Travelport Delivering Growth -Third Quarter 2013 Results-

ATLANTA, Nov. 6, 2013 /PRNewswire/ -- Travelport Limited, a leading distribution services and e-commerce provider for the global travel industry, today announces its financial results for the third quarter ended September 30, 2013.

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

"We have delivered five percent growth in both Revenue and Adjusted EBITDA for the quarter and year to date and we look to the future with confidence."

Highlights:

  • Grown Net Revenue and Adjusted EBITDA by 5% in both Q3 and year to date
  • Increased RevPas by 4% in both Q3 and year to date
  • Delivered new Japanese GDS for AXESS/Japan Airlines
  • Further established industry-leading positions in both air and hotel content:
    • Gained significant momentum on ground-breaking air merchandising platform, adding new low cost carriers and increasing ancillary content across all regions
    • Sustained focus on hotel content – now offering 525,000 unique properties
  • Another record quarter for our fast-growing eNett virtual payments business

Financial Highlights

Third Quarter 2013

(in $ millions)

Q3 2013

Q3 2012

$ Change

% Change

Net Revenue

511

489

22

5

Operating Income

57

27

30

111

EBITDA

108

83

25

30

Adjusted EBITDA

128

123

5

5

Travelport's Net Revenue of $511 million for the third quarter of 2013 was $22 million (5%) higher than the third quarter of 2012, and Adjusted EBITDA of $128 million was $5 million (5%) higher than the third quarter of 2012.

Travelport RevPas increased 4% to $5.51.

Travelport generated $55 million in net cash from operating activities for the three months ended September 30, 2013 compared to $6 million for the three months ended September 30, 2012.

YTD 2013






Excluding MSA

(in $ millions)

YTD 2013

YTD 2012

$ Change

% Change

$ Change

% Change

Net Revenue

1,596

1,545

51

3

78

5

Operating Income

182

155

27

17

48

31

EBITDA

334

324

10

3

31

11

Adjusted EBITDA

408

414

(6)

(1)

17

5

Travelport's Net Revenue of $1,596 million on a year to date basis for 2013 was $51 million (3%) higher than 2012 and Adjusted EBITDA of $408 million was $6 million (1%) lower than 2012.

The Master Service Agreement ("MSA") with United Airlines contributed approximately $27 million to Net Revenue, $21 million to each of Operating Income and EBITDA and $23 million to Adjusted EBITDA on a year to date basis for 2012. Excluding the impact of the MSA, Net Revenue increased $78 million (5%) and Adjusted EBITDA increased $17 million (5%) compared to 2012.  The MSA only impacted the comparison of the results of operations for the six months of the year in 2013 compared to 2012.

Travelport RevPas increased 4% to $5.47.

Interest costs of $257 million year to date were $42 million higher for 2013 due to $21 million of financing costs incurred in relation to the debt refinancings in April and June 2013 and a $21 million increase due to higher interest rates.

Travelport's net debt was $3,319 million as of September 30, 2013, which comprised debt of $3,543 million less $160 million in cash and cash equivalents and less $64 million of cash held as collateral.

Travelport generated $67 million in net cash from operating activities for the nine months ended September 30, 2013 compared to $134 million for the nine months ended September 30, 2012. The decrease is a result of the fluctuation in operating working capital.

In connection with the refinancing of our first lien credit agreement in June 2013, we amended our definition of Adjusted EBITDA to exclude the amortization of customer loyalty payments. As a result, we have revised our reported Adjusted EBITDA for all periods presented to exclude the amortization of customer loyalty payments.   Adjusted EBITDA now excludes the amortization of customer loyalty payments of $16 million and $17 million for the quarter ended September 30, 2013 and 2012, respectively and $45 million and $48 million on a year to date basis for 2013 and 2012, respectively.

Conference Call

The Company's third quarter 2013 earnings conference call will be held on November 6, 2013 beginning at 11:00 a.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 Center on the Company's website.

About Travelport

Travelport Limited is a leading distribution services and e-commerce provider for the global travel industry.

With a presence in over 170 countries, over 3,500 employees and 2012 net revenue of more than $2.0 billion, Travelport is comprised of the global distribution system (GDS) business, which includes the Galileo and Worldspan brands and its Airline IT Solutions business and a majority joint venture in virtual payments business, eNett.

Headquartered in Atlanta, Georgia, Travelport is a privately-owned company.

Investor Contact

Julian Walker
Head of Corporate Communications and Investor Relations
+44 (0)1753 288 210
julian.walker@travelport.com

Media Contacts

Kate Aldridge
Senior Director, Corporate Communications, EMEA and APAC
+44 (0)1753 328 8720
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, particularly the U.S. dollar, 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, including our universal desktop product; 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, including our ability to renew our existing agreement with Orbitz Worldwide, and to enter into new relationships on acceptable financial and other terms; and our ability to grow adjacencies, such as our acquisition of Sprice and 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.

