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8-K - FORM 8-K - Travelport LTD | y90562e8vk.htm |
Exhibit 99.1
Travelport
Full Year and Fourth Quarter 2010 Results
Increased revenues and positive cash generation
NEW YORK, NY, March 30, 2011 Travelport Limited, a leading provider of critical transaction
processing for the global travel industry, today announces its financial results for the fourth
quarter and full year ended December 31, 2010.
Financial Summary:
($ in millions)
($ in millions)
| Net Revenue FY: $2,290 (2009: $2,248) and Q4: $529 (2009: $533) | ||
| Operating Income FY: $314 (2009: Loss of $499) and Q4: $55 (2009: $69) | ||
| Adjusted EBITDA FY: $629 (2009: $632) and Q4: $139 (2009: $138) | ||
| Cash generated by operations FY: $284 (2009: $239) and Q4: $30 (2009: $48) |
Operational Highlights:
| Agreed numerous airline, hotel and transport content deals | ||
| Prepared the ground for 2011 strategic roll-out of Travelport Universal Desktop | ||
| Completed notable customer migrations |
Post Year End Highlights:
| Announced industry first merchandising agreement with British Airways | ||
| Signed unique capability to fully support Air Canadas merchandising functionality | ||
| Announced proposed $720 million sale of GTA business |
Commenting on developments, Jeff Clarke, President and CEO of Travelport, said:
2010 was a year of investment in new technologies and emerging markets for Travelport. We have a
solid pipeline of customers for Travelport Universal Desktop and are already seeing the benefits
from our industry leading Travelport Universal API product set. The strong cash flow performance of the
company supports continued investment while also allowing us to opportunistically improve our
capital structure.
Travelport Consolidated
($ in millions)
Q4 2010 | Q4 2009 | Change | % Change | |||||||||||||
Net Revenue |
$ | 529 | $ | 533 | $ | (4 | ) | (1 | )% | |||||||
Operating Income |
$ | 55 | $ | 69 | $ | (14 | ) | (20 | )% | |||||||
Adjusted EBITDA |
$ | 139 | $ | 138 | $ | 1 | 1 | % |
FY 2010 | FY 2009 | Change | % Change | |||||||||||||
Net Revenue |
$ | 2,290 | $ | 2,248 | $ | 42 | 2 | % | ||||||||
Operating Income (Loss) |
$ | 314 | $ | (499 | ) | $ | 813 | N/A | ||||||||
Adjusted EBITDA |
$ | 629 | $ | 632 | $ | (3 | ) | | % |
Q4 2010: Travelports Net Revenue of $529 million for the fourth quarter of 2010 represented a
1% decrease compared to the corresponding period in the prior year. Operating Income of $55
million is a reduction of $14 million compared to the prior year. Travelport achieved Adjusted
EBITDA of $139 million for the three months ended December 31, 2010, 1% higher than the prior year.
FY 2010: Travelports full year Net Revenue of $2,290 million represented a 2% increase compared to
the prior year. Operating Income of $314 million is an improvement of $813 million compared to the
prior year. Excluding the 2009 impairment charge of $833 million, Operating Income declined by
$20 million (6%), with increased revenue of $42 million offset by an increase in total costs and
expenses of $62 million, including $11 million of incremental corporate transaction costs and $9
million of unfavorable movements in the fair value of foreign exchange derivatives. Travelport
achieved full year Adjusted EBITDA of $629 million in 2010, marginally lower than the prior year.
1
Financial Highlights Fourth Quarter and Full Year 2010
Global Distribution Systems (GDS)
Travelports main business is its global distribution system (GDS), which includes the Worldspan
and Galileo brands and also the Companys Airline IT Solutions business.
