |       
|Income (loss) before provision for
    income taxes |                                 |                              | 159,488 |            |         | 221,153                     |         |                     | 48,655  |                    |       
|Provision for income taxes                          |                                 |                              | 4,136   |            |         | 73,784                      |         |                     | 15,341  |                    |       
|                                                    |                                 |                              |         |            |         |                             |         |                     |         |                    |       
|Net income (loss)                                   |                                 | $                            | 155,352 |            | $       | 147,369                     |         | $                   | 33,314  |                    | $     
|                                                    |                                 |                              |         |            |         |                             |         |                     |         |                    |       

25

---

UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2003
(in thousands)

|                                                    |                                 | Sabre
Holdings               |        | Sabre Inc. |        | Non-
Guarantor
Subsidiaries |         | Eliminating
Entries |         | Sabre
Consolidated |      
|--------------------------------------------------- | ------------------------------- | ---------------------------- | ------ | ---------- | ------ | --------------------------- | ------- | ------------------- | ------- | ------------------ | -----
|Revenues                                            |                                 | $                            |       |            | $      | 365,948                     |         | $                   | 271,128 |                    | $    
|Operating expenses                                  |                                 |                              | 1,104  |            |        | 359,565                     |         |                     | 236,015 |                    |      
|                                                    |                                 |                              |        |            |        |                             |         |                     |         |                    |      
|Operating income (loss)                             |                                 |                              | (1,104 | )          |        | 6,383                       |         |                     | 35,113  |                    |      
|Other income (expense)                              |                                 |                              |        |            |        |                             |         |                     |         |                    |      
|                                                    | Interest income                 |                              |        | 18,554     |        |                             | 2,336   |                     |         | 4,504              |      
|                                                    | Interest expense                |                              |        | (4,272     | )      |                             | (21,696 | )                   |         | (753               | )    
|                                                    | Income (loss) from subsidiaries |                              |        | (1,865     | )      |                             | 25,779  |                     |         |                   |      
|                                                    | Other, net                      |                              |        |           |        |                             | (27,798 | )                   |         | (2,147             | )    
|                                                    |                                 |                              |        |            |        |                             |         |                     |         |                    |      
|                                                    |                                 | Total other income (expense) |        |            | 12,417 |                             |         | (21,379             | )       |                    | 1,604
|Minority interests                                  |                                 |                              |       |            |        |                            |         |                     | 36      |                    |      
|                                                    |                                 |                              |        |            |        |                             |         |                     |         |                    |      
|Income (loss) before provision for
    income taxes |                                 |                              | 11,313 |            |        | (14,996                     | )       |                     | 36,753  |                    |      
|Provision for income taxes                          |                                 |                              | 4,497  |            |        | (13,131                     | )       |                     | 10,974  |                    |      
|                                                    |                                 |                              |        |            |        |                             |         |                     |         |                    |      
|Net income (loss)                                   |                                 | $                            | 6,816  |            | $      | (1,865                      | )       | $                   | 25,779  |                    | $    
|                                                    |                                 |                              |        |            |        |                             |         |                     |         |                    |      

26

---

UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2002
(in thousands)

