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Travelport Announces Second Quarter 2008 Results
NEW YORK
(Map)
-
(Logo: http://www.newscom.com/cgi-bin/prnh/20061023/NYM260LOGO )
Travelport Consolidated
($ in millions)
2Q 2007 2Q 2008 Change* % Change*
Net Revenue (1) (2) $715 $703 $(12) (2)%
Adjusted Net Revenue (3) $694 $703 $9 1%
EBITDA (1) (2) $121 $187 $66 55%
Adjusted EBITDA (3) $188 $203 $15 8%
Adjusted EBITDA Margin % 27.1% 28.9% 179 bps 7%
* May not calculate due to rounding
(1) 2Q 2007 includes Orbitz Worldwide results.
(2) 2Q 2007 excludes Worldspan results.
(3) Adjusted results exclude Orbitz Worldwide and include Worldspan in all
periods, as if both transactions had taken place on January 1, 2007.
Travelport Consolidated Excluding Worldspan and Orbitz Worldwide
($ in millions)
2Q 2007 2Q 2008 Change* % Change*
Adjusted Net Revenue $497 $518 $21 4%
Adjusted EBITDA $132 $153 $21 16%
Adjusted EBITDA Margin % 26.6% 29.5% 298 bps 11%
* May not calculate due to rounding
Travelport CEO and President,
Financial Highlights Second Quarter 2008
GDS
($ in millions)
2Q 2007 2Q 2008 Change* % Change*
Net Revenue (1) $408 $592 $184 45%
Adjusted Net Revenue (2) $606 $592 $(14) (2)%
EBITDA (1) $120 $164 $44 37%
Adjusted EBITDA (2) $188 $188 $0 0%
Adjusted EBITDA Margin % 31.0% 31.8% 73 bps 2%
* May not calculate due to rounding
(1) 2Q 2007 excludes Worldspan results.
(2) Adjusted results include Worldspan in all periods, as if the
acquisition had closed on January 1, 2007.
Net revenue and EBITDA from our GDS business were
Galileo (included in GDS results above)
($ in millions)
2Q 2007 2Q 2008 Change* % Change*
Net Revenue $408 $407 $(1) (0)%
Adjusted Net Revenue $409 $407 $(2) (0)%
EBITDA $120 $123 $3 2%
Adjusted EBITDA $132 $137 $5 4%
Adjusted EBITDA Margin % 32.3% 33.7% 139 bps 4%
* May not calculate due to rounding
Adjusted net revenue and adjusted EBITDA from Galileo were
Worldspan (included in GDS results above)
($ in millions)
2Q 2007 2Q 2008 Change* % Change*
Net Revenue (1) - $185 - -
Adjusted Net Revenue (2) $197 $185 $(12) (6)%
EBITDA (1) - $41 - -
Adjusted EBITDA (2) $56 $50 $(6) (11)%
Adjusted EBITDA Margin % 28.4% 27.0% -140 bps (5)%
* May not calculate due to rounding
- Not meaningful
(1) 2Q 2007 excludes Worldspan results.
(2) Adjusted results include Worldspan in all periods, as if the
acquisition had closed on January 1, 2007.
Adjusted net revenue from Worldspan was
GTA
($ in millions)
2Q 2007 2Q 2008 Change* % Change*
Net Revenue (1) $88 $111 $23 26%
Adjusted Net Revenue (1) $88 $111 $23 26%
EBITDA (1) $26 $36 $10 38%
Adjusted EBITDA (1) $30 $36 $6 20%
Adjusted EBITDA Margin % 34.1% 32.4% -166 bps (5)%
* May not calculate due to rounding
(1) The results of 2Q 2007 reflect the sale of Trust International on
January 2, 2008, as a discontinued operation in our financial results.
Net revenue and EBITDA for GTA were
Corporate and Other
Travelport incurred adjusted Corporate and Other expenses of
Prior Period Adjustments
Travelport also reported an error related to certain financial assistance
expenses effecting prior periods. Such error had an insignificant impact on
prior financial results and no impact to cash. However, Travelport decided to
restate prior periods in order to correct the presentation. As a result,
Travelport will be restating certain previously issued financial statements.
