Travelport Performance and Innovation

                    Travelport Performance and Innovation  -Fourth Quarter and Full Year 2013 Results-  PR Newswire  ATLANTA, Feb. 27, 2014  ATLANTA, Feb. 27, 2014 /PRNewswire/ --Travelport Limited, a leading distribution services and e-commerce provider for the global travel industry, today announces its financial results for the fourth quarter and full year ended December 31, 2013.  Commenting on developments, Gordon Wilson, President and CEO of Travelport, said:  "I am delighted to report a successful growth year for Travelport, with key financial performance metrics up 5% with positive innovation and traction across all aspects of the business. We maintain forward momentum in transforming our core air business and growing our Beyond Air initiatives of payments, hospitality and advertising. I am also pleased to note that this momentum has continued into the early part of the current year."  Highlights    o5% growth in Net Revenue and 5% growth in Adjusted EBITDA for the full     year^*   oNew airline merchandising platform attracting low cost airline     participation and wider network carrier content   oDouble digit growth in Beyond Air initiatives – including advertising,     hospitality and payments   oDeployed new Point of Sale upgrades to over 75% of our targeted customer     base   oFirst Quarter 2014 developments include:         oNew long-term agreement with Orbitz Worldwide        oRenewed and extended British Airways, Iberia, Iberia Express and          easyJet contracts        oDeleveraging debt-for-equity exchange of $135 million, further          improving our capital structure  _____________ * Excluding the loss of the Master Services Agreement ("MSA") with United Airlines    Financial Highlights Fourth Quarter 2013 (in $ millions)         Q4 2013 Q42012 $Change %Change Net Revenue             480     457     23       5 Operating Income (Loss) 26      (17)    43       * EBITDA                  80      41      39       95 Adjusted EBITDA         109     103     6        4 *Not meaningful  Travelport's Net Revenue of $480 million for the fourth quarter of 2013 was $23 million (5%) higher than the fourth quarter of 2012, and Adjusted EBITDA of $109 million was $6 million (4%) higher than the fourth quarter of 2012.  Travelport RevPas increased 2% to $5.58.  Full Year 2013                                                 Excluding MSA (in $ millions)  2013  2012  $ Change %Change $ Change % Change Net Revenue      2,076 2,002 74        4        101      5 Operating Income 208   138   70        51       91       78 EBITDA           414   365   49        13       70       20 Adjusted EBITDA  517   517   —         —        23       5  Travelport's Net Revenue of $2,076 million for the full year 2013 was $74 million (4%) higher than 2012 and Adjusted EBITDA of $517 million was flat compared to the full year 2012.  The 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 $101 million (5%), and Adjusted EBITDA increased $23 million (5%) compared to 2012. The MSA only impacted the comparison of the results of operations for six months of the year in 2013 compared to 2012.  Travelport RevPas increased 4% to $5.49.  Interest costs of $342 million for the full year 2013 were $52 million higher than 2012 due to higher interest rates on our debt as a result of the debt refinancings we completed in April and June 2013.  Travelport's net debt was $3,340 million as of December 31, 2013, which comprised debt of $3,573 million less $154 million in cash and cash equivalents and less $79 million of cash held as collateral.  Travelport generated $100 million in net cash from operating activities for the full year 2013 compared to $181 million for 2012. The decrease is primarily a result of increased interest payments, increased customer loyalty payments and changes in operating working capital.  To further strengthen our capital structure, Travelport Worldwide Limited, our ultimate parent company, entered into separate, individually negotiated private exchange agreements with Morgan Stanley, certain funds and accounts managed by AllianceBernstein L.P. and certain funds and accounts managed by P. Schoenfeld Asset Management LP to exchange $135 million of our subordinated debt at par into common stock, par value $0.0002 (the "Common Shares"), of Travelport Worldwide at a value of $1.55 per Common Share. An aggregate of approximately 87 million Common Shares will be issued in the exchanges, which brings our fully diluted shares outstanding to approximately 928 million.  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 $18 million and $14 million for the quarters ended December 31, 2013 and 2012, respectively, and $63 million and $62 million for the full year 2013 and 2012, respectively.  Conference Call  The Company's fourth quarter and full year 2013 earnings conference call will be held on February 27, 2014 beginning at 2:00 p.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 Centre 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 2013 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 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; 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 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                                         Three Months Year         Year                            Three Months                            Ended       Ended        Ended        Ended (in $ millions)                            December 31, December 31, December 31, December 31,                            2013         2012                                                      2013         2012 Net Revenue                480          457          2,076        2,002 Costs and expenses Cost of revenue            294          272          1,266        1,191 Selling, general and       106          144          396          446 administrative Depreciation and           54           58           206          227 amortization Total costs and expenses   454          474          1,868        1,864 Operating income (loss)    26           (17)         208          138 Interest expense, net      (85)         (75)         (342)        (290) (Loss) gain on early       —            —            (49)         6 