EX-99.1 2 a07-13678_2ex99d1.htm EX-99.1

Exhibit 99.1

—   Travelport Announces First Quarter 2007 Results   —

Quarterly highlights

·                  Net Revenue growth of 5%, Adjusted Net Revenue growth of 8%

·                  EBITDA of $99 million, Adjusted EBITDA of $157 million

·                  Orbitz Worldwide gross bookings up 21% versus 1Q 2006

·                  Executed cost saving actions that are expected to result in approximately $113 million of annualized run rate savings

·                  $100 million discretionary pay down of term loan debt on May 7th

NEW YORK, NY, May 14, 2007  — Travelport Limited, the parent company of the Travelport group of companies, today announced its financial results for the quarter ended March 31, 2007. Travelport recognized net revenue for the quarter of $668 million and EBITDA of $99 million.  Adjusted net revenue was $684 million and adjusted EBITDA was $157 million, representing growth of 8% and 36%, respectively, over the year ago period.  A description of our adjusted results, which exclude items related to the Blackstone acquisition of Travelport and separation of Travelport from Cendant, among others, and a reconciliation to our GAAP results are included in this press release.

Travelport Consolidated

($ in millions)

 

 

1Q 2006

 

1Q 2007

 

$ Change*

 

% Change

 

Net Revenue

 

$

636

 

$

668

 

$

33

 

5

%

Adjusted Net Revenue

 

$

636

 

$

684

 

$

49

 

8

%

EBITDA

 

$

107

 

$

99

 

($8

)

-8

%

Adjusted EBITDA

 

$

115

 

$

157

 

$

42

 

36

%

Adjusted EBITDA Margin%

 

18.2

%

23.0

%

4.8 ppt

 

26

%


*                    May not foot due to rounding

Travelport President and CEO, Jeff Clarke, stated:  “Travelport is off to an excellent start in 2007.  We achieved strong performance driven by both top line revenue growth and cost control through our reengineering efforts.  We are now operating as three global businesses and I believe we are seeing benefits of this realignment in our operating performance, for example at Galileo, where adjusted net revenue grew 3% and adjusted EBITDA grew 9%. Our Orbitz Worldwide business had another strong quarter with global gross bookings growth of 21%,  domestic growth of 19% and international growth of 36% .

Mike Rescoe, Travelport Executive Vice President and CFO, stated “We continue to focus on our reengineering efforts and as of the end of April, we had taken actions that we expect will produce approximately $113 million of annualized run rate cost savings.  During the quarter, we realized $21 million, of cost savings which helped drive a 480 bps increase in Adjusted EBITDA margins. The strong performance of the company enabled us to make a discretionary $100 million repayment of our term loan debt on May 7th.”

Financial Highlights

First Quarter 2007

Galileo

($ in millions)

 

 

1Q 2006

 

1Q 2007

 

$ Change*

 

% Change

 

Net Revenue

 

$

403

 

$

414

 

$

11

 

3

%

Adjusted Net Revenue

 

$

403

 

$

416

 

$

13

 

3

%

EBITDA

 

$

132

 

$

117

 

($16

)

-12

%

Adjusted EBITDA

 

$

127

 

$

139

 

$

12

 

9

%

Adjusted EBITDA Margin%

 

31.6

%

33.5

%

1.9 ppt

 

6

%


*       May not foot due to rounding




 

Net revenue and EBITDA from Galileo were $414 million and $117 million, respectively, for the first quarter of 2007.  Adjusted net revenue and adjusted EBITDA from Galileo were $416 million and $139 million, respectively, an increase of 3% and 9%, respectively, versus the first quarter of 2006.  Higher revenue resulted from growth in GDS transactions, primarily in the U.S. and Asia Pacific regions, and higher international yields.  Revenue growth more than offset the anticipated yield decline from our new U.S. airline contracts.  In addition, the savings from Galileo’s reengineering efforts have started to flow through. Absent the impact of F/X, operating expenses, excluding inducements to agents, were 8% lower than the first quarter of 2006.  The revenue growth and operating expense savings drove higher adjusted EBITDA, more than offsetting unfavorable foreign exchange movements year-over-year which impacted Galileo approximately $7 million as compared to the prior year quarter.  Adjusted EBITDA margin improved 190 basis points, driven by cost savings realized during the quarter.

