LANGLEY, U.K., Feb. 22, 2019
/PRNewswire/ -- Travelport Worldwide Limited (NYSE: TVPT)
today announced its financial results for the fourth quarter and
full year ended December 31,
2018.
Key Points (for full year 2018 unless stated
otherwise)
- Net revenue increased 4% to $2,551
million, including Travel Commerce Platform revenue growth
of 5% to $2,454 million
- Net income decreased 46% to $75
million; Adjusted EBITDA was flat at $590 million
- Income per share (diluted) decreased 50% to $0.57; Adjusted Income per Share (diluted)
increased 1% to $1.46
- Payment Solutions (eNett) net revenue grew 63% to $315 million
- Net cash provided by operating activities increased 15% to
$364 million; Free Cash Flow
increased 10% to $220 million
- Fourth quarter net revenue increased 3% to $589 million; net income decreased 93% to
$3 million; and Adjusted EBITDA
increased 1% to $140 million
Gordon Wilson, President and CEO
of Travelport, commented:
"I am pleased to report that we ended the year with all of our
full year key financial performance measures either in line with or
better than management expectations and guidance. We also
made significant operational progress across our four customer
priorities of delivering superior choice, performance, experiences
and intelligence in travel and payments.
In December, we announced we entered into a definitive merger
agreement to be acquired by affiliates of Siris Capital Group, LLC
and Evergreen Coast Capital Corp. We continue to work towards
finalizing the merger, which currently is expected to close in the
first half of this year."
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
(in $ thousands,
except per share amounts)
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
|
|
Net
revenue
|
|
|
588,633
|
|
|
573,567
|
|
|
3
|
%
|
|
2,551,064
|
|
|
2,447,279
|
|
4
|
%
|
Operating
income
|
|
|
52,822
|
|
|
53,277
|
|
|
(1)
|
%
|
|
216,894
|
|
|
289,274
|
|
(25)
|
%
|
Net income
|
|
|
3,067
|
|
|
45,370
|
|
|
(93)
|
%
|
|
75,173
|
|
|
140,280
|
|
(46)
|
%
|
Income per share –
diluted
|
|
$
|
0.02
|
|
$
|
0.37
|
|
|
(95)
|
%
|
$
|
0.57
|
|
$
|
1.13
|
|
(50)
|
%
|
Adjusted
EBITDA
|
|
|
139,704
|
|
|
138,017
|
|
|
1
|
%
|
|
590,117
|
|
|
590,013
|
|
—
|
|
Adjusted Operating
Income
|
|
|
81,732
|
|
|
83,141
|
|
|
(2)
|
%
|
|
349,943
|
|
|
351,606
|
|
—
|
|
Adjusted Net
Income
|
|
|
39,719
|
|
|
44,140
|
|
|
(10)
|
%
|
|
186,625
|
|
|
181,174
|
|
3
|
%
|
Adjusted Income per
Share – diluted
|
|
$
|
0.31
|
|
$
|
0.35
|
|
|
(11)
|
%
|
$
|
1.46
|
|
$
|
1.44
|
|
1
|
%
|
Net cash provided by
operating activities
|
|
|
78,929
|
|
|
43,320
|
|
|
82
|
%
|
|
364,364
|
|
|
317,662
|
|
15
|
%
|
Free Cash
Flow
|
|
|
43,532
|
|
|
4,998
|
|
|
|
*
|
|
219,731
|
|
|
200,148
|
|
10
|
%
|
Cash dividend per
share
|
|
$
|
0.075
|
|
$
|
0.075
|
|
|
—
|
|
$
|
0.300
|
|
$
|
0.300
|
|
—
|
|
___________________
|
* Percentage
calculated not meaningful
|
|
The Company refers to
certain non-GAAP financial measures in this press release,
including Adjusted EBITDA, Adjusted Operating Income (Loss),
Adjusted Net Income (Loss), Adjusted Income (Loss) per Share -
diluted, Capital Expenditures, Net Debt and Free Cash Flow.
Please refer to pages 15 to 18 of this press release for additional
information, including reconciliations of such non-GAAP financial
measures.
|
Discussion of Results for the Fourth Quarter and Full Year of
2018
Net Revenue
Net revenue is comprised of:
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
(in $
thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
Air
|
|
$
|
384,748
|
|
$
|
385,597
|
|
|
—
|
|
$
|
1,706,273
|
|
$
|
1,701,097
|
|
|
—
|
Beyond Air
|
|
|
181,008
|
|
|
163,564
|
|
|
11
|
|
|
747,748
|
|
|
640,038
|
|
|
17
|
Travel Commerce
Platform
|
|
|
565,756
|
|
|
549,161
|
|
|
3
|
|
|
2,454,021
|
|
|
2,341,135
|
|
|
5
|
Technology
Services
|
|
|
22,877
|
|
|
24,406
|
|
|
(6)
|
|
|
97,043
|
|
|
106,144
|
|
|
(9)
|
Net
revenue
|
|
$
|
588,633
|
|
$
|
573,567
|
|
|
3
|
|
$
|
2,551,064
|
|
$
|
2,447,279
|
|
|
4
|
Fourth Quarter 2018
Net revenue increased by $15
million, or 3%, to $589
million primarily due to growth in Travel Commerce Platform
revenue of $17 million, or 3%.
Within Travel Commerce Platform revenue, Beyond Air revenue
increased by $17 million, or 11%,
offset by a marginal decrease in Air revenue of $1 million. The increase in Beyond Air
revenue was driven by an increase in net revenue from the Payment
Solutions business of 38% to $75
million, primarily due to an increase in the volume of
payments settled with existing customers that was partially offset
by a decline in the remainder of the Beyond Air portfolio.
The marginal decrease in Air revenue was mainly due to a decrease
in Air Reported Segments that includes the impact of the loss of a
large Pacific-based travel agency and other specific travel agency
headwinds reported in earlier quarters, offset by improved
pricing. Technology Services revenue decreased $2 million, or 6%, primarily due to lower hosting
revenue.
Full Year 2018
Net revenue increased by $104
million, or 4%, to $2,551
million primarily due to growth in Travel Commerce Platform
revenue of $113 million, or 5%.
