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8-K - FORM 8-K - Travelport LTDd722334d8k.htm

Exhibit 99.1

Travelport Limited

Travel Content Leadership

-First Quarter 2014 Results-

Atlanta, GA, May 8, 2014 — Travelport is a travel commerce marketplace providing distribution, technology, payment and other solutions for the $7 trillion global travel and tourism industry.

Commenting on developments, Gordon Wilson, President and CEO of Travelport, said:

“As we celebrate the one year anniversary of our merchandising platform, I am pleased we have further strengthened our air proposition with the signing of new ground-breaking agreements with Ryanair and AirAsia, an extended partnership with easyJet, and over thirty airline agreements for our Rich Content and Branding functionality. Through these unrivalled agreements, we are now uniquely positioned to sell the content of all the world’s top ten airlines. This milestone builds on our leadership in global hotel content distribution and augments our strong financial performance.”

Highlights:

 

    Net Revenue +4% and Adjusted EBITDA +7%

 

    Unrivalled content added to our Travel Commerce Platform:

 

    Uniquely distributing content from all the world’s top ten airlines

 

    One year anniversary of Travelport Merchandising Platform™ marked by:

 

    New agreements with Ryanair and AirAsia and an extended partnership with easyJet

 

    Over 30 airlines signed for Rich Content and Branding functionality, including British Airways / Iberia and Air China

 

    Expanded hotel content leadership – now offering 580,000 unique properties

 

    Improvement of capital structure with deleveraging $135 million debt-for-equity exchange transactions completed in March

Financial Highlights

During the first quarter 2014, we realigned our reporting to better reflect our underlying operations to enable travel commerce through our platform. As a result, we are reporting Adjusted EBITDA and Adjusted Net Income as key non-GAAP performance metrics, as defined on page 12, and presented in the table below:

 

(in $ millions)    Q1 2014     Q1 2013     $ Change     % Change  

Net Revenue

     572        548        24        4   

Operating Income

     75        69        6        9   

Net Income (Loss)

     (27     (10     (17     (170

Adjusted Net Income

     3        14        (11     (79

Adjusted EBITDA

     151        141        10        7   

Further, we have added Adjusted Free Cash Flow and Adjusted Unlevered Free Cash Flow to our cash flow reporting metrics on page 7 as also defined on page 12. We are also reporting a split of our Revenue into Travel Commerce Platform revenue, including our Air and Beyond Air revenue, and Technology Services revenue in the table on page 8 with three year historical information provided on page 9.

 

1


Net Revenue of $572 million for the first quarter of 2014 was $24 million (4%) higher than the first quarter of 2013, and Adjusted EBITDA of $151 million was $10 million (7%) higher than the first quarter of 2013.

Adjusted Net Income of $3 million decreased from $14 million for the first quarter of 2014 primarily due to a $13 million increase in interest costs.

Travel Commerce Platform RevPas increased 3% to $5.61.

Interest costs of $83 million for the three months ended March 31, 2014 were $13 million higher than 2013 due to higher interest rates on debt as a result of our debt refinancing in 2013.

Travelport’s net debt reduced to $3,226 million as of March 31, 2014, which comprised debt of $3,485 million less $180 million in cash and cash equivalents and less $79 million of cash held as collateral, from $3,340 million as of December 31, 2013 following the deleveraging $135 million debt-for-equity exchange transactions completed in March.

Travelport generated $23 million in net cash from operating activities for the three months ended March 31, 2014 compared to net cash used in operating activities of $21 million for the three months ended March 31, 2013. The improvement of $44 million is primarily a result of the timing of interest payments, as some payments were deferred into the second quarter of 2014 as a result of our 2013 refinancing.

We continue to assess and evaluate potential capital markets transactions, including potential debt-for-equity exchanges, and similar transactions. We can give no assurances that we will pursue or consummate such transactions as they are dependent, among other things, on market conditions and other factors that are inherently unpredictable.

Conference Call

The Company’s first quarter 2014 earnings conference call will be held on May 8, 2014 beginning at 2.30 p.m. (EST). Details for this conference call as well as the earnings presentation are available through the Investor Center section of the Company’s website (www.travelport.com/investors/Financial-Calendar), where pre-registration for the call is required.

