Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Sabre Corp | d857868d8k.htm |
| EX-99.2 - EX-99.2 - Sabre Corp | d857868dex992.htm |
| EX-2.1 - EX-2.1 - Sabre Corp | d857868dex21.htm |
Exhibit 99.1
UNAUDITED PRO FORMA FINANCIAL INFORMATION
In the fourth quarter of 2014, we committed to a plan to divest of our Travelocity business. On January 23, 2015, we completed the sale of our Travelocity business in the United States and Canada. In addition, on December 16, 2014, we announced that we received a binding offer to sell lastminute.com, the European portion of our Travelocity business, which is expected to be closed in the first quarter of 2015. Our Travelocity segment will have no remaining operations once the lastminute.com transaction is completed.
The following unaudited pro forma financial information are based on our historical consolidated financial statements after giving effect to the divestiture of our Travelocity business.
The unaudited pro forma consolidated balance sheet as of September 30, 2014, has been prepared to give effect to the divestiture of the assets of the Travelocity business as if it occurred on September 30, 2014. The unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2014 and the years ended December 31, 2013, 2012 and 2011 have been prepared to give effect to the divestiture of the Travelocity business as if it occurred on January 1, 2011.
The unaudited pro forma financial information was prepared utilizing our historical financial data derived from the interim consolidated financial statements included in our Quarterly Report on Form 10-Q filed with the SEC on November 12, 2014 and from the audited consolidated financial statements for the year ended December 31, 2013 included in our prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act on April 17, 2014. The pro forma adjustments are described in the notes to the unaudited pro forma information and are based upon available information and assumptions that we believe are reasonable.
The unaudited pro forma financial information are for informational purposes only and are not necessarily indicative of what our financial performance and financial position would have been had the transactions been completed on the dates assumed nor is such unaudited pro forma financial information necessarily indicative of the results to be expected in any future period.
SABRE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2014
(in thousands, except share amounts)
| As Reported | (a) Divestiture in Travelocity Business |
Pro Forma | ||||||||||
| Assets |
||||||||||||
| Current assets |
||||||||||||
| Cash and cash equivalents |
$ | 157,747 | $ | 280,000 | $ | 437,747 | ||||||
| Restricted cash |
755 | — | 755 | |||||||||
| Accounts receivable, net |
466,753 | (45,784 | ) | 420,969 | ||||||||
| Prepaid expenses and other current assets |
56,315 | (17,966 | ) | 38,349 | ||||||||
| Current deferred income taxes |
39,184 | — | 39,184 | |||||||||
| Other receivables, net |
28,902 | — | 28,902 | |||||||||
| Assets of discontinued operations |
9,364 | — | 9,364 | |||||||||
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|
|
|
|
|
|
|||||||
| Total current assets |
759,020 | 216,250 | 975,270 | |||||||||
| Property and equipment, net |
526,722 | (8,226 | ) | 518,496 | ||||||||
| Investments in joint ventures |
142,639 | — | 142,639 | |||||||||
| Goodwill |
2,152,590 | — | 2,152,590 | |||||||||
| Trademarks and brandnames, net |
307,445 | (66,200 | ) | 241,245 | ||||||||
| Other intangible assets, net |
261,581 | — | 261,581 | |||||||||
| Other assets, net |
522,397 | (35,822 | ) | 486,575 | ||||||||
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| Total assets |
$ | 4,672,394 | $ | 106,002 | $ | 4,778,396 | ||||||
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| Liabilities and stockholders’ equity |
||||||||||||
| Current liabilities |
||||||||||||
| Accounts payable |
$ | 129,555 | $ | (1,939 | ) | $ | 127,616 | |||||
| Travel supplier liabilities and related deferred revenue |
107,409 | (82,833 | ) | 24,576 | ||||||||
| Accrued compensation and related benefits |
91,700 | (4,862 | ) | 86,838 | ||||||||
| Accrued subscriber incentives |
168,019 | — | 168,019 | |||||||||
| Deferred revenues |
176,990 | (2,357 | ) | 174,633 | ||||||||
| Litigation settlement liability and related deferred revenue |
75,409 | — | 75,409 | |||||||||
| Other accrued liabilities |
210,196 | (37,568 | ) | 172,628 | ||||||||
| Current portion of debt |
22,418 | — | 22,418 | |||||||||
| Liabilities of discontinued operations |
23,881 | — | 23,881 | |||||||||
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|
|||||||
| Total current liabilities |