Within Travel Commerce Platform revenue, Beyond Air revenue
increased by $108 million, or 17%,
and Air revenue increased by $5
million. The increase in Beyond Air revenue was driven
by an increase in net revenue from the Payment Solutions business
of 63% to $315 million, primarily due
to an increase in the volume of payments settled with existing
customers that was partially offset by a decline in the remainder
of the Beyond Air portfolio. The increase in Air revenue was
mainly due to improved pricing that was offset by a decrease in Air
Reported Segments that includes the impact of the loss of a large
Pacific-based travel agency and other specific travel agency
headwinds and a $9 million
recognition of revenue in 2017 in respect of revenue deferred in
previous years. Technology Services revenue decreased
$9 million, or 9%, primarily due to
the sale of IGT Solutions Private Ltd. in April 2017.
The table below sets forth Travel Commerce Platform revenue by
region:
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
(in $
thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
Asia
Pacific
|
|
$
|
137,820
|
|
$
|
127,498
|
|
|
8
|
|
$
|
564,548
|
|
$
|
565,246
|
|
|
—
|
Europe
|
|
|
191,428
|
|
|
184,651
|
|
|
4
|
|
|
861,510
|
|
|
753,462
|
|
|
14
|
Latin America and
Canada
|
|
|
25,432
|
|
|
25,713
|
|
|
(1)
|
|
|
112,949
|
|
|
109,632
|
|
|
3
|
Middle East and
Africa
|
|
|
79,597
|
|
|
72,854
|
|
|
9
|
|
|
319,190
|
|
|
311,813
|
|
|
2
|
International
|
|
|
434,277
|
|
|
410,716
|
|
|
6
|
|
|
1,858,197
|
|
|
1,740,153
|
|
|
7
|
United
States
|
|
|
131,479
|
|
|
138,445
|
|
|
(5)
|
|
|
595,824
|
|
|
600,982
|
|
|
(1)
|
Travel Commerce
Platform
|
|
$
|
565,756
|
|
$
|
549,161
|
|
|
3
|
|
$
|
2,454,021
|
|
$
|
2,341,135
|
|
|
5
|
The tables below set forth Travel Commerce Platform Reported
Segments and global RevPas by region:
|
|
Segments (in thousands)
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
|
2018
|
|
2017
|
|
%
Change
|
|
2018
|
|
2017
|
|
% Change
|
Asia
Pacific
|
|
|
15,880
|
|
|
15,210
|
|
|
4
|
|
|
65,052
|
|
|
69,922
|
|
|
(7)
|
Europe
|
|
|
18,595
|
|
|
19,724
|
|
|
(6)
|
|
|
84,132
|
|
|
83,202
|
|
|
1
|
Latin America and
Canada
|
|
|
4,142
|
|
|
4,306
|
|
|
(4)
|
|
|
18,373
|
|
|
18,168
|
|
|
1
|
Middle East and
Africa
|
|
|
9,340
|
|
|
8,854
|
|
|
5
|
|
|
37,640
|
|
|
37,125
|
|
|
1
|
International
|
|
|
47,957
|
|
|
48,094
|
|
|
—
|
|
|
205,197
|
|
|
208,417
|
|
|
(2)
|
United
States
|
|
|
26,383
|
|
|
29,509
|
|
|
(11)
|
|
|
129,974
|
|
|
134,161
|
|
|
(3)
|
Travel Commerce
Platform Reported
Segments
|
|
|
74,340
|
|
|
77,603
|
|
|
(4)
|
|
|
335,171
|
|
|
342,578
|
|
|
(2)
|
|
|
|
RevPas (in
$)
|
|
|
Three Months Ended December
31,
|
|
Year Ended December 31,
|
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
International
|
|
$
|
9.06
|
|
$
|
8.54
|
|
|
6
|
|
$
|
9.06
|
|
$
|
8.35
|
|
|
8
|
United
States
|
|
$
|
4.98
|
|
$
|
4.69
|
|
|
6
|
|
$
|
4.58
|
|
$
|
4.48
|
|
|
2
|
Travel Commerce
Platform RevPas
|
|
$
|
7.61
|
|
$
|
7.08
|
|
|
8
|
|
$
|
7.32
|
|
$
|
6.83
|
|
|
7
|
Fourth Quarter 2018
Travel Commerce Platform RevPas increased 8% to $7.61, driving a $40
million increase in Travel Commerce Platform revenue.
International RevPas increased 6% to $9.06, and United States RevPas increased 6% to
$4.98. Reported Segments
decreased 4% due to the impact of the loss of a large Pacific-based
travel agency and other specific travel agency headwinds.
International Travel Commerce Platform revenue increased by
$24 million, or 6%, with growth in
the Payment Solutions business across most regions contributing to
this increase.
Full Year 2018
Travel Commerce Platform RevPas increased 7% to $7.32, driving a $164
million increase in Travel Commerce Platform revenue.
International RevPas increased 8% to $9.06, and United States RevPas increased 2% to
$4.58. Reported Segments
decreased 2% due to the impact of the loss of a large Pacific-based
travel agency and other specific travel agency headwinds.
International Travel Commerce Platform revenue increased by
$118 million, or 7%, with
Europe mainly contributing to this
increase due to an increase in its RevPas of 13%. The
decrease in Travel Commerce Platform revenue in Asia Pacific of $1
million includes the loss of revenue resulting from the loss
of a large Pacific-based travel agency.