A recording of the call will be made available within 24 hours in the Financial/Operating Data section of the Investor Centre on the Company’s website.

About Travelport

Travelport is a travel commerce marketplace providing distribution, technology, payment and other solutions for the $7 trillion global travel and tourism industry. With a presence in over 170 countries, approximately 3,600 employees and 2013 net revenue of $2.1 billion, Travelport is a privately owned company comprised of:

 

    Our Travel Commerce Platform (formerly known as our global distribution system or “GDS” business), through which we facilitate travel commerce by connecting the world’s leading travel providers with online and offline travel buyers in our proprietary business to business (“B2B”) travel commerce marketplace. As travel industry demands evolve, we are utilizing our Travel Commerce Platform to redefine the electronic distribution and merchandising of airline core and ancillary products, as well as extending our reach into the growing world of travel commerce beyond air, including to hotel, car rental, rail, cruise-line and tour operators. In addition, we have leveraged our domain expertise in the travel industry to design a pioneering B2B payment solution that addresses the needs of travel intermediaries to efficiently and securely settle travel transactions. We also utilize the extensive data managed by our platform to provide an array of additional services, such as advertising solutions, subscription services, business intelligence data services, and marketing-oriented analytical tools to travel agencies, travel providers and other travel data users.

 

    Our Technology Services, through which we provide critical IT services to airlines, such as pricing, shopping, ticketing, departure control and other solutions, enabling them to focus on their core business competencies and reduce costs. We manage reservations, inventory management and other related critical systems for Delta Air Lines.

 

2


Investor Contact

Peter Golby

Vice President, Investor Relations

+44 (0)1753 288 187

peter.golby@travelport.com

Media Contacts

Kate Aldridge

Vice President, Corporate Communications

+44 (0)1753 288 720

kate.aldridge@travelport.com

Jill Brenner

Senior Director, Corporate Communications, Americas

+1 (973) 753 3110

jill.brenner@travelport.com

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 and the economic conditions in the eurozone; 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; 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 to enter into new relationships on acceptable financial and other terms; and our ability to grow adjacencies, such as our controlling interest in eNett. Other unknown or unpredictable factors could also 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 press release includes certain non-GAAP financial measures as defined under Securities and Exchange Commission (“SEC”) rules. As required by SEC rules, important information regarding such measures is contained below.

 

3


TRAVELPORT LIMITED

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

 

(in $ millions)    Three Months
Ended

March 31,
2014
    Three Months
Ended

March 31,
2013
 

Net Revenue

     572        548   
  

 

 

   

 

 

 

Costs and expenses

    

Cost of revenue

     353        333   

Selling, general and administrative

     88        94   

Depreciation and amortization

     56        52   
  

 

 

   

 

 

 

Total costs and expenses

     497        479   
  

 

 

   

 

 

 

Operating income

     75        69   

Interest expense, net

     (83     (70

Loss on extinguishment of debt

     (5     —     
  

 

 

   

 

 

 

Loss before income taxes and equity in (losses) earnings of investment in Orbitz Worldwide

     (13     (1

Provision for income taxes

     (10     (11

Equity in (losses) earnings of investment in Orbitz Worldwide

     (4     2   
  

 

 

   

 

 

 

Net loss

     (27     (10

Net income attributable to non-controlling interest in subsidiaries

     (2     —     
  

 

 

   

 

 

 

Net loss attributable to the Company

     (29     (10
  

 

 

   

 

 

 

 

4


TRAVELPORT LIMITED

CONSOLIDATED CONDENSED BALANCE SHEETS

(unaudited)

 

(in $ millions)    March 31,
2014
    December 31,
2013
 

Assets

    

Current assets:

    

Cash and cash equivalents

     180        154   

Accounts receivable (net of allowances for doubtful accounts of $13 and $13)

     233        177   

Deferred income taxes

     1        1   

Other current assets

     146        134   
  

 

 

   

 

 

 

Total current assets

     560        466   

Property and equipment, net

     422        428   

Goodwill

     986        986   

Trademarks and tradenames

     314        314   

Other intangible assets, net

     677        671   

Cash held as collateral

     79        79   

Investment in Orbitz Worldwide

     13        19   

Non-current deferred income taxes

     5        5   

Other non-current assets

     133        120   
  

 