The impact of the corrections amount to approximately
Orbitz Worldwide
($ in millions)
Travelport Limited currently owns approximately 48% of the outstanding
equity of Orbitz Worldwide. Travelport deconsolidated the results of Orbitz
Worldwide with effect from
2Q 2007 2Q 2008 Change % Change
Net Revenue (1) $235 - - -
Adjusted Net Revenue (1) - - - -
EBITDA (1) $26 - - -
Adjusted EBITDA (1) - - - -
- Not meaningful
(1) 2Q 2007 includes Orbitz Worldwide results. Adjusted results exclude
Orbitz Worldwide in all periods.
Conference Call/Webcast
The Company's second quarter 2008 earnings conference call will be
accessible to the media and general public via live Internet Webcast today
beginning at
About Travelport
Travelport is one of the world's largest travel conglomerates offering
broad based business services to companies operating in the global travel
industry. The company is comprised of Travelport GDS, a global distribution
system business that includes the Worldspan and Galileo brands; GTA, a group
travel and wholesale hotel business; Business Intelligence Services, a data
analysis business; and IT Services and Software, which hosts mission critical
applications and provides business solutions for major airlines. Travelport
also owns approximately 48% of Orbitz Worldwide (NYSE: OWW), a leading global
online travel company. With on-going annual revenues of approximately
Forward-Looking Statements
Certain statements in this press release constitute "forward-looking statements" that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", "may increase", "may fluctuate" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements.
Various risks that could cause future results to differ from those
expressed by the forward-looking statements included in this press release
include, but are not limited to: our ability to service our outstanding
indebtedness and the impact such indebtedness may have on the way we operate
our business; factors affecting the level of travel activity, particularly air
travel volume, including security concerns, natural disasters and other
disruptions; general economic and business conditions in the markets in which
we operate, including fluctuations in currencies; pricing, regulatory and
other trends in the travel industry; our ability to obtain travel supplier
inventory from travel suppliers, such as airlines, hotels, car rental
companies, cruise lines and other travel suppliers; risks associated with
doing business in multiple countries and in multiple currencies; maintenance
and protection of our information technology and intellectual property; our
ability to successfully integrate acquired businesses and realize anticipated
benefits of past and future acquisitions, including the Worldspan acquisition;
the impact on supplier capacity and inventory resulting from consolidation of
the airline industry; financing plans and access to adequate capital on
favorable terms; our ability to achieve expected cost savings and operational
synergies from our re-engineering efforts and the Worldspan acquisition; our
ability to successfully complete the consolidation of our system
infrastructure and web and database servers for our Galileo and Worldspan GDS
operations in
This release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, important information regarding such measures is contained on pages 7 through 9 of this release.
TRAVELPORT LIMITED
STATEMENTS OF OPERATIONS
(in millions)
(UNAUDITED)
As Restated As Restated
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2007 2008 2007 2008
Net revenue $715 $703 $1,381 $1,369
Costs and expenses
Cost of revenue 285 362 565 702
Selling, general
and administrative 301 158 562 341
Separation and
restructuring charges 6 5 29 14
Depreciation and
amortization 51 62 105 129
Other expense, net 2 - 2 -
Total costs and expenses 645 587 1,263 1,186
Operating income 70 116 118 183
Interest expense, net (83) (52) (168) (138)
Gain on early
extinguishment of debt - 9 - 18
Income (loss) from
continuing operations
before income taxes and
equity in losses of
investments, net (13) 73 (50) 63
Provision for
income taxes (8) (11) (5) (23)
Equity in losses of
investments, net - (3) - (10)
Income (loss) from
continuing operations,
net of tax (21) 59 (55) 30
Loss from discontinued
operations (1) - (1) -
Net income (loss) $(22) $59 $(56) $30
TRAVELPORT LIMITED
SEGMENT EBITDA AND RECONCILIATION OF EBITDA
(in millions)
(UNAUDITED)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2007 2008 2007 2008
GDS
Net revenue $408 $592 $822 $1,184
Segment EBITDA 120 164 235 330
GTA
Net revenue 88 111 145 185
Segment EBITDA 26 36 25 45
Orbitz Worldwide
Net revenue 235 - 447 -
Segment EBITDA 26 - 49 -
Corporate and other
EBITDA(a) (51) (13) (86) (45)
Intersegment
eliminations(b)
Net revenue (16) - (33) -
Consolidated Totals
Net revenue $715 $703 $1,381 $1,369
EBITDA $121 $187 $223 $330
- Not meaningful.
