Galileo International Reports First Quarter Economic Earnings Per Share Of $0.86

-- Operating Margin a Strong 22 Percent

-- Information and Network Services Revenues Grow 20 Percent

-- Total Revenues Grow 6 Percent



Apr 23, 2001, 01:00 ET from Galileo International, Inc.

    ROSEMONT, Ill., April 23 /PRNewswire Interactive News Release/ -- Galileo
 International, Inc. (NYSE:   GLC), today reported that first quarter economic
 earnings per share grew 4.8 percent to $0.86 per diluted share, compared to
 economic earnings of $0.82 per diluted share, before one-time items, for the
 same quarter last year(A).  Reported earnings in the first quarter were
 $50.6 million, or $0.57 per diluted share, compared to $61.8 million, or
 $0.68 per diluted share, before one-time items, last year.  Total revenue grew
 5.7 percent to $465.8 million for the quarter.  Operating income declined
 17.3 percent to $104.2 million, from $126.0 million for the same period in
 2000, due to the incremental amortization of intangible assets resulting from
 the TRIP.com acquisition in 2000, and increased investments to maintain and
 grow the business.  Galileo's operating margin was 22.4 percent for the
 quarter, and continues to be the highest in the industry.
     ( Photo:  http://www.newscom.com/cgi-bin/prnh/20000208/GALILEO )
     "We are very pleased to have again delivered growth to our investors,
 particularly during the challenging economic environment in the U.S.," said
 James E. Barlett, chairman, president and CEO.  "With our global footprint, we
 continue to be well positioned to rise above market-specific conditions that
 impact travel demand."*
 
     Global Distribution Revenues Increase
     For the quarter ended March 31, 2001, total revenues were $465.8 million,
 a 5.7 percent increase year over year.  Electronic global distribution
 services (EGDS) revenues increased 5.0 percent to $442.5 million from
 $421.3 million in the same period last year.  EGDS revenue growth was driven
 mainly by the January 2001 airline booking fee increase and growth in
 international bookings.  Revenue from TRIP.com and Galileo UK, both acquired
 in 2000, also contributed to the growth.  Information and network services
 revenues grew a strong 19.9 percent to $23.3 million for the quarter,
 reflecting an increase in revenue primarily from hosting, network and
 development services.  Revenues from new Quantitude customers also contributed
 to the growth.
     The company experienced solid bookings growth in several markets around
 the world, however, overall global booking volumes fell 2.6 percent to
 93.4 million compared to the prior year.
     International booking volumes grew 1.7 percent in the first quarter, with
 the Middle East, Africa and the Asia Pacific regions continuing to experience
 solid growth.  The company experienced double-digit air bookings growth in
 several markets, including India, Belgium and Kuwait.  The international
 bookings growth comes despite the effect of a change in airline behavior that
 resulted in an increased number of cancellations of waitlist and other
 non-ticketed bookings, which reduced the net billable segments in the quarter.
 This change in airline behavior, primarily in Europe and the Middle East, was
 first reported in the third quarter of 2000.  Excluding the effect of this
 change in airline behavior, international bookings would have grown a solid
 4 percent in the first quarter.
     Booking volumes in the U.S. declined 8.7 percent during the quarter,
 primarily due to the impact of a shift in bookings to Internet travel sites,
 where Galileo's market share is lower, and weaker travel demand resulting from
 the slowdown in the U.S. economy.
     "Toward the end of the quarter we began to realize bookings from some of
 last year's significant customer wins," said Cheryl Ballenger, executive vice
 president and CFO.  "We expect to continue to grow our customer base through
 aggressive sales efforts, the delivery of industry-leading technology
 solutions, and superior customer service, and will continue to aggressively
 pursue our points of presence strategy on the Web."*
 
     Operating Expenses
     Total operating expenses grew 14.9 percent in the first quarter to
 $361.6 million from $314.7 million, before one-time items, a year earlier.
     Cost of operations expenses grew 22.1 percent for the quarter, primarily
 due to higher intangible amortization expense related to the TRIP.com
 acquisition and the impact of a full quarter's operating expenses related to
 the acquisition of TRIP.com and Galileo UK.  Excluding the incremental
 operating expenses related to TRIP.com and Galileo UK, all other cost of
 operations expenses increased approximately 7 percent for the quarter.  This
 increase was driven by higher wages consistent with higher staffing levels in
 Galileo's technical operations and its Quantitude subsidiary; and higher
 depreciation and amortization expenses.
     Total commissions, selling and administrative expenses increased
 9.5 percent in the first quarter, primarily due to higher subscriber incentive
 payments and the incremental expenses of TRIP.com.  Although subscriber
 incentives continued to grow during the quarter, the rate of growth has slowed
 compared to the prior year.  Higher distributor commission payments resulting
 directly from higher revenues in markets managed by national distribution
 companies were offset by commission savings resulting from the company's
 acquisition of Galileo UK.
 
