Travelport Redefining Travel Commerce -Second Quarter 2014 Results-

ATLANTA, Aug. 4, 2014 /PRNewswire/ -- Travelport is a leading travel commerce platform providing distribution, technology, payment and other solutions for the $7 trillion global travel and tourism industry.

Gordon Wilson, President and CEO of Travelport, commented:

"The first half of 2014 has been a significant one for Travelport.  We have not only demonstrated continued financial growth and strong operating performance, but we have also made a number of targeted strategic investments in Beyond Air to extend this growth, specifically in all of the payments, corporate travel and hotel distribution aspects of our Travel Commerce Platform.  Additionally, we entered into a new long-term agreement with Delta Air Lines for the provision of hosting services for two of their critical airline operating systems.  From a capital structure perspective, we have concluded deleveraging transactions of almost $1 billion through a series of debt for equity deals and the sale of the majority of our shares in Orbitz Worldwide.  Our business is now even stronger and we remain firmly on track to deliver our strategic goals."

2014 Key Point Summary

• Year-to-date 2014 growth of +4% for Net Revenue and +6% for Adjusted EBITDA
• Travel Commerce Platform
  • Over 50 airlines have now signed for Travelport's industry leading Rich Content & Branding in addition to our merchandising capabilities
  • Expanded our Beyond Air capabilities through strategic investments:
    • Hospitality – purchased Hotelzon, a European based provider of corporate hotel booking technology
    • Corporate Travel – purchased 49% of Locomote, an Australian based corporate travel procurement and management platform
    • Payments – purchased a further 16% of eNett, our B2B payments company, taking our share from 57% to 73% in a transaction valuing the company at approximately $450 million
• Technology Services
  • Signed a new long term agreement with Delta Air Lines to host their core reservations and operations systems
• Capital Structure
  • Successfully completed deleveraging transactions amounting to $937 million year-to-date August 4, 2014, including debt for equity exchanges and the sale of substantially all of our shares in Orbitz Worldwide
  • On a proforma basis, Net Debt at June 30, 2014 would have been $2.5 billion with a Total Leverage Ratio of 4.9x⁽¹⁾
  • Launched a comprehensive debt refinancing transaction for our remaining debt

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⁽¹⁾ Proforma is calculated using June 30, 2014 Net Debt adjusted for the July 2014 Debt-for-Equity and Orbitz deleveraging transactions.  The Total Leverage Ratio is calculated using Total Debt divided by the previous twelve months' Adjusted EBITDA as defined under our Senior Secured Credit Agreement.

Financial Highlights

Second Quarter 2014

Travelport's Net Revenue of $551 million for the second quarter of 2014 was $14 million (3%) higher than the second quarter of 2013, and Adjusted EBITDA of $146 million was $7 million (5%) higher than the second quarter of 2013.

Travelport RevPas increased 2% to $5.75.

Travelport's Net Revenue of $1,123 million for year-to-date 2014 was $38 million (4%) higher than 2013 and Adjusted EBITDA of $297 million was $17 million (6%) higher than 2013.

Travelport RevPas increased 2% to $5.68.

Travelport's net debt was reduced in the first half of 2014 by $247 million to $3,093 million as of June 30, 2014, comprised of $3,256 million in debt less $163 million in cash, cash equivalents and cash held as collateral.

In March 2014, we completed a $135 million debt for equity exchange transaction.

In June 2014, we completed $182 million of debt for equity exchange transactions and sold 8.6 million Orbitz Worldwide shares for net proceeds of $54 million.

In July 2014, we completed $254 million of debt for equity exchange transactions and received net proceeds of $312 million from the sale of 39 million Orbitz Worldwide shares. 

Travelport generated $42 million in net cash from operating activities for the six months ended June 30, 2014 compared to net cash from operating activities of $12 million for the six months ended June 30, 2013.

Conference Call

The Company's second quarter 2014 earnings conference call will be held on August 4, 2014 beginning at 11.00am. (EDT).  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 is a travel commerce platform providing distribution, technology, payment and other solutions for the $7 trillion global travel and tourism industry.  With a presence in over 170 countries, approximately 3,600 employees and an additional 1,100 employees at Interglobe and 2013 net revenue of $2.1 billion, Travelport is a privately owned company comprised of:

• Our Travel Commerce Platform through which we facilitate travel commerce by connecting the world's leading travel providers with online and offline travel buyers in our proprietary business to business ("B2B") travel commerce marketplace. As travel industry demands evolve, we are utilizing our Travel Commerce Platform to redefine the electronic distribution and merchandising of airline core and ancillary products, as well as extending our reach into the growing world of travel commerce beyond air, including to hotel, car rental, rail, cruise-line and tour operators. In addition, we have leveraged our domain expertise in the travel industry to design a pioneering B2B payment solution that addresses the needs of travel intermediaries to efficiently and securely settle travel transactions. We also utilize the extensive data managed by our platform to provide an array of additional services, such as advertising solutions, subscription services, business intelligence data services, and marketing-oriented analytical tools to travel agencies, travel providers and other travel data users.
• Our Technology Services, through which we provide critical IT services to airlines, such as shopping, ticketing, departure control and other solutions, enabling them to focus on their core business competencies and reduce costs. We manage reservations, inventory management and other related critical systems for Delta Air Lines.

Investor Contact

Peter Golby
Vice President, Investor Relations
+44 (0)1753 288 187
[email protected]

Media Contacts

Kate Aldridge
Vice President, Corporate Communications
+44 (0)1753 328 8720
[email protected]

Jill Brenner
Senior Director, Corporate Communications, Americas
+1 (973) 753 3110
[email protected]

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.

Our revenue is earned through our Travel Commerce Platform (including our Air and Beyond Air revenue) and Technology Services.  Our Travel Commerce Platform combines state-of-the-art technology with industry leading features, functionality and innovative solutions to address the high volume and growing transaction processing requirements for the evolving needs of the travel industry.

Air: We provide sophisticated and comprehensive real-time search pricing, booking, change, payment and integrated itinerary creation for travelers who use the services of online and offline travel agents for both leisure and corporate travel.

Beyond Air: Our Beyond Air portfolio includes hospitality, advertising, payment solutions and other platform services.

The table below sets forth Travel Commerce Platform revenue by region:

The table below sets forth Travel Commerce Platform segments by region and global RevPas:

TRAVELPORT LIMITED
OPERATING STATISTICS AND DEFINITIONS
(unaudited)

Definitions:

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.  Adjusted EBITDA is defined as Adjusted Net Income (Loss), excluding depreciation and amortization of property and equipment, amortization of customer loyalty payments, interest and income taxes.  Capital expenditures, which impact depreciation and amortization, Customer Loyalty Payments, interest expense and income tax expense, are reviewed separately by management.  Adjusted EBITDA is disclosed so investors have the same tools available to management when evaluating the results of 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 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.

Adjusted Free Cash Flow: is a non-GAAP measure and may not be comparable to similarly named measures used by other companies.  Adjusted Free Cash Flow is defined as net cash provided by (used in) operating activities of continuing operations, adjusted to remove the impact of cash paid for other adjusting items which we believe are unrelated to our ongoing operations and to deduct capital expenditures on property and equipment additions including capital lease repayments.  We believe Adjusted 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.

Adjusted Net Income (Loss): 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.  Adjusted Net Income (Loss) is disclosed so investors have the same tools available to management when evaluating the results of Travelport.  Adjusted Net Income (Loss) is defined as net income (loss) from continuing operations excluding amortization of acquired intangible assets, gain/(loss) on early extinguishment of debt, equity in earnings/(losses) of investment in Orbitz Worldwide, the contribution from the terminated master services agreement ("MSA") with United Airlines, gain on sale of Orbitz Worldwide and items that are excluded under our debt covenants, such as non-cash equity-based compensation, certain corporate and restructuring costs, certain litigation and related costs, and other non-cash items such as foreign currency gains/(losses) on euro denominated debt and earnings hedges along with any income taxes related to these exclusions.

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.

Trading Working Capital: is a non-GAAP financial measure and may not be comparable to similarly named measures used by other companies.  Trading Working Capital is defined as assets and liabilities directly related to our core trading operations (accounts receivables and deferred revenue from travel providers and travel agencies, current prepaid travel agency incentive payments and accounts payable and accrued liabilities for commissions and incentives).

Travel Commerce Platform Reported Segments ("Segments"): Travel provider revenue generating units sold by our travel agency network, geographically presented by region based upon point of sale location.

Travel Commerce Platform RevPas ("RevPas"): Travel Commerce Platform revenue divided by the number of Travel Commerce Platform Reported Segments.

Unlevered Adjusted Free Cash Flow: is a non-GAAP measure and may not be comparable to similarly named measures used by other companies.  Unlevered Adjusted Free Cash Flow is defined as Adjusted Free Cash Flow Adjusted to remove the impact of interest payments.

SOURCE Travelport

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