($ in millions)
Q4 2010 | Q4 2009 | Change | % Change | |||||||||||||
Net Revenue |
$ | 452 | $ | 467 | $ | (15 | ) | (3 | )% | |||||||
Segment EBITDA |
$ | 114 | $ | 127 | $ | (13 | ) | (10 | )% | |||||||
Segment Adjusted EBITDA |
$ | 125 | $ | 133 | $ | (8 | ) | (6 | )% |
FY 2010 | FY 2009 | Change | % Change | |||||||||||||
Net Revenue |
$ | 1,996 | $ | 1,981 | $ | 15 | 1 | % | ||||||||
Segment EBITDA |
$ | 560 | $ | 602 | $ | (42 | ) | (7 | )% | |||||||
Segment Adjusted EBITDA |
$ | 587 | $ | 628 | $ | (41 | ) | (7 | )% |
Q4 2010: Net Revenue and Segment EBITDA for the GDS business were $452 million and $114
million, respectively, for the fourth quarter of 2010, with a decrease of 3% in Net Revenue and a
decrease of 10% in Segment EBITDA compared to 2009. Segment Adjusted EBITDA for the GDS business
was $125 million for the fourth quarter of 2010, a 6% reduction compared to 2009. Net Revenue
decreased compared to the prior year as a result of a 1% decrease in segments and an 11% decrease
in Airline IT Solutions revenue due to the merger of Delta and Northwest.
FY 2010: Net Revenue and Segment EBITDA for the GDS business were $1,996 million and $560 million,
respectively, for the year ended December 31, 2010, representing a 1% increase in Net Revenue and a
7% decrease in Segment EBITDA compared to 2009. Segment Adjusted EBITDA for the GDS business was
$587 million for 2010, a 7% reduction compared to 2009. Increased Net Revenue of 1% resulted from
a 3% increase in segments compared to 2009, partially offset by an 11% decrease in Airline IT
Solutions revenue due to the merger of Delta and Northwest.
Gullivers Travel Associates (GTA)
GTA is a leading global, multi-channel provider of hotel and ground services.
($ in millions)
Q4 2010 | Q4 2009 | Change | % Change | |||||||||||||
Net Revenue |
$ | 77 | $ | 66 | $ | 11 | 17 | % | ||||||||
Segment EBITDA |
$ | 21 | $ | 16 | $ | 5 | 31 | % | ||||||||
Segment Adjusted EBITDA |
$ | 24 | $ | 15 | $ | 9 | 60 | % |
FY 2010 | FY 2009 | Change | % Change | |||||||||||||
Net Revenue |
$ | 294 | $ | 267 | $ | 27 | 10 | % | ||||||||
Segment EBITDA |
$ | 82 | $ | (776 | ) | $ | 858 | N/A | ||||||||
Segment Adjusted EBITDA |
$ | 84 | $ | 59 | $ | 25 | 42 | % |
Q4 2010: Net Revenue and Segment EBITDA for the GTA business were $77 million and $21 million,
respectively, for the fourth quarter of 2010. Segment Adjusted EBITDA for GTA in the fourth
quarter of 2010 was $24 million, representing a $9 million improvement compared to 2009. Total
Transaction Value (TTV) increased 18% in the quarter primarily due to a 20% growth in the number
of room nights. Net Revenue increased 17% in the quarter due to the increase in TTV, partially
offset by lower margin on sales.
FY 2010: Net Revenue and Segment EBITDA for the GTA business were $294 million and $82 million,
respectively, for the year ended December 31, 2010. Segment Adjusted EBITDA for GTA in 2010 was
$84 million, representing a $25 million improvement compared to 2009. TTV increased 18% in the
year primarily due to a 19% growth in the number of room nights. Net Revenue increased 10% in the
year due to the increase in TTV, partially offset by lower margin on sales.
2
Corporate
For the fourth quarter of 2010, Travelport incurred adjusted corporate costs of $10 million, which
was flat compared to the fourth quarter of 2009.
For the year ended December 31, 2010, Travelport incurred adjusted corporate costs of $42 million,
which was $13 million less than 2009.
