Travelport Driving Forward Momentum -- Fourth Quarter and Full Year 2012 Results -- PR Newswire ATLANTA, March 12, 2013 ATLANTA, March 12, 2013 /PRNewswire/ --Travelport Limited, a leading provider of critical transaction processing for the global travel industry, today announces its financial results for the fourth quarter and full year ended December 31, 2012. Commenting on the company's performance, Gordon Wilson, President and CEO of Travelport, said: "Travelport's strategic growth plans continue to gain momentum. We broadened our travel content, improved our point of sale platform delivery, grew our payments business and developed greater distribution capabilities for ancillary products and services. Our key underlying business performance indicators of RevPas and Gross Margin have improved every quarter of this year compared to 2011." These results are being released following a Travelport announcement of a proposed comprehensive refinancing plan. 2012 Highlights: oIncreased hotel content to over 375,000 bookable properties and more than 950,000 room offers; oSigned 35 new airline and merchandizing content agreements, including: oAir Canada, Air China, China Southern, Delta Airlines, KLM, Lufthansa, Qantas and South African Airways oLow cost airlines such as easyJet, Kulula, RAK Airways and Transavia; oWon customers in all regions and key countries, including Canada, Russia, the UK and the USA; oGrew eNett business settling transactions in 2012 with 18x increase over 2011; oExecuted strategic partnerships in Asia: oSecured long-term agreement to run the Japan Airlines AXESS GDS oExtended co-operation with Chinese GDS, TravelSky, to include hotels; oRecognised by both the travel and technology industries with awards in all regions, including 'Best GDS'(Asia Pacific) and 'IT Team of the Year' in the American Business Awards. Financial Highlights for Fourth Quarter 2012 (in $ millions) Q4 2012 Q42011 Change %Change Net Revenue 457 465 (8) (2) Operating (Loss) Income (17) 4 (21) * EBITDA 41 62 (21) (34) Adjusted EBITDA 89 106 (17) (16) * Not meaningful Travelport RevPas increased 5% to $5.47 for the fourth quarter of 2012. The loss of the Master Services Agreement ("MSA") with United Airlines contributed approximately $26 million to the decline in net revenue and $19 million to the decline in each of operating income, EBITDA and Adjusted EBITDA for the fourth quarter of 2012 compared to 2011. Excluding the impact of this loss, net revenue for the fourth quarter of 2012 increased $18 million from the fourth quarter of 2011, both operating income and EBITDA declined by $2 million, compared to 2011, and Adjusted EBITDA increased by $2 million compared to 2011. The average rate of agency commissions increased 1% for the fourth quarter of 2012. Financial Highlights for the Full Year 2012 (in $ millions) 2012 2011 Change %Change Net Revenue 2,002 2,035 (33) (2) Operating Income 138 200 (62) (31) EBITDA 371 427 (56) (13) Adjusted EBITDA 455 507 (52) (10) Travelport RevPas increased 3% to $5.28 for the full year 2012. The loss of the MSA with United Airlines contributed approximately $69 million to the decline in net revenue and $50 million to the decline in each of operating income, EBITDA and Adjusted EBITDA in 2012 compared to 2011. Excluding the impact of this loss, net revenue for 2012 increased $36 million from 2011, and operating income, EBITDA and Adjusted EBITDA declined by $12 million, $6 million and $2 million respectively, compared to 2011. The average rate of agency commissions increased 1% for the full year 2012. Interest costs of $290 million for the full year 2012 were $3 million higher due to higher effective interest rates. Travelport generated $181 million in net cash from operating activities of continuing operations for the full year 2012, a $57 million increase from 2011, due to improved operating working capital and lower interest payments, partially offset by a decline in Adjusted EBITDA. For the full year 2012 free cash flow was $73 million, unlevered free cash flow was $305 million and including other financing and investing activities net cash and cash equivalents decreased by $14 million. Travelport's net debt was $3,183 million as of December 31, 2012, which comprised debt of $3,430 million less $110 million in cash and cash equivalents and less $137 million of cash held as collateral. Conference Calls The Company's fourth quarter and full year 2012 earnings conference call will be held on, March 12, 2013, beginning at 1100hrs (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 the Company's website. About Travelport Travelport is a leading provider of critical transaction processing solutions and data to companies operating in the global travel industry. With a presence in over 170 countries, approximately 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, its