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Travelport Delivering Growth



                         Travelport Delivering Growth

-Third Quarter 2013 Results-

PR Newswire

ATLANTA, Nov. 6, 2013

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:

  o Grown Net Revenue and Adjusted EBITDA by 5% in both Q3 and year to date
  o Increased RevPas by 4% in both Q3 and year to date
  o Delivered new Japanese GDS for AXESS/Japan Airlines
  o Further established industry-leading positions in both air and hotel
    content:

       o Gained significant momentum on ground-breaking air merchandising
         platform, adding new low cost carriers and increasing ancillary
         content across all regions
       o Sustained focus on hotel content – now offering 525,000 unique
         properties

  o 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)
                          Three Months               Nine Months
                                       Three Months  Ended       Nine Months
(in $ millions)           Ended        Ended         September   Ended
                          September    September 30, 30,         September 30,
                          30,          2012          2013        2012
                          2013
Net revenue               511          489           1,596       1,545
Costs and expenses
Cost of revenue           313          296           972         919
Selling, general and      90           110           290         302
administrative
Depreciation and          51           56            152         169
amortization
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      —            5             (49)        6
extinguishment of debt
Loss before income taxes
and equity in earnings of (26)         (39)          (124)       (54)
investment in Orbitz
Worldwide
Provision for income      (7)          (8)           (24)        (24)
taxes
Equity in earnings of
investment of Orbitz      6            7             8           6
Worldwide
Net loss                  (27)         (40)          (140)       (72)
Net income attributable
to non-controlling        —            (1)           (2)         —
interest in subsidiaries
Net loss attributable to  (27)         (41)          (142)       (72)
the Company

 

 

TRAVELPORT LIMITED
CONSOLIDATED CONDENSED BALANCE SHEETS
(unaudited)
                                                    September 30, December 31,

(in $ millions)                                     2013          2012
Assets
Current assets:
Cash and cash equivalents                           160           110
Accounts receivable (net of allowances for doubtful 214           150
accounts of $18 and $16)
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  17            16
subsidiaries
Total equity                                        (1,369)       (1,202)
Total liabilities and equity                        3,164         3,158

 

 

TRAVELPORT LIMITED
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(unaudited)
                                                   Nine Months   Nine Months

                                                   Ended         Ended
(in $ millions)
                                                   September 30, September 30,

                                                   2013          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        25            29
discount
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         (8)           (6)
Worldwide
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       48            34
current liabilities
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         (8)           (49)
derivative contracts
Proceeds from settlement of foreign exchange       3             9
derivative contracts
Distribution to a parent company                   (6)           —
Other                                              (1)           2
Net cash provided by (used in) financing           65            (75)
activities
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      229           —
Tranche 2 Loans
Exchange of Senior Notes due 2014 and 2016 for new 591           —
Senior Notes due 2016

 

TRAVELPORT LIMITED
NON-GAAP MEASURES
(in $ millions and unaudited)
Reconciliation of Travelport Adjusted EBITDA  Three Months Ended September 30,
to Operating Income
                                              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  Nine Months Ended September 30,
to Operating Income
                                              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    (76)               (61)
and equipment additions
Less: Repayment of capital lease          (14)               (13)
obligations
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
                                                           Excluding MSA
                       September 30,
                       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

Website: http://www.travelport.com
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