Full year interest costs of $272 million for 2010 were $14 million less than for 2009, primarily
due to lower interest rates.
During the year ended December 31, 2010, Travelport generated $284 million in cash from operations,
a $45 million increase over 2009. This increase is primarily attributable to a $23 million
decrease in cash used for interest payments and a $17 million decrease in cash used for tax
payments. During the year ended December 31, 2010, Travelport used $241 million for investment,
including $50 million for the purchase of shares of common stock of Orbitz Worldwide and $182
million for continued investment and upgrades to the IT infrastructure, including the deployment of
the latest IBM technology.
Travelports net debt at December 31, 2010 was $3,435 million, which comprised debt of $3,814
million less $242 million in cash and cash equivalents and less $137 million of restricted cash
provided as collateral.
In August 2010, Travelport issued $250 million of 9% senior notes due 2016, using a portion of the
proceeds to repay $149 million of term loans.
In October 2010, Travelport amended its senior secured credit agreement to, among other things,
extend the maturities on approximately 90% of its term loans and letters of credit commitments by
two years and amend certain terms under the senior secured credit agreement, providing the Company
with greater financial flexibility. As a result, and subject to the terms of this amendment, less
than 10% of current Travelport indebtedness matures prior to September 2014.
Orbitz Worldwide
Travelport currently owns approximately 48% of the outstanding equity of Orbitz Worldwide.
Travelport accounts for its investment in Orbitz Worldwide under the equity method of accounting.
During the fourth quarter and full year ended December 31, 2010, Travelport recorded losses of $38
million and $28 million, respectively, in losses from our investment in Orbitz Worldwide. During
the fourth quarter of 2010, as a result of Orbitz Worldwides annual impairment test for goodwill
and intangible assets, Orbitz Worldwide recorded a non-cash impairment charge of $70 million, of
which $42 million was to impair the goodwill and $28 million was to impair the trademarks and
tradenames. The loss in the fourth quarter and full year ended December 31, 2010 includes the
Companys share of that non-cash impairment charge.
Conference Call/Webcast
The Companys fourth quarter and full year 2010 earnings conference call will be accessible to the
media and general public via live Internet webcast today, beginning at 11:00 a.m. (EDT) and through
a limited number of dial-in conference lines. The webcast and conference call details are available
through the Investor Centre section of the Companys website (www.travelport.com/investor.aspx),
where pre-registration for the event is required.
About Travelport
Travelport is a broad-based business services company and a leading provider of critical
transaction processing solutions to companies operating in the global travel industry.
With a presence in 160 countries, approximately 5,475 employees and reported 2010 revenues of $2.3
billion, Travelport is comprised of the global distribution system (GDS) business that includes the
Galileo and Worldspan brands; GTA, a leading global, multi-channel provider of hotel and ground
services; and Airline IT Solutions, which hosts mission critical applications and provides business
and data analysis solutions for major airlines.
Travelport also owns approximately 48% of Orbitz Worldwide (NYSE: OWW), a leading global online
travel company. Travelport is a private company owned by The Blackstone Group, One Equity Partners,
Technology Crossover Ventures, and Travelport management.
Investor Contact
Julian Walker, Head of Corporate Communications, +44 (0) 1753 288210, or
julian.walker@travelport.com
3
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: the impact that our
outstanding indebtedness may have on the way we operate our business; factors affecting the level
of travel activity, particularly air travel volume, including security concerns, general economic
conditions, 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;
our ability to develop and deliver products and services that are valuable to travel agencies and
travel suppliers and generate new revenue streams, including our new universal desktop product;
risks associated with doing business in multiple countries and in multiple currencies; maintenance
and protection of our information technology and intellectual property; 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 from
our efforts to improve operational efficiency; our ability to maintain existing relationships with
travel agencies and tour operators and to enter into new relationships on acceptable financial and
other terms; and our ability to grow adjacencies, such as our recent acquisition of Sprice and our
controlling interest in eNett. 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 below.
