EX-99.2 3 a07-28256_1ex99d2.htm EX-99.2

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF JUNE 30, 2007

(in millions)

 

 

 

Travelport

 

 

 

Pro Forma

 

 

 

 

 

Limited

 

Worldspan

 

Adjustments

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

315

 

$

92

 

$

 

$

407

 

Accounts receivable, net

 

461

 

89

 

 

550

 

Deferred income taxes

 

9

 

 

 

 

9

 

Other current assets

 

195

 

11

 

(10

)(a)

196

 

 

 

 

 

 

 

 

 

 

 

Total current assets

 

980

 

192

 

(10

)

1,162

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

486

 

89

 

151

(e)

665

 

 

 

 

 

 

 

(61

)(a)

 

 

Intangible assets

 

4,458

 

506

 

638

(a)

5,451

 

 

 

 

 

 

 

(151

)(e)

 

 

Deferred income taxes

 

12

 

 

 

12

 

Other non-current assets

 

369

 

179

 

(123

)(a) (b)

460

 

 

 

 

 

 

 

35

(a) (d)

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

6,305

 

$

966

 

$

479

 

$

7,750

 

 

 

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

425

 

$

12

 

$

 

$

437

 

Accrued expenses and other current liabilities

 

981

 

151

 

(14

)(a) (c)

1,118

 

Current portion of long-term debt

 

24

 

7

 

(7

)(a)

24

 

Current portion of capital lease obligations

 

 

12

 

 

12

 

Deferred income taxes

 

14

 

 

 

14

 

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

1,444

 

182

 

(21

)

1,605

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

3,546

 

1,194

 

96

(a)

4,586

 

 

 

 

 

 

 

(250

)(a) (b)

 

 

Long-term portion of capital lease obligations

 

 

56

 

 

56

 

Deferred income taxes

 

240

 

 

 

240

 

Tax sharing liability

 

138

 

 

 

138

 

Other non-current liabilities

 

154

 

62

 

(6

)

210

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

5,522

 

1,494

 

(181

)

6,835

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

783

 

(528

)

132

(a) (b)

915

 

 

 

 

 

 

 

528

(a)

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

6,305

 

$

966

 

$

479

 

$

7,750

 


 

(a)

The pro forma adjustments give effect to the proposed acquisition of Worldspan by Travelport and the allocation of the preliminary purchase price of $1.3 billion.

 

 

 

In accordance with the merger agreement, the proceeds from the new Travelport term loans to be used to repay the
$950 million Worldspan long-term debt. The excess of the preliminary purchase price less amounts used to pay Worldspan long term debt of $950 million, Travelport's Payment In Kind ("PIK") notes which were forgiven of $250 million a and capitalized transaction costs of $35 million over the historical June 30, 2007 Worldspan stockholders deficit balance of $528 million, plus fair value adjustments of $110 million results in estimated incremental goodwill and intangible assets of $699 million.

 

 

 

Reflects the following fair value adjustments made in connection with preliminary fair value established in purchase accounting:

 

 

Reduction to book value of Technology Assets to fair value

 

61

 

 

Increase investments to fair value

 

(2

)

 

Establish restructuring liability for retention plan and known terminations

 

17

 

 

Adjustment to fair value of other liabilities

 

(3

 

Adjustment to eliminate unfavorable contract between OWW and Worldspan

 

(30

)

 

 

43

 

 

Upon updating the perliminary allocation of the Worldspan purchase price, there may be adjustments to depreciable and amortizable assets that could have a material impact on the balance sheet and statements of operations.

 

 

The amounts reflected as Worldspan goodwill and other intangible assets and related amortization expense in the pro forma financial information is subject to change.

 

 

(b)

Reflects forgiveness of the $125 million PIK note issued by Worldspan to Travelport and the $125 million PIK note issued by Worldspan to a parent affiliate of Travelport. The $125 million PIK note issued to Travelport is eliminated from the balance sheet of Travelport and the $125 million PIK note issued to a parent affiliate of Travelport plus accrued interest is recorded as a capital contribution.

 

 

(c)

Reflects elimination of $14 million of interest accrued on the $250 million PIK notes issued by Worldspan for the six months ended June 30, 2007.

 

 

(d)

Reflects estimated transaction fees directly related to the acquisition of Worldspan by Travelport.

 

 

(e)

Reclassification of developed technology asset reflected as an intangible asset by Worldspan as PP&E by Travelport.

 

 

 



 

UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS DATA

FOR THE SIX MONTHS ENDED JUNE 30, 2007

 

 

 

Travelport

 

 

 

Pro Forma

 

 

 

(in millions)

 

Limited

 

Worldspan

 

Adjustments

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

1,392

 

$

390

 

(24

)(a)

$

1,758

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Cost of revenue

 

561

 

259

 

(24

)(a)

786

 

 

 

 

 

 

 

(10

)(b)

 

 

Selling, general and administrative

 

573

 

47

 

(13

)(b)

607

 

Separation and restructuring charges

 

29

 

 

 

29

 

Depreciation and amortization

 

108

 

18

 

23

(b)

149

 

Other expense

 

2

 

 

 

2

 

Total operating expenses

 

1,273

 

324

 

(24

)

1,573

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

119

 

66

 

 

185

 

Interest expense, net

 

(167

)

(51

)

6

(c)

(219

)

 

 

 

 

 

 

(7

)(d)

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

(48

)

15

 

(1

)

(34

)

Provision (benefit) for income taxes

 

6

 

5

 

(e)

11

 

Net income (loss)

 

$

(54

)

$

10

 

$

(1

)

$

(45

)

 


(a)

 

Reflects elimination of inducements paid by Worldspan to Orbitz

(b)

 

Reclassification of depreciation and amortization expense to conform to Travelport presentation.

(c)

 

Represents pro forma interest expense resulting from the proposed debt structure resulting from the planned acquisition of Worldspan using the applicable interest rates as follows:

 

 

 

Six Months Ended

 

 

 

June 30,

 

(in millions)

 

2007

 

Interest on new funded indebtedness

 

40.9

(1)

Capital lease obligations assumed

 

2.8

(2)

 

 

 

 

Total cash interest expense

 

43.7

 

Amortization of capitalized debt issuance costs

 

1.6

(3)

 

 

 

 

Total pro forma interest expense

 

45.3

 

Less historical interest expense, net

 

(50.9

)

 

 

 

 

Total pro forma interest expense adjustment

 

(5.6

)

 

 

(1) Reflects pro forma interest expense on a $1,040 million U.S. dollar-denominate term loan facility at an assumed interest rate if LIBOR of 5.36% plus 2.5%. This is based on rates of the existing Travelport floating rates notes.

 

 

 

(2) Reflects historical interest expense on assumed capital lease obligations.

 

 

 

(3) Reflects non-cash amortization of capitalized debt issuance costs. These costs are amortized over the term of the related facilities.

 

(d)

 

Eliminate intercompany interest income on PIK note

(e)

 

Represents the tax effect of the pro forma adjustments calculated at an assumed applicable statutory rate.