1,005,577 | (129,559 | ) | 876,018 | ||||||||
| Deferred income taxes |
8,601 | 63,298 | 71,899 | |||||||||
| Other noncurrent liabilities |
523,728 | (712 | ) | 523,016 | ||||||||
| Long-term debt |
3,065,440 | — | 3,065,440 | |||||||||
| Stockholders’ equity |
||||||||||||
| Common Stock: $0.01 par value; 450,000,000 authorized shares; 265,224,958 shares issued and 264,787,572 outstanding |
2,652 | — | 2,652 | |||||||||
| Additional paid-in capital |
1,911,172 | — | 1,911,172 | |||||||||
| Treasury Stock, at cost, 437,386 shares |
(5,297 | ) | — | (5,297 | ) | |||||||
| Retained deficit |
(1,797,944 | ) | 172,975 | (1,624,969 | ) | |||||||
| Accumulated other comprehensive loss |
(41,592 | ) | — | (41,592 | ) | |||||||
| Noncontrolling interest |
57 | — | 57 | |||||||||
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| Total stockholders’ equity |
69,048 | 172,975 | 242,023 | |||||||||
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| Total liabilities and stockholders’ equity |
$ | 4,672,394 | $ | 106,002 | $ | 4,778,396 | ||||||
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SABRE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014
(in thousands, except per share amounts)
| Nine Months Ended September 30, 2014 | ||||||||||||
| As Reported | (b) Divestiture in Travelocity Business |
Pro Forma | ||||||||||
| Revenue |
$ | 2,229,286 | $ | (244,011 | ) | $ | 1,985,275 | |||||
| Cost of revenue |
1,399,919 | (84,250 | ) | 1,315,669 | ||||||||
| Selling, general and administrative |
575,413 | (222,839 | ) | 352,574 | ||||||||
| Restructuring charges (adjustments) |
2,325 | (2,929 | ) | (604 | ) | |||||||
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|||||||
| Operating income |
251,629 | 66,007 | 317,636 | |||||||||
| Other income (expense): |
||||||||||||
| Interest expense, net |
(167,332 | ) | — | (167,332 | ) | |||||||
| Loss on extinguishment of debt |
(33,538 | ) | — | (33,538 | ) | |||||||
| Joint venture equity income |
9,367 | — | 9,367 | |||||||||
| Other, net |
760 | (1,599 | ) | (839 | ) | |||||||
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| Total other expense, net |
(190,743 | ) | (1,599 | ) | (192,342 | ) | ||||||
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| Income from continuing operations before income taxes |
60,886 | 64,408 | 125,294 | |||||||||
| Provision for income taxes |
27,878 | 27,773 | 55,651 | |||||||||
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| Income from continuing operations |
33,008 | 36,635 | 69,643 | |||||||||
| Net income attributable to noncontrolling interests |
2,168 | — | 2,168 | |||||||||
| Preferred stock dividends |
11,381 | — | 11,381 | |||||||||
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| Net income from continuing operations available to common shareholders |
$ | 19,459 | $ | 36,635 | $ | 56,094 | ||||||
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| Net income from continuing operations per share available to common shareholders: |
||||||||||||
| Basic |
$ | 0.08 | $ | 0.16 | $ | 0.24 | ||||||
| Diluted |
$ | 0.08 | $ | 0.15 | $ | 0.24 | ||||||
| Weighted-average common shares outstanding: |
||||||||||||
| Basic |
229,405 | 229,405 | ||||||||||
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| Diluted |
237,994 | 237,994 | ||||||||||
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SABRE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2013
(in thousands, except per share amounts)
| Year Ended December 31, 2013 | ||||||||||||
| As Reported | (b) Divestiture in Travelocity Business |
Pro Forma | ||||||||||
| Revenue |
$ | 3,049,525 | $ | (525,979 | ) | $ | 2,523,546 | |||||
| Cost of revenue |
1,904,850 | (199,687 | ) | 1,705,163 | ||||||||
| Selling, general and administrative |
792,929 | (363,639 | ) | 429,290 | ||||||||
| Impairment |
138,435 | (138,435 | ) | — | ||||||||
| Restructuring charges |
36,551 | (28,388 | ) | 8,163 | ||||||||
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| Operating income |
176,760 | 204,170 | 380,930 | |||||||||
| Other income (expense): |
||||||||||||
| Interest expense, net |
(274,689 | ) | — | (274,689 | ) | |||||||
| Loss on extinguishment of debt |
(12,181 | ) | — | (12,181 | ) | |||||||
| Joint venture equity income |
12,350 | — | 12,350 | |||||||||
| Other, net |
(6,724 | ) | 6,419 | (305 | ) | |||||||
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| Total other expense, net |
(281,244 | ) | 6,419 | (274,825 | ) | |||||||
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| (Loss) income from continuing operations before income taxes |
(104,484 | ) | 210,589 | 106,105 | ||||||||
| (Benefit) provision for income taxes |
(14,029 | ) | 68,068 | 54,039 | ||||||||