     Non-Operating Expenses
     Galileo's first quarter results include other non-operating expense of
 $3.4 million, primarily related to the write-off of one of its technology
 investments, which was partially offset by gains from other technology and
 travel-related investments.
 
     Balance Sheet/Cash Flow
     Galileo's balance sheet remains solid and its cash flow is strong.  In the
 first quarter, cash flow from operations was used primarily to make capital
 investments to grow the business, reduce bank debt, and repurchase Galileo
 shares.  The company expects to continue to use its strong cash flow for
 capital investments, strategic acquisitions, share repurchase and debt
 repayment, and will continue to assess these options to best meet the needs of
 the business.*
     Capital expenditures, including internally developed software, were
 $44.2 million for the quarter.  This capital investment was made primarily to
 purchase equipment related to the build out of Quantitude's TCP/IP network, to
 enhance the technological platform of Galileo's computer systems and to
 purchase subscriber equipment.
     Total depreciation and amortization expense was $60.3 million, including
 $30.8 million in amortization of intangible assets relating to mergers and
 acquisitions.
 
     Share Repurchase
     Continuing to believe its stock is undervalued, Galileo took advantage of
 the weakness in its share price by repurchasing 686,000 shares during the
 first quarter.  Since the inception of the share repurchase program, Galileo
 has bought 23.1 million shares at a total cost of $811.9 million.
 
     Board Declares Dividend
     The board of directors of Galileo International declared a regular
 quarterly cash dividend of $0.09 per share payable on May 18, 2001, to
 stockholders of record as of the close of business on May 4, 2001.
 
     Business Highlights
      -- Galileo signed several new contracts, including an exclusive,
         five-year, multi-million travel booking agreement with Flight Centre
         Ltd., one of the world's largest and fastest growing travel retailers.
      -- On April 1, Galileo acquired Galileo Southern Cross from TIAS, the
         owners of which are the Qantas Airways Group, Ansett Airlines and Air
         New Zealand.  Galileo Southern Cross is the company's distributor for
         the Australia, New Zealand and South Pacific markets, where Galileo is
         the market share leader.  Australia and New Zealand is Galileo's fifth
         largest market.
      -- Quantitude made significant progress on its network build out during
         the quarter, putting it on track to meet its accelerated build out
         schedule.  To date, Quantitude has installed 43 hubs, and 18 virtual
         POPs, or points of presence, throughout the U.S. in 61 cities.  In
         addition, the company entered into an agreement with Singapore
         Telecommunications covering transmission and co-location facilities
         throughout the Asia Pacific region, and in early April secured an
         agreement with Belgacom SA for networking services throughout Europe.
      -- Rosenbluth International, which has the second largest travel
         management presence in the world, selected Quantitude to provide
         managed networking services, including voice and data between its
         1,140 offices worldwide and its central site in Philadelphia, Pa.
 
     Outlook*
     Galileo continues to expect strong revenue growth in 2001 driven by
 international bookings growth, the airline booking fee increase implemented on
 January 1, 2001, and new revenue streams generated by its Quantitude
 subsidiary and Web hosting services.  The company expects to deliver full-year
 revenue growth in the range of 10 to 12 percent and economic EPS growth of
 between 7 and 9 percent.  While a further weakening in U.S. economic
 conditions could pose a risk to this outlook, airlines have typically reduced
 fares to stimulate demand during such times, which mitigates the negative
 impact to Galileo's revenue outlook.
     Galileo expects second quarter revenue growth to improve slightly over its
 first quarter performance and economic EPS growth in the mid-single digits.
 Galileo expects to continue to strengthen its U.S. market position in the
 traditional agency distribution channel and further expects to drive
 profitable growth through its various Internet initiatives.
 