Operating Income
Fourth Quarter 2018
Operating income decreased by 1% to $53
million mainly due to the following:
- $14 million increase in cost of
revenue primarily due to incremental costs from the Payment
Solutions business and an increase in travel distribution cost per
segment driven by pricing, offset by a decrease in volume and
favorable foreign exchange movements
- $2 million increase in selling,
general and administrative expenses ("SG&A") primarily due to
unfavorable foreign exchange movements and increase in other
commercial operating costs, offset by lower employee related costs
including lower equity-based compensation expense and related taxes
and a decrease in corporate and restructuring costs; offset by
- $15 million increase in net
revenue
Full Year 2018
Operating income decreased by $72
million, or 25%, to $217
million mainly due to the following:
- $124 million increase in cost of
revenue primarily due to incremental costs from the Payment
Solutions business, an increase in travel distribution cost per
segment driven by price, mix, impairment of customer loyalty
payments and unfavorable foreign exchange movements, offset by a
decrease in volume and higher capitalization of technology
investments
- $60 million increase in SG&A
primarily due to unfavorable movements in the fair value of foreign
currency derivative contracts, an increase in other commercial
operating costs and corporate and restructuring costs, offset by
lower employee related costs including lower equity-based
compensation expense and related taxes; offset by
- $104 million increase in net
revenue
- $9 million decrease in
depreciation and amortization due to a lower level of depreciable
property and equipment
Net Income
Fourth Quarter 2018
Net income decreased by $42
million, or 93%, to $3 million
mainly due to the following:
- $24 million increase in income
tax expense primarily due to the favorable tax impact recognized in
2017 on enactment of U.S. Tax Cuts and Jobs Act ("U.S. Tax
Reforms") resulting from the reduction in the U.S. federal
corporate tax rate
- $17 million increase in interest
expense, net, due to the unfavorable impact of fair value changes
on interest rate derivative instruments
- marginal decrease in operating income
Full Year 2018
Net income decreased by $65
million, or 46%, to $75
million due to the following:
- $72 million decrease in operating
income
- $22 million increase in loss on
early extinguishment of debt due to the debt refinancing in
March 2018
- $6 million increase in the
provision for income tax primarily due to the favorable tax impact
recognized in 2017 resulting from U.S. Tax Reforms offset by the
benefit realized in 2018 from the release of the U.K. valuation
allowance on deferred tax assets and lower tax provision due to the
decrease in pre-tax income and a change in geographical profit-mix;
offset by
- $26 million increase in income
from discontinued operations due to the release of the indemnity
provision during the first quarter of 2018
- $9 million decrease in interest
expense, net, primarily due to a reduced debt balance, lower
amortization of debt finance cost and discount offset by the
unfavorable impact of fair value changes of interest rate
derivative financial instruments and higher interest rates
Net Cash Provided by Operating Activities
Fourth Quarter 2018
Net cash provided by operating activities increased by
$36 million, or 82%, to $79 million, primarily due to the positive impact
of changes in working capital and other assets and liabilities, and
lower interest, income tax and customer loyalty payments.
Full Year 2018
Net cash provided by operating activities increased by
$47 million, or 15%, to $364 million, primarily due to the positive
impact of changes in working capital and other assets and
liabilities, lower restructuring and interest payments, offset by
higher customer loyalty and income tax payments.
Adjusted EBITDA
Fourth Quarter 2018
Adjusted EBITDA increased by $2
million, or 1%, to $140
million due to the following:
- $15 million increase in net
revenue; offset by
- $13 million increase within cost
of revenue (excluding a $1 million
increase related to items that are excluded from net income to
determine Adjusted EBITDA) primarily due to incremental costs from
the Payment Solutions business and an increase in travel
distribution cost per segment driven by pricing that is offset by a
decrease in volume and favorable foreign exchange movements
Full Year 2018
Adjusted EBITDA was flat at $590
million mainly due to the following:
- $104 million increase in net
revenue; offset by
- $96 million increase within cost
of revenue (excluding a $28 million
increase related to items that are excluded from net income to
determine Adjusted EBITDA) primarily due to incremental costs from
the Payment Solutions business, an increase in travel distribution
cost per segment driven by pricing, mix and unfavorable foreign
exchange movements offset by a decrease in volume and higher
capitalization of technology investments
- $12 million increase in SG&A
(excluding $48 million increase
related to non-core corporate costs that are excluded from net
income to determine Adjusted EBITDA) mainly due to higher other
commercial operating costs
Adjusted Net Income
Fourth Quarter 2018
Adjusted Net Income decreased by $4
million, or 10%, to $40
million due to the following:
- $2 million increase in Adjusted
EBITDA; offset by
- $6 million decrease due to higher
depreciation and amortization of property and equipment and
customer loyalty payments and higher remaining provision for income
taxes
Full Year 2018
Adjusted Net Income increased by $5
million, or 3%, to $187
million due to lower interest expense, net, (excluding the
impact of unrealized gains (losses) on interest rate derivative
financial instruments) offset by higher remaining provision for
income taxes with Adjusted EBITDA remaining flat.
Free Cash Flow
Fourth Quarter 2018
Free Cash Flow increased by $39
million to a cash inflow of $44
million due to a $36 million
increase in net cash provided by operating activities and a
$3 million decrease in payments made
for additions to property and equipment.
Full Year 2018
Free Cash Flow increased by $20
million, or 10%, to a cash inflow of $220 million due to a $47
million increase in net cash provided by operating
activities offset by a $27 million
increase in payments made for additions to property and
equipment.
Net Debt
Net Debt decreased from $2,108
million as of December 31,
2017 to $2,036 million as of
December 31, 2018 and is comprised of
$2,252 million in total debt less
$216 million in cash, cash
equivalents and restricted cash. The increase in total debt
of $22 million reflects (i)
$2,154 million principal amount of
term loans repaid under the former 2014 senior secured credit
agreement and $15 million principal
amount of term loans repaid under the new 2018 senior secured
credit agreement, (ii) $1,400 million
principal amount of borrowings under the 2018 senior secured credit
agreement in March 2018, (iii) the
issuance of $745 million principal
amount of senior secured notes in March
2018 and (iv) a net $36
million increase in capital lease obligations and other
indebtedness, and is offset by a $94
million increase in cash, cash equivalents and restricted
cash balance as of December 31, 2018
compared to December 31, 2017,
contributing to a decrease of $72
million in the Net Debt balance.
Impact of Foreign Exchange Movements
Our results of operations are reported in U.S. dollars.
With approximately 87% of our net revenue denominated in U.S.
dollars in the fourth quarter of 2018, changes in foreign exchange
rates have a low impact on our net revenue. Our Payment
Solutions business, which represented approximately 13% of our net
revenue in the fourth quarter of 2018, is the largest source of
non-U.S. dollar net revenue.
Of our costs and expenses in the fourth quarter of 2018,
excluding depreciation on property and equipment, amortization of
customer loyalty payments, amortization of acquired intangible
assets and non-core corporate costs, approximately 58% were
denominated in U.S. dollars.