Airline IT Solutions business and a majority joint venture ownership in eNett. Headquartered in Atlanta, Georgia, Travelport is a privately owned company. Investor Contact Julian Walker Head of Corporate Communications and Investor Relations +44 (0)17 5328 8210 firstname.lastname@example.org Media Contacts Kate Aldridge Senior Director, Corporate Communications, EMEA and APAC +44 (0)17 5328 8720 email@example.com Jill Brenner Senior Director, Corporate Communications, Americas +1 (973) 939 1325 firstname.lastname@example.org 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 Securities and Exchange Commission ("SEC") rules. As required by SEC rules, important information regarding such measures is contained below. TRAVELPORT LIMITED CONSOLIDATED STATEMENTS OF OPERATIONS (in $ millions) Year Ended December Three Months Ended 31, December 31, 2012 2011 2012 2011 457 465 2,002 2,035 Net revenue Costs and expenses Cost of revenue 272 271 1,191 1,211 Selling, general and administrative 144 132 446 397 Depreciation and amortization 58 58 227 227 Total costs and expenses 474 461 1,864 1,835 Operating (loss) (17) 4 138 200 income Interest expense, net (75) (64) (290) (287) Gain on early extinguishment of debt — — 6 — Loss from continuing operations before income taxes and equity in (92) (60) (146) (87) investment in Orbitz Worldwide Provision for income taxes — (2) (23) (29) Equity in losses of investment in (80) (22) (74) (18) Orbitz Worldwide Net loss from continuing operations (172) (84) (243) (134) (Loss) income from discontinued — — — (6) operations, net of tax Gain from disposal of discontinued 7 — 7 312 operations, net of tax Net (loss) income (165) (84) (236) 172 Net loss attributable to non-controlling interests in — 2 — 3 subsidiaries Net (loss) income attributable to the (165) (82) (236) 175 Company TRAVELPORT LIMITED CONSOLIDATED BALANCE SHEET (in $ millions) December31, December31, 2012 2011 Assets Current assets: Cash and cash equivalents 110 124 Accounts receivable (net of allowances for doubtful 150 180 accounts of $16 and $22) Deferred income taxes 2 3 Other current assets 220 168 Total current assets 482 475 Property and equipment, net 416 431 Goodwill 986 986 Trademarks and tradenames 314 314 Other intangible assets, net 599 681 Cash held as collateral 137 137 Investment in Orbitz Worldwide — 77 Non-current deferred income taxes 6 6 Other non-current assets 218 237 Total assets 3,158 3,344 Liabilities and equity Current liabilities: Accounts payable 74 72 Accrued expenses and other current liabilities 537 501 Deferred income taxes 38 — Current portion of long-term debt 38 50 Total current liabilities 687 623 Long-term debt 3,392 3,357 Deferred income taxes 7 42 Other non-current liabilities 274 279 Total liabilities 4,360 4,301 Commitments and contingencies Shareholders' equity: Common shares ($1.00par value; 12,000shares — — authorized; 12,000shares issued and outstanding) Additional paid in capital 718 717 Accumulated deficit (1,747) (1,511) Accumulated other comprehensive loss (189) (176) Total shareholders' equity (1,218) (970) Equity attributable to non-controlling interest in 16 13 subsidiaries Total equity (1,202) (957) Total liabilities and equity 3,158 3,344 TRAVELPORT LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS (in $ millions ) Year ended Year ended December31, December31, 2012 2011 Operating activities of continuing operations Net (loss) income (236) 172 Income from discontinued operations (including gain (7) (306) from disposal), net of tax Net loss from continuing operations (243) (134) Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities of continuing operations: Depreciation and amortization 227 227 Equity-based compensation 2 5 Amortization of debt finance costs and debt 37 23 discount Non-cash interest on Second Priority Secured Notes 14 3 Gain on early extinguishment of debt (6) — Gain on interest rate derivative instruments (1) (22) Gain on foreign exchange derivative instruments — (1) Equity in losses of investment in Orbitz Worldwide 74 18 Deferred income taxes 4 3 FASA liability (7) (16) Defined benefit pension plan funding (27) (17) Changes in assets and liabilities: Accounts receivable 22 (20) Other current assets (3) 13 Accounts payable, accrued expenses and other 36 9 current liabilities Other 52 33 Net cash provided by operating activities of 181 124 continuing operations Net cash (used in) provided by operating activities — (12) of discontinued operations Investing activities Property and equipment additions (92) (77) Proceeds from the sale of GTA business, net of cash — 628 disposed of $7 million Other 3 5 Net cash (used in) provided by investing activities (89) 556 Financing activities Proceeds from new term loans 170 — Repayment of term loans (165) (658) Proceeds from revolver borrowings 80 35 Repayment