Orbitz Worldwide

($ in millions)

 

 

1Q 2006

 

1Q 2007

 

$ Change*

 

% Change

 

Net Revenue

 

$

185

 

$

207

 

$

22

 

12

%

Adjusted Net Revenue

 

$

185

 

$

220

 

$

34

 

19

%

EBITDA

 

$

15

 

$

17

 

$

3

 

18

%

Adjusted EBITDA

 

$

18

 

$

34

 

$

16

 

87

%

Adjusted EBITDA Margin%

 

9.8

%

15.4

%

5.6 ppt

 

58

%


*                    May not foot due to rounding

Net revenue and EBITDA from Orbitz Worldwide were $207 million and $17 million, respectively, for the first quarter of 2007.  Adjusted net revenue and adjusted EBITDA from Orbitz Worldwide were $220 million and $34 million, respectively, an increase of 19% and 87%, respectively, versus the first quarter of 2006.  Higher revenue resulted from global gross bookings growth of 21%.  Domestic revenue benefited from growth in air, hotel and dynamic package transactions.  Excluding marketing expenses, operating expenses declined year-over-year, demonstrating the benefits of our reengineering programs.  Adjusted EBITDA grew as a result of revenue growth and expense management, demonstrating the scale in the business.

GTA

($ in millions)

 

 

1Q 2006

 

1Q 2007

 

$ Change*

 

% Change

 

Net Revenue

 

$

62

 

$

64

 

$

2

 

4

%

Adjusted Net Revenue

 

$

62

 

$

66

 

$

4

 

6

%

EBITDA

 

($8

)

($0

)

$

7

 

NA

 

Adjusted EBITDA

 

($3

)

$

4

 

$

8

 

NA

 

Adjusted EBITDA Margin%

 

-5.5

%

6.5

%

12.0 ppt

 

NA

 


* May not foot due to rounding

Net revenue and EBITDA loss from GTA were $64 million and ($0) million, respectively, for the first quarter of 2007.  Adjusted net revenue and adjusted EBITDA from GTA were $66 million and $4 million, respectively, an increase of 6% and $8 million, respectively, versus the first quarter of 2006.  The first quarter of the year tends to be GTA’s weakest and one where historically it has generated a loss.  Global Total Transaction Value (“TTV”) grew 17% year-over-year, driven by strong individual traveler demand across all regions.  Net revenue increased as a result of higher gross bookings.  Operating expense grew at a slower pace, resulting in an increase in adjusted EBITDA versus the first quarter of 2006.

In addition, Travelport incurred adjusted corporate and unallocated expenses of $21 million.  On an unadjusted basis corporate and unallocated expenses were $35 million. These expenses were $5 million lower than the first quarter of 2006, driven by cost savings realized during the quarter, offset somewhat by higher stand alone operating expenses.

Excluded from the adjusted results are items such as the impairment charges, separation expenses from Cendant, and restructuring expenses, among others, that are detailed on the reconciliation of EBITDA included in this release.

2




 

Travelport generated $163 million of cash flow from operations during the first quarter.  Cash capital spending was $32 million and scheduled principal payments on the term loans were $6 million.  As of March 31, 2007, Travelport had $221 million of cash and cash equivalents on hand.  As previously mentioned, we made a $100 million discretionary payment on our term loan debt on May 7th, 2007, subsequent to the March 31, 2007 balance sheet date.

Conference Call/Webcast

The Company’s first quarter 2007 earnings conference call will be accessible to the media and general public via live Internet Web cast beginning at 11:00 a.m. (EDT), and through a limited number of listen-only, dial-in conference lines.

The Web cast will be available through the Investor Center section of the Company’s Web site at www.travelport.com.  To access the call through a conference line, dial 866-825-3209 in the United States and 617-213-8061 for international callers beginning at least 10 minutes prior to the scheduled start of the call. The passcode is 66873624.

A replay of the conference call will be available May 14, 2007 at 12:00 p.m. (EDT) through May 21, 2007. To access the replay, dial 888-286-8010 in the United States and 617-801-6888 for international callers. The passcode is 89638297.

About Travelport

Travelport is one of the world’s largest travel conglomerates. It operates 20 leading brands including Galileo, a global distribution system (GDS); Orbitz Worldwide, an on-line travel agency; and Gullivers Travel Associates, a wholesaler of travel content. With 2006 revenues of $2.6 billion, the Company has 8,000 employees and operates in 130 countries. Travelport is a private company owned by The Blackstone Group of New York, Technology Crossover Ventures of Palo Alto, California and One Equity Partners of New York.

