NEW YORK,
May 13, 2008 /PRNewswire/ -- Travelport Limited, the parent
company of the Travelport group of companies, today announced its financial
results for the first quarter ended
March 31, 2008. Travelport recognized net
revenue and adjusted net revenue of
$666 million and EBITDA of
$145 million in
the first quarter of 2008. Adjusted EBITDA in the first quarter was
$173
million, representing a decline of (7)% over the same period last year, due to
the year-over-year decline in EBITDA from Worldspan arising from the loss of
Expedia segments prior to Travelport's acquisition of Worldspan.
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Travelport Consolidated
($ in millions)
1Q 2007 1Q 2008 Change* % Change*
Net Revenue (1) (2) $666 $666 $0 0%
Adjusted Net Revenue (3) $683 $666 $(17) (2)%
EBITDA (1) (2) $104 $145 $41 39%
Adjusted EBITDA (3) $186 $173 $(13) (7)%
Adjusted EBITDA Margin % 27.2% 26.0% -126 bps (5)%
* May not calculate due to rounding
(1) 1Q 2007 includes Orbitz Worldwide results.
(2) 1Q 2007 excludes Worldspan results.
(3) Adjusted results exclude Orbitz Worldwide and include Worldspan in all
periods, as if both transactions had taken place on January 1, 2007.
Travelport Consolidated Excluding Worldspan and Orbitz Worldwide
($ in millions)
1Q 2007 1Q 2008 Change* % Change*
Adjusted Net Revenue (1) $473 $486 $13 3%
Adjusted EBITDA (1) $120 $130 $10 8%
Adjusted EBITDA Margin % 25.4% 26.7% 138 bps 5%
* May not calculate due to rounding
(1) Excludes Worldspan and Orbitz Worldwide results in all periods.
Travelport CEO and President, Jeff Clarke, stated: "The first quarter of
2008 demonstrated the strength of Travelport's geographic breadth,
diversification and business model. Excluding the impact of Worldspan,
Travelport grew adjusted net revenue and adjusted EBITDA by 3% and 8%,
respectively. Despite a soft travel environment in the quarter, the
strengthening of new and emerging markets continues to benefit Travelport's
businesses given our higher value-added services for international travel
suppliers and customers throughout the world."
Mike Rescoe, Travelport executive vice president and CFO, stated: "We
continue to successfully execute on our re-engineering and Worldspan synergy
programs. During the quarter we realized $42 million of cost savings from our
original re-engineering program. This is an incremental $23 million, to the
$19 million that we realized during the first quarter of 2007. Also during
the quarter, we realized $10 million from Worldspan synergies. During the
quarter, we repurchased approximately $44 million in principal amount of our
bonds and ended the quarter with $207 million of cash. In addition, we
recently entered into a multi-year interest rate swap which effectively
converts $1 billion of our floating rate term loan debt to a fixed rate of
5.4%. This interest rate swap allows us to significantly reduce potential
volatility in earnings and cash flows from interest rate fluctuations and
locks in an improvement in interest rates on a substantial portion of our
debt."
Financial Highlights First Quarter 2008
GDS
($ in millions)
1Q 2007 1Q 2008 Change* % Change*
Net Revenue (1) $414 $592 $178 43%
Adjusted Net Revenue (2) $626 $592 $(34) (5)%
EBITDA (1) $117 $167 $50 43%
Adjusted EBITDA (2) $203 $188 $(15) (7)%
Adjusted EBITDA Margin % 32.4% 31.8% -67 bps (2)%
* May not calculate due to rounding
(1) 1Q 2007 excludes Worldspan results.
(2) Adjusted results include Worldspan in all periods, as if the
acquisition had closed January 1, 2007.
Net revenue and EBITDA within our GDS business were $592 million and $167
million, respectively, for the first quarter of 2008. Adjusted net revenue
and adjusted EBITDA were $592 million and $188 million, respectively, for the
first quarter of 2008. In the tables below, we provide a further analysis of
the underlying Galileo and Worldspan results within the GDS segment.