4
TRAVELPORT LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) | (unaudited) | |||||||||||||||
Three Months | Three Months | |||||||||||||||
Ended | Ended | Year Ended | Year Ended | |||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
(in $ millions) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Net revenue |
529 | 533 | 2,290 | 2,248 | ||||||||||||
Costs and expenses |
||||||||||||||||
Cost of revenue |
265 | 256 | 1,164 | 1,090 | ||||||||||||
Selling, general and administrative |
137 | 151 | 547 | 567 | ||||||||||||
Restructuring charges |
8 | 1 | 13 | 19 | ||||||||||||
Depreciation and amortization |
64 | 56 | 252 | 243 | ||||||||||||
Impairment of goodwill and other intangible assets |
| | | 833 | ||||||||||||
Other income |
| | | (5 | ) | |||||||||||
Total costs and expenses |
474 | 464 | 1,976 | 2,747 | ||||||||||||
Operating income (loss) |
55 | 69 | 314 | (499 | ) | |||||||||||
Interest expense, net |
(70 | ) | (63 | ) | (272 | ) | (286 | ) | ||||||||
Gain on early extinguishment of debt |
2 | | 2 | 10 | ||||||||||||
(Loss) income from operations before income taxes
and equity in losses of investment in Orbitz
Worldwide |
(13 | ) | 6 | 44 | (775 | ) | ||||||||||
(Provision) benefit for income taxes |
(18 | ) | 4 | (60 | ) | 68 | ||||||||||
Equity in losses of investment in Orbitz Worldwide |
(38 | ) | (9 | ) | (28 | ) | (162 | ) | ||||||||
Net (loss) income |
(69 | ) | 1 | (44 | ) | (869 | ) | |||||||||
Net loss (income) attributable to
non-controlling interest in subsidiaries |
| | 1 | (2 | ) | |||||||||||
Net (loss) income attributable to the Company |
(69 | ) | 1 | (43 | ) | (871 | ) | |||||||||
5
TRAVELPORT LIMITED
SEGMENT EBITDA
SEGMENT EBITDA
The Companys presentation of Segment EBITDA may not be comparable to similarly titled
measures used by other companies.
(unaudited) | (unaudited) | |||||||||||||||
Three Months | Three Months | |||||||||||||||
Ended | Ended | Year Ended | Year Ended | |||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
(in $ millions) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
GDS |
||||||||||||||||
Net revenue |
452 | 467 | 1,996 | 1,981 | ||||||||||||
Segment EBITDA |
114 | 127 | 560 | 602 | ||||||||||||
GTA |
||||||||||||||||
Net revenue |
77 | 66 | 294 | 267 | ||||||||||||
Segment EBITDA |
21 | 16 | 82 | (776 | ) | |||||||||||
Combined Totals |
||||||||||||||||
Net revenue |
529 | 533 | 2,290 | 2,248 | ||||||||||||
Segment EBITDA |
135 | 143 | 642 | (174 | ) | |||||||||||
Reconciling items: |
||||||||||||||||
Corporate and unallocated |
(16 | ) | (18 | ) | (76 | ) | (82 | ) | ||||||||
Gain on early extinguishment of debt |
2 | | 2 | 10 | ||||||||||||
Interest expense, net |
(70 | ) | (63 | ) | (272 | ) | (286 | ) | ||||||||
Depreciation and amortization |
(64 | ) | (56 | ) | (252 | ) | (243 | ) | ||||||||
(Loss) income from operations
before income taxes and equity in
losses of investment in Orbitz
Worldwide |
(13 | ) | 6 | 44 | (775 | ) | ||||||||||
6
TRAVELPORT LIMITED
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
December 31, | December 31, | |||||||
(in $ millions) | 2010 | 2009 | ||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
242 | 217 | ||||||
Accounts receivable (net of allowances for doubtful accounts of $35 and $59) |