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| (Loss) income from continuing operations |
(90,455 | ) | 142,521 | 52,066 | ||||||||
| Net income attributable to noncontrolling interests |
2,863 | — | 2,863 | |||||||||
| Preferred stock dividends |
36,704 | — | 36,704 | |||||||||
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| Net (loss) income from continuing operations available to common shareholders |
$ | (130,022 | ) | $ | 142,521 | $ | 12,499 | |||||
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| Net (loss) income from continuing operations per share available to common shareholders: |
||||||||||||
| Basic |
$ | (0.73 | ) | $ | 0.80 | $ | 0.07 | |||||
| Diluted |
$ | (0.73 | ) | $ | 0.80 | $ | 0.07 | |||||
| Weighted-average common shares outstanding: |
||||||||||||
| Basic |
178,125 | 178,125 | ||||||||||
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| Diluted |
178,125 | 184,978 | ||||||||||
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SABRE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2012
(in thousands, except per share amounts)
| Year Ended December 31, 2012 | ||||||||||||
| As Reported | (b) Divestiture in Travelocity Business |
Pro Forma | ||||||||||
| Revenue |
$ | 2,974,364 | $ | (592,216 | ) | $ | 2,382,148 | |||||
| Cost of revenue |
1,819,235 | (244,049 | ) | 1,575,186 | ||||||||
| Selling, general and administrative |
1,188,248 | (394,954 | ) | 793,294 | ||||||||
| Impairment |
573,180 | (552,926 | ) | 20,254 | ||||||||
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| Operating loss |
(606,299 | ) | 599,713 | (6,586 | ) | |||||||
| Other income (expense): |
||||||||||||
| Interest expense, net |
(232,450 | ) | — | (232,450 | ) | |||||||
| Gain on sale of business |
25,850 | — | 25,850 | |||||||||
| Joint venture equity income |
(2,513 | ) | — | (2,513 | ) | |||||||
| Other, net |
(1,385 | ) | (5,250 | ) | (6,635 | ) | ||||||
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| Total other expense, net |
(210,498 | ) | (5,250 | ) | (215,748 | ) | ||||||
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| Loss from continuing operations before income taxes |
(816,797 | ) | 594,463 | (222,334 | ) | |||||||
| Benefit for income taxes |
(195,071 | ) | 188,164 | (6,907 | ) | |||||||
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| Loss from continuing operations |
(621,726 | ) | 406,299 | (215,427 | ) | |||||||
| Net (loss) income attributable to noncontrolling interests |
(59,317 | ) | 60,836 | 1,519 | ||||||||
| Preferred stock dividends |
34,583 | — | 34,583 | |||||||||
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| Net loss from continuing operations available to common shareholders |
$ | (596,992 | ) | $ | 345,463 | $ | (251,529 | ) | ||||
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| Net loss from continuing operations per share available to common shareholders: |
||||||||||||
| Basic |
$ | (3.37 | ) | $ | 1.95 | $ | (1.42 | ) | ||||
| Diluted |
$ | (3.37 | ) | $ | 1.95 | $ | (1.42 | ) | ||||
| Weighted-average common shares outstanding: |
||||||||||||
| Basic |
177,206 | 177,206 | ||||||||||
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| Diluted |
177,206 | 177,206 | ||||||||||
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SABRE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2011
(in thousands, except per share amounts)
| Year Ended December 31, 2011 | ||||||||||||
| As Reported | (b) Divestiture in Travelocity Business |
Pro Forma | ||||||||||
| Revenue |
$ | 2,855,961 | $ | (603,515 | ) | $ | 2,252,446 | |||||
| Cost of revenue |
1,736,041 | (207,015 | ) | 1,529,026 | ||||||||
| Selling, general and administrative |
806,435 | (414,127 | ) | 392,308 | ||||||||
| Impairment |
185,240 | (185,240 | ) | — | ||||||||
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| Operating income |
128,245 | 202,867 | 331,112 | |||||||||
| Other income (expense): |
||||||||||||
| Interest expense, net |
(174,390 | ) | — | (174,390 | ) | |||||||
| Joint venture equity income |
23,501 | — | 23,501 | |||||||||
| Other, net |
1,156 | (1,091 | ) | 65 | ||||||||
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| Total other expense, net |
(149,733 | ) | (1,091 | ) | (150,824 | ) | ||||||
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| (Loss) income from continuing operations before income taxes |
(21,488 | ) | 201,776 | 180,288 | ||||||||
| Provision for income taxes |
57,806 | 9,004 | 66,810 | |||||||||
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| (Loss) income from continuing operations |
(79,294 | ) | 192,772 | 113,478 | ||||||||
| Net loss attributable to noncontrolling interests |