|                                                    |                          | Sabre
Holdings               |        | Sabre Inc. |        | Non-
Guarantor
Subsidiaries |         | Eliminating
Entries |         | Sabre
Consolidated |      
|--------------------------------------------------- | ------------------------ | ---------------------------- | ------ | ---------- | ------ | --------------------------- | ------- | ------------------- | ------- | ------------------ | -----
|Revenues                                            |                          | $                            |       |            | $      | 421,533                     |         | $                   | 226,913 |                    | $    
|Operating expenses                                  |                          |                              | 860    |            |        | 327,592                     |         |                     | 215,690 |                    |      
|                                                    |                          |                              |        |            |        |                             |         |                     |         |                    |      
|Operating income (loss)                             |                          |                              | (860   | )          |        | 93,941                      |         |                     | 11,223  |                    |      
|Other income (expense)                              |                          |                              |        |            |        |                             |         |                     |         |                    |      
|                                                    | Interest income          |                              |        | 14,445     |        |                             | 5,901   |                     |         | 6,414              |      
|                                                    | Interest expense         |                              |        | (4,640     | )      |                             | (19,393 | )                   |         | (742               | )    
|                                                    | Income from subsidiaries |                              |        | 62,073     |        |                             | 13,036  |                     |         |                   |      
|                                                    | Other, net               |                              |        |           |        |                             | 976     |                     |         | 189                |      
|                                                    |                          |                              |        |            |        |                             |         |                     |         |                    |      
|                                                    |                          | Total other income (expense) |        |            | 71,878 |                             |         | 520                 |         |                    | 5,861
|Minority interests                                  |                          |                              |       |            |        |                            |         |                     | (888    | )                  |      
|                                                    |                          |                              |        |            |        |                             |         |                     |         |                    |      
|Income (loss) before provision for
    income taxes |                          |                              | 71,018 |            |        | 94,461                      |         |                     | 16,196  |                    |      
|Provision for income taxes                          |                          |                              | 3,053  |            |        | 32,388                      |         |                     | 3,160   |                    |      
|                                                    |                          |                              |        |            |        |                             |         |                     |         |                    |      
|Net income (loss)                                   |                          | $                            | 67,965 |            | $      | 62,073                      |         | $                   | 13,036  |                    | $    
|                                                    |                          |                              |        |            |        |                             |         |                     |         |                    |      

27

---

UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(in thousands)

|                     |                                                                                     | Sabre
Holdings                                       |   | Sabre Inc. |         | Non-
Guarantor
Subsidiaries |            | Eliminating
Entries |   | Sabre
Consolidated |         
|-------------------- | ----------------------------------------------------------------------------------- | ---------------------------------------------------- | - | ---------- | ------- | --------------------------- | ---------- | ------------------- | - | ------------------ | --------
|Operating Activities |                                                                                     |                                                      |   |            |         |                             |            |                     |   |                    |         
|                     | Net earnings                                                                        |                                                      | $ | 71,695     |         | $                           | 53,975     |                     | $ | 45,617             |         
|                     | Adjustments to reconcile net earnings
    to cash provided by operating activities: |                                                      |   |            |         |                             |            |                     |   |                    |         
|                     |                                                                                     | Depreciation and amortization                        |   |            |        |                             |            | 25,660              |   |                    | 36,076  
|                     |                                                                                     | Stock compensation                                   |   |            |        |                             |            | 2,608               |   |                    | 6,651   
|                     |                                                                                     | Deferred income taxes                                |   |            |        |                             |            | (5,292              | ) |                    |        
|                     |                                                                                     | Tax benefit from exercise of stock options           |   |            | 265     |                             |            |                    |   |                    |        
|                     |                                                                                     | Loss on refinancing building                         |   |            |        |                             |            | 27,947              |   |                    |        
|                     |                                                                                     | Minority interests                                   |   |            |        |                             |            |                    |   |                    | 591     