348 | 346 | ||||||
Deferred income taxes |
5 | 22 | ||||||
Other current assets |
204 | 156 | ||||||
Total current assets |
799 | 741 | ||||||
Property and equipment, net |
521 | 452 | ||||||
Goodwill |
1,277 | 1,285 | ||||||
Trademarks and tradenames |
413 | 419 | ||||||
Other intangible assets, net |
1,048 | 1,183 | ||||||
Investment in Orbitz Worldwide |
91 | 60 | ||||||
Non-current deferred income taxes |
5 | 2 | ||||||
Other non-current assets |
346 | 204 | ||||||
Total assets |
4,500 | 4,346 | ||||||
Liabilities and equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
183 | 139 | ||||||
Accrued expenses and other current liabilities |
809 | 765 | ||||||
Current portion of long-term debt |
18 | 23 | ||||||
Total current liabilities |
1,010 | 927 | ||||||
Long-term debt |
3,796 | 3,640 | ||||||
Deferred income taxes |
133 | 143 | ||||||
Other non-current liabilities |
233 | 228 | ||||||
Total liabilities |
5,172 | 4,938 | ||||||
Shareholders equity: |
||||||||
Common shares $1.00 par value; 12,000 shares authorized; 12,000 shares
issued and outstanding |
| | ||||||
Additional paid in capital |
1,011 | 1,006 | ||||||
Accumulated deficit |
(1,686 | ) | (1,643 | ) | ||||
Accumulated other comprehensive income |
(9 | ) | 30 | |||||
Total shareholders equity |
(684 | ) | (607 | ) | ||||
Equity attributable to non-controlling interest in subsidiaries |
12 | 15 | ||||||
Total equity |
(672 | ) | (592 | ) | ||||
Total liabilities and equity |
4,500 | 4,346 | ||||||
7
TRAVELPORT LIMITED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Year ended | Year ended | |||||||
December 31, | December 31, | |||||||
(in $ millions) | 2010 | 2009 | ||||||
Operating activities |
||||||||
Net loss |
(44 | ) | (869 | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
252 | 243 | ||||||
Impairment of goodwill and other intangible assets |
| 833 | ||||||
Gain on sale of assets |
| (5 | ) | |||||
Provision for bad debts |
2 | 15 | ||||||
Equity-based compensation |
5 | 10 | ||||||
Gain on early extinguishment of debt |
(2 | ) | (10 | ) | ||||
Amortization of debt finance costs |
23 | 16 | ||||||
(Gain) loss on interest rate derivative instruments |
(6 | ) | 6 | |||||
Gain on foreign exchange derivative instruments |
(3 | ) | (13 | ) | ||||
Equity in losses of investment in Orbitz Worldwide |
28 | 162 | ||||||
FASA liability |
(18 | ) | (26 | ) | ||||
Deferred income taxes |
11 | (118 | ) | |||||
Changes in assets and liabilities, net of effects from acquisitions: |
||||||||
Accounts receivable |
(6 | ) | 31 | |||||
Other current assets |
(12 | ) | (4 | ) | ||||
Accounts payable, accrued expenses and other current liabilities |
68 | (20 | ) | |||||
Other |
(14 | ) | (12 | ) | ||||
Net cash provided by operating activities |
284 | 239 | ||||||
Investing activities |
||||||||
Property and equipment additions |
(182 | ) | (58 | ) | ||||
Investment in Orbitz Worldwide |
(50 | ) | | |||||
Businesses acquired |
(16 | ) | (2 | ) | ||||
Loan to parent company |
(9 | ) | | |||||
Loan repaid by parent company |
9 | | ||||||
Proceeds from sale of assets |
2 | 5 | ||||||
Other |
5 | | ||||||
Net cash used in investing activities |
(241 | ) | (55 | ) | ||||
Financing activities |
||||||||
Principal repayments |