(36,681 | ) | 22,359 | (14,322 | ) | |||||||
| Preferred stock dividends |
32,579 | — | 32,579 | |||||||||
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| Net (loss) income from continuing operations available to common shareholders |
$ | (75,192 | ) | $ | 170,413 | $ | 95,221 | |||||
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| Net (loss) income from continuing operations per share available to common shareholders: |
||||||||||||
| Basic |
$ | (0.43 | ) | $ | 0.96 | $ | 0.54 | |||||
| Diluted |
$ | (0.43 | ) | $ | 0.95 | $ | 0.52 | |||||
| Weighted-average common shares outstanding: |
||||||||||||
| Basic |
176,703 | 176,703 | ||||||||||
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| Diluted |
176,703 | 181,889 | ||||||||||
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SABRE CORPORATION
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
Sale of Travelocity.com
On January 23, 2015, we announced the sale of our global online travel business operated under the Travelocity brand (“Travelocity.com”) to Expedia, Inc., pursuant to the terms of an Asset Purchase Agreement (the “Purchase Agreement”), dated January 23, 2015, by and among Sabre GLBL Inc. and Travelocity.com LP, and Expedia. The signing and closing of the Purchase Agreement occurred contemporaneously. Expedia purchased Travelocity.com pursuant to the Purchase Agreement for cash consideration of $280 million. The Purchase Agreement contains customary representations and warranties, covenants and indemnities for a transaction of this nature. We expect to utilize the cash proceeds for general corporate purposes.
As a result of the sale of Travelocity.com pursuant to the Purchase Agreement, the previously disclosed strategic marketing agreement, pursuant to which Expedia powered the technology platforms of Travelocity’s existing U.S. and Canadian websites, and the related put/call arrangement, pursuant to which Expedia could have acquired, or we could have sold to Expedia, assets relating to Travelocity.com, have been terminated.
Binding offer for lastminute.com
On December 16, 2014, we announced that we had received a binding offer from Bravofly Rumbo Group to acquire lastminute.com, the European portion of our Travelocity business. The transaction will be completed through the transfer of net liabilities and is expected to close during first quarter of 2015. We will not receive any cash proceeds or any other significant consideration in the transaction. We cannot provide any assurance that this transaction will occur on the terms described herein or at all.
Continuing Cash Flows
Our Travel Network business earns revenue from airlines for bookings transacted through our GDS. Historically, Travel Network recognized intersegment incentive consideration expense for bookings generated by our Travelocity business. Such costs are representative of costs incurred on a consolidated basis relating to Travel Network’s revenue from airlines for bookings transacted through our GDS. The acquirer of Travelocity.com has signed, and the acquirer of lastminute.com has committed to sign as part of its binding offer, a long term agreement with our Travel Network business to continue to utilize our GDS for bookings which will generate incentive consideration to be paid by us to the acquirers.
Pro Forma Adjustments
| (a) | Represents adjustments to reflect the disposition of the assets and liabilities of the Travelocity segment associated with the transactions described above for $280 million in cash. We expect to use the cash proceeds for general corporate purposes. The net assets of Travelocity.com expected to be disposed of primarily include a tradename asset with a book value of $57 million. The net liabilities of lastminute.com expected to be disposed of primarily consist of negative working capital. The net decrease to retained deficit of $173 million represents the estimated after-tax gains of $143 million and $30 million, respectively, on the disposition of Travelocity.com and lastminute.com as if they occurred on September 30, 2014. |
| (b) | Represents adjustments to eliminate the direct operating results of the Travelocity segment as if the dispositions occurred on January 1, 2011. Selling, general and administrative expense adjustments include amounts historically reported in corporate costs that are directly related to the Travelocity segment and that will be eliminated post-closing of the transactions. Cost of revenue and selling, general and administrative adjustments exclude overhead costs that were previously allocated to the Travelocity segment but that will not be eliminated upon sale of the Travelocity segment. See also above “—Continuing Cash Flows.” |