(a) Other includes corporate general and administrative costs not
allocated to the segments.
(b) Consists primarily of eliminations related to the inducements paid by
Galileo to Orbitz Worldwide.
Provided below is a reconciliation of EBITDA to income/(loss) from
continuing operations before income taxes and equity in losses of investments,
net:
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2007 2008 2007 2008
EBITDA $121 $187 $223 $330
Interest expense, net (83) (52) (168) (138)
Depreciation and
amortization (51) (62) (105) (129)
Income (loss) from
continuing operations
before income taxes and
equity in losses
of investments, net $(13) $73 $(50) $63
Adjusted Revenue, EBITDA, and Adjusted EBITDA are non-GAAP measures and may not be comparable to similarly named measures used by other companies. We believe that these measures provide management with a more complete understanding of the underlying operating results and trends and an enhanced overall understanding of the Company's financial performance and prospects for the future. Adjusted Revenue, EBITDA and Adjusted EBITDA are not intended to be measures of liquidity or cash flows from operations nor measures comparable to net income as they do not take into account certain requirements such as capital expenditures and related depreciation, principal and interest payments and tax payments. However, they are management's primary metric for measuring business performance and are used by the Board of Directors to determine incentive compensation. Capital expenditures, which impact depreciation and amortization, interest expense and income tax expense, are reviewed separately by management. Adjusted Revenue, EBITDA and Adjusted EBITDA are disclosed so that investors may have the same tools available to management when evaluating the results of Travelport. Adjusted Revenue is defined as Revenue adjusted to exclude the impact of deferred revenue written off due to purchase accounting on the acquisition of Travelport by an affiliate of The Blackstone Group. EBITDA is defined as net income (loss) before interest, income taxes, depreciation and amortization, each of which is presented on Travelport's Statement of Operations. Adjusted EBITDA is defined as EBITDA adjusted to exclude the aforementioned impact of purchase accounting, impairment of intangibles assets, expenses incurred in conjunction with Travelport's separation from Cendant, expenses incurred to acquire and integrate Travelport's portfolio of businesses, costs associated with Travelport's restructuring efforts and development of a global on-line travel platform, non-cash equity-based compensation, and other adjustments made to exclude expenses management views as outside the normal course of operations.
TRAVELPORT LIMITED
RECONCILIATION OF NET REVENUE AND EBITDA TO ADJUSTED NET REVENUE
AND ADJUSTED EBITDA
(in millions)
(UNAUDITED)
Three Months Ended June 30, 2008
Orbitz Corporate
Galileo Worldspan Worldwide GTA & Other Total*
Net Revenue $407 $185 $- $111 $- $703
Adjustments
Total (0) - - - - (0)
Adjusted Net
Revenue* $407 $185 $- $111 $- $703
EBITDA $123 $41 $- $36 $(13) $187
Adjustments
Impairment - - - - 0 0
Acquired /
Disposed EBITDA 5 - - - - 5
Separation from
Cendant and Related 0 - - - 2 2
Non-recurring Items
Associated with
Travelport
Acquisitions 7 8 - (1) 3 16
Restructure and
Related 3 1 - 1 1 5
Other - - - - (12) (12)
Total 14 9 - (1) (6) 16
Adjusted EBITDA* $137 $50 $- $36 $(20) $203
Three Months Ended June 30, 2007
Orbitz Corporate
Galileo Worldspan Worldwide GTA & Other Total*
Net Revenue $408 $- $235 $88 $(16) $715
Adjustments
Acquired /
Disposed Revenue (0) 197 (235) (1) 16 (22)
Separation from
Cendant and Related 1 - - 0 - 1
Other - - - - - -
Total 1 197 (235) (0) 16 (21)
Adjusted Net
Revenue* $409 $197 $- $88 $- $694
EBITDA $120 $- $26 $26 $(51) $121
Adjustments
Impairment 0 - - - 0 0
Acquired /
Disposed EBITDA 4 61 (26) (0) - 38
Separation from
Cendant and Related 1 - - 0 3 5
Non-recurring Items
Associated with
Travelport
Acquisitions 3 - - 3 11 17
Restructure
and Related 4 - - 1 0 4
Equity based
compensation - - - 0 9 9
Other - (5) - - (3) (8)
Total 12 56 (26) 4 21 67
Adjusted EBITDA* $132 $56 $- $30 $(30) $188
* Totals may not calculate due to rounding.
