Travelport Limited Third Quarter 2012 Results Delivering Strategic Growth PR Newswire ATLANTA, Nov. 2, 2012 ATLANTA, Nov. 2, 2012 /PRNewswire/ --Travelport Limited, a leading provider of critical transaction processing for the global travel industry, today announces its financial results for the third quarter ended September 30, 2012. Commenting on developments, Gordon Wilson, President and CEO of Travelport, said: "We continue to deliver on our strategy as we report a sixth consecutive quarter of RevPas growth, underlying gross margin improvement and strong cash generation. In another positive quarter for Travelport, we have further expanded our content offering, increased our customer base, continued the successful deployment of our products and realized significant benefits from our investments in key adjacencies." Highlights: oIncreased RevPas by 3% to $5.30 in Q3 2012 oGrew Adjusted EBITDA by $5 million in Q3 2012 (excluding the impact of the United Airlines Master Services Agreement) oImproved YTD operating cash flow by $48 million to $134 million oTwo merchandising milestones achieved with Air Canada and KLM oNew Travelport mobile solutions deployed regionally oFirst Russian language corporate booking tool launched Financial Highlights for Third Quarter 2012 (in $ millions) Q3 2012 Q32011 Change %Change Net Revenue 489 509 (20) (4) Operating Income 27 51 (24) (47) EBITDA 88 107 (19) (18) Adjusted EBITDA 106 118 (12) (10) The loss of the Master Services Agreement with United Airlines contributed approximately $23 million to the decline in net revenue and $17 million to the decline in each of operating income, EBITDA and Adjusted EBITDA for the third quarter of 2012 compared to 2011. Excluding the impact of this loss, net revenue for the third quarter of 2012 increased $3 million from the third quarter of 2011, operating income and EBITDA declined by $7 million and $2 million, respectively, compared to 2011, and Adjusted EBITDA increased by $5 million compared to 2011. RevPas increased by 3% to $5.30, and average rate of agency commissions declined 1%. Financial Highlights for YTD 2012 (in $ millions) YTD 2012 YTD2011 Change %Change Net Revenue 1,545 1,570 (25) (2) Operating Income 155 196 (41) (21) EBITDA 330 365 (35) (10) Adjusted EBITDA 366 401 (35) (9) The loss of the Master Services Agreement with United Airlines contributed approximately $43 million to the decline in net revenue and $31 million to the decline in each of operating income, EBITDA and Adjusted EBITDA year to date 2012 compared to 2011. Excluding the impact of this loss, net revenue for year to date 2012 increased $18 million from the same period in 2011, operating income and EBITDA declined by $10 million and $4 million, respectively, compared to 2011, and Adjusted EBITDA declined by $4 million compared to 2011. RevPas increased by 2% to $5.23, and average rate of agency commissions increased 1%. Interest costs of $215 million year to date were $8 million lower for 2012 due to a lower net debt balance and the favorable impact of interest rate hedges, offset by a higher underlying effective interest rate. Travelport generated $134 million in net cash from operating activities of continuing operations, a $48 million increase from 2011, due to a $38 million decrease in interest payments and improved operating working capital. Travelport's net debt was $3,122 million as of September 30, 2012, which comprised debt of $3,384 million less $125 million in cash and cash equivalents and less $137 million of cash held as collateral. We have omitted certain financial information from our Third Quarter 2012 Results Earnings Release, including our Consolidated Condensed Balance Sheets and Consolidated Condensed Statements of Cash Flows. We have included an abridged version of our Consolidated Condensed Statement of Operations. Our financial statements include our 47% share of the earnings or losses in our Investment in Orbitz Worldwide, which we account for under the equity method of accounting. Orbitz Worldwide has not yet released its third quarter 2012 results. A complete set of financial statements will be included in our Quarterly Report on Form 10-Q, which we expect to file on November 7, 2012, after Orbitz Worldwide releases its quarterly earnings report. Conference Calls The Company's third quarter 2012 earnings conference call will be held on November 2, 2012, beginning at 10:30a.m. (EDT). Details for this call and 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 our website. About Travelport Travelport is a broad-based business services company and a leading provider of critical transaction processing solutions to companies operating in the global travel industry. With a presence in over 170 countries, approximately 3,500 employees and 2011 net revenue of $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. 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 email@example.com Media Contacts Kate Aldridge Senior Director, Corporate Communications, EMEA and APAC +44 (0)1753 288 720 firstname.lastname@example.org Jill Brenner Senior Director, Corporate Communications, Americas +1 (973) 939 1325 email@example.com Forward-Looking Statements Certain statements in this press release constitute "forward-looking statements" that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", "may increase", "may fluctuate" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements. Various risks that could cause future results to differ from those expressed by the forward-looking statements included in this press release include, but are not limited to: the impact that our outstanding indebtedness may have on the way we operate our business; factors affecting the level of travel activity, particularly air travel volume, including security concerns, general economic conditions, natural disasters and other disruptions; general economic and business conditions in the markets in which we operate, including fluctuations in currencies and the economic conditions in the eurozone; pricing, regulatory and other trends in the travel industry; our