 

   

 

 

 

Total assets

     3,189        3,088   
  

 

 

   

 

 

 

Liabilities and equity

    

Current liabilities:

    

Accounts payable

     70        72   

Accrued expenses and other current liabilities

     616        540   

Deferred income taxes

     24        24   

Current portion of long-term debt

     96        45   
  

 

 

   

 

 

 

Total current liabilities

     806        681   

Long-term debt

     3,389        3,528   

Deferred income taxes

     21        18   

Other non-current liabilities

     174        172   
  

 

 

   

 

 

 

Total liabilities

     4,390        4,399   
  

 

 

   

 

 

 

Commitments and contingencies

    

Shareholders’ equity (deficit):

    

Common shares ($1.00 par value; 12,000 shares authorized; 12,000 shares issued and outstanding)

     —          —     

Additional paid in capital

     829        691   

Accumulated deficit

     (1,968     (1,939

Accumulated other comprehensive loss

     (83     (82
  

 

 

   

 

 

 

Total shareholders’ equity (deficit)

     (1,222     (1,330

Equity attributable to non-controlling interest in subsidiaries

     21        19   
  

 

 

   

 

 

 

Total equity (deficit)

     (1,201     (1,311
  

 

 

   

 

 

 

Total liabilities and equity

     3,189        3,088   
  

 

 

   

 

 

 

 

5


TRAVELPORT LIMITED

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

 

(in $ millions)    Three Months
Ended
March 31,
2014
    Three Months
Ended
March 31,
2013
 

Operating activities

    

Net loss

     (27     (10

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

    

Depreciation and amortization

     56        52   

Amortization of customer loyalty payments

     18        14   

Amortization of debt finance costs

     3        7   

Accrual of repayment fee and amortization of debt discount

     3        —     

Loss on extinguishment of debt

     5        —     

Payment-in-kind interest

     6        4   

Gain on interest rate derivative instruments

     (1     —     

(Gain) loss on foreign exchange derivative instruments

     (1     7   

Equity in losses (earnings) of investment in Orbitz Worldwide

     4        (2

Equity-based compensation

     1        —     

Deferred income taxes

     3        —     

Customer loyalty payments

     (26     (12

Changes in assets and liabilities:

    

Accounts receivable

     (55     (60

Other current assets

     4        (12

Accounts payable, accrued expenses and other current liabilities

     42        (2

Other

     (12     (7
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     23        (21
  

 

 

   

 

 

 

Investing activities

    

Property and equipment additions

     (26     (23

Minority investment

     (10     —     
  

 

 

   

 

 

 

Net cash used in investing activities

     (36     (23
  

 

 

   

 

 

 

Financing activities

    

Proceeds from revolver borrowings

     50        53   

Repayment of term loans

     (4     —     

Repayment of capital lease obligations

     (7     (4

Payment related to extinguishment of debt

     (3     —     

Proceeds from settlement of foreign exchange derivative contracts

     3        2   

Debt finance costs

     —          (2

Payments on settlement of foreign exchange derivative contracts

     —          (7
  

 

 

   

 

 

 

Net cash provided by financing activities

     39        42   
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     26        (2

Cash and cash equivalents at beginning of period

     154        110   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

     180        108   
  

 

 

   

 

 

 

Supplementary disclosures of cash flow information

    

Interest payments

     57        88   

Income tax payments, net

     7        6   

Non-cash exchange of Senior Subordinated Notes for equity of a parent company

     135        —     

Non-cash capital lease additions

     5        1   

 

6


TRAVELPORT LIMITED

NON-GAAP MEASURES

(in $ millions and unaudited)

Reconciliation of Net Loss to Adjusted Net Income and Adjusted EBITDA

 

     Three Months Ended March 31,  
     2014     2013  

Net loss

     (27     (10

Adjustments:

    

Amortization of acquired intangible assets

     19        20   

Corporate costs

     3        1   

Equity-based compensation

     1        —     

Litigation and related costs

     —          10   

Other-non cash

     (2     (5

Equity in losses (earnings) of investment in Orbitz Worldwide

     4        (2

Loss on extinguishment of debt

     5        —     
  

 