Galileo (included in GDS results above)
($ in millions)
1Q 2007 1Q 2008 Change* % Change*
Net Revenue $414 $412 $(2) (0)%
Adjusted Net Revenue $416 $412 $(4) (1)%
EBITDA $117 $136 $19 16%
Adjusted EBITDA $137 $145 $8 6%
Adjusted EBITDA Margin % 32.9% 35.2% 226 bps 7%
* May not calculate due to rounding
Adjusted net revenue and adjusted EBITDA from Galileo were $412 million
and $145 million in the first quarter of 2008, a decrease of (1)% and an
increase of 6%, respectively, compared to the first quarter of 2007. Lower
revenue resulted from a (3)% decline in Galileo segments, particularly in the
Americas where segments were down (7)%, partially offset by higher yield per
segment. Agency inducements increased $8 million, or 5%, compared to the
first quarter of 2007, approximately half of which was driven by unfavorable
exchange rates. In addition, Galileo reduced its operating expenses,
excluding inducements to agents, by $21 million, or 17%. Despite a modest
decline in revenue and an increase in inducements, adjusted EBITDA margins
improved 226 bps, or 7%, as a result of the operating expense savings.
Worldspan (included in GDS results above)
($ in millions)
1Q 2007 1Q 2008 Change* % Change*
Net Revenue (1) - $180 - -
Adjusted Net Revenue (2) $210 $180 $(30) (14)%
EBITDA (1) - $31 - -
Adjusted EBITDA (2) $66 $43 $(23) (35)%
Adjusted EBITDA Margin % 31.4% 23.9% -754 bps (24)%
* May not calculate due to rounding
- Not meaningful
(1) 1Q 2007 excludes Worldspan results.
(2) Adjusted results include Worldspan in all periods, as if the
acquisition had closed January 1, 2007.
Adjusted net revenue from Worldspan was $180 million for the first quarter
of 2008, reflecting a decline of (14)% compared with the same period in 2007,
mainly due to the loss of segments from Expedia. Adjusted EBITDA from
Worldspan was $43 million for the first quarter of 2008, which represents a
decline of (35)% compared to the same quarter in 2007 and reflects the short-
term reverse leverage impact of lower revenue.
GTA
($ in millions)
1Q 2007 1Q 2008 Change* % Change*
Net Revenue (1) $57 $74 $17 30%
Adjusted Net Revenue (1) $57 $74 $17 30%
EBITDA (1) ($1) $9 $10 -
Adjusted EBITDA (1) $4 $9 $5 125%
Adjusted EBITDA Margin % 7.0% 12.2% 514 bps 73%
* May not calculate due to rounding
- Not meaningful
(1) The results of 1Q 2007 have been adjusted to reflect the sale of Trust
International on January 2, 2008, as this business is treated as a
discontinued operation in our financial results.
Net revenue and EBITDA for GTA were $74 million and $9 million,
respectively, in the first quarter of 2008. Adjusted net revenue and adjusted
EBITDA for GTA were $74 million and $9 million, an increase of 30% and 125%,
respectively, compared with the first quarter of 2007. Global Total
Transaction Value (TTV) grew 20% in the quarter, driven primarily by a mix of
improved pricing, favorable currency trends and growth in transactions.
Operating expenses for GTA increased 24% during the first quarter of 2008,
however, excluding the impact of currency rates, operating expenses would have
only increased approximately 10% compared to the first quarter of 2007. The
impact of higher sales volumes and a cost base growing at a slower rate
enabled GTA to increase adjusted EBITDA margins from 7% in the first quarter
of 2007 to 12% for the first quarter of 2008.
Corporate and Other
Travelport incurred adjusted Corporate and Other expenses of $24 million
for the first quarter of 2008. Excluded from the adjusted results are gains
from the retirement of our repurchased bonds and exceptional one-time costs
related to potential corporate transactions.
Orbitz Worldwide
($ 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 October 31, 2007 and accounts for the Orbitz
Worldwide results under the equity method of accounting. For a discussion of
Orbitz Worldwide's year-over-year performance, please refer to the earnings
release of Orbitz Worldwide.
1Q 2007 1Q 2008 Change % Change
Net Revenue (1) $212 - - -
Adjusted Net Revenue (2) - - - -
EBITDA (1) $23 - - -
Adjusted EBITDA (2) - - - -
- Not meaningful
(1) 1Q 2007 includes Orbitz Worldwide results.
(2) Adjusted results exclude Orbitz Worldwide in all periods.