- Not meaningful.
TRAVELPORT LIMITED
RECONCILIATION OF NET REVENUE AND EBITDA TO ADJUSTED NET REVENUE AND
ADJUSTED EBITDA
(in millions)
(UNAUDITED)
Six Months Ended June 30, 2008
Orbitz Corporate
Galileo Worldspan Worldwide GTA & Other Total*
Net Revenue $819 $365 $- $185 $- $1,369
Adjustments
Acquired /
Disposed Revenue (0) - - - - (0)
Separation from
Cendant and Related 1 - - - - 1
Total 1 - - - - 1
Adjusted Net
Revenue* $820 $365 $- $185 $- $1,370
EBITDA $257 $72 $- $45 $(45) $330
Adjustments
Impairment - - - - 0 0
Acquired /
Disposed EBITDA 7 - - - - 7
Separation from
Cendant and Related 1 - - (0) 3 4
Non-recurring Items
Associated with
Travelport
Acquisitions 11 18 - (2) 15 41
Restructure
and Related 6 3 - 2 3 14
Other - - - - (20) (20)
Total 25 21 - (1) 1 46
Adjusted EBITDA* $282 $93 $- $45 $(44) $376
Six Months Ended June 30, 2007
Orbitz Corporate
Galileo Worldspan Worldwide GTA & Other Total*
Net Revenue $822 $- $447 $145 $(34) $1,381
Adjustments
Acquired /
Disposed Revenue (0) 407 (447) (2) 34 (9)
Separation from
Cendant and Related 3 - - 2 - 5
Total 2 407 (447) 0 34 (4)
Adjusted Net
Revenue* $825 $407 $- $145 $- $1,377
EBITDA $235 $- $49 $25 $(86) $223
Adjustments
Impairment 0 - - - 0 0
Acquired /
Disposed EBITDA 6 124 (49) (1) - 80
Separation from
Cendant and Related 3 - - 2 7 12
Non-recurring Items
Associated with
Travelport
Acquisitions 3 - - 6 18 27
Restructure
and Related 22 - - 2 1 24
Equity based
compensation - - - 1 12 12
Other - (2) - - (3) (5)
Total 34 122 (49) 9 35 151
Adjusted EBITDA* $269 $122 $- $34 $(51) $374
* Totals may not calculate due to rounding.
- Not meaningful.