 

   

 

 

 

Adjusted Net Income

     3        14   

Adjustments:

    

Depreciation and amortization of property and equipment

     37        32   

Amortization of customer loyalty payments

     18        14   

Interest expense, net

     83        70   

Provision for income taxes

     10        11   
  

 

 

   

 

 

 

Adjusted EBITDA

     151        141   
  

 

 

   

 

 

 

Reconciliation of Adjusted EBITDA to Net Cash Provided (Used in) by Operating Activities and Unlevered Adjusted Free Cash Flow

 

     Three Months Ended March 31,  
   2014     2013  

Adjusted EBITDA

     151        141   

Less:

    

Interest payments

     (57     (88

Tax payments

     (7     (6

Changes in operating working capital

     (32     (39

Customer loyalty payments

     (26     (12

Other adjusting items (*)

     (6     (17
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     23        (21

Add: Other adjusting items (*)

     6        17   

Less: Capital expenditures on property and equipment additions

     (26     (23

Less: Repayment of capital lease obligations

     (7     (4
  

 

 

   

 

 

 

Adjusted Free Cash Flow

     (4     (31

Add: Interest paid

     57        88   
  

 

 

   

 

 

 

Unlevered Adjusted Free Cash Flow

     53        57   
  

 

 

   

 

 

 

 

* Other adjusting items relate to payments for costs included within operating income but excluded from Adjusted EBITDA. These include (i) $6 million and $13 million of corporate costs payments during the three months ended March 31, 2014 and 2013, respectively, and (ii) $4 million of litigation and related costs payments for the three months ended March 31, 2013.

 

7


TRAVELPORT LIMITED

OPERATING STATISTICS AND DEFINITIONS

(unaudited)

Net revenue is comprised of:

 

     Three Months
Ended March 31,
     Change  
(in $ millions)    2014      2013      $     %  

Air

     445         428         17        4   

Beyond Air

     97         89         8        9   
  

 

 

    

 

 

    

 

 

   

 

 

 

Travel Commerce Platform

     542         517         25        5   

Technology Services

     30         31         (1     (1
  

 

 

    

 

 

    

 

 

   

 

 

 

Net revenue

     572         548         24        4   
  

 

 

    

 

 

    

 

 

   

 

 

 

Our revenue is earned through our Travel Commerce Platform (including our Air and Beyond Air revenue) and Technology Services. Our Travel Commerce Platform combines state-of-the-art technology with industry leading features, functionality and innovative solutions to address the high volume and growing transaction processing requirements for the evolving needs of the travel industry.

Air: We provide sophisticated and comprehensive real-time search pricing, booking, change, payment and integrated itinerary creation for travelers who use the services of online and offline travel agents for both leisure and corporate travel.

Beyond Air: Our Beyond Air portfolio includes hospitality and advertising, payments and other platform services.

The table below sets forth Travel Commerce Platform revenue by region:

 

     Three Months
Ended March 31,
     Change  
(in $ millions)    2014      2013      $      %  

Asia Pacific

     101         94         7         7   

Europe

     178         164         14         8   

Latin America and Canada

     23         22         1         4   

Middle East and Africa

     72         70         2         3   
  

 

 

    

 

 

    

 

 

    

 

 

 

International

     374         350         24         7   

United States

     168         167         1         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform

     542         517         25         5   
  

 

 

    

 

 

    

 

 

    

 

 

 

The table below sets forth Travel Commerce Platform segments by region and global RevPas:

 

     Segments (in millions)  
     Three Months
Ended March 31,
     Change  
     2014      2013             %  

Asia Pacific

     16         15         1         3   

Europe

     25         24         1         5   

Latin America and Canada

     4         4         —           3   

Middle East and Africa

     10         10         —           3   
  

 

 

    

 

 

    

 

 

    

 

 

 

International

     55         53         2         4   

United States

     42         42         —           (1
  

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform Segments

     97         95         2         2   
  

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform RevPas

   $ 5.61       $ 5.47       $ 0.14         3   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