Conference Call/Webcast
The Company's first quarter 2008 earnings conference call will be
accessible to the media and general public via live Internet Webcast today
beginning at 11:00 a.m. (EST), and through a limited number of listen-only,
dial-in conference lines. The Webcast will be available through the Investor
Center section of the Company's Web site at www.travelport.com. To access the
call through a conference line, dial 888-679-8018 in the United States and
617-213-4845 for international callers beginning at least 10 minutes prior to
the scheduled start of the call. The passcode is 92155565. A replay of the
conference call will be available May 13, 2008 at 1:00 p.m. (EST) through May
20, 2008. To access the replay, dial 888-286-8010 in the United States and
617-801-6888 for international callers. The passcode is 55294416.
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 $2.6
billion, Travelport operates in 145 countries and has approximately 6,000
employees. Travelport is a private company owned by The Blackstone Group, One
Equity Partners, Technology Crossover Ventures and Travelport management.
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; and
our ability to maintain existing relationships with travel agencies and tour
operators and to enter into new relationships. Other unknown or unpredictable
factors also could have material adverse effects on our performance or
achievements. In light of these risks, uncertainties, assumptions and factors,
the forward-looking events discussed in this press release may not occur. You
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date stated, or if no date is stated, as of the
date of this press release. Except to the extent required by applicable
securities laws, the Company undertakes no obligation to release any revisions
to any forward-looking statements, to report events or to report the
occurrence of unanticipated events unless required by law.
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 6 through 7 of this release.
TRAVELPORT LIMITED
STATEMENTS OF OPERATIONS
(in millions)
(UNAUDITED)
Three Months Three Months
Ended Ended
March 31, 2007 March 31, 2008
Net revenue $666 $666
Costs and expenses
Cost of revenue 278 339
Selling, general and administrative 261 182
Separation and restructuring charges 23 9
Depreciation and amortization 54 67
Total costs and expenses 616 597
Operating income 50 69
Interest expense, net (85) (86)
Gain on early extinguishment of debt - 9
Loss from continuing operations before
income taxes and equity in losses of
investments, net (35) (8)
Benefit (provision) for income taxes 3 (12)
Equity in losses of investments, net - (7)
Net loss $(32) $(27)
TRAVELPORT LIMITED
SEGMENT EBITDA AND RECONCILIATION OF EBITDA
(in millions)
(UNAUDITED)
Three Months Three Months
Ended Ended
March 31, 2007 March 31, 2008
GDS
Net revenue $414 $592
Segment EBITDA 117 167
GTA
Net revenue 57 74
Segment EBITDA (1) 9
Orbitz Worldwide
Net revenue 212 -
Segment EBITDA 23 -
Corporate and other
EBITDA(a) (35) (31)
Intersegment eliminations(b)
Net revenue (17) -
Combined Totals
Net revenue $666 $666
EBITDA $104 $145
- 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 loss from continuing
operations before income taxes and equity in losses of investments, net:
Three Months Three Months
Ended Ended
March 31, 2007 March 31, 2008
EBITDA $104 $145
Interest expense, net (85) (86)
Depreciation and amortization (54) (67)
Losses from continuing operations
before income taxes and equity
in losses of investments, net $(35) $(8)
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 March 31, 2008
Orbitz Corporate
Galileo Worldspan Worldwide GTA & Other Total*
Net Revenue $ 412 $180 $- $74 $- $ 666
Adjustments
Separation from
Cendant and Related 1 - - - - 1
Total 1 - - - - 1
Adjusted Net
Revenue* $412 $180 $- $74 $- $666
EBITDA $136 $31 $- $9 $(30) $145
Adjustments
Separation from
Cendant and Related 1 - - - - 1
Non-recurring Items
Associated with
Travelport
Acquisitions 4 10 - (1) 12 25
Restructure and
Related 4 1 - 1 2 9
Other - - - - (8) (8)
Total 9 12 - - 6 27
Adjusted EBITDA* $145 $43 $- $9 $(24) $173
Three Months Ended March 31, 2007
Orbitz Corporate
Galileo Worldspan Worldwide GTA & Other Total*
Net Revenue $414 $- $212 $57 $(17) $666
Adjustments
Acquired /
Disposed Revenue - 202 (212) (2) 17 5
Separation from
Cendant and Related 2 - - 2 - 3
Other - 8 - - - 8
Total 2 210 (212) - 17 17
Adjusted Net
Revenue* $416 $210 $- $57 $- $683
EBITDA $117 $- $23 $(1) $(36) $104
Adjustments
Acquired / Disposed
EBITDA - 55 (23) (1) - 31
Separation from
Cendant and Related 2 - - 2 4 8
Non-recurring Items
Associated with
Travelport
Acquisitions - - - 3 7 10
Restructure and
Related 18 - - 1 1 20
Equity based
compensation - - - - 3 3
Other - 11 - - - 11
Total 20 66 (23) 5 15 82
Adjusted EBITDA* $137 $66 $- $4 $(21) $186
* Totals may not calculate due to rounding.