of revolver borrowings (95) — Repayment of capital lease obligations (16) (14) Repurchase and retirement of Senior Notes (20) — Debt finance costs (20) (100) Payments on settlement of foreign exchange (51) — derivative contracts Proceeds from settlement of foreign exchange 9 34 derivative contracts Distribution to a parent company — (89) Other 2 1 Net cash used in financing activities (106) (791) Effect of changes in exchange rates on cash and — 5 cash equivalents Net decrease in cash and cash equivalents (14) (118) Cash and cash equivalents at beginning of year 124 242 (including cash of discontinued operations) Cash and cash equivalents of continuing operations 110 124 at end of year Supplemental disclosure of cash flow information of continuing operations Interest payments 232 267 Income tax payments, net 16 22 Non-cash capital distribution to a parent company — 208 Non-cash capital lease additions 63 28 TRAVELPORT LIMITED NON-GAAP MEASURES (in $ millions) Reconciliation of Travelport Adjusted EBITDA Three Months Ended December 31, to Operating (Loss) Income 2012 2011 Travelport Adjusted EBITDA 89 106 Less adjustments: Corporatecosts (10) (4) Equity based compensation ― (5) Litigation and related costs (28) (37) Other - non cash (10) 2 Total (48) (44) EBITDA 41 62 Less: Depreciation and amortization (58) (58) Operating (loss) income (17) 4 Reconciliation of Travelport Adjusted EBITDA Year Ended December 31, to Operating Income 2012 2011 Travelport Adjusted EBITDA 455 507 Less adjustments: Corporatecosts (19) (15) GAAP restructuring charges ― (4) Equity-based compensation (2) (5) Litigation and related costs (53) (50) Gain on extinguishment of debt 6 ― Other -non cash (16) (6) Total (84) (80) EBITDA 371 427 Less: Depreciation and amortization (227) (227) Less: Gain on extinguishment of debt (6) ― Operating income 138 200 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 a number which is broadly computed from the Travelport Adjusted EBITDA for the last twelve months and the consolidated net debt, the first lien debt and the senior secured debt as at the balance sheet date and are known as the Total Leverage Ratio, the First Lien Leverage Ratio and the Senior Secured Leverage Ratio. Travelport is currently in compliance with all of our financial covenants. A breach of these covenants could result in a default under the senior secured credit agreement and the indentures governing the notes. TRAVELPORT LIMITED NON-GAAP MEASURES (in $ millions) Reconciliation of Travelport Adjusted EBITDA to Net Cash Provided by Operating Activities of Continuing Operation, Unlevered Free Cash Flow and Free Cash Flow Year Ended December 31, 2012 2011 Travelport Adjusted EBITDA 455 507 Less: Interest payments (232) (267) Tax payments (16) (22) Changes in operating working capital 72 (7) FASA liability payments (7) (16) Defined benefit pension plan funding (27) (17) Other adjusting items^(1) (64) (54) Net cash provided by operating activities of 181 124 continuing operations Interest payments 232 267 Capital expenditures on property and equipment (92) (72) additions Repayment of capital lease obligations (16) (14) Unlevered free cash flow 305 305 Less: interest payments (232) (267) Free cash flow 73 38 ^(1) Other adjusting items relate to payments for costs included within operating income, but excluded from Travelport Adjusted EBITDA. These primarily include (i) $28 million and $6 million of litigation and related cash payments during the years ended December 31, 2012 and 2011, respectively (ii) $15 million and $21 million of cash payments resulting from the resolution of a historical dispute related to a terminated arrangement with a former distributor in the Middle East, which was subject to binding arbitration, during the years ended December 31, 2012 and 2011, respectively (iii) $20 million and $16 million of corporate transaction cost payments during the years ended December 31, 2012 and 2011, respectively, and (iv) $1 million and $11 million of restructuring and related payments made during the years ended December 31, 2012 and 2011, respectively. 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 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 December 31, 2012 2011 Change % Change Segments (in millions) Americas 37 39 (2)* (6.1)% Europe 19 19 ― 1.1% Asia Pacific 12 13 (1) (2.6)% Middle East and Africa 9 9 ― (1.2)% Total Segments 77 80 (3) (3.3)% Year Ended December 31, 2012 2011 Change % Change Segments (in millions) Americas 170 176 (6)* (3.5)% Europe 84 85 (1) (0.9)% Asia Pacific 54 56 (2) (2.9)% Middle East and Africa 39 38 1 1.8% Total Segments 347 355 (8) (2.2)% * Includes the loss of segments related to the MSA with United SOURCE Travelport Limited Website: http://www.travelport.com
Travelport Driving Forward Momentum
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