 


TRAVELPORT LIMITED


CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS


(unaudited)


(in $ millions)

Three Months

Ended
September 30,
2013

Three Months
Ended
September 30,
2012

Nine Months
Ended
September 30,
2013

Nine Months
Ended
September 30,
2012

Net revenue

511

489

1,596

1,545

Costs and expenses





Cost of revenue

313

296

972

919

Selling, general and administrative

90

110

290

302

Depreciation and amortization

51

56

152

169

Total costs and expenses

454

462

1,414

1,390

Operating income

57

27

182

155

Interest expense, net

(83)

(71)

(257)

(215)

Gain (loss) on early extinguishment of debt

5

(49)

6

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

(26)

(39)

(124)

(54)

Provision for income taxes

(7)

(8)

(24)

(24)

Equity in earnings of investment of Orbitz Worldwide

6

7

8

6

Net loss

(27)

(40)

(140)

(72)

Net income attributable to non-controlling interest in subsidiaries

(1)

(2)

Net loss attributable to the Company

(27)

(41)

(142)

(72)

 

 

TRAVELPORT LIMITED

CONSOLIDATED CONDENSED BALANCE SHEETS

(unaudited)


 

(in $ millions)

September 30,

2013

December 31,

2012

Assets



Current assets:



Cash and cash equivalents

160

110

Accounts receivable (net of allowances for doubtful accounts of $18 and $16)

214

150

Deferred income taxes

2

2

Other current assets

200

170

Total current assets

576

432

Property and equipment, net

405

416

Goodwill

986

986

Trademarks and tradenames

314

314

Other intangible assets, net

678

717

Cash held as collateral

64

137

Investment in Orbitz Worldwide

15

Non-current deferred income taxes

6

6

Other non-current assets

120

150

Total assets

3,164

3,158

Liabilities and equity



Current liabilities:



Accounts payable

63

74

Accrued expenses and other current liabilities

596

537

Deferred income taxes

38

38

Current portion of long-term debt

38

38

Total current liabilities

735

687

Long-term debt

3,505

3,392

Deferred income taxes

9

7

Other non-current liabilities

284

274

Total liabilities

4,533

4,360




Shareholders' equity:



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

Additional paid in capital

690

718

Accumulated deficit

(1,889)

(1,747)

Accumulated other comprehensive loss

(187)

(189)

Total shareholders' equity

(1,386)

(1,218)

Equity attributable to non-controlling interest in subsidiaries

17

16

Total equity

(1,369)

(1,202)

Total liabilities and equity

3,164

3,158

 

 


TRAVELPORT LIMITED

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

(unaudited)


(in $ millions)

Nine Months

Ended

September 30,

2013

Nine Months

Ended

September 30,

2012

Operating activities



Net loss

(140)

(72)

Adjustments to reconcile net loss to net cash provided by operating activities :



Depreciation and amortization

152

169

Amortization of customer loyalty payments

45

48

Equity-based compensation

4

2

Amortization of debt finance costs and debt discount

25

29

Loss (gain) on extinguishment of debt

49

(6)

Payment-in-kind interest

16

10

Gain on interest rate derivative instruments

(3)

Gain on foreign exchange derivative instruments

(2)

Equity in earnings of investment in Orbitz Worldwide

(8)

(6)

Deferred income taxes

3

2

FASA liability

(7)

Defined benefit pension plan funding

(15)

Customer loyalty payments

(60)

(38)

Changes in assets and liabilities:



Accounts receivable

(64)

(13)

Other current assets

(18)

(14)

Accounts payable, accrued expenses and other current liabilities

48

34

Other

20

11

Net cash provided by operating activities

67

134

Investing activities



Property and equipment additions

(76)

(61)

Other

(6)

3

Net cash used in investing activities

(82)

(58)

Financing activities



Proceeds from term loans

2,169

170

Proceeds from revolver borrowings

53

60

Repayment of term loans

(1,663)

(165)

Repayment of revolver borrowings

(73)

(60)

Repayment of capital lease obligations

(14)

(13)

Repurchase of Senior Notes

(413)

(20)

Release of cash provided as collateral

137

Cash provided as collateral

(64)

Debt finance costs

(55)

(9)

Payments on settlement of foreign exchange derivative contracts

(8)

(49)

Proceeds from settlement of foreign exchange derivative contracts

3

9

Distribution to a parent company

(6)

Other

(1)

2

Net cash provided by (used in) financing activities

65

(75)