As part of our rolling hedging program, we employ foreign
exchange forward contracts to hedge a portion of our net exposure
to changes in foreign exchange rates, particularly against the
British pound, the Euro and the Australian dollar, which are the
main non-U.S. dollar components of our costs and expenses.
The year-on-year impact of foreign exchange rate movements on
Adjusted EBITDA for the fourth quarter of 2018 was immaterial, net
of the impact from realized foreign exchange rate hedges undertaken
during 2017.
Acquisition of Travelport by Siris and Elliott
As announced in December 2018,
Travelport has entered into a definitive agreement to be acquired
by affiliates of Siris Capital Group, LLC ("Siris") and Evergreen
Coast Capital Corp. ("Evergreen") in an all-cash transaction (the
transaction hereafter referred to as "Merger"). Evergreen is
the private equity affiliate of Elliott Management Corporation
("Elliott"). Under the terms of the agreement, Siris and
Evergreen will acquire all the outstanding common shares of
Travelport for $15.75 per common
share in cash. The Board of Directors of Travelport has
unanimously approved the agreement and recommended that
shareholders vote in favor of the transaction. The Company is
in the process of obtaining shareholders' approval. Upon the
completion of the transaction, which is subject to shareholders'
approval and other regulatory and closing conditions under the
agreement, Travelport will become a privately held company and
Travelport common shares will no longer be listed on any public
market.
Additional Information and Where to Find It
The proposed acquisition of Travelport by Siris and Evergreen
will be submitted to the shareholders of the Company for their
consideration. In connection with the proposed transaction,
the Company has filed with the Securities and Exchange Commission
(the "SEC") a proxy statement with respect to a special meeting of
the Company's shareholders to approve the proposed
transaction. The definitive proxy statement was mailed to the
Company's shareholders on or about February
13, 2019. The Company also plans to file other
documents with the SEC regarding the proposed transaction.
INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE
PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE COMPANY, SIRIS, EVERGREEN AND
THE PROPOSED TRANSACTION. Investors and shareholders can
obtain free copies of the proxy statement and other documents
containing important information about the Company, Siris and
Evergreen, through the website maintained by the SEC at
http://www.sec.gov. Copies of the documents filed with the
SEC by the Company are available free of charge on the Company's
website at ir.travelport.com or by contacting the Company's
Investor Relations Department at +44 (0)1753 288 686.
Certain Information Regarding Participants
Travelport and certain of its directors, executive officers and
other members of management and employees may be deemed to be
participants in the solicitation of proxies from the shareholders
of Travelport in connection with the proposed transaction.
Information about the directors and executive officers of
Travelport is set forth in its Annual Report on Form 10-K for the
year ended December 31, 2018, which
will be filed with the SEC on February 22,
2019. Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the proxy statement and other relevant materials to be filed with
the SEC when they become available. These documents can be obtained
free of charge from the sources indicated above.
No Offer or Solicitation
This communication does not constitute a solicitation of proxy,
an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Dividend
As communicated in December 2018,
pursuant to the pendency of Merger, Travelport's Board of Directors
has suspended declaring any future dividends, and no dividends were
declared for the fourth quarter of 2018.
Conference Call
In light of the pending Merger, Travelport will not hold an
earnings conference call to discuss its fourth quarter and full
year 2018 results.
Contacts
For further information, please contact:
Investors:
Peter
Russell
Head of Treasury and Investor Relations
Tel: +44 (0)1753 288 248
peter.russell@travelport.com
Media:
Julian
Eccles
Vice President, PR and Corporate Communications
Tel: +44 (0)7720 409 374
julian.eccles@travelport.com
About Travelport (www.travelport.com)
Travelport (NYSE: TVPT) is the technology company that makes the
experience of buying and managing travel continually better.
It operates a travel commerce platform providing distribution,
technology, payment and other solutions for the global travel and
tourism industry. The Company facilitates travel commerce by
connecting the world's leading travel providers with online and
offline travel buyers in a proprietary business-to-business (B2B)
travel platform.
Travelport has a leadership position in airline merchandising,
hotel content and distribution, car rental, mobile commerce and B2B
payment solutions. The Company also provides critical IT
services to airlines, such as shopping, ticketing, departure
control and other solutions. With net revenue of over
$2.5 billion in 2018, Travelport is
headquartered in Langley, U.K., has over 3,700 employees and is
represented in approximately 180 countries and territories.
Forward-Looking Statements
This press release contains "forward-looking
statements" that are not limited to historical facts, but
reflect Travelport's current beliefs, expectations or intentions
regarding future events. In some cases, forward-looking
statements can be identified by words such as "anticipate,"
"believe," "could,"
"estimate," "expect," "intend," "may," "plan," "predict," "potential," "should," "will",
and "would" or other similar words. Any statements that
refer to expectations or other characterizations of future events,
circumstances or results are forward-looking statements. These
forward-looking statements include, without limitation,
Travelport's expectations with respect to the costs and other
anticipated financial impacts of the proposed Merger transaction;
future financial and operating results of Travelport; Travelport's
plans, objectives, expectations and intentions with respect to
future operations and services; approval of the proposed
transaction by shareholders; the satisfaction of the closing
conditions to the proposed Merger transaction; and the timing of
the completion of the proposed Merger transaction.
All forward-looking statements involve significant risks and
uncertainties that could cause future results to differ from those
expressed by the forward-looking statements, many of which are
generally outside the control of Travelport and are difficult to
predict. Examples of such risks and uncertainties include, but are
not limited to, (i) the possibility that the proposed transaction
is delayed or does not close, including due to the failure to
receive required shareholder or regulatory approvals, the taking of
governmental action to block the proposed transaction, the
inability to obtain required financing, or the failure of other
closing conditions, and (ii) the possibility that expected
financial results will not be realized, or will not be realized
within the expected time period, because of, among other things,
factors affecting the level of travel activity, particularly air
travel volume, including security concerns, pandemics, general
economic conditions, natural disasters and other disruptions;
general economic and business conditions in the markets in which
Travelport operates, including fluctuations in currencies,
particularly in the U.S. dollar, and the economic conditions in the
Eurozone; pricing, regulatory and other trends in the travel
industry; Travelport's ability to obtain travel provider inventory
from travel providers, such as airlines, hotels, car rental
companies, cruise lines and other travel providers; Travelport's
ability to develop and deliver products and services that are
valuable to travel agencies and travel providers and generate new
revenue streams; maintenance and protection of Travelport's
information technology and intellectual property; the impact on
travel provider capacity and inventory resulting from consolidation
of the airline industry; the impact Travelport's outstanding
indebtedness may have on the way Travelport operates its business;
Travelport's ability to achieve expected cost savings from
Travelport's efforts to improve operational and technology
efficiency, including through Travelport's consolidation of
multiple technology vendors and locations and the centralization of
activities; Travelport's ability to maintain existing relationships
with travel agencies and to enter into new relationships on
acceptable financial and other terms; and Travelport's ability to
grow adjacencies, such as payment and mobile solutions; and the
impact on business conditions worldwide as a result of political
decisions, including the United
Kingdom's decision to leave the European Union.