TRAVELPORT LIMITED
BALANCE SHEETS
(in millions, except per share data)
(UNAUDITED)
As Restated
December 31, 2007 June 30, 2008
Assets
Current assets:
Cash and cash equivalents $309 $309
Accounts receivable, net 417 504
Deferred income taxes 9 10
Other current assets 252 340
Assets of discontinued operations 36 -
Total current assets 1,023 1,163
Property and equipment, net 532 518
Goodwill 1,757 1,832
Trademarks and tradenames 510 524
Other intangible assets, net 1,717 1,702
Investment in Orbitz Worldwide 366 365
Non-current deferred income taxes 3 3
Other non-current assets 242 235
Total assets $6,150 $6,342
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $191 $228
Accrued expenses and other current liabilities 827 936
Current portion of long-term debt 17 19
Deferred income taxes - 1
Liabilities of discontinued operations 8 -
Total current liabilities 1,043 1,184
Long-term debt 3,751 3,708
Deferred income taxes 261 275
Other non-current liabilities 209 171
Total liabilities 5,264 5,338
Commitments and contingencies
Shareholders' equity:
Common stock $1.00 par value; 12,000 shares
authorized, 12,000 shares issued and outstanding - -
Additional paid in capital 1,317 1,317
Accumulated deficit (594) (564)
Accumulated other comprehensive income 163 251
Total shareholders' equity 886 1,004
Total liabilities and shareholders' equity $6,150 $6,342
TRAVELPORT LIMITED
STATEMENTS OF CASH FLOWS
(in millions)
(UNAUDITED)
As Restated
Six Months Six Months
Ended Ended
June 30, 2007 June 30, 2008
Operating activities of
continuing operations
Net income (loss) $(56) $30
Loss from discontinued operations 1 -
Loss from continuing operations (55) 30
Adjustments to reconcile net loss to
net cash provided by operating activities
from continuing operations
Depreciation and amortization 105 129
Deferred income taxes (12) (6)
Provision for bad debts 4 7
Payment of FASA liability - (17)
Amortization of debt issuance costs 10 11
Non-cash charges related to tax sharing liability 6 -
Gain on early extinguishment of debt - (18)
Unrealized gains on interest rate derivatives - (25)
Equity based compensation 13 -
Equity in losses of investments, net - 10
Changes in assets and liabilities, net of
effects from acquisitions and disposals
Accounts receivable (3) (78)
Other current assets - (6)
Accounts payable, accrued expenses
and other current liabilities 267 129
Other (19) (13)
Net cash provided by operating
activities of continuing operations 316 153
Investing activities of continuing operations
Property and equipment additions (64) (46)
Businesses acquired, net of cash
and acquisition related payments (7) (3)
Proceeds from asset sales 75 -
Other 1 1
Net cash provided by (used in) investing
activities of continuing operations 5 (48)
Financing activities of continuing operations
Principal payments on borrowings (111) (109)
Issuance of common stock 2 -
Net cash used in financing activities
of continuing operations (109) (109)
Effect of changes in exchange rates
on cash and cash equivalents 4 4
Net increase in cash and cash
equivalents from continuing operations 216 -
Cash and cash equivalents at beginning of period 87 309
Cash and cash equivalents at end of period 303 309
Less cash of discontinued operations (1) -
Cash and cash equivalents of continuing operations $302 $309
Supplemental disclosure of cash flow information
Interest payments $161 $131
Income tax payments, net $16 $8
TRAVELPORT LIMITED
Operating Statistics
(UNAUDITED)
Three Months Ended
June 30,
2008 2007 Change % Change
Galileo (segments
in millions)
Americas Segments 24.6 26.7 (2.1) (8)%
International Segments 43.3 45.0 (1.7) (4)%
Total Segments 67.9 71.7 (3.8) (5)%
Worldspan (segments
in millions)
Total Segments 33.5 40.0 (6.5) (16)%
Total GDS Segments
(segments in millions) 101.4 111.7 (10.3) (9)%
GTA (TTV in millions)
Total Transaction
Value $551 $486 $65 13%
Six Months Ended
June 30,
2008 2007 Change % Change
Galileo (segments
in millions)
Americas Segments 51.3 55.2 (3.9) (7)%
International Segments 89.1 91.3 (2.2) (2)%
Total Segments 140.4 146.5 (6.1) (4)%
Worldspan (segments
in millions)
Total Segments 69.2 84.1 (14.9) (18)%
Total GDS Segments
(segments in millions) 209.6 230.6 (21.0) (9)%
GTA (TTV in millions)
Total Transaction Value $941 $812 $129 16%
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