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: our substantial indebtedness; our ability to service such indebtedness and the impact thereof on the way we operate our business; interest rate movements; factors affecting the level of travel activity, particularly air travel volume, including security concerns, natural disasters and other disruptions; general economic and business conditions, both nationally and in air markets; competition in the travel industry; pricing, regulatory and other trends in the travel industry; risks associated with doing business in multiple international jurisdictions and in multiple currencies; maintenance and protection of our information technology and intellectual property; the outcome of pending litigation; our ability to consummate the proposed acquisition of Worldspan; acquisition opportunities and our ability to successfully integrate acquired businesses and realize anticipated benefits of such acquisitions, including the proposed Worldspan acquisition; financing plans and access to adequate capital on favorable terms; and our ability to achieve anticipated cost savings. Other unknown or unpredictable factors also could 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 release includes certain non-GAAP financial measures as defined under SEC rules.  As required by SEC rules,

3




important information regarding such measures is contained on pages 6 and 7 of this release.

SOURCE: Travelport Limited

INVESTOR CONTACT: Raffaele Sadun of Travelport, +1-973-939-1450, or raffaele.sadun@travelport.com

MEDIA CONTACT: Elliot Bloom of Travelport, +1-212-915-9110, or elliot.bloom@travelport.com

Web site: http://www.travelport.com/

4




 

TRAVELPORT LIMITED

STATEMENTS OF OPERATIONS

(in millions)

(UNAUDITED)

Our results on a segment basis for the Three Months Ended March 31, 2007 as compared to the Three Months Ended March 31, 2006 are as follows.

 

 

 

 

Predecessor

 

 

 

Three Months Ended

 

Three Months Ended

 

 

 

March 31, 2007

 

March 31, 2006

 

Net revenue

 

$

668

 

$

636

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

Cost of revenue

 

280

 

278

 

Selling, general and administrative

 

265

 

250

 

Separation and restructuring charges

 

23

 

7

 

Depreciation and amortization

 

55

 

49

 

Other expense (income)

 

1

 

(6

)

Total operating expense

 

624

 

578

 

 

 

 

 

 

 

Operating income

 

44

 

58

 

Interest expense, net

 

(86

)

(12

)

Income (loss) from continuing operations before income taxes

 

(42

)

46

 

Provision (benefit) for income taxes

 

(3

)

(2

)

Income (loss) from continuing operations, net of tax

 

(39

)

48

 

Loss from discontinued operations, net of tax

 

 

(1

)

Net income (loss)

 

$

(39

)

$

47

 

 

5




 

TRAVELPORT LIMITED

SEGMENT EBITDA AND RECONCILIATION OF EBITDA TO NET INCOME

(in millions)

(UNAUDITED)

 

 

 

 

Predecessor

 

 

 

Three Months Ended
March 31, 2007

 

Three Months Ended
March 31, 2006

 

Galileo

 

 

 

 

 

Net revenue

 

$

414

 

$

403

 

Segment EBITDA

 

117

 

132

 

Orbitz

 

 

 

 

 

Net revenue

 

207

 

185

 

Segment EBITDA

 

17

 

15

 

GTA

 

 

 

 

 

Net revenue

 

64

 

62

 

Segment EBITDA

 

(0

)

(8

)

Corporate and Other

 

 

 

 

 

EBITDA

 

(35

)

(32

)

Intersegment eliminations

 

 

 

 

 

Net revenue

 

(17

)

(14

)

Combined Totals

 

 

 

 

 

Revenue

 

$

668

 

$

636

 

EBITDA

 

$

99

 

$

107

 

Provided below is a reconciliation of EBITDA to income before income taxes:

 

 

 

 

Predecessor

 

 

 

Three Months
Ended March 31, 2007

 

Three Months
Ended March 31,
2006

 

EBITDA

 

$

99

 

$

107

 

Interest Expense, Net

 

(86

)

(12

)

Depreciation and Amortization

 

(55

)

(49

)

Income (Loss) Before Income Taxes

 

$

(42

)

$

46

 

 