Forward-looking statements should not be read as a guarantee of
future performance or results, and will not necessarily be accurate
indications of the times at, or by which, such performance or
results will be achieved. Forward-looking information is based on
information available at the time and/or management's good faith
belief with respect to future events and is subject to risks and
uncertainties that could cause actual performance or results to
differ materially from those expressed in the statements. The
factors listed in the section captioned "Risk Factors" in
Travelport's Annual Report on Form 10-K for the year ended
December 31, 2018, to be filed with
the SEC on February 22, 2019, provide
examples of risks, uncertainties and events that may cause actual
results to differ materially from the expectations described in the
forward-looking statements. You should be aware that the occurrence
of the events described in these risk factors and elsewhere could
have an adverse effect on Travelport's business, results of
operations, financial position and cash flows.
Forward-looking statements speak only as of the date the
statements are made. Travelport assumes no obligation to update
forward-looking statements to reflect actual results, changes in
assumptions or changes in other factors affecting forward-looking
information except to the extent required by applicable securities
laws. If Travelport does update one or more forward-looking
statements, no inference should be drawn that it will make
additional updates with respect thereto or with respect to other
forward-looking statements. For any forward-looking statements
contained in any document, Travelport claims the protection of the
safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995.
This press release includes certain non-GAAP financial measures
as defined under SEC rules. As required by SEC rules,
important information regarding such measures is contained
below.
TRAVELPORT
WORLDWIDE LIMITED
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
Three
Months
|
|
Three
Months
|
|
Year
|
|
Year
|
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
(in $ thousands,
except share data)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net
revenue
|
|
$
|
588,633
|
|
$
|
573,567
|
|
$
|
2,551,064
|
|
$
|
2,447,279
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
375,509
|
|
|
361,438
|
|
|
1,630,377
|
|
|
1,506,010
|
Selling, general and
administrative
|
|
|
110,055
|
|
|
108,413
|
|
|
505,148
|
|
|
444,685
|
Depreciation and
amortization
|
|
|
50,247
|
|
|
50,439
|
|
|
198,645
|
|
|
207,310
|
Total costs and
expenses
|
|
|
535,811
|
|
|
520,290
|
|
|
2,334,170
|
|
|
2,158,005
|
Operating
income
|
|
|
52,822
|
|
|
53,277
|
|
|
216,894
|
|
|
289,274
|
Interest expense,
net
|
|
|
(36,335)
|
|
|
(19,226)
|
|
|
(102,647)
|
|
|
(111,237)
|
Loss on early
extinguishment of debt
|
|
|
(36)
|
|
|
(684)
|
|
|
(27,735)
|
|
|
(5,366)
|
Gain on sale of a
subsidiary
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,217
|
Other
expense
|
|
|
(265)
|
|
|
(847)
|
|
|
(995)
|
|
|
(3,385)
|
Income from
continuing operations before income
taxes
|
|
|
16,186
|
|
|
32,520
|
|
|
85,517
|
|
|
170,503
|
(Provision for)
benefit from income taxes
|
|
|
(13,119)
|
|
|
10,843
|
|
|
(38,091)
|
|
|
(32,230)
|
Net income from
continuing operations
|
|
|
3,067
|
|
|
43,363
|
|
|
47,426
|
|
|
138,273
|
Income from
discontinued operations, net of tax
|
|
|
—
|
|
|
2,007
|
|
|
27,747
|
|
|
2,007
|
Net
income
|
|
|
3,067
|
|
|
45,370
|
|
|
75,173
|
|
|
140,280
|
Net (income) loss
attributable to non-controlling
interest in
subsidiaries
|
|
|
(520)
|
|
|
1,210
|
|
|
(2,545)
|
|
|
2,183
|
Net income
attributable to the Company
|
|
$
|
2,547
|
|
$
|
46,580
|
|
$
|
72,628
|
|
$
|
142,463
|
Income per
share – Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per share -
continuing operations
|
|
$
|
0.02
|
|
$
|
0.36
|
|
$
|
0.36
|
|
$
|
1.13
|
Income per share -
discontinued operations
|
|
|
—
|
|
|
0.02
|
|
|
0.22
|
|
|
0.02
|
Basic income per
share
|
|
$
|
0.02
|
|
$
|
0.38
|
|
$
|
0.58
|
|
$
|
1.15
|
Weighted average
common shares outstanding –
Basic
|
|
|
126,421,913
|
|
|
125,202,376
|
|
|
126,037,947
|
|
|
124,530,102
|
Income per
share – Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per share -
continuing operations
|
|
$
|
0.02
|
|
$
|
0.35
|
|
$
|
0.35
|
|
$
|
1.11
|
Income per share -
discontinued operations
|
|
|
—
|
|
|
0.02
|
|
|
0.22
|
|
|
0.02
|
Diluted income per
share
|
|
$
|
0.02
|
|
$
|
0.37
|
|
$
|
0.57
|
|
$
|
1.13
|
Weighted average
common shares outstanding –
Diluted
|
|
|
128,104,575
|
|
|
126,109,980
|
|
|
127,923,586
|
|
|
126,008,533
|
Cash dividends
declared per common share
|
|
$
|
0.075
|
|
$
|
0.075
|
|
$
|
0.300
|
|
$
|
0.300
|
TRAVELPORT
WORLDWIDE LIMITED
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
December
31,
|
|
December
31,
|
(in $ thousands,
except share data)
|
|
2018
|
|
2017
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
213,001
|
|
$
|
122,039
|
Accounts receivable