|                     |                                                                                     | (Income) loss from subsidiaries                      |   |            | (53,975 | )                           |            | (45,617             | ) |                    |        
|                     |                                                                                     | Other                                                |   |            | (837    | )                           |            | 2,150               |   |                    | 3,125   
|                     |                                                                                     | Changes in operating assets and liabilities          |   |            | (17,876 | )                           |            | (145,906            | ) |                    | 124,070 
|                     |                                                                                     |                                                      |   |            |         |                             |            |                     |   |                    |         
|                     | Cash provided by (used for) operating activities                                    |                                                      |   | (728       | )       |                             | (84,475    | )                   |   | 216,130            |         
|Investing Activities |                                                                                     |                                                      |   |            |         |                             |            |                     |   |                    |         
|                     | Additions to property and equipment                                                 |                                                      |   |           |         |                             | (27,718    | )                   |   | (11,871            | )       
|                     | Purchases of marketable securities                                                  |                                                      |   |           |         |                             | (4,458,582 | )                   |   | (1,572             | )       
|                     | Sales of marketable securities                                                      |                                                      |   |           |         |                             | 4,414,459  |                     |   | 143                |         
|                     | Investments in subsidiaries, net                                                    |                                                      |   | 10,051     |         |                             | 206,783    |                     |   |                   |         
|                     | Business combinations, net of cash acquired                                         |                                                      |   |           |         |                             | (10,161    | )                   |   | (1,707             | )       
|                     | Other investing activities, net                                                     |                                                      |   |           |         |                             |           |                     |   | 13,141             |         
|                     |                                                                                     |                                                      |   |            |         |                             |            |                     |   |                    |         
|                     |                                                                                     | Cash provided by (used for)
    investing activities |   |            | 10,051  |                             |            | 124,781             |   |                    | (1,866  
|Financing Activities |                                                                                     |                                                      |   |            |         |                             |            |                     |   |                    |         
|                     | Distributions to affiliates                                                         |                                                      |   |           |         |                             | (10,051    | )                   |   | (206,783           | )       
|                     | Proceeds from issuance of
    common stock                                          |                                                      |   | 706        |         |                             |           |                     |   |                   |         
|                     | Dividends paid                                                                      |                                                      |   | (10,029    | )       |                             |           |                     |   |                   |         
|                     | Payment to refinance building                                                       |                                                      |   |           |         |                             | (27,947    | )                   |   |                   |         
|                     | Other financing activities, net                                                     |                                                      |   |           |         |                             |           |                     |   | (2,030             | )       
|                     |                                                                                     |                                                      |   |            |         |                             |            |                     |   |                    |         
|                     |                                                                                     | Cash provided by (used for)
    financing activities |   |            | (9,323  | )                           |            | (37,998             | ) |                    | (208,813
|                     |                                                                                     |                                                      |   |            |         |                             |            |                     |   |                    |         
|                     | Increase in cash                                                                    |                                                      |   |           |         |                             | 2,308      |                     |   | 5,451              |         
|                     | Cash at beginning of period                                                         |                                                      |   |           |         |                             | 9,219      |                     |   | 11,957             |         
|                     |                                                                                     |                                                      |   |            |         |                             |            |                     |   |                    |         
|                     | Cash at end of period                                                               |                                                      | $ |           |         | $                           | 11,527     |                     | $ | 17,408             |         
|                     |                                                                                     |                                                      |   |            |         |                             |            |                     |   |                    |         