     Strategies for Maximizing Shareholder Value*
     Believing that the public market is not appropriately valuing the
 company's financial performance, cash flow generation and excellent growth
 prospects, Galileo announced in November that its board of directors retained
 financial advisors to explore strategic alternatives for the company designed
 to maximize shareholder value.  The process has been a top priority for
 Galileo.  The company has been progressing as quickly and prudently as
 possible and believes the process is nearing conclusion.  No assurance can be
 made that any transaction will be completed.
     Galileo International is a diversified, global technology leader.  Its
 core business is providing electronic global distribution services for the
 travel industry through its computerized reservation systems, leading-edge
 products and innovative Internet-based solutions.  Galileo is a value-added
 distributor of travel inventory dedicated to supporting its travel agency and
 corporate customers and, through them, expanding traveler choice.  Among
 Galileo's subsidiaries are TRIP.com, an award-winning online travel service
 and technology provider; and Quantitude, which delivers advanced
 telecommunications services and enterprise networking solutions.  Galileo also
 offers secure, flexible and cost-effective managed hosting services.
 Headquartered in Rosemont, Illinois, USA, Galileo International has offices
 worldwide and operates a state-of-the-art data center in Greenwood Village,
 Colo., USA.  Visit www.galileo.com .
 
     (A) Galileo's economic earnings are calculated by adding back to reported
         earnings the after-tax amortization of intangible assets arising from
         mergers and acquisitions.
 
     *Statements in this release that are not strictly historical, which can be
 identified by the use of forward-looking terminology such as "continue" and
 "expect" or the negative thereof or other variations thereon or comparable
 terminology are forward-looking statements within the meaning of Section 27A
 of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
 of 1934.  We have based these forward-looking statements on our current
 expectations and projections about future events.  We undertake no obligation
 to publicly update or revise any forward-looking statement, whether as a
 result of new information, future events or otherwise.  These forward-looking
 statements are subject to risks and uncertainties that could cause actual
 events or results to differ materially from the events or results expressed or
 implied by the forward-looking statements.  You are cautioned not to place
 undue reliance on these forward-looking statements.  Risks and uncertainties
 associated with these forward-looking statements include, but are not limited
 to: heightened industry competition; the loss and inability to replace the
 bookings generated by one or more of our five largest travel agency customers;
 our ability to successfully expand our operations and service offerings in new
 markets, including the online travel market; failure to maintain
 technological  competitiveness, including our ability to timely develop and
 achieve market acceptance of new products; natural disasters or other
 calamities that may cause significant damage to our Data Center facility; our
 ability to protect our network and software against a security breach or
 similar threat; new or different legal or regulatory requirements governing
 the CRS industry; our sensitivity to general economic conditions and events
 that affect airline travel and the airlines that participate in our Apollo(R)
 and Galileo(R) systems; our ability to deliver to Galileo and to outside
 customers a new, Internet protocol-based network as planned, and for the cost
 and within the time frame currently estimated; our ability to effectively
 execute our sales initiatives in key markets; the loss of key employees; our
 ability to manage administrative, technical and operational issues presented
 by our expansion plans and acquisitions of other businesses; the results of
 our international operations and expansion into developing and new
 computerized reservation system ("CRS") markets and other travel distribution
 channels, governmental approvals, trade and tariff barriers, and political
 risks; and, the type and number of strategic alternatives, if any, designed to
 maximize shareholder value as determined by our Board of Directors.  For
 additional information concerning these risks, see the risk factors filed as
 an exhibit to Galileo's Annual Report on Form 10-K for 2000.
 
 
                            GALILEO INTERNATIONAL, INC.
                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                               BEFORE ONE-TIME ITEMS
                  (Unaudited, in millions, except per share data)
 
 
 
                                                 Quarter Ended March 31,
                                                2001      2000 (A)     Change
 
     Revenues:
        Electronic global distribution
         services                              $442.5      $421.3        5.0 %
        Information and network services         23.3        19.4       19.9 %
                                                465.8       440.7        5.7 %
 
     Operating expenses:
        Cost of operations                      163.6       134.0       22.1 %
        Commissions, selling and
         administrative                         198.0       180.7        9.5 %
                                                361.6       314.7       14.9 %
 
     Operating income                           104.2       126.0      (17.3)%
 
     Other income (expense):
        Interest expense, net                   (10.5)       (9.3)
        Other, net                               (3.4)       (2.4)
                                                (13.9)      (11.7)
     Income before income taxes                  90.3       114.3      (21.0)%
 
        Income taxes                             39.7        52.5      (24.3)%
 
     Net income                                 $50.6       $61.8      (18.3)%
 
     Weighted average shares outstanding         88.0        90.7
     Basic earnings per share                   $0.57       $0.68
     Diluted weighted average shares
      outstanding                                88.2        90.9
     Diluted earnings per share                 $0.57       $0.68      (15.8)%
 
     Diluted economic earnings per share (B)    $0.86       $0.82        4.8 %
 
     (A) The 2000 condensed consolidated statement of income excludes a special
         charge related to the extinguishment of a portion of the Company's
         liability arising from its services agreement with US Airways
         ($19.7 million) and a special charge to write-off in-process research
         and development costs related to the TRIP.com acquisition
         ($7.0 million).  Including these items, net income would have been
         $47.4 million, diluted earnings per share would have been $0.52, and
         diluted economic earnings per share would have been $0.66.
 