(318 | ) | (307 | ) | ||||
Proceeds from new borrowings |
517 | 144 | ||||||
Cash provided as collateral |
(137 | ) | | |||||
Payments on settlement of derivative contracts |
(77 | ) | | |||||
Proceeds on settlement of derivative contracts |
16 | 87 | ||||||
Net share settlement for equity-based compensation |
| (7 | ) | |||||
Debt finance costs |
(20 | ) | (3 | ) | ||||
Distribution to a parent company |
| (227 | ) | |||||
Other |
(3 | ) | (4 | ) | ||||
Net cash used in financing activities |
(22 | ) | (317 | ) | ||||
Effect of changes in exchange rates on cash and cash equivalents |
4 | 5 | ||||||
Net increase (decrease) in cash and cash equivalents |
25 | (128 | ) | |||||
Cash and cash equivalents at beginning of year |
217 | 345 | ||||||
Cash and cash equivalents at end of year |
242 | 217 | ||||||
Supplemental disclosure of cash flow information |
||||||||
Interest payments |
232 | 255 | ||||||
Income tax payments, net |
29 | 46 |
8
TRAVELPORT LIMITED
NON-GAAP MEASURES
(in $ millions and unaudited)
NON-GAAP MEASURES
(in $ millions and unaudited)
Three Months Ended December 31, 2010 | ||||||||||||||||
Reconciling | ||||||||||||||||
Items: | ||||||||||||||||
Corporate and | ||||||||||||||||
Unallocated | ||||||||||||||||
Reconciliation of Adjusted EBITDA to Operating Income | GDS | GTA | Costs | Total | ||||||||||||
Adjusted EBITDA |
125 | 24 | (10 | ) | 139 | |||||||||||
Less adjustments: |
||||||||||||||||
Acquisitions and corporate transaction costs |
1 | 2 | 1 | 4 | ||||||||||||
Restructuring charges |
6 | 1 | 1 | 8 | ||||||||||||
Equity-based compensation |
| | 3 | 3 | ||||||||||||
Unrealized losses on foreign exchange derivatives |
| | 2 | 2 | ||||||||||||
Other |
4 | | (3 | ) | 1 | |||||||||||
Total |
11 | 3 | 4 | 18 | ||||||||||||
EBITDA |
114 | 21 | (14 | ) | 121 | |||||||||||
Less: |
||||||||||||||||
Depreciation and amortization |
(64 | ) | ||||||||||||||
Gain on early extinguishment of debt |
(2 | ) | ||||||||||||||
Operating income |
55 | |||||||||||||||
Three Months Ended December 31, 2009 | ||||||||||||||||
Reconciling | ||||||||||||||||
Items: | ||||||||||||||||
Corporate and | ||||||||||||||||
Unallocated | ||||||||||||||||
Reconciliation of Adjusted EBITDA to Operating Income | GDS | GTA | Costs | Total | ||||||||||||
Adjusted EBITDA |
133 | 15 | (10 | ) | 138 | |||||||||||
Less adjustments: |
||||||||||||||||
Acquisitions and corporate transaction costs |
5 | (2 | ) | 2 | 5 | |||||||||||
Restructuring charges |
| 1 | | 1 | ||||||||||||
Equity based compensation |
| | 3 | 3 | ||||||||||||
Unrealized losses on foreign exchange derivatives |
| | 1 | 1 | ||||||||||||
Other |
1 | | 2 | 3 | ||||||||||||
Total |
6 | (1 | ) | 8 | 13 | |||||||||||
EBITDA |
127 | 16 | (18 | ) | 125 | |||||||||||
Less: |
||||||||||||||||
Depreciation and amortization |
(56 | ) | ||||||||||||||
Operating income |
69 | |||||||||||||||
9
TRAVELPORT LIMITED
NON-GAAP MEASURES
(in $ millions and unaudited)
NON-GAAP MEASURES
(in $ millions and unaudited)
Year Ended December 31, 2010 | ||||||||||||||||
Reconciling | ||||||||||||||||
Items: | ||||||||||||||||
Corporate and | ||||||||||||||||
Unallocated | ||||||||||||||||
Reconciliation of Adjusted EBITDA to Operating Income | GDS | GTA | Costs | Total | ||||||||||||