28

---

UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2002
(in thousands)

|                     |                                                             | Sabre
Holdings                                  |   | Sabre Inc. |          | Non-
Guarantor
Subsidiaries |            | Eliminating
Entries |   | Sabre
Consolidated |         
|-------------------- | ----------------------------------------------------------- | ----------------------------------------------- | - | ---------- | -------- | --------------------------- | ---------- | ------------------- | - | ------------------ | --------
|Operating Activities |                                                             |                                                 |   |            |          |                             |            |                     |   |                    |         
|                     | Net earnings                                                |                                                 | $ | 155,352    |          | $                           | 147,369    |                     | $ | 33,314             |         
|                     | Adjustments to reconcile net earnings                       |                                                 |   |            |          |                             |            |                     |   |                    |         
|                     |                                                             | to cash provided by operating activities:       |   |            |          |                             |            |                     |   |                    |         
|                     |                                                             | Depreciation and amortization                   |   |            |         |                             |            | 19,256              |   |                    | 37,917  
|                     |                                                             | Stock compensation                              |   |            |         |                             |            |                    |   |                    | 22,355  
|                     |                                                             | Deferred income taxes                           |   |            |         |                             |            | 41,330              |   |                    | 12,291  
|                     |                                                             | Tax benefit from exercise of
    stock options  |   |            | 9,246    |                             |            |                    |   |                    |        
|                     |                                                             | Minority interests                              |   |            |         |                             |            |                    |   |                    | 41      
|                     |                                                             | (Income) loss from subsidiaries                 |   |            | (147,369 | )                           |            | (33,314             | ) |                    |        
|                     |                                                             | Gain on sale of certain assets                  |   |            |         |                             |            | (18,308             | ) |                    |        
|                     |                                                             | Other                                           |   |            | 12,484   |                             |            | (13,436             | ) |                    | (11,381 
|                     |                                                             | Changes in operating assets
    and liabilities |   |            | (451,579 | )                           |            | 577,430             |   |                    | (245,428
|                     |                                                             |                                                 |   |            |          |                             |            |                     |   |                    |         
|                     | Cash provided by (used for)
    operating activities        |                                                 |   | (421,866   | )        |                             | 720,327    |                     |   | (150,891           | )       
|Investing Activities |                                                             |                                                 |   |            |          |                             |            |                     |   |                    |         
|                     | Additions to property and equipment                         |                                                 |   |           |          |                             | (19,422    | )                   |   | (9,253             | )       
|                     | Purchases of marketable securities                          |                                                 |   |           |          |                             | (1,313,871 | )                   |   | (303,509           | )       
|                     | Sales of marketable securities                              |                                                 |   |           |          |                             | 1,112,018  |                     |   | 280,772            |         
|                     | Investments in subsidiaries, net                            |                                                 |   | (11,391    | )        |                             | (623,653   | )                   |   |                   |         
|                     | Business combinations, net of
    cash acquired             |                                                 |   |           |          |                             |           |                     |   | (477,330           | )       
|                     | Proceeds from exercise of Travelocity.com
    stock options |                                                 |   |           |          |                             |           |                     |   |                   |         
|                     | Proceeds from sale of former headquarters building          |                                                 |   |           |          |                             | 80,000     |                     |   |                   |         
|                     | Proceeds from sale of subsidiary                            |                                                 |   |           |          |                             |           |                     |   | 23,466             |         
|                     | Other investing activities, net                             |                                                 |   |           |          |                             | 30,284     |                     |   | 36                 |         
|                     |                                                             |                                                 |   |            |          |                             |            |                     |   |                    |         
|                     | Cash provided by (used for)
    investing activities        |                                                 |   | (11,391    | )        |                             | (734,644   | )                   |   | (485,818           | )       
|Financing Activities |                                                             |                                                 |   |            |          |                             |            |                     |   |                    |         
|                     | Contributions from affiliates                               |                                                 |   |           |          |                             | 11,391     |                     |   | 623,653            |         
|                     | Proceeds from issuance of common stock                      |                                                 |   | 433,257    |          |                             |           |                     |   | 33,658             |         
|                     | Other financing activities, net                             |                                                 |   |           |          |                             |           |                     |   | (16,234            | )       
|                     |                                                             |                                                 |   |            |          |                             |            |                     |   |                    |         
|                     | Cash provided by (used for)
    financing activities        |                                                 |   | 433,257    |          |                             | 11,391     |                     |   | 641,077            |         
|                     | Increase (decrease) in cash                                 |                                                 |   |           |          |                             | (2,926     | )                   |   | 4,368              |         
|                     | Cash at beginning of the period                             |                                                 |   |           |          |                             | 8,642      |                     |   | 10,213             |         
|                     |                                                             |                                                 |   |            |          |                             |            |                     |   |                    |         
|                     | Cash at end of the period                                   |                                                 | $ |           |          | $                           | 5,716      |                     | $ | 14,581             |         
|                     |                                                             |                                                 |   |            |          |                             |            |                     |   |                    |         

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8.     Subsequent Events

None.

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

SABRE HOLDINGS CORPORATION

RESULTS OF OPERATIONS





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Three Months Ended June 30, 2003 and 2002



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Six Months Ended June 30, 2003 and 2002



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SABRE HOLDINGS CORPORATION
LIQUIDITY AND CAPITAL RESOURCES



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Year Ending December 31,2003

$
4,8032004


9,6072005


9,6072006


9,6072007


9,6072008 and thereafter


212,138Amounts representing interest


(87,363
)Total

$
168,006


SABRE HOLDINGS CORPORATION
CAUTIONARY STATEMENT



RISK FACTORS

General



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OUR
REVENUES ARE HIGHLY DEPENDENT ON THE TRAVEL AND TRANSPORTATION INDUSTRIES, AND PARTICULARLY ON AIRLINES, AND A PROLONGED SUBSTANTIAL DECREASE IN TRAVEL BOOKINGS VOLUMES COULD ADVERSELY AFFECT US.