     (B) The Company's diluted economic earnings per share are calculated by
         adding back to reported earnings the after-tax amortization of
         intangible assets arising from mergers and acquisitions.
 
 
                            GALILEO INTERNATIONAL, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                  (Unaudited, in millions, except per share data)
 
                                                Quarter Ended March 31,
                                                2001      2000 (A)     Change
 
     Revenues:
        Electronic global distribution
         services                              $442.5      $421.3       5.0 %
        Information and network services         23.3        19.4      19.9 %
                                                465.8       440.7       5.7 %
 
     Operating expenses:
        Cost of operations                      163.6       134.0      22.1 %
        Commissions, selling and
         administrative                         198.0       180.7       9.5 %
        Special charge - services
         agreement                                 -         19.7
        Special charge - in-process R&D
         write-off                                 -          7.0
                                                361.6       341.4       5.9 %
 
     Operating income                           104.2        99.3       5.0 %
 
     Other income (expense):
        Interest expense, net                   (10.5)       (9.3)
        Other, net                               (3.4)       (2.4)
                                                (13.9)      (11.7)
     Income before income taxes                  90.3        87.6       3.0 %
 
        Income taxes                             39.7        40.2      (1.2)%
 
     Net income                                 $50.6       $47.4       6.7 %
 
     Weighted average shares outstanding         88.0        90.7
     Basic earnings per share                   $0.57       $0.52
     Diluted weighted average shares
      outstanding                                88.2        90.9
     Diluted earnings per share                 $0.57       $0.52       9.9 %
 
     Diluted economic earnings per share (A)    $0.86       $0.66      30.0 %
 
 
     (A) The 2000 condensed consolidated statement of income includes a special
         charge related to the extinguishment of a portion of the Company's
         liability arising from its services agreement with US Airways
         ($19.7 million) and a special charge to write-off in-process research
         and development costs related to the TRIP.com acquisition
         ($7.0 million).
 
     (B) The Company's diluted economic earnings per share are calculated by
         adding back to reported earnings the after-tax amortization of
         intangible assets arising from mergers and acquisitions.
 
 
                            GALILEO INTERNATIONAL, INC.
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (In thousands)
 
                                                    March 31,      December 31,
                                                      2001             2000
                                                   (unaudited)
     ASSETS
     Current assets:
        Cash and cash equivalents                    $10,580          $2,460
        Accounts receivable, net                     271,249         192,199
        Other current assets                          51,798          50,036
     Total current assets                            333,627         244,695
 
     Property and equipment, net                     209,067         210,677
     Computer software, net                          164,359         160,270
     Intangible assets, net                          694,279         720,212
     Other noncurrent assets                         141,661         143,405
                                                  $1,542,993      $1,479,259
 
 
     LIABILITIES AND STOCKHOLDERS'  EQUITY
     Current liabilities:
        Accounts payable                             $72,262         $76,913
        Accrued commissions                           44,671          34,471
        Other current liabilities                    170,048         112,864
        Long-term debt, current portion              187,654         212,654
     Total current liabilities                       474,635         436,902
 
     Long-term debt, less current portion            434,392         434,392
     Other noncurrent liabilities                    142,853         142,729
     Total liabilities                             1,051,880       1,014,023
 
     Stockholders' equity                            491,113         465,236
                                                  $1,542,993      $1,479,259
 
 
                            GALILEO INTERNATIONAL, INC.
                             RESERVATION STATISTICS (A)
                                     (Millions)
 
     Bookings for Quarter Ended March 31
 
 
                                                 2001        2000       Change
     US Market
     Air                                         30.8        33.7        -8.8%
     Car/Hotel/Leisure                            5.3         5.8        -7.8%
     Total Bookings                              36.1        39.5        -8.7%
 
     All Other Markets
     Air                                         55.7        54.8         1.6%
     Car/Hotel/Leisure                            1.7         1.6         4.5%
     Total Bookings                              57.3        56.4         1.7%
 
     Worldwide Bookings                          93.4        95.9        -2.6%
 
 
 