Adjusted Revenue, EBITDA, and Adjusted EBITDA are non-GAAP measures and may not be comparable to similarly named measures used by other companies. We believe that these measures provide management with a more complete understanding of the underlying operating results and trends and an enhanced overall understanding of the Company’s financial performance and prospects for the future. Adjusted Revenue, EBITDA and Adjusted EBITDA are not intended to be measures of liquidity or cash flows from operations nor measures comparable to net income as they do not take into account certain requirements such as capital expenditures and related depreciation, principal and interest payments and tax payments. However, they are Management’s primary metric for measuring business performance and are used by the Board to determine incentive compensation.  Capital expenditures, which impact depreciation and amortization, interest expense and income tax expense, are reviewed separately by management.  Adjusted Revenue, EBITDA and Adjusted EBITDA are disclosed so that investors may have the same tools available to Management when evaluating the results of Travelport. Adjusted Revenue is defined as Revenue adjusted to exclude the impact of deferred revenue written off due to purchase accounting on the acquisition of Travelport by an affiliate of The Blackstone Group. EBITDA is defined as net income (loss) before interest, income taxes, depreciation and amortization, each of which is presented on Travelport’s Statement of Operations.  Adjusted EBITDA is defined as EBITDA adjusted to exclude, the aforementioned impact of purchase accounting, impairment of intangibles assets, expenses incurred in conjunction with Travelport’s separation from Cendant, expenses incurred to acquire and integrate Travelport’s portfolio of businesses, costs associated with Travelport’s restructuring efforts and development of a global on-line travel platform, non-cash stock based compensation, and other adjustments made to exclude expenses management views as outside the normal course of operations.

 

6




 

Provided below is a reconciliation of Net Revenue to Adjusted Net Revenue and EBITDA to Adjusted EBITDA:

 

 

Three Month Ended March 31, 2007

 

Three Month Ended March 31, 2006

 

 

 

Galileo

 

Orbitz

 

GTA

 

Corporate & Other

 

Total

 

Galileo

 

Orbitz

 

GTA

 

Corporate & Other

 

Total

 

Net Revenue

 

$

414

 

$

207

 

$

64

 

($17

)

$

668

 

$

403

 

$

185

 

$

62

 

($14

)

$

636

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Separation from Cendant and Related

 

$

2

 

$

13

 

$

2

 

$

0

 

$

16

 

$

0

 

$

0

 

$

0

 

$

0

 

$

0

 

Non-recurring Items Associated with Travelport Acquisitions

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

Restructure and Related

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

Equity based compensation

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

Other

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

Total

 

$

2

 

$

13

 

$

2

 

$

0

 

$

16

 

$

0

 

$

0

 

$

0

 

$

0

 

$

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Revenue

 

$

416

 

$

220

 

$

66

 

($17

)

$

684

 

$

403

 

$

185

 

$

62

 

($14

)

$

636

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

$

117

 

$

17

 

($0

)

($35

)

$

99

 

$

132

 

$

15

 

($8

)

($32

)

$

107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Separation from Cendant and Related

 

$

2

 

$

13

 

$

2

 

$

4

 

$

20

 

$

0

 

$

2

 

$

1

 

$

4

 

$

7

 

Non-recurring Items Associated with Travelport Acquisitions

 

0

 

1

 

3

 

7

 

11

 

0

 

2

 

4

 

0

 

5

 

Restructure and Related

 

18

 

3

 

1

 

1

 

23

 

0

 

1

 

0

 

1

 

2

 

Equity based compensation

 

0

 

0

 

0

 

3

 

3

 

0

 

1

 

0

 

0

 

1

 

Other

 

2

 

(1

)

(1

)

(1

)

0

 

(5

)

(2

)

(0

)

0

 

(7

)

Total

 

$

23

 

$

16

 

$

5

 

$

14

 

$

58

 

($5

)

$

3

 

$

4

 

$

6

 

$

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

139

 

$

34

 

$

4

 

($21

)

$

157

 

$

127

 

$

18

 

($3

)

($26

)

$

115

 


* Totals may not foot due to rounding.

7




 

TRAVELPORT LIMITED

BALANCE SHEETS

(in millions)

(UNAUDITED)

 

 

March 31,
2007

 

December 31,
2006

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

221

 

$

97

 

Accounts receivable

 

436

 

454

 

Deferred income taxes

 

8

 

6

 

Other current assets

 

136

 

155

 

Assets held for sale

 

43

 

42

 

Total current assets

 

844

 

754

 

 

 

 

 

 

 

Property and equipment, net

 

480

 

474

 

Goodwill

 

2,174

 

2,165

 

Trademarks and tradenames

 

710

 

707

 

Other intangible assets, net

 

1,593

 

1,634

 

Deferred income taxes

 

9

 

12

 

Other non-current assets

 

373

 

384

 

Total assets

 

$

6,183

 

$

6,130

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

336

 

$

308

 

Accrued expenses and other current liabilities

 

903

 

821

 

Current portion of long term debt

 

24

 

24

 

Deferred income taxes

 

12

 

13

 

Total current liabilities

 

1,275

 

1,166

 