WE
FACE COMPETITION FROM ESTABLISHED AND EMERGING TRAVEL DISTRIBUTION CHANNELS, WHICH COULD DIVERT CUSTOMERS TO OUR COMPETITORS AND ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.



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SOME
TRAVEL SUPPLIERS ARE AGGRESSIVELY SEEKING TO BYPASS OUR TRAVEL DISTRIBUTION CHANNELS, WHICH MAY HAVE THE EFFECT OF ADVERSELY AFFECTING OUR RESULTS OF OPERATIONS.



CONSOLIDATION
IN THE TRAVEL AGENCY INDUSTRY AND INCREASED COMPETITION FOR TRAVEL AGENCY SUBSCRIBERS MAY RESULT IN INCREASED EXPENSES, LOST BOOKINGS AND REDUCED REVENUE.



AIRLINES
THAT DIVEST THEIR OWNERSHIP OF GLOBAL DISTRIBUTION SYSTEMS MIGHT LIMIT THEIR PARTICIPATION IN OUR GLOBAL DISTRIBUTION SYSTEM

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SERVICES,
WHICH WOULD ADVERSELY AFFECT OUR BOOKING FEE REVENUE AND OUR RESULTS OF OPERATIONS.



SOME
OF OUR COMPETITORS ARE WELL FUNDED, WHICH MAY GIVE THESE COMPETITORS A COMPETITIVE ADVANTAGE THAT COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.



WE
MAY BE UNSUCCESSFUL IN PURSUING AND INTEGRATING BUSINESS COMBINATIONS AND STRATEGIC ALLIANCES, WHICH COULD RESULT IN INCREASED EXPENDITURES OR CAUSE US TO FAIL TO ACHIEVE ANTICIPATED COST SAVINGS
OR REVENUE GROWTH.



RAPID
TECHNOLOGICAL CHANGES AND NEW DISTRIBUTION CHANNELS OR UNAUTHORIZED USE OF OUR INTELLECTUAL PROPERTY MAY RENDER OUR TECHNOLOGY OBSOLETE OR ADVERSELY AFFECT THE VALUE OF OUR CURRENT OR FUTURE
TECHNOLOGIES TO US AND OUR CUSTOMERS, WHICH COULD CAUSE US TO INCREASE EXPENDITURES TO UPGRADE OUR TECHNOLOGY OR DEVELOP COMPETING PRODUCTS IN NEW DISTRIBUTION CHANNELS AND TO PROTECT THEM.



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OUR
SYSTEMS MAY SUFFER FAILURES, CAPACITY CONSTRAINTS AND BUSINESS INTERRUPTIONS, WHICH COULD INCREASE OUR OPERATING COSTS AND CAUSE US TO LOSE CUSTOMERS.



REGULATORY
DEVELOPMENTS COULD LIMIT OUR ABILITY TO COMPETE BY RESTRICTING OUR FLEXIBILITY TO RESPOND TO COMPETITIVE CONDITIONS, WHICH COULD CAUSE OUR CUSTOMERS TO BE DIVERTED TO OUR COMPETITORS AND
ADVERSELY AFFECT OUR REVENUE AND RESULTS OF OPERATIONS.



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WE
FACE TRADE BARRIERS OUTSIDE OF NORTH AMERICA THAT LIMIT OUR ABILITY TO COMPETE, WHICH COULD REQUIRE US TO INCREASE INCENTIVES, REDUCE PRICES, INCREASE SPENDING ON MARKETING OR PRODUCT DEVELOPMENT,
OR TO OTHERWISE TAKE ACTIONS THAT COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.



OUR
INTERNATIONAL OPERATIONS ARE SUBJECT TO OTHER RISKS, WHICH MAY IMPEDE OUR ABILITY TO GROW INTERNATIONALLY AND ADVERSELY AFFECT OUR OVERALL RESULTS OF OPERATIONS.