     (A)  The numbers contained in this schedule may not total due to rounding.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X55483278
 
 

SOURCE Galileo International, Inc.
    ROSEMONT, Ill., April 23 /PRNewswire Interactive News Release/ -- Galileo
 International, Inc. (NYSE:   GLC), today reported that first quarter economic
 earnings per share grew 4.8 percent to $0.86 per diluted share, compared to
 economic earnings of $0.82 per diluted share, before one-time items, for the
 same quarter last year(A).  Reported earnings in the first quarter were
 $50.6 million, or $0.57 per diluted share, compared to $61.8 million, or
 $0.68 per diluted share, before one-time items, last year.  Total revenue grew
 5.7 percent to $465.8 million for the quarter.  Operating income declined
 17.3 percent to $104.2 million, from $126.0 million for the same period in
 2000, due to the incremental amortization of intangible assets resulting from
 the TRIP.com acquisition in 2000, and increased investments to maintain and
 grow the business.  Galileo's operating margin was 22.4 percent for the
 quarter, and continues to be the highest in the industry.
     ( Photo:  http://www.newscom.com/cgi-bin/prnh/20000208/GALILEO )
     "We are very pleased to have again delivered growth to our investors,
 particularly during the challenging economic environment in the U.S.," said
 James E. Barlett, chairman, president and CEO.  "With our global footprint, we
 continue to be well positioned to rise above market-specific conditions that
 impact travel demand."*
 
     Global Distribution Revenues Increase
     For the quarter ended March 31, 2001, total revenues were $465.8 million,
 a 5.7 percent increase year over year.  Electronic global distribution
 services (EGDS) revenues increased 5.0 percent to $442.5 million from
 $421.3 million in the same period last year.  EGDS revenue growth was driven
 mainly by the January 2001 airline booking fee increase and growth in
 international bookings.  Revenue from TRIP.com and Galileo UK, both acquired
 in 2000, also contributed to the growth.  Information and network services
 revenues grew a strong 19.9 percent to $23.3 million for the quarter,
 reflecting an increase in revenue primarily from hosting, network and
 development services.  Revenues from new Quantitude customers also contributed
 to the growth.
     The company experienced solid bookings growth in several markets around
 the world, however, overall global booking volumes fell 2.6 percent to
 93.4 million compared to the prior year.
     International booking volumes grew 1.7 percent in the first quarter, with
 the Middle East, Africa and the Asia Pacific regions continuing to experience
 solid growth.  The company experienced double-digit air bookings growth in
 several markets, including India, Belgium and Kuwait.  The international
 bookings growth comes despite the effect of a change in airline behavior that
 resulted in an increased number of cancellations of waitlist and other
 non-ticketed bookings, which reduced the net billable segments in the quarter.
 This change in airline behavior, primarily in Europe and the Middle East, was
 first reported in the third quarter of 2000.  Excluding the effect of this
 change in airline behavior, international bookings would have grown a solid
 4 percent in the first quarter.
     Booking volumes in the U.S. declined 8.7 percent during the quarter,
 primarily due to the impact of a shift in bookings to Internet travel sites,
 where Galileo's market share is lower, and weaker travel demand resulting from
 the slowdown in the U.S. economy.
     "Toward the end of the quarter we began to realize bookings from some of
 last year's significant customer wins," said Cheryl Ballenger, executive vice
 president and CFO.  "We expect to continue to grow our customer base through
 aggressive sales efforts, the delivery of industry-leading technology
 solutions, and superior customer service, and will continue to aggressively
 pursue our points of presence strategy on the Web."*
 
     Operating Expenses
     Total operating expenses grew 14.9 percent in the first quarter to
 $361.6 million from $314.7 million, before one-time items, a year earlier.
     Cost of operations expenses grew 22.1 percent for the quarter, primarily
 due to higher intangible amortization expense related to the TRIP.com
 acquisition and the impact of a full quarter's operating expenses related to
 the acquisition of TRIP.com and Galileo UK.  Excluding the incremental
 operating expenses related to TRIP.com and Galileo UK, all other cost of
 operations expenses increased approximately 7 percent for the quarter.  This
 increase was driven by higher wages consistent with higher staffing levels in
 Galileo's technical operations and its Quantitude subsidiary; and higher
 depreciation and amortization expenses.
     Total commissions, selling and administrative expenses increased
 9.5 percent in the first quarter, primarily due to higher subscriber incentive
 payments and the incremental expenses of TRIP.com.  Although subscriber
 incentives continued to grow during the quarter, the rate of growth has slowed
 compared to the prior year.  Higher distributor commission payments resulting
 directly from higher revenues in markets managed by national distribution
 companies were offset by commission savings resulting from the company's
 acquisition of Galileo UK.
 
