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Travelport Announces Third Quarter 2008 Results
Third Quarter Highlights
By: PR Newswire
Nov. 13, 2008 07:01 AM
(Logo: http://www.newscom.com/cgi-bin/prnh/20061023/NYM260LOGO ) Travelport Consolidated ($ in millions) 3Q 2007 3Q 2008 Change* % Change* Net Revenue (1) (2) $754 $634 $(120) (16)% Adjusted Net Revenue (3) $658 $635 $(23) (3)% EBITDA (1) (2) $158 $169 $11 7% Adjusted EBITDA (3) $186 $191 $5 3% Adjusted EBITDA Margin % 28.3% 30.1% 181 bps 6% * May not calculate due to rounding (1) 3Q 2007 includes Orbitz Worldwide results. (2) 3Q 2007 includes Worldspan results from August 21, 2007 to September 30, 2007. (3) Adjusted results exclude Orbitz Worldwide and include Worldspan in all periods, as if both transactions had taken place on January 1, 2007. Travelport CEO and President,
Financial Highlights Third Quarter 2008
GDS
($ in millions)
3Q 2007 3Q 2008 Change* % Change*
Net Revenue (1) $449 $531 $82 18%
Adjusted Net Revenue (2) $556 $532 $(24) (4)%
EBITDA (1) $122 $146 $24 20%
Adjusted EBITDA (2) $167 $165 $(2) (1)%
Adjusted EBITDA Margin % 30.0% 31.0% 98 bps 3%
* May not calculate due to rounding
(1) 3Q 2007 includes Worldspan results from August 21, 2007 to September
30, 2007.
(2) Adjusted results include Worldspan in all periods, as if the
acquisition had closed on January 1, 2007.
Net revenue and EBITDA for our GDS business were
GTA
($ in millions)
3Q 2007 3Q 2008 Change* % Change*
Net Revenue (1) $103 $103 $0 0%
Adjusted Net Revenue (1) $103 $103 $0 0%
EBITDA (1) $38 $47 $9 24%
Adjusted EBITDA (1) $40 $46 $6 15%
Adjusted EBITDA Margin % 38.8% 44.7% 583 bps 15%
* May not calculate due to rounding
(1) 3Q 2007 reflects the sale of Trust International on January 2, 2008 as
a discontinued operation in our financial results.
Net revenue and EBITDA for GTA were Corporate and Other Travelport incurred adjusted Corporate and Other expenses of
Orbitz Worldwide
($ 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 In connection with the preparation of its financial statements for the
quarter ended
3Q 2007 3Q 2008 Change % Change
Net Revenue (1) $225 - - -
Adjusted Net Revenue (1) - - - -
EBITDA (1) $38 - - -
Adjusted EBITDA (1) - - - -
- Not meaningful
(1) 3Q 2007 includes Orbitz Worldwide results. Adjusted results exclude
Orbitz Worldwide in all periods.
Conference Call/Webcast The Company's third quarter 2008 earnings conference call will be
accessible to the media and general public via live Internet Webcast today
beginning at About Travelport Travelport is one of the world's largest travel conglomerates offering
broad based business services to companies operating in the global travel
industry. The company is comprised of Travelport GDS, a global distribution
system business that includes the Worldspan and Galileo brands; GTA, a group
travel and wholesale hotel business; Business Intelligence Services, a data
analysis business; and IT Services and Software, which hosts mission critical
applications and provides business solutions for major airlines. Travelport
also owns approximately 48% of Orbitz Worldwide (NYSE: OWW), a leading global
online travel company. With 2007 revenues of 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 8 of this release.
TRAVELPORT LIMITED
STATEMENTS OF OPERATIONS
(in millions)
(UNAUDITED)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
2007 2008 2007 2008
Net revenue $754 $634 $2,135 $2,003
Costs and expenses
Cost of revenue 298 308 863 1,010
Selling, general and
administrative 297 162 859 503
Separation and
restructuring charges - 5 29 19
Depreciation and
amortization 70 65 175 194
Other expense, net - 1 2 1
Total costs and
expenses 665 541 1,928 1,727
Operating income 89 93 207 276
Interest expense, net (113) (84) (281) (222)
Other expense, net (1) - (1) -
Gain on early
extinguishment of debt - 11 - 29
Income (loss) from
continuing operations
before income taxes,
minority interest and
equity in losses of
investments, net (25) 20 (75) 83
Provision for income
taxes (26) (10) (31) (33)
Minority interest in
loss of consolidated
subsidiaries, net of
tax 1 - 1 -
Equity in losses of
investments, net - (138) - (148)
Loss from continuing
operations, net of tax (50) (128) (105) (98)
Loss from discontinued
operations - - (1) -
Net loss $(50) $(128) $(106) $(98)
TRAVELPORT LIMITED
SEGMENT EBITDA AND RECONCILIATION OF EBITDA
(in millions)
(UNAUDITED)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
2007 2008 2007 2008
GDS
Net revenue $449 $531 $1,271 $1,715
Segment EBITDA 122 146 357 474
GTA
Net revenue 103 103 248 288
Segment EBITDA 38 47 63 92
Orbitz Worldwide
Net revenue 225 - 672 -
Segment EBITDA 38 - 87 -
Corporate and other
EBITDA(a) (40) (24) (126) (67)
Intersegment
eliminations(b)
Net revenue (23) - (56) -
Consolidated Totals
Net revenue $754 $634 $2,135 $2,003
EBITDA $158 $169 $381 $499
- Not meaningful.