(net of allowances for doubtful accounts of $8,415 and
$10,245 as of December 31, 2018 and
2017, respectively)
|
|
|
209,834
|
|
|
206,524
|
Other current
assets
|
|
|
113,605
|
|
|
109,724
|
Total current
assets
|
|
|
536,440
|
|
|
438,287
|
Property and equipment,
net
|
|
|
495,699
|
|
|
431,741
|
Goodwill
|
|
|
1,083,766
|
|
|
1,089,590
|
Trademarks and
tradenames
|
|
|
313,097
|
|
|
313,097
|
Other intangible
assets, net
|
|
|
423,512
|
|
|
496,180
|
Deferred income
taxes
|
|
|
21,229
|
|
|
12,796
|
Other non-current
assets
|
|
|
55,314
|
|
|
76,808
|
Total
assets
|
|
$
|
2,929,057
|
|
$
|
2,858,499
|
Liabilities and
equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
65,936
|
|
$
|
73,278
|
Accrued expenses and
other current liabilities
|
|
|
506,266
|
|
|
509,068
|
Current portion of
long-term debt
|
|
|
57,497
|
|
|
64,291
|
Total current
liabilities
|
|
|
629,699
|
|
|
646,637
|
Long-term
debt
|
|
|
2,194,537
|
|
|
2,165,722
|
Deferred income
taxes
|
|
|
37,254
|
|
|
34,899
|
Other non-current
liabilities
|
|
|
219,925
|
|
|
203,562
|
Total
liabilities
|
|
|
3,081,415
|
|
|
3,050,820
|
Commitments and
contingencies
|
|
|
|
|
|
|
Shareholders' equity
(deficit):
|
|
|
|
|
|
|
Preference shares
($0.0025 par value; 225,000,000 shares authorized; no
shares
issued and outstanding as of
December 31, 2018 and 2017)
|
|
|
—
|
|
|
—
|
Common shares ($0.0025
par value; 560,000,000 shares authorized; 128,229,030
shares and 126,967,010 shares issued;
126,436,176 shares and 125,346,613
shares outstanding as of
December 31, 2018 and 2017, respectively)
|
|
|
320
|
|
|
317
|
Additional paid in
capital
|
|
|
2,680,615
|
|
|
2,700,133
|
Treasury shares, at
cost (1,792,854 shares and 1,620,397 shares as of
December 31, 2018 and 2017,
respectively)
|
|
|
(27,623)
|
|
|
(24,755)
|
Accumulated
deficit
|
|
|
(2,648,761)
|
|
|
(2,722,375)
|
Accumulated other
comprehensive loss
|
|
|
(174,953)
|
|
|
(155,621)
|
Total shareholders'
equity (deficit)
|
|
|
(170,402)
|
|
|
(202,301)
|
Equity attributable to
non-controlling interest in subsidiaries
|
|
|
18,044
|
|
|
9,980
|
Total equity
(deficit)
|
|
|
(152,358)
|
|
|
(192,321)
|
Total liabilities
and equity
|
|
$
|
2,929,057
|
|
$
|
2,858,499
|
TRAVELPORT
WORLDWIDE LIMITED
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
Year
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
(in $
thousands)
|
|
2018
|
|
2017
|
Operating
activities
|
|
|
|
|
|
|
Net income
|
|
$
|
75,173
|
|
$
|
140,280
|
Income from
discontinued operations, net of tax
|
|
|
(27,747)
|
|
|
(2,007)
|
Net income from
continuing operations
|
|
|
47,426
|
|
|
138,273
|
Adjustments to
reconcile net income from continuing operations to net cash
provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
198,645
|
|
|
207,310
|
Amortization of
customer loyalty payments
|
|
|
82,487
|
|
|
74,651
|
Impairment of
long-lived assets
|
|
|
17,505
|
|
|
1,763
|
Amortization of debt
finance costs and debt discount
|
|
|
4,728
|
|
|
10,012
|
Gain on sale of a
subsidiary
|
|
|
—
|
|
|
(1,217)
|
Loss on early
extinguishment of debt
|
|
|
27,735
|
|
|
5,366
|
Unrealized loss (gain)
on foreign exchange derivative instruments
|
|
|
25,814
|
|
|
(32,365)
|
Unrealized gain on
interest rate derivative instruments
|
|
|
(1,343)
|
|
|
(5,764)
|
Equity-based
compensation
|
|
|
16,980
|
|
|
32,972
|
Deferred income
taxes
|
|
|
(7,121)
|
|
|
(27,352)
|
Customer loyalty
payments
|
|
|
(89,167)
|
|
|
(76,008)
|
Pension liability
contribution
|
|
|
(3,643)
|
|
|
(2,156)
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
|
(3,398)
|
|
|
7,237
|
Other current
assets
|
|
|
(7,486)
|
|
|
(12,911)
|
Accounts payable,
accrued expenses and other current liabilities
|
|
|
30,350
|
|
|
14,445
|
Other
|
|
|
24,852
|
|
|
(16,594)
|
Net cash provided
by operating activities
|
|
$
|
364,364
|
|
|
317,662
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
Property and
equipment additions
|
|
$
|
(144,633)
|
|
|
(117,514)
|
Sale of subsidiary,
net of cash disposed
|
|
|
—
|
|
|
(3,433)
|
Net cash used in
investing activities
|
|
$
|
(144,633)
|
|
|
(120,947)
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
Proceeds from term
loans
|
|
$
|
1,400,000
|
|
$
|
114,000
|
Proceeds from
issuance of senior secured notes
|
|
`
|
745,000
|
|
|
—
|
Repayment of term
loans
|
|
|
(2,168,750)
|
|
|
(237,750)
|
Repayment of capital
lease obligations and other indebtedness
|
|
|
(43,760)
|
|
|
(43,311)
|
Debt finance costs
and lender fees
|
|
|
(21,551)
|
|
|
(686)
|
Dividend to
shareholders
|
|
|
(38,093)
|
|
|
(38,789)
|
Purchase of
non-controlling interest in a subsidiary
|
|
|
—
|
|
|
(1,063)
|
Proceeds from share
issuance under employee share purchase plan and stock
options
|
|
|
8,895
|
|
|
3,077
|
Treasury share
purchase related to vesting of equity awards
|
|
|
(3,412)
|
|
|
(11,228)
|
Other
|
|
|
(2,240)
|
|
|
—
|
Net cash used in
financing activities
|
|
$
|
(123,911)
|
|
$
|
(215,750)
|
Effects of changes in
exchange rates on cash, cash equivalents and restricted
cash
|
|
|
(1,479)
|
|
|
1,136
|
Net increase