extinguishment of debt Loss from continuing operations before income taxes and equity in        (59)         (92)         (183)        (146) earnings (losses) of investment in Orbitz Worldwide Benefit from (provision    4            1            (20)         (23) for) income taxes Equity in earnings (losses) of investment in  2            (80)         10           (74) Orbitz Worldwide Net loss from continuing   (53)         (171)        (193)        (243) operations Gain from disposal of discontinued operations,   4            7            4            7 net of tax Net loss                   (49)         (164)        (189)        (236) Net income attributable to non-controlling interest   (1)          —            (3)          — in subsidiaries Net loss attributable to   (50)         (164)        (192)        (236) the Company    TRAVELPORT LIMITED CONSOLIDATED BALANCE SHEETS (in $millions)                                      December31, December31,                                                      2013        2012  Assets Current assets: Cash and cash equivalents                            154          110 Accounts receivable (net of allowances for doubtful  177          150 accounts of $13 and $16) Deferred income taxes                                1            2 Other current assets                                 134          170 Total current assets                               466          432 Property and equipment, net                          428          416 Goodwill                                             986          986 Trademarks and tradenames                            314          314 Other intangible assets, net                         671          717 Cash held as collateral                              79           137 Investment in Orbitz Worldwide                       19           — Non-current deferred income taxes                    5            6 Other non-current assets                             120          150 Total assets                                         3,088        3,158 Liabilities and equity Current liabilities: Accounts payable                                     72           74 Accrued expenses and other current liabilities       540          537 Deferred income taxes                                24           38 Current portion of long-term debt                    45           38 Total current liabilities                            681          687 Long-term debt                                       3,528        3,392 Deferred income taxes                                18           7 Other non-current liabilities                        172          274 Total liabilities                                    4,399        4,360 Commitments and contingencies Shareholders' equity: Common shares ($1.00par value; 12,000shares authorized; 12,000shares issued and                 —            — outstanding) Additional paid in capital                           691          718 Accumulated deficit                                  (1,939)      (1,747) Accumulated other comprehensive loss                 (82)         (189) Total shareholders' equity (deficit)                 (1,330)      (1,218) Equity attributable to non-controlling interest in   19           16 subsidiaries Total equity (deficit)                               (1,311)      (1,202) Total liabilities and equity                         3,088        3,158      TRAVELPORT LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS                                                      Year ended   Year ended (in $millions)                                      December 31, December 31,                                                       2013        2012 Operating activities Net loss                                             (189)        (236) Income from discontinued operations (including       (4)          (7) gain from disposal), net of tax Net loss from continuing operations                  (193)        (243) Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities of continuing operations: Depreciation and amortization                        206          227 Amortization of customer loyalty payments            63           62 Amortization of debt finance costs                   24           37 Non-cash accrual of repayment fee and amortization   7            — of debt discount Loss (gain) on early extinguishment of debt          49           (6) Payment-in-kind interest                             22           14 Gain on interest rate derivative instruments         (3)          (1) Loss on foreign exchange derivative instruments      1            — Equity in (earnings) losses of investment in         (10)         74 Orbitz Worldwide Equity-based compensation                            6            2 Deferred income taxes                                (1)          4 Customer loyalty payments                            (78)         (47) Defined benefit pension plan funding                 (3)          (27) FASA liability                                       —            (7) Changes in assets and liabilities: Accounts receivable                                  (27)         22 Other current assets                                 5            (3) Accounts payable, accrued expenses and other         5            37 current liabilities Other                                                27           36 Net cash provided by operating activities            100          181 Investing activities Property and equipment additions                     (107)        (92) Proceeds from sale of assets held for sale           17           — Other                                                (6)          3 Net cash used in investing activities                (96)         (89) Financing activities Proceeds from new term loans                         2,169        170 Proceeds from revolver borrowings                    73           80 Repayment of term loans                              (1,667)      (165) Repayment of revolver borrowings                     (93)         (95) Repurchase of Senior Notes                           (413)        (20) Repayment of capital lease obligations               (20)         (16) Debt finance costs                                   (55)         (20) Release