     Non-Operating Expenses
     Galileo's first quarter results include other non-operating expense of
 $3.4 million, primarily related to the write-off of one of its technology
 investments, which was partially offset by gains from other technology and
 travel-related investments.
 
     Balance Sheet/Cash Flow
     Galileo's balance sheet remains solid and its cash flow is strong.  In the
 first quarter, cash flow from operations was used primarily to make capital
 investments to grow the business, reduce bank debt, and repurchase Galileo
 shares.  The company expects to continue to use its strong cash flow for
 capital investments, strategic acquisitions, share repurchase and debt
 repayment, and will continue to assess these options to best meet the needs of
 the business.*
     Capital expenditures, including internally developed software, were
 $44.2 million for the quarter.  This capital investment was made primarily to
 purchase equipment related to the build out of Quantitude's TCP/IP network, to
 enhance the technological platform of Galileo's computer systems and to
 purchase subscriber equipment.
     Total depreciation and amortization expense was $60.3 million, including
 $30.8 million in amortization of intangible assets relating to mergers and
 acquisitions.
 
     Share Repurchase
     Continuing to believe its stock is undervalued, Galileo took advantage of
 the weakness in its share price by repurchasing 686,000 shares during the
 first quarter.  Since the inception of the share repurchase program, Galileo
 has bought 23.1 million shares at a total cost of $811.9 million.
 
     Board Declares Dividend
     The board of directors of Galileo International declared a regular
 quarterly cash dividend of $0.09 per share payable on May 18, 2001, to
 stockholders of record as of the close of business on May 4, 2001.
 
     Business Highlights
      -- Galileo signed several new contracts, including an exclusive,
         five-year, multi-million travel booking agreement with Flight Centre
         Ltd., one of the world's largest and fastest growing travel retailers.
      -- On April 1, Galileo acquired Galileo Southern Cross from TIAS, the
         owners of which are the Qantas Airways Group, Ansett Airlines and Air
         New Zealand.  Galileo Southern Cross is the company's distributor for
         the Australia, New Zealand and South Pacific markets, where Galileo is
         the market share leader.  Australia and New Zealand is Galileo's fifth
         largest market.
      -- Quantitude made significant progress on its network build out during
         the quarter, putting it on track to meet its accelerated build out
         schedule.  To date, Quantitude has installed 43 hubs, and 18 virtual
         POPs, or points of presence, throughout the U.S. in 61 cities.  In
         addition, the company entered into an agreement with Singapore
         Telecommunications covering transmission and co-location facilities
         throughout the Asia Pacific region, and in early April secured an
         agreement with Belgacom SA for networking services throughout Europe.
      -- Rosenbluth International, which has the second largest travel
         management presence in the world, selected Quantitude to provide
         managed networking services, including voice and data between its
         1,140 offices worldwide and its central site in Philadelphia, Pa.
 
     Outlook*
     Galileo continues to expect strong revenue growth in 2001 driven by
 international bookings growth, the airline booking fee increase implemented on
 January 1, 2001, and new revenue streams generated by its Quantitude
 subsidiary and Web hosting services.  The company expects to deliver full-year
 revenue growth in the range of 10 to 12 percent and economic EPS growth of
 between 7 and 9 percent.  While a further weakening in U.S. economic
 conditions could pose a risk to this outlook, airlines have typically reduced
 fares to stimulate demand during such times, which mitigates the negative
 impact to Galileo's revenue outlook.
     Galileo expects second quarter revenue growth to improve slightly over its
 first quarter performance and economic EPS growth in the mid-single digits.
 Galileo expects to continue to strengthen its U.S. market position in the
 traditional agency distribution channel and further expects to drive
 profitable growth through its various Internet initiatives.
 