(decrease) in cash, cash equivalents and restricted
cash
|
|
|
94,341
|
|
|
(17,899)
|
Cash, cash
equivalents and restricted cash at beginning of year
|
|
|
122,039
|
|
|
139,938
|
Cash, cash
equivalents and restricted cash at end of year
|
|
$
|
216,380
|
|
$
|
122,039
|
Supplemental
disclosures of cash flow information
|
|
|
|
|
|
|
Interest payments,
net of capitalized interest
|
|
$
|
91,812
|
|
$
|
110,466
|
Income tax payments,
net of refunds
|
|
|
47,732
|
|
|
42,886
|
Non-cash capital
lease asset additions
|
|
|
77,377
|
|
|
38,355
|
Non-cash purchase of
property and equipment
|
|
|
4,220
|
|
|
4,785
|
TRAVELPORT
WORLDWIDE LIMITED
|
SEGMENT
INFORMATION (1)
|
|
The table below sets
forth net revenue of the Company by segment:
|
|
|
|
Three Months Ended
December 31,
|
|
Year ended
December 31,
|
(in $
thousands)
|
|
2018
|
|
2017
|
|
%
Change
|
|
2018
|
|
2017
|
|
%
Change
|
Travel
Solutions
|
|
$
|
513,583
|
|
$
|
519,230
|
|
|
(1)
|
|
$
|
2,235,789
|
|
$
|
2,253,513
|
|
|
(1)
|
Payment
Solutions
|
|
|
75,050
|
|
|
54,337
|
|
|
38
|
|
|
315,275
|
|
|
193,766
|
|
|
63
|
Net
revenue
|
|
$
|
588,633
|
|
$
|
573,567
|
|
|
3
|
|
$
|
2,551,064
|
|
$
|
2,447,279
|
|
|
4
|
|
The table below sets
forth Segment Adjusted EBITDA of the Company by segment:
|
|
|
|
Three Months Ended
December 31,
|
|
Year ended
December 31,
|
(in $
thousands)
|
|
2018
|
|
2017
|
|
%
Change
|
|
2018
|
|
2017
|
|
%
Change
|
Travel
Solutions
|
|
$
|
130,492
|
|
$
|
133,857
|
|
|
(3)
|
|
$
|
552,637
|
|
$
|
569,186
|
|
|
(3)
|
Payment
Solutions
|
|
|
9,212
|
|
|
4,160
|
|
|
121
|
|
|
37,480
|
|
|
20,827
|
|
|
80
|
Segment Adjusted
EBITDA
|
|
$
|
139,704
|
|
$
|
138,017
|
|
|
1
|
|
$
|
590,117
|
|
$
|
590,013
|
|
|
—
|
|
|
(1)
|
Our operations are
organized into two operating segments: (i) Travel Solutions and
(ii) Payment Solutions. Travel Solutions comprises our Air,
Beyond Air (excluding our B2B travel payment solutions) and
Technology Services. Payment Solutions comprises our B2B
travel payment solutions through eNett. In prior periods, we
have reported our Payment Solutions business together with Travel
Solutions as one reportable segment as Payment Solutions was not
considered to be material to be disclosed separately as a
reportable segment.
|
TRAVELPORT
WORLDWIDE LIMITED
|
NON-GAAP
MEASURES
|
(unaudited)
|
|
Reconciliation
of Net Income to Adjusted Net Income,
|
|
Three Months
Ended
|
|
Year
Ended
|
Adjusted
Operating Income and Adjusted EBITDA
|
|
December
31,
|
|
December
31,
|
(in $
thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net
income
|
|
$
|
3,067
|
|
$
|
45,370
|
|
$
|
75,173
|
|
$
|
140,280
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired intangible assets
|
|
|
10,165
|
|
|
10,166
|
|
|
40,662
|
|
|
40,854
|
Gain on sale of a
subsidiary
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,217)
|
Loss on early
extinguishment of debt
|
|
|
36
|
|
|
684
|
|
|
27,735
|
|
|
5,366
|
Equity-based
compensation and related taxes
|
|
|
5,084
|
|
|
10,384
|
|
|
16,921
|
|
|
34,739
|
Corporate and
restructuring costs
|
|
|
7,011
|
|
|
10,101
|
|
|
31,715
|
|
|
24,998
|
Impairment of
long-lived assets
|
|
|
2,593
|
|
|
1,078
|
|
|
17,505
|
|
|
1,763
|
Income from
discontinued operations
|
|
|
—
|
|
|
(2,007)
|
|
|
(27,747)
|
|
|
(2,007)
|
Other – non-cash
(1)
|
|
|
14,365
|
|
|
(7,903)
|
|
|
24,903
|
|
|
(42,401)
|
Tax
adjustments
|
|
|
(2,602)
|
|
|
(23,733)
|
|
|
(20,242)
|
|
|
(21,201)
|
Adjusted Net
Income
|
|
|
39,719
|
|
|
44,140
|
|
|
186,625
|
|
|
181,174
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
(2)
|
|
|
26,027
|
|
|
26,111
|
|
|
103,990
|
|
|
117,001
|
Other
expense
|
|
|
265
|
|
|
—
|
|
|
995
|
|
|
—
|
Remaining provision for
income taxes
|
|
|
15,721
|
|
|
12,890
|
|
|
58,333
|
|
|
53,431
|
Adjusted Operating
Income
|
|
|
81,732
|
|
|
83,141
|
|
|
349,943
|
|
|
351,606
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization of property and equipment
|
|
|
40,038
|
|
|
37,573
|
|
|
157,687
|
|
|
163,756
|
Amortization of
customer loyalty payments
|
|
|
17,934
|
|
|
17,303
|
|
|
82,487
|
|
|
74,651
|
Adjusted
EBITDA
|
|
$
|
139,704
|
|
$
|
138,017
|
|
$
|
590,117
|
|
$
|
590,013
|
_______________________
|
(1)
|
Other—non-cash
includes (i) unrealized losses (gains) on foreign currency
derivatives contracts of $4 million and $(4) million for the three
months ended December 31, 2018 and 2017, respectively, and $26
million and $(31) million for the years ended December 31, 2018 and
2017, respectively, (ii) unrealized losses (gains) on interest rate
derivative contracts of $10 million and $(7) million for the three
months ended December 31, 2018 and 2017, respectively, and $(1)
million and $(6) million for the years ended December 31, 2018 and
2017, respectively, (iii) $8 million related to revenue deferred in
previous years for the year ended December 31, 2017 and (iv) other
expenses/losses of $3 million for the three months ended December
31, 2017 and $1 million and $2 million for the years ended December
31, 2018 and 2017, respectively.