of cash provided as collateral               137          — Cash provided as collateral                          (79)         — Payments on settlement of foreign exchange           (8)          (51) derivative contracts Proceeds from settlement of foreign exchange         4            9 derivative contracts Distribution to a parent company                     (6)          — Other                                                (2)          2 Net cash provided by (used in) financing             40           (106) activities Net increase (decrease) in cash and cash             44           (14) equivalents Cash and cash equivalents at beginning of year       110          124 Cash and cash equivalents at end of year             154          110 Supplemental disclosure of cash flow information Interest payments                                    273          232 Income tax payments, net                             29           16 Non-cash capital lease additions                     32           63 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) Reconciliation of Travelport Adjusted EBITDA   Three Months Ended December 31, to Operating Income (Loss)                                                2013            2012 Travelport Adjusted EBITDA                     109             103 Less adjustments: Amortization of customer loyalty payments      (18)            (14) Corporate costs                                (3)             (10) Equity-based compensation                      (2)             — Litigation and related costs                   —               (28) Other – non cash                               (6)             (10) Total Adjustments                              (29)            (62) EBITDA                                         80              41 Less: Depreciation and amortization            (54)            (58) Operating income (loss)                        26              (17) Reconciliation of Travelport Adjusted EBITDA   Year Ended December 31, to Operating Income                                                2013            2012 Travelport Adjusted EBITDA                     517             517 Less adjustments: Amortization of customer loyalty payments      (63)            (62) Corporate costs                                (7)             (19) Equity-based compensation                      (6)             (2) Litigation and related costs                   (12)            (53) Other – non cash                               (15)            (16) Total Adjustments                              (103)           (152) EBITDA                                         414             365 Less: Depreciation and amortization            (206)           (227) Operating income                               208             138    Reconciliation of Travelport Adjusted EBITDA to Net Cash Provided by Operating Activities and Unlevered Free Cash Flow                                          Year Ended December 31,                                          2013               2012 Travelport Adjusted EBITDA               517                517 Less: Interest payments                        (273)              (232) Tax payments                             (29)               (16) Changes in operating working capital     13                 57 Customer loyalty payments                (78)               (47) Defined benefit pension plan funding     (3)                (27) Other adjusting items^(*)                (47)               (71) Net cash provided by operating           100                181 activities Add back interest paid                   273                232 Less: Capital expenditures on property   (107)              (92) and equipment additions Less: Repayment of capital lease         (20)               (16) obligations Unlevered free cash flow                 246                305 (*) Other adjusting items relate to payments for costs included within operating income, but excluded from Travelport Adjusted EBITDA. These include (i) $24 million and $20 million of corporate costs payments during the years ended December 31, 2013 and 2012, respectively, (ii) $23 million and $28 million of litigation and related costs payments for the years ended December 31, 2013 and 2012, respectively, (iii) a $15 million payment related to a historical dispute related to a now terminated arrangement with a former distributor in the Middle East during the year ended December 31, 2012, and (iv) $1 million of restructuring related payments made during the year ended December 31, 2012.    TRAVELPORT LIMITED OPERATING STATISTICS AND DEFINITIONS (unaudited)                        Three Months Ended                         December 31,                        2013      2012     Change % Change Segments (in millions) Americas               38        37       1       3 Europe                 20        19       1       5 Asia Pacific           13        12       1       8 Middle East and Africa 9         9        —       — Total Segments         80        77       3       4 RevPas                 $5.58     $5.47    $0.11   2.0%                         Year Ended                                                      Excluding MSA                        December 31,                        2013   2012  Change % Change Change % Change Segments (in millions) Americas               170    172   (2)     (1)      —      — Europe                 85     82    3       4        3      4 Asia Pacific           56     54    2       4        2      4 Middle East and Africa 39     39    —       —        —      — Total Segments         350    347   3       1        5      2 RevPas                 $5.49  $5.28 $0.21   4.0%  ______________________  Definitions:  RevPas: Revenue per Segment is 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 EBITDA: is a non-GAAP financial measure and may not be comparable to similarly named measures used by other companies. Travelport EBITDA is defined as operating income (loss) plus depreciation and amortization expense.  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 is 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 as 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  Website: http://www.travelport.com  
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