(a) Corporate and other includes corporate general and administrative
costs not allocated to the segments.
(b) Consists primarily of eliminations related to the inducements paid by
the Company's GDSs to Orbitz Worldwide.
Provided below is a reconciliation of EBITDA to income/(loss) from
continuing operations before income taxes and equity in losses of
investments, net:
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
2007 2008 2007 2008
EBITDA $158 $169 $381 $499
Interest expense, net (113) (84) (281) (222)
Depreciation and
amortization (70) (65) (175) (194)
Income (loss) from
continuing operations
before income taxes,
minority interest and
equity in losses of
investments, net $(25) $20 $(75) $83
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 September 30, 2008
Orbitz Corporate
GDS Worldwide GTA & Other Total*
Net Revenue $531 $- $103 $- $634
Adjustments
Separation from Cendant
and Related 1 - - - 1
Total 1 - - - 1
Adjusted Net Revenue* $532 $- $103 $- $635
EBITDA $146 $- $47 $(24) $169
Adjustments
Impairment - - - 1 1
Acquired / Disposed EBITDA 0 - - - 0
Separation from Cendant
and Related 1 - - 3 3
Non-recurring Items Associated
with Travelport Acquisitions 14 - (1) 2 15
Restructure and Related 3 - 0 2 5
Equity based compensation - - - 2 2
Other - - - (5) (5)
Total 19 - (1) 4 22
Adjusted EBITDA* $165 $- $46 $(20) $191
Three Months Ended September 30, 2007
Orbitz Corporate
GDS Worldwide GTA & Other Total*
Net Revenue $449 $225 $103 $(23) $754
Adjustments
Acquired / Disposed Revenue 99 (225) - 23 (104)
Separation from Cendant
and Related 1 - - - 1
Other 7 - - - 7
Total 107 (225) - 23 (96)
Adjusted Net Revenue* $556 $- $103 $- $658
EBITDA $122 $38 $38 $(40) $158
Adjustments
Impairment - - - - -
Acquired / Disposed EBITDA 21 (38) (0) (0) (16)
Separation from Cendant
and Related 1 - - 3 4
Non-recurring Items Associated
with Travelport Acquisitions 10 - 3 6 19
Restructure and Related (1) (0) 0 0 (1)
Equity based compensation - - (0) 8 8
Other 15 - - 1 16
Total 45 (38) 2 18 28
Adjusted EBITDA* $167 $- $40 $(21) $186
* Totals may not calculate due to rounding.
- Not meaningful.
TRAVELPORT LIMITED
RECONCILIATION OF NET REVENUE AND EBITDA TO
ADJUSTED NET REVENUE AND ADJUSTED EBITDA
(in millions)
(UNAUDITED)
Nine Months Ended September 30, 2008
Orbitz Corporate
GDS Worldwide GTA & Other Total*
Net Revenue $1,715 $- $288 $- $2,003
Adjustments
Acquired / Disposed Revenue (0) - - - (0)
Separation from Cendant
and Related 2 - - - 2
Total 2 - - - 2
Adjusted Net Revenue* $1,717 $- $288 $- $2,005
EBITDA $474 $- $92 $(67) $499
Adjustments
Impairment - - - 1 1
Acquired / Disposed EBITDA 7 - - - 7
Separation from Cendant
and Related 2 - (0) 5 7
Non-recurring Items Associated
with Travelport Acquisitions 43 - (3) 17 56
Restructure and Related 12 - 2 5 19
Equity based compensation - - - 2 2
Other - - - (25) (25)
Total 65 - (1) 5 68
Adjusted EBITDA* $539 $- $90 $(62) $567
Nine Months Ended September 30, 2007
Orbitz Corporate
GDS Worldwide GTA & Other Total*
Net Revenue $1,271 $672 $248 $(56) $2,135
Adjustments
Acquired / Disposed Revenue 505 (672) (2) 56 (112)
Separation from Cendant
and Related 4 - 2 - 6
Other 7 - - - 7
Total 516 (672) - 56 (100)
Adjusted Net Revenue* $1,787 $- $248 $- $2,035
EBITDA $357 $87 $63 $(126) $381
Adjustments
Impairment 0 - - 0 0
Acquired / Disposed EBITDA 151 (89) (1) (0) 61
Separation from Cendant
and Related 4 - 2 10 16
Non-recurring Items Associated
with Travelport Acquisitions 13 - 9 24 46
Restructure and Related 20 1 2 1 24
Equity based compensation - - 0 20 20
Other 12 - - (2) 11
Total 201 (87) 11 54 178
Adjusted EBITDA* $558 $- $74 $(72) $559
* Totals may not calculate due to rounding.