Adjusted EBITDA |
587 | 84 | (42 | ) | 629 | |||||||||||
Less adjustments: |
||||||||||||||||
Acquisitions and corporate transaction costs |
11 | | 23 | 34 | ||||||||||||
Restructuring charges |
6 | 2 | 5 | 13 | ||||||||||||
Equity-based compensation |
| | 5 | 5 | ||||||||||||
Unrealized losses on foreign exchange derivatives |
| | 3 | 3 | ||||||||||||
Other |
10 | | (4 | ) | 6 | |||||||||||
Total |
27 | 2 | 32 | 61 | ||||||||||||
EBITDA |
560 | 82 | (74 | ) | 568 | |||||||||||
Less: |
||||||||||||||||
Depreciation and amortization |
(252 | ) | ||||||||||||||
Gain on early extinguishment of debt |
(2 | ) | ||||||||||||||
Operating income |
314 | |||||||||||||||
Year Ended December 31, 2009 | ||||||||||||||||
Reconciling | ||||||||||||||||
Items: | ||||||||||||||||
Corporate and | ||||||||||||||||
Unallocated | ||||||||||||||||
Reconciliation of Adjusted EBITDA to OperatingLoss | GDS | GTA | Costs | Total | ||||||||||||
Adjusted EBITDA |
628 | 59 | (55 | ) | 632 | |||||||||||
Less adjustments: |
||||||||||||||||
Sponsor monitoring fees |
| | 7 | 7 | ||||||||||||
Acquisitions and corporate transaction costs |
17 | (2 | ) | 8 | 23 | |||||||||||
Restructuring charges |
6 | 4 | 9 | 19 | ||||||||||||
Equity-based compensation |
| | 10 | 10 | ||||||||||||
Unrealized gains on foreign exchange derivatives |
| | (6 | ) | (6 | ) | ||||||||||
Impairment |
| 833 | | 833 | ||||||||||||
Other |
3 | | (11 | ) | (8 | ) | ||||||||||
Total |
26 | 835 | 17 | 878 | ||||||||||||
EBITDA |
602 | (776 | ) | (72 | ) | (246 | ) | |||||||||
Less: |
||||||||||||||||
Depreciation and amortization |
(243 | ) | ||||||||||||||
Gain on early extinguishment of debt |
(10 | ) | ||||||||||||||
Operating loss |
(499 | ) | ||||||||||||||
10
TRAVELPORT LIMITED
NON-GAAP MEASURES (Continued)
(in $ millions and unaudited)
NON-GAAP MEASURES (Continued)
(in $ millions and unaudited)
Year Ended | Year Ended | |||||||
Reconciliation of Adjusted EBITDA to Net Cash Provided | December 31, | December 31, | ||||||
by Operating Activities and Unlevered Free Cash Flow | 2010 | 2009 | ||||||
GDS Segment Adjusted EBITDA |
587 | 628 | ||||||
GTA Segment Adjusted EBITDA |
84 | 59 | ||||||
Reconciling items: Corporate and Unallocated costs |
(42 | ) | (55 | ) | ||||
Adjusted EBITDA |
629 | 632 | ||||||
Less: |
||||||||
Cash interest payments |
(232 | ) | (255 | ) | ||||
Tax payments |
(29 | ) | (46 | ) | ||||
Changes in operating working capital |
(29 | ) | (32 | ) | ||||
FASA liability payments |
(18 | ) | (26 | ) | ||||
Other non-operating and adjusting items |
(37 | ) | (34 | ) | ||||
Net cash provided by operating activities |
284 | 239 | ||||||
Add cash interest payments |
232 | 255 | ||||||
Less capital expenditures |
(182 | ) | (58 | ) | ||||
Unlevered free cash flow |
334 | 436 | ||||||
Adjusted EBITDA is a non-GAAP measure and may not be comparable to similarly named measures used by
other companies. We believe this measure provides management with a more complete understanding of
the underlying results and trends and an enhanced overall understanding of our financial liquidity
and prospects for the future. Adjusted EBITDA is the primary metric for; measuring our business