8


TRAVELPORT LIMITED

HISTORICAL FINANCIAL INFORMATION

(in $ millions and unaudited)

The table below sets forth the historical quarterly Net revenue for the Travel Commerce Platform and Technology Services for the three years ended December 31, 2013:

 

     Q1 2013      Q2 2013      Q3 2013      Q4 2013      FY 2013  

Air

     428         410         387         363         1,588   

Beyond Air

     89         97         96         89         371   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform

     517         507         483         452         1,959   

Technology Services

     31         30         28         28         117   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net revenue

     548         537         511         480         2,076   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Q1 2012      Q2 2012      Q3 2012      Q4 2012      FY 2012  

Air

     434         395         375         344         1,548   

Beyond Air

     73         82         84         87         326   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform

     507         477         459         431         1,874   

Technology Services

     43         29         30         26         128   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net revenue

     550         506         489         457         2,002   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Q1 2011      Q2 2011      Q3 2011      Q4 2011      FY 2011  

Air

     422         412         391         352         1,577   

Beyond Air

     67         73         74         69         283   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform

     489         485         465         421         1,860   

Technology Services

     42         45         44         44         175   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net revenue

     531         530         509         465         2,035   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Note:

 

1) FY 2011 includes $35 million of Travel Commerce Platform Air revenue and $61 million of Technology Services revenue under the United MSA.

 

2) FY 2012 includes $8 million of Travel Commerce Platform Air revenue and $19 million of Technology Services revenue under the United MSA.

 

9


TRAVELPORT LIMITED

HISTORICAL FINANCIAL INFORMATION

(in $ millions and unaudited)

The table below sets forth the historical quarterly Travel Commerce Platform revenue by geographic region for the three years ended December 31, 2013:

 

     Q1 2013      Q2 2013      Q3 2013      Q4 2013      FY 2013  

Asia Pacific

     94         96         94         85         369   

Europe

     164         150         140         142         596   

Latin America and Canada

     22         22         22         20         86   

Middle East and Africa

     70         74         69         64         277   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

International

     350         342         325         311         1,328   

United States

     167         165         158         141         631   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform

     517         507         483         452         1,959   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Q1 2012      Q2 2012      Q3 2012      Q4 2012      FY 2012  

Asia Pacific

     89         85         81         81         336   

Europe

     149         136         134         130         549   

Latin America and Canada

     19         20         20         18         77   

Middle East and Africa

     69         73         66         62         270   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

International

     326         314         301         291         1,232   

United States

     181         163         158         140         642   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform

     507         477         459         431         1,874   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Q1 2011      Q2 2011      Q3 2011      Q4 2011      FY 2011  

Asia Pacific

     84         85         82         72         323   

Europe

     150         136         128         121         535   

Latin America and Canada

     21         19         17         16         73   

Middle East and Africa

     56         72         67         62         257   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

International

     311         312         294         271         1,188   

United States

     178         173         171         150         672   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform

     489         485         465         421         1,860   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Note:

 

1) FY 2011 includes $35 million of Travel Commerce Platform Air revenue (all in the United States) under the United MSA.

 

2) FY 2012 includes $8 million of Travel Commerce Platform Air revenue (all in the United States) under the United MSA.

 

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TRAVELPORT LIMITED

HISTORICAL FINANCIAL INFORMATION

(in millions, except Travel Commerce Platform RevPas and unaudited)

The table below sets forth the historical quarterly Travel Commerce Platform Reported Segments by geographic region and historical quarterly Travel Commerce Platform RevPas for the three years ended December 31, 2013:

 

     Q1 2013      Q2 2013      Q3 2013      Q4 2013      FY 2013  

Asia Pacific

     15         14         14         13         56   

Europe

     24         22         19         20         85   

Latin America and Canada

     4         3         4         4         15   

Middle East and Africa

     10         10         10         9         39   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

International

     53         49         47         46         195   

United States

     42         40         39         34         155   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform

     95         89         86         80         350   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform RevPas

   $ 5.47       $ 5.66       $ 5.60       $ 5.68       $ 5.60   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Q1 2012      Q2 2012      Q3 2012      Q4 2012      FY 2012  