|
|
|
(2)
|
Interest expense,
net, excludes the impact of unrealized losses (gains) on interest
rate derivative contracts of $10 million and $(7) million for the
three months ended December 31, 2018 and 2017, respectively, and
$(1) million and $(6) million for the year ended December 31, 2018
and 2017, respectively, which is included within
"Other—non-cash."
|
Reconciliation
of net cash provided by operating activities to
|
|
Three Months
Ended
|
|
Year
Ended
|
Free Cash
Flow:
|
|
December
31,
|
|
December
31,
|
(in $
thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net cash provided
by operating activities
|
|
$
|
78,929
|
|
$
|
43,320
|
|
$
|
364,364
|
|
$
|
317,662
|
Less: capital
expenditures on property and equipment additions
|
|
|
(35,397)
|
|
|
(38,322)
|
|
|
(144,633)
|
|
|
(117,514)
|
Free Cash
Flow
|
|
$
|
43,532
|
|
$
|
4,998
|
|
$
|
219,731
|
|
$
|
200,148
|
TRAVELPORT
WORLDWIDE LIMITED
|
NON-GAAP MEASURES
AND OPERATING STATISTICS
|
(unaudited)
|
|
Reconciliation
of Net Debt
|
|
December
31,
|
|
December
31,
|
(in $
thousands)
|
|
2018
|
|
2017
|
Current portion of
long-term debt
|
|
$
|
57,497
|
|
$
|
64,291
|
Non-current portion
of long-term debt
|
|
|
2,194,537
|
|
|
2,165,722
|
Total
debt
|
|
|
2,252,034
|
|
|
2,230,013
|
Less: Cash, cash
equivalents and restricted cash
|
|
|
(216,380)
|
|
|
(122,039)
|
Net
Debt
|
|
$
|
2,035,654
|
|
$
|
2,107,974
|
Reconciliation
of Income per Share – Diluted to Adjusted
|
|
Three Months
Ended
|
|
Year
Ended
|
Income per
Share – Diluted
|
|
December
31,
|
|
December
31,
|
(in
$)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Income per
share – diluted
|
|
$
|
0.02
|
|
$
|
0.37
|
|
$
|
0.57
|
|
$
|
1.13
|
Per share adjustments
to net income to determine
Adjusted Income per Share –
diluted
|
|
|
0.29
|
|
|
(0.02)
|
|
|
0.89
|
|
|
0.31
|
Adjusted Income
per Share – diluted
|
|
$
|
0.31
|
|
$
|
0.35
|
|
$
|
1.46
|
|
$
|
1.44
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
Reconciliation
of Capital Expenditures
|
|
December
31,
|
|
December
31,
|
(in $
thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Property and
equipment additions
|
|
$
|
35,397
|
|
$
|
38,322
|
|
$
|
144,633
|
|
$
|
117,514
|
Repayment of capital
lease obligations and other
indebtedness
|
|
|
13,128
|
|
|
13,500
|
|
|
43,760
|
|
|
43,311
|
Capital
Expenditures
|
|
$
|
48,525
|
|
$
|
51,822
|
|
$
|
188,393
|
|
$
|
160,825
|
Other
Metrics
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
(in thousands,
except where specified)
|
|
2018
|
|
2017
|
|
%
Change
|
|
2018
|
|
2017
|
|
%
Change
|
Transaction value
processed on the
Travel Commerce
Platform
|
|
$
|
19,796,932
|
|
$
|
19,610,540
|
|
|
1
|
|
$
|
88,716,901
|
|
$
|
82,677,624
|
|
7
|
Percent of Air
segment revenue from
away bookings
|
|
|
68%
|
|
|
67%
|
|
|
1.0 ppts
|
|
|
68%
|
|
|
67%
|
|
1.7 ppts
|
Hotel room nights
sold
|
|
|
15,444
|
|
|
16,800
|
|
|
(8)
|
|
|
66,760
|
|
|
68,159
|
|
(2)
|
Car rental days
sold
|
|
|
24,532
|
|
|
24,785
|
|
|
(1)
|
|
|
107,095
|
|
|
105,589
|
|
1
|
Hospitality segments
per 100 airline
tickets issued
|
|
|
46
|
|
|
48
|
|
|
(4)
|
|
|
45
|
|
|
46
|
|
(2)
|
TRAVELPORT WORLDWIDE
LIMITED
DEFINITIONS
(unaudited)
Definitions
Adjusted EBITDA is defined as Adjusted Net Income (Loss)
excluding depreciation and amortization of property and equipment,
amortization of customer loyalty payments, interest expense, net
(excluding unrealized gains (losses) on interest rate derivative
instruments), components of net periodic pension and
post-retirement benefit costs other than service cost and related
income taxes.
Adjusted Income (Loss) per Share – Diluted is
defined as Adjusted Net Income (Loss) for the period divided by the
weighted average number of dilutive common shares.
Adjusted Net Income (Loss) is defined as net income
(loss) excluding amortization of acquired intangible assets, gain
(loss) on early extinguishment of debt, and items that are excluded
under our debt covenants, such as, income (loss) from discontinued
operations, gain (loss) on sale of subsidiary, non-cash
equity-based compensation, certain corporate and restructuring
costs, non-cash impairment of long-lived