- Not meaningful.
TRAVELPORT LIMITED
BALANCE SHEETS
(in millions, except per share data)
(UNAUDITED)
December 31, September 30,
2007 2008
Assets
Current assets:
Cash and cash equivalents $309 $268
Accounts receivable, net 417 496
Deferred income taxes 9 9
Other current assets 252 223
Assets of discontinued operations 36 -
Total current assets 1,023 996
Property and equipment, net 532 501
Goodwill 1,757 1,742
Trademarks and tradenames 510 502
Other intangible assets, net 1,717 1,592
Investment in Orbitz Worldwide 366 215
Non-current deferred income taxes 3 1
Other non-current assets 242 211
Total assets $6,150 $5,760
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $191 $213
Accrued expenses and other current liabilities 827 815
Current portion of long-term debt and
revolver borrowings 17 132
Deferred income taxes - 1
Liabilities of discontinued operations 8 -
Total current liabilities 1,043 1,161
Long-term debt 3,751 3,533
Deferred income taxes 261 240
Other non-current liabilities 209 166
Total liabilities 5,264 5,100
Commitments and contingencies
Shareholders' equity:
Common stock $1.00 par value; 12,000 shares
authorized, 12,000 shares issued and outstanding - -
Additional paid in capital 1,317 1,257
Accumulated deficit (594) (692)
Accumulated other comprehensive income 163 95
Total shareholders' equity 886 660
Total liabilities and shareholders' equity $6,150 $5,760
TRAVELPORT LIMITED
STATEMENTS OF CASH FLOWS
(in millions)
(UNAUDITED)
Nine Months Nine Months
Ended Ended
September 30, September 30,
2007 2008
Operating activities of continuing operations
Net income (loss) $(106) $(98)
Loss from discontinued operations (1) -
Income (loss) from continuing operations (105) (98)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities
from continuing operations
Depreciation and amortization 175 194
Deferred income taxes (1) (8)
Provision for bad debts 6 6
FASA liability - (25)
Amortization of debt issuance costs 34 16
Non-cash charges related to tax sharing
liability 11 -
Gain on early extinguishment of debt - (29)
Unrealized gains on interest rate derivatives - (17)
Equity based compensation 23 -
Equity in losses of investments, net - 148
Changes in assets and liabilities, net of
effects from acquisitions and disposals
Accounts receivable (69) (100)
Other current assets (19) (8)
Accounts payable, accrued expenses and other
current liabilities 214 74
Other (32) (13)
Net cash provided by operating activities
of continuing operations 237 140
Investing activities of continuing operations
Property and equipment additions (80) (71)
Businesses acquired, net of cash and
acquisition related payments (1,058) 4
Proceeds from asset sales 55 7
Other (25) (4)
Net cash used in investing activities of
continuing operations (1,108) (64)
Financing activities of continuing operations
Proceeds from borrowings 1,640 113
Principal payments on borrowings (1,091) (165)
Issuance of common stock 5 -
Distribution to a parent company - (60)
Proceeds from Orbitz Worldwide IPO 477 -
Contribution from Parent 135 -
Debt issuance costs (25) -
Net cash provided by (used in) financing
activities of continuing operations 1,141 (112)
Effect of changes in exchange rates on cash
and cash equivalents 5 (5)
Net increase (decrease) in cash and cash
equivalents from continuing operations 275 (41)
Cash provided by (used in) discontinued
operations
Operating activities 2 -
Investing Activities (2) -
Cash and cash equivalents at beginning of
period 87 309
Cash and cash equivalents at end of period 362 268
Less cash of discontinued operations (2) -
Cash and cash equivalents of continuing
operations $360 $268
Supplemental disclosure of cash flow information
Interest payments $272 $235
Income tax payments, net $18 $18
TRAVELPORT LIMITED
Operating Statistics
(UNAUDITED)
Three Months Ended
September 30,
2008 2007 Change % Change
GDS (segments in millions)
Americas Segments 43.7 48.3 (4.6) (10)%
International Segments 44.7 49.9 (5.2) (10)%
Total Segments 88.4 98.2 (9.8) (10)%
GTA (TTV in millions)
Total Transaction Value $575 $563 $12 2%
Nine Months Ended
September 30,
2008 2007 Change % Change
GDS (segments in millions)
Americas Segments 145.5 168.5 (23.0) (14)%
International Segments 152.4 160.3 (7.9) (5)%
Total Segments 297.9 328.8 (30.9) (9)%
GTA (TTV in millions)
Total Transaction Value $1,516 $1,375 $141 10%
SOURCE Travelport Limited
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