 

 

 

 

 

 

Long-term debt

 

3,633

 

3,623

 

Deferred income taxes

 

251

 

247

 

Tax sharing liability

 

128

 

125

 

Other non-current liabilities

 

144

 

194

 

Total liabilities

 

5,431

 

5,355

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

Common stock $1.00 par value; 12,000 shares authorized, 12,000 shares issued and outstanding

 

 

 

Additional paid in capital

 

913

 

908

 

Accumulated deficit

 

(184

)

(144

)

Accumulated other comprehensive income

 

23

 

11

 

Total equity

 

752

 

775

 

Total liabilities & equity

 

$

6,183

 

$

6,130

 

 

8




 

TRAVELPORT LIMITED

STATEMENTS OF CASH FLOWS

(in millions)

(UNAUDITED)

 

 

 

 

Predecessor

 

 

 

Three Months Ended

 

Three Months Ended

 

 

 

March 31, 2007

 

March 31, 2006

 

 

 

 

 

 

 

Operating activities of continuing operations

 

 

 

 

 

Net income (loss)

 

$

(39

)

$

47

 

Loss from discontinued operations

 

 

(1

)

Income (loss) from continuing operations

 

(39

)

48

 

Adjustments to reconcile net income to net cash provided by operating activities from continuing operations

 

 

 

 

 

Depreciation and amortization

 

55

 

49

 

Deferred income taxes

 

1

 

(5

)

Provision for bad debts

 

3

 

3

 

Gain on sale of property

 

1

 

(7

)

Amortization of debt issuance costs

 

5

 

 

Non-cash charges related to tax sharing liability

 

3

 

3

 

Equity based compensation

 

3

 

 

Changes in assets and liabilities, net of effects from acquisitions and disposals

 

 

 

 

 

Accounts receivable

 

20

 

24

 

Other current assets

 

(8

)

3

 

Accounts payable, accrued expenses and other current liabilities

 

110

 

86

 

Other

 

9

 

(6

)

Net cash provided by operating activities of continuing operations

 

163

 

198

 

Investing activities of continuing operations

 

 

 

 

 

Property and equipment additions

 

(32

)

(34

)

Businesses acquired, net of cash

 

(5

)

(21

)

Net intercompany funding with AvisBudget

 

 

(36

)

Proceeds from asset sales

 

1

 

10

 

Other

 

 

2

 

Net cash used in investing activities of continuing operations

 

(36

)

(79

)

Financing activities of continuing operations

 

 

 

 

 

Principal payments on borrowings

 

(6

)

(1

)

Issuance of common stock

 

2

 

 

Net cash used in financing activities of continuing operations

 

(4

)

(1

)

Effect of changes in exchange rates on cash & cash equivalents

 

1

 

(1

)

Net increase in cash and cash equivalents from continuing operations

 

124

 

117

 

Cash used in discontinued operations

 

 

 

 

 

Investing activities

 

 

(1

)

 

 

 

(1

)

Cash and cash equivalents at beginning of period

 

97

 

93

 

Cash and cash equivalents at end of period

 

221

 

209

 

Less cash of discontinued operations

 

 

(4

)

Cash and cash equivalents of continuing operations

 

$

221

 

$

205

 

 

9




 

TRAVELPORT LIMITED

Operating Statistics

(UNAUDITED)

 

 

Three Months Ended

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

2007

 

2006

 

Change

 

% Change

 

Galileo

 

 

 

 

 

 

 

 

 

Air Segments

 

68,623

 

66,930

 

1,693

 

3

%

Non-Air Segment

 

6,224

 

6,102

 

123

 

2

%

Total Segments

 

74,848

 

73,032

 

1,816

 

2

%

 

 

 

 

 

 

 

 

 

 

Americas Segments

 

28,552

 

27,877

 

675

 

2

%

International Segments

 

46,295

 

45,154

 

1,141

 

3

%

Total Segments

 

74,848

 

73,032

 

1,816

 

2

%

 

 

 

 

 

 

 

 

 

 

Orbitz Worldwide

 

 

 

 

 

 

 

 

 

Domestic Gross Bookings

 

2,531

 

2,129

 

402

 

19

%

International Gross Bookings

 

411

 

303

 

108

 

36

%

Total Gross Bookings

 

2,942

 

2,432

 

510

 

21

%

 

 

 

 

 

 

 

 

 

 

GTA

 

 

 

 

 

 

 

 

 

Total Transaction Value

 

295,900

 

252,400

 

43,500

 

17

%

 

10