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Item 3. Quantitative and Qualitative Disclosures about Market Risk



Item 4. Controls and Procedures



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PART II: OTHER INFORMATION

Item 1. Legal Proceedings



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



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Item 6. Exhibits and Reports on Form 8-K

|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                          
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1            |  | Restated Certificate of Incorporation of Sabre Holdings Corporation. (1)                                                                                                                                                                                                                                                                        
|3.2            |  | Restated Bylaws of Sabre Holdings Corporation. (2)                                                                                                                                                                                                                                                                                              
|10.1           |  | Capital Lease Facility with Various Associated Documents dated as of June 15, 2003, as specified below.                                                                                                                                                                                                                                         
|               |  | 10.1 (a) Participation Agreement dated as of June 15, 2003, among Sabre Inc., as Lessee, Sabre Holdings Corporation, as Lessee Guarantor, CSL Leasing Inc., as Lessor, the Institutional Investors named therein, as Purchasers, and Wilmington Trust
Company, as Indenture Trustee. (3)                                                        
|               |  | 10.1 (b) Master Lease and Deed of Trust dated as of June 15, 2003, between Sabre Inc., as Lessee, and CSL Leasing Inc., as Lessor. (3)                                                                                                                                                                                                          
|               |  | 10.1 (c) Lease Supplement No. 1 (Memorandum of Lease Supplement, Memorandum of Master Lease and Deed of Trust, Fixture Filing and Memorandum of Option to Purchase) dated June 26, 2003, between Sabre Inc., as the Lessee and grantor, and CSL Leasing
Inc., as Lessor and beneficiary, and to Jeffrey A. Rattikin, as trustee and grantee. (3)
|               |  | 10.1 (d) Trust Indenture and Security Agreement dated as of June 15, 2003, between CSL Leasing Inc. and Wilmington Trust Company, as Indenture Trustee. (3)                                                                                                                                                                                     
|               |  | 10.1 (e) Assignment of Lease and Rent and Security Agreement dated as of June 15, 2003, made by CSL Leasing Inc., in favor of Wilmington Trust Company, as Indenture Trustee.(3)                                                                                                                                                                
|               |  | 10.1 (f) Deed of Trust and Security Agreement with Assignment of Rents dated as of June 15, 2003, from CSL Leasing Inc., as grantor, and Sabre Inc., as grantor, to Jeffrey A. Rattikin, as trustee, for the use and benefit of Wilmington Trust Company,
as Indenture Trustee. (3)                                                             
|               |  | 10.1 (g) Lease Guaranty dated as of June 15, 2003, made by Sabre Holdings Corporation, in favor of CSL Leasing Inc., as Lessor, the parties who from time to time become Purchasers under the Operative Documents, and Wilmington Trust Company, as
Indenture Trustee. (3)                                                                      
|12.1           |  | Sabre Holdings Corporation Computation of Ratio of Earnings to Fixed Charges (3)                                                                                                                                                                                                                                                                
|31.1           |  | Written statement pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated August 14, 2003, signed by William J. Hannigan as Chief Executive Officer (3)                                                                                                                                   
|31.2           |  | Written statement pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated August 14, 2003, signed by Jeffery M. Jackson as Chief Financial Officer (3)                                                                                                                                    
|32.1           |  | Written statement pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated May 15, 2003, signed by William J. Hannigan as Chief Executive Officer (4)                                                                                                                                    
|               |  |                                                                                                                                                                                                                                                                                                                                                 

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|32.2 |  | Written statement pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated May 15, 2003, signed by Jeffery M. Jackson as Chief Financial Officer (4)
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Pursuant
to General Instruction B.2. of Form 8-K, to the extent that the Forms 8-K listed below contain Item 9 and/or Item 12 disclosures, and consequently such Forms
8-K, those Items are not incorporated into this Form 10-Q or into any other form or report filed with the Commission into which this Form 10-Q would
be incorporated by reference.



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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.

|                      |  | SABRE HOLDINGS CORPORATION
|--------------------- |  | --------------------------
|                      |  | By:                       
|Date: August 14, 2003 |  |                           

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