results, forecasting and determining future capital investment allocations and is 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 EBITDA is disclosed so that investors have the same tools available to management when
evaluating the results of Travelport. The Adjusted EBITDA measure is a defined term within our
credit agreement and bond indentures. Adjusted EBITDA is defined as EBITDA adjusted to exclude the
impact of purchase accounting, impairment of goodwill and intangibles assets, expenses incurred in
conjunction with Travelports separation from Cendant, expenses incurred to acquire and integrate
Travelports portfolio of businesses, costs associated with Travelports restructuring efforts,
non-cash equity-based compensation, and other adjustments made to exclude expenses management views
as outside the normal course of operations. Adjusted EBITDA is a critical measure as it is required
to calculate our key financial ratio under our credit agreement covenants. This ratio compares our
Adjusted EBITDA for the last twelve months to our consolidated net debt and is known as our
Leverage Ratio. We are currently in compliance with our Leverage Ratio. A breach of this covenant
could result in a default under the senior secured credit agreement and the indentures governing
our notes.
Unlevered free cash flow is a non-GAAP measure and may not be comparable to similarly named
measures used by other companies. Unlevered free cash flow is defined as net cash provided by (used
in) operations adjusted to exclude cash interest payments and include capital expenditures, all of
which are GAAP measures included within our Statements of Cash Flows. We believe unlevered free
cash flow provides management and investors with a more complete understanding of the underlying
liquidity of the core operating businesses and our ability to meet its current and future financing
and investing needs.
11
TRAVELPORT LIMITED
Operating Statistics
(unaudited)
Operating Statistics
(unaudited)
Three Months Ended | ||||||||||||||||
December 31, | ||||||||||||||||
2010 | 2009 | Change | % Change | |||||||||||||
GDS (segments in millions) |
||||||||||||||||
Americas segments |
37.5 | 38.6 | (1.1 | ) | (3 | )% | ||||||||||
International Segments: |
||||||||||||||||
Europe |
18.6 | 18.2 | 0.4 | 2 | % | |||||||||||
Middle East and Africa |
8.3 | 9.1 | (0.8 | ) | (9 | )% | ||||||||||
Asia Pacific |
13.1 | 12.1 | 1.0 | 8 | % | |||||||||||
Total Segments |
77.5 | 78.0 | (0.5 | ) | (1 | )% | ||||||||||
GTA |
||||||||||||||||
Total
Transaction Value (in millions) |
$ | 480 | $ | 406 | $ | 74 | 18 | % | ||||||||
Room nights (in millions) |
3.0 | 2.5 | 0.5 | 20 | % |
Year Ended | ||||||||||||||||
December 31, | ||||||||||||||||
2010 | 2009 | Change | % Change | |||||||||||||
GDS (segments in millions) |
||||||||||||||||
Americas segments |
172.5 | 169.9 | 2.6 | 2 | % | |||||||||||
International Segments: |
||||||||||||||||
Europe |
83.7 | 80.0 | 3.7 | 5 | % | |||||||||||
Middle East and Africa |
38.3 | 39.9 | (1.6 | ) | (4 | )% | ||||||||||
Asia Pacific |
54.9 | 48.5 | 6.4 | 13 | % | |||||||||||
Total Segments |
349.4 | 338.3 | 11.1 | 3 | % | |||||||||||
GTA |
||||||||||||||||
Total Transaction Value (in millions) |
$ | 1,887 | $ | 1,594 | $ | 293 | 18 | % | ||||||||
Room nights (in millions) |
11.9 | 10.0 | 1.9 | 19 | % |
12