- Not meaningful.
TRAVELPORT LIMITED
BALANCE SHEETS
(in millions, except per share data)
(UNAUDITED)
December 31, March 31,
2007 2008
Assets
Current assets:
Cash and cash equivalents $309 $207
Accounts receivable, net 416 506
Deferred income taxes 9 10
Other current assets 253 330
Assets of discontinued operations 36 -
Total current assets 1,023 1,053
Property and equipment, net 541 522
Goodwill 1,746 1,820
Trademarks and tradenames 510 525
Other intangible assets, net 1,717 1,736
Investment in Orbitz Worldwide 364 358
Non-current deferred income taxes 3 3
Other non-current assets 236 244
Total assets $6,140 $6,261
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $191 $178
Accrued expenses and other current liabilities 821 859
Current portion of long-term debt 17 18
Deferred income taxes - 1
Liabilities of discontinued operations 8 -
Total current liabilities 1,037 1,056
Long-term debt 3,751 3,791
Deferred income taxes 261 278
Other non-current liabilities 203 190
Total liabilities 5,252 5,315
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 1,311 1,311
Accumulated deficit (587) (614)
Accumulated other comprehensive income 164 249
Total shareholders' equity 888 946
Total liabilities and shareholders' equity $6,140 $6,261
TRAVELPORT LIMITED
STATEMENTS OF CASH FLOWS
(in millions)
(UNAUDITED)
Three Months Three Months
Ended Ended
March 31, March 31,
2007 2008
Operating activities of continuing operations
Net loss $(32) $(27)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities from
continuing operations
Depreciation and amortization 54 67
Deferred income taxes 1 (4)
Provision for bad debts 3 4
Gain on early extinguishment of debt - (9)
Gain on sale of property 1 -
Amortization of debt issuance costs 5 5
Non-cash charges related to tax sharing liability 3 -
Equity based compensation 3 -
Equity in losses of investments - 7
Payment of FASA liability - (8)
Changes in assets and liabilities, net of effects
from acquisitions and disposals
Accounts receivable 21 (78)
Other current assets - (4)
Accounts payable, accrued expenses and other
current liabilities 101 7
Other 1 (11)
Net cash provided by (used in) operating activities
of continuing operations 161 (51)
Investing activities of continuing operations
Property and equipment additions (31) (13)
Acquisition related payments (5) (3)
Other 1 (1)
Net cash used in investing activities of continuing
operations (35) (17)
Financing activities of continuing operations
Principal payments on borrowings (6) (38)
Issuance of common stock 2 -
Net cash used in financing activities of continuing
operations (4) (38)
Effect of changes in exchange rates on cash and cash
equivalents 1 4
Net increase (decrease) in cash and cash equivalents
from continuing operations 123 (102)
Cash provided by (used in) discontinued operations
Operating activities 2 -
Investing activities (1) -
Cash provided by discontinued operations 1 -
Cash and cash equivalents at beginning of period 97 309
Cash and cash equivalents at end of period 221 207
Less cash of discontinued operations (3) -
Cash and cash equivalents of continuing operations $218 $207
TRAVELPORT LIMITED
Operating Statistics
(UNAUDITED)
Three Months Ended
March 31,
2008 2007 Change % Change
Galileo (segments in millions)
Americas Segments 26.7 28.6 (1.9) (7)%
International Segments 45.8 46.3 (0.5) (1)%
Total Segments 72.5 74.9 (2.4) (3)%
Worldspan (segments in millions)
Total Segments 35.7 44.1 (8.4) (19)%
GTA (TTV in millions)
Total Transaction Value $391 $326 $65 20%
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