Asia Pacific

     15         14         13         12         54   

Europe

     24         20         19         19         82   

Latin America and Canada

     3         3         4         3         13   

Middle East and Africa

     10         10         10         9         39   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

International

     52         47         46         43         188   

United States

     46         40         39         34         159   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform

     98         87         85         77         347   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform RevPas

   $ 5.19       $ 5.46       $ 5.39       $ 5.61       $ 5.40   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Q1 2011      Q2 2011      Q3 2011      Q4 2011      FY 2011  

Asia Pacific

     15         14         14         13         56   

Europe

     24         20         20         19         83   

Latin America and Canada

     3         3         3         2         11   

Middle East and Africa

     10         10         9         9         38   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

International

     52         47         46         43         188   

United States

     44         43         43         37         167   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform

     96         90         89         80         355   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Travel Commerce Platform RevPas

   $ 5.11       $ 5.34       $ 5.23       $ 5.31       $ 5.24   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Note:

 

1) FY 2011 includes 8 million Travel Commerce Platform Reported Segments (all in the United States) under the United MSA.

 

2) FY 2012 includes 2 million Travel Commerce Platform Reported Segments (all in the United States) under the United MSA.

 

11


TRAVELPORT LIMITED

HISTORICAL FINANCIAL INFORMATION

(in $ millions and unaudited)

Definitions:

Adjusted EBITDA: is a non-GAAP financial 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 for future periods. Adjusted EBITDA is defined as Adjusted Net Income, adjusted to exclude depreciation and amortization of property and equipment, amortization of customer loyalty payments, interest expense, net and provision for income taxes. Capital expenditures, which impact depreciation and amortization, Customer Loyalty Payments, interest expense and income tax expense, are reviewed separately by management. Adjusted EBITDA is disclosed so investors have the same tools available to management when evaluating the results of Travelport. Adjusted EBITDA is a critical measure as it is required to calculate our key financial ratios under the covenants contained in our credit agreements. These ratios use a number which is broadly computed from Adjusted EBITDA for the last twelve months and consolidated net debt, as at the balance sheet date and are known as the Total Leverage Ratio and Senior Secured Leverage Ratio. Travelport is currently in compliance with all of its financial covenants. A breach of these covenants could result in a default under the senior secured credit agreement, second lien credit agreement and the indentures governing the notes.

Adjusted Free Cash Flow: is a non-GAAP measure and may not be comparable to similarly named measures used by other companies. Adjusted Free Cash Flow is defined as net cash provided by (used in) operating activities adjusted to exclude the cash impact of other adjusted items (which relate to payments for costs included within operating income, but excluded from Adjusted EBITDA, including corporate costs and litigation and related costs), and to include capital expenditures and capital lease repayments. We believe adjusted free cash flow provides management and investors with a more complete understanding of the underlying liquidity of the core operating businesses and its ability to meet current and future financing and investing needs.

Adjusted Net Income: is a non-GAAP financial 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. Adjusted Net Income is disclosed so investors have the same tools available to management when evaluating the results of Travelport. Adjusted Net Income is defined as Net Income adjusted to exclude items we believe potentially restrict our ability to assess the results of our underlying business, such as amortization of acquired intangible assets, corporate costs, equity-based compensation, litigation and related costs, other-non cash costs, equity in earnings (losses) of investment in Orbitz Worldwide and loss on extinguishment of debt.

Customer Loyalty Payments: development advance payments that are made with the objective of increasing the number of clients or improving customer loyalty with travel agents or travel providers. The amortization of such payments is excluded from Adjusted EBITDA under the terms of our senior secured credit agreement and our second lien credit agreement.

Travel Commerce Platform Reported Segments (“Segments”): Travel provider revenue generating units sold by our travel agency network, geographically presented by region based upon point of sale locations.

Travel Commerce Platform RevPas (“RevPas”): Travel Commerce Platform revenue divided by the number of Travel Commerce Platform Reported Segments.

Unlevered Adjusted Free Cash Flow: is a non-GAAP measure and may not be comparable to similarly named measures used by other companies. Unlevered Adjusted Free Cash Flow is defined as Adjusted Free Cash Flow adjusted to exclude cash interest payments.

 

 

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