     Strategies for Maximizing Shareholder Value*
     Believing that the public market is not appropriately valuing the
 company's financial performance, cash flow generation and excellent growth
 prospects, Galileo announced in November that its board of directors retained
 financial advisors to explore strategic alternatives for the company designed
 to maximize shareholder value.  The process has been a top priority for
 Galileo.  The company has been progressing as quickly and prudently as
 possible and believes the process is nearing conclusion.  No assurance can be
 made that any transaction will be completed.
     Galileo International is a diversified, global technology leader.  Its
 core business is providing electronic global distribution services for the
 travel industry through its computerized reservation systems, leading-edge
 products and innovative Internet-based solutions.  Galileo is a value-added
 distributor of travel inventory dedicated to supporting its travel agency and
 corporate customers and, through them, expanding traveler choice.  Among
 Galileo's subsidiaries are TRIP.com, an award-winning online travel service
 and technology provider; and Quantitude, which delivers advanced
 telecommunications services and enterprise networking solutions.  Galileo also
 offers secure, flexible and cost-effective managed hosting services.
 Headquartered in Rosemont, Illinois, USA, Galileo International has offices
 worldwide and operates a state-of-the-art data center in Greenwood Village,
 Colo., USA.  Visit www.galileo.com .
 
     (A) Galileo's economic earnings are calculated by adding back to reported
         earnings the after-tax amortization of intangible assets arising from
         mergers and acquisitions.
 
     *Statements in this release that are not strictly historical, which can be
 identified by the use of forward-looking terminology such as "continue" and
 "expect" or the negative thereof or other variations thereon or comparable
 terminology are forward-looking statements within the meaning of Section 27A
 of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
 of 1934.  We have based these forward-looking statements on our current
 expectations and projections about future events.  We undertake no obligation
 to publicly update or revise any forward-looking statement, whether as a
 result of new information, future events or otherwise.  These forward-looking
 statements are subject to risks and uncertainties that could cause actual
 events or results to differ materially from the events or results expressed or
 implied by the forward-looking statements.  You are cautioned not to place
 undue reliance on these forward-looking statements.  Risks and uncertainties
 associated with these forward-looking statements include, but are not limited
 to: heightened industry competition; the loss and inability to replace the
 bookings generated by one or more of our five largest travel agency customers;
 our ability to successfully expand our operations and service offerings in new
 markets, including the online travel market; failure to maintain
 technological  competitiveness, including our ability to timely develop and
 achieve market acceptance of new products; natural disasters or other
 calamities that may cause significant damage to our Data Center facility; our
 ability to protect our network and software against a security breach or
 similar threat; new or different legal or regulatory requirements governing
 the CRS industry; our sensitivity to general economic conditions and events
 that affect airline travel and the airlines that participate in our Apollo(R)
 and Galileo(R) systems; our ability to deliver to Galileo and to outside
 customers a new, Internet protocol-based network as planned, and for the cost
 and within the time frame currently estimated; our ability to effectively
 execute our sales initiatives in key markets; the loss of key employees; our
 ability to manage administrative, technical and operational issues presented
 by our expansion plans and acquisitions of other businesses; the results of
 our international operations and expansion into developing and new
 computerized reservation system ("CRS") markets and other travel distribution
 channels, governmental approvals, trade and tariff barriers, and political
 risks; and, the type and number of strategic alternatives, if any, designed to
 maximize shareholder value as determined by our Board of Directors.  For
 additional information concerning these risks, see the risk factors filed as
 an exhibit to Galileo's Annual Report on Form 10-K for 2000.
 
 
                            GALILEO INTERNATIONAL, INC.
                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                               BEFORE ONE-TIME ITEMS
                  (Unaudited, in millions, except per share data)
 
 
 
                                                 Quarter Ended March 31,
                                                2001      2000 (A)     Change
 
     Revenues:
        Electronic global distribution
         services                              $442.5      $421.3        5.0 %
        Information and network services         23.3        19.4       19.9 %
                                                465.8       440.7        5.7 %
 
     Operating expenses:
        Cost of operations                      163.6       134.0       22.1 %
        Commissions, selling and
         administrative                         198.0       180.7        9.5 %
                                                361.6       314.7       14.9 %
 
     Operating income                           104.2       126.0      (17.3)%
 
     Other income (expense):
        Interest expense, net                   (10.5)       (9.3)
        Other, net                               (3.4)       (2.4)
                                                (13.9)      (11.7)
     Income before income taxes                  90.3       114.3      (21.0)%
 
        Income taxes                             39.7        52.5      (24.3)%
 
     Net income                                 $50.6       $61.8      (18.3)%
 
     Weighted average shares outstanding         88.0        90.7
     Basic earnings per share                   $0.57       $0.68
     Diluted weighted average shares
      outstanding                                88.2        90.9
     Diluted earnings per share                 $0.57       $0.68      (15.8)%
 
     Diluted economic earnings per share (B)    $0.86       $0.82        4.8 %
 
     (A) The 2000 condensed consolidated statement of income excludes a special
         charge related to the extinguishment of a portion of the Company's
         liability arising from its services agreement with US Airways
         ($19.7 million) and a special charge to write-off in-process research
         and development costs related to the TRIP.com acquisition
         ($7.0 million).  Including these items, net income would have been
         $47.4 million, diluted earnings per share would have been $0.52, and
         diluted economic earnings per share would have been $0.66.
 