ability to obtain travel supplier inventory from travel suppliers, such as airlines, hotels, car rental companies, cruise lines and other travel suppliers; our ability to develop and deliver products and services that are valuable to travel agencies and travel suppliers and generate new revenue streams, including our universal desktop product; risks associated with doing business in multiple countries and in multiple currencies; maintenance and protection of our information technology and intellectual property; the impact on supplier capacity and inventory resulting from consolidation of the airline industry; financing plans and access to adequate capital on favorable terms; our ability to achieve expected cost savings from our efforts to improve operational efficiency; our ability to maintain existing relationships with travel agencies and to enter into new relationships on acceptable financial and other terms; and our ability to grow adjacencies, such as our 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 SEC rules. As required by SEC rules, important information regarding such measures is contained below. TRAVELPORT LIMITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (unaudited) Three Months Three Months Nine Months Nine Months (in $millions) Ended Ended Ended Ended September30, September30, September30, September30, 2012 2011 2012 2011 Net revenue 489 509 1,545 1,570 Costs and expenses Cost of revenue 296 313 919 940 Selling, general 110 89 302 265 and administrative Depreciation and 56 56 169 169 amortization Total costs and 462 458 1,390 1,374 expenses Operating 27 51 155 196 income Interest expense, (71) (74) (215) (223) net Gain on early extinguishment of 5 — 6 — debt Loss from continuing operations before income taxes and (39) (23) (54) (27) equity ininvestment in Orbitz Worldwide TRAVELPORT LIMITED NON-GAAP MEASURES (in $ millions and unaudited) Reconciliation of Travelport Adjusted EBITDA Three Months Ended September 30, to Operating Income 2012 2011 Travelport Adjusted EBITDA 106 118 Less adjustments: Corporate transaction costs (3) (2) Litigation and related costs (12) (3) Gain on extinguishment of debt 5 ― Other (8) (6) Total (18) (11) EBITDA 88 107 Less: Depreciation and amortization (56) (56) Less: Gain on extinguishment of debt (5) ― Operating income 27 51 Reconciliation of Travelport Adjusted EBITDA Nine Months Ended September 30, to Operating Income 2012 2011 Travelport Adjusted EBITDA 366 401 Less adjustments: Corporate transaction costs (9) (11) Restructuring charges ― (4) Equity-based compensation (2) ― Litigation and related costs (25) (13) Gain on extinguishment of debt 6 ― Impairment of property and equipment ― (4) Other (6) (4) Total (36) (36) EBITDA 330 365 Less: Depreciation and amortization (169) (169) Less: Gain on extinguishment of debt (6) ― Operating income 155 196 TRAVELPORT LIMITED NON-GAAP MEASURES (in $ millions and unaudited) Reconciliation of Travelport Adjusted EBITDA Nine Months Ended September 30, to Net Cash Provided by Operating Activities of Continuing Operations and Unlevered Free 2012 2011 Cash Flow Travelport Adjusted EBITDA 366 401 Less: Interest payments (202) (240) Tax payments (9) (13) Changes in operating working capital 44 (9) FASA liability payments (7) (12) Defined benefit pension plan funding (15) (13) Other adjusting items (43) (28) Net cash provided by operating activities of 134 86 continuing operations Add back interest paid 202 240 Less: Capital expenditures on property and (61) (50) equipment additions of continuing operations Less: Repayment of capital lease obligations (13) (11) Unlevered free cash flow 262 265 Travelport Adjusted EBITDA is a non-GAAP measure and may not be comparable to similarly named measures used by other companies. We believe this measure provides management with a more complete understanding of the underlying results and trends and an enhanced overall understanding of our financial liquidity and prospects for the future. Adjusted EBITDA is the primary metric for measuring our business results, forecasting and determining future capital investment allocations and is used by the Board of Directors to determine incentive compensation. Capital expenditures, which impact depreciation and amortization, 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 the impact of purchase accounting, impairment of goodwill and intangibles assets, expenses incurred to acquire and integrate Travelport's portfolio of businesses, costs associated with Travelport's restructuring efforts, non-cash equity-based compensation, and other adjustments made to exclude expenses management views as outside the normal course of operations. Travelport Adjusted EBITDA is a critical measure as it is required to calculate our key financial ratios under our credit agreement covenants. These ratios use the Travelport Adjusted EBITDA for the last twelve months and the consolidated net debt and the first lien debt as at the balance sheet date and are known as the Total Leverage Ratio and the First Lien Leverage Ratio. Travelport is currently in compliance with its Total Leverage Ratio and its First Lien Leverage Ratio. A breach of these covenants could result in a default under the senior secured credit agreement and the indentures governing the notes. 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 operating activities of continuing operations 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 LIMITED Operating Statistics (unaudited) Three Months Ended September 30, 2012 2011 Change % Change Segments (in millions) Americas 41 45 (4) (6.2)% Europe 21 21 ― 0.7% Asia Pacific 13 14 (1) (9.2)% Middle East and Africa 10 9 1 0.9% Total Segments 85 89 (4) (4.4)% Nine Months Ended September 30, 2012 2011 Change % Change Segments (in millions) Americas 133 137 (4) (2.7)% Europe 65 66 (1) (1.5)% Asia Pacific 42 43 (1) (3.4)% Middle East and Africa 30 29 1 3.1% Total Segments 270 275 (5) (1.9)% SOURCE Travelport Limited Website: http://www.travelport.com
Travelport Limited Third Quarter 2012 Results
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