Net increase in cash and cash equivalents

50

1

Cash and cash equivalents at beginning of period

110

124

Cash and cash equivalents at end of period

160

125

Supplementary disclosures of cash flow information



Interest payments

186

202

Income tax payments, net

20

9

Non-cash capital lease additions

10

6

Non-cash capital distribution to a parent company

25

Exchange of Second Priority Secured Notes for Tranche 2 Loans

229

Exchange of Senior Notes due 2014 and 2016 for new Senior Notes due 2016

591

 

TRAVELPORT LIMITED

NON-GAAP MEASURES

(in $ millions and unaudited)


Reconciliation of Travelport Adjusted EBITDA to Operating Income

Three Months Ended September 30,


2013

2012




Travelport Adjusted EBITDA

128

123

Less adjustments:



Amortization of customer loyalty payments

(16)

(17)

Corporate costs

(3)

Equity-based compensation

(2)

Litigation and related costs

(12)

Other – non cash

(2)

(8)

Total Adjustments

(20)

(40)

EBITDA

108

83

Less: Depreciation and amortization

(51)

(56)

Operating income

57

27




Reconciliation of Travelport Adjusted EBITDA to Operating Income

Nine Months Ended September 30,


2013

2012




Travelport Adjusted EBITDA

408

414

Less adjustments:



Amortization of customer loyalty payments

(45)

(48)

Corporate costs

(4)

(9)

Equity-based compensation

(4)

(2)

Litigation and related costs

(12)

(25)

Other – non cash

(9)

(6)

Total Adjustments

(74)

(90)

EBITDA

334

324

Less: Depreciation and amortization

(152)

(169)

Operating income

182

155

 

 

 

Reconciliation of Travelport Adjusted EBITDA to Net Cash Provided by Operating Activities and Unlevered Free Cash Flow



Nine Months Ended September 30,

2013

2012

 Travelport Adjusted EBITDA

408

414

Less:



Interest payments

(186)

(202)

Tax payments

(20)

(9)

Changes in operating working capital

(30)

34

Customer loyalty payments

(60)

(38)

Defined benefit pension plan funding

(15)

Other adjusting items(*)

(45)

(50)

Net cash provided by operating activities

67

134

Add back interest paid

186

202

Less: Capital expenditures on property and equipment additions

(76)

(61)

Less: Repayment of capital lease obligations

(14)

(13)

Unlevered free cash flow

163

262




(*) Other adjusting items relate to payments for costs included within operating income, but excluded from Travelport Adjusted EBITDA. These include (i) $22 million and $13 million of corporate costs payments during the nine months ended September 30, 2013 and 2012, respectively, (ii) $23 million and $15 million of litigation and related costs payments for the nine months ended September 30, 2013 and 2012, respectively, (iii) a $14 million payment related to a historical dispute related to a now terminated arrangement with a former distributor in the Middle East during the nine months ended September 30, 2012, (iv) $7 million of FASA liability payments and (v) $1 million of restructuring related payments made during the nine months ended September 30, 2012.

 

TRAVELPORT LIMITED

OPERATING STATISTICS AND DEFINITIONS

(unaudited)



Three Months Ended

September 30,






2013

2012

 Change

% Change



Segments (in millions)







Americas

43

43

(0.5)



Europe

19

19

(0.4)



Asia Pacific

14

13

1

9.1



Middle East and Africa

10

10

2.1



Total Segments

86

85

1

1.3










RevPas

$5.51

$5.30

$0.21

4.1%









Nine Months Ended

September 30,



Excluding MSA


2013

2012

 Change

% Change

Change

% Change

Segments (in millions)







Americas

132

135

(3)

(2.2)

(1)

(0.8)

Europe

65

63

2

3.5

2

3.5

Asia Pacific

43

42

1

2.7

1

2.7

Middle East and Africa

30

30

(0.2)

(0.2)

Total Segments

270

270

0.1

2

0.7








RevPas

$5.47

$5.23

$0.24

4.4%



______________________

Definitions:

RevPas: transaction processing revenue divided by the number of reported segments.

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.

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) operating activities adjusted to exclude cash interest payments and include capital expenditures and capital lease repayments. 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 its ability to meet current and future financing and investing needs.

Travelport 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 will be used by the Board of Directors to determine incentive compensation for future periods. Capital expenditures, which impact depreciation and amortization, Customer Loyalty Payments, interest expense and income tax expense, are reviewed separately by management. Travelport Adjusted EBITDA is disclosed so investors have the same tools available to management when evaluating the results of Travelport. Travelport Adjusted EBITDA is defined as EBITDA adjusted to exclude items we believe potentially restrict our ability to assess the results of our underlying business. 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 Travelport 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.

SOURCE Travelport Limited



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