     (B) The Company's diluted economic earnings per share are calculated by
         adding back to reported earnings the after-tax amortization of
         intangible assets arising from mergers and acquisitions.
 
 
                            GALILEO INTERNATIONAL, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                  (Unaudited, in millions, except per share data)
 
                                                Quarter Ended March 31,
                                                2001      2000 (A)     Change
 
     Revenues:
        Electronic global distribution
         services                              $442.5      $421.3       5.0 %
        Information and network services         23.3        19.4      19.9 %
                                                465.8       440.7       5.7 %
 
     Operating expenses:
        Cost of operations                      163.6       134.0      22.1 %
        Commissions, selling and
         administrative                         198.0       180.7       9.5 %
        Special charge - services
         agreement                                 -         19.7
        Special charge - in-process R&D
         write-off                                 -          7.0
                                                361.6       341.4       5.9 %
 
     Operating income                           104.2        99.3       5.0 %
 
     Other income (expense):
        Interest expense, net                   (10.5)       (9.3)
        Other, net                               (3.4)       (2.4)
                                                (13.9)      (11.7)
     Income before income taxes                  90.3        87.6       3.0 %
 
        Income taxes                             39.7        40.2      (1.2)%
 
     Net income                                 $50.6       $47.4       6.7 %
 
     Weighted average shares outstanding         88.0        90.7
     Basic earnings per share                   $0.57       $0.52
     Diluted weighted average shares
      outstanding                                88.2        90.9
     Diluted earnings per share                 $0.57       $0.52       9.9 %
 
     Diluted economic earnings per share (A)    $0.86       $0.66      30.0 %
 
 
     (A) The 2000 condensed consolidated statement of income includes a special
         charge related to the extinguishment of a portion of the Company's
         liability arising from its services agreement with US Airways
         ($19.7 million) and a special charge to write-off in-process research
         and development costs related to the TRIP.com acquisition
         ($7.0 million).
 
     (B) The Company's diluted economic earnings per share are calculated by
         adding back to reported earnings the after-tax amortization of
         intangible assets arising from mergers and acquisitions.
 
 
                            GALILEO INTERNATIONAL, INC.
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (In thousands)
 
                                                    March 31,      December 31,
                                                      2001             2000
                                                   (unaudited)
     ASSETS
     Current assets:
        Cash and cash equivalents                    $10,580          $2,460
        Accounts receivable, net                     271,249         192,199
        Other current assets                          51,798          50,036
     Total current assets                            333,627         244,695
 
     Property and equipment, net                     209,067         210,677
     Computer software, net                          164,359         160,270
     Intangible assets, net                          694,279         720,212
     Other noncurrent assets                         141,661         143,405
                                                  $1,542,993      $1,479,259
 
 
     LIABILITIES AND STOCKHOLDERS'  EQUITY
     Current liabilities:
        Accounts payable                             $72,262         $76,913
        Accrued commissions                           44,671          34,471
        Other current liabilities                    170,048         112,864
        Long-term debt, current portion              187,654         212,654
     Total current liabilities                       474,635         436,902
 
     Long-term debt, less current portion            434,392         434,392
     Other noncurrent liabilities                    142,853         142,729
     Total liabilities                             1,051,880       1,014,023
 
     Stockholders' equity                            491,113         465,236
                                                  $1,542,993      $1,479,259
 
 
                            GALILEO INTERNATIONAL, INC.
                             RESERVATION STATISTICS (A)
                                     (Millions)
 
     Bookings for Quarter Ended March 31
 
 
                                                 2001        2000       Change
     US Market
     Air                                         30.8        33.7        -8.8%
     Car/Hotel/Leisure                            5.3         5.8        -7.8%
     Total Bookings                              36.1        39.5        -8.7%
 
     All Other Markets
     Air                                         55.7        54.8         1.6%
     Car/Hotel/Leisure                            1.7         1.6         4.5%
     Total Bookings                              57.3        56.4         1.7%
 
     Worldwide Bookings                          93.4        95.9        -2.6%
 
 
 
     (A)  The numbers contained in this schedule may not total due to rounding.
 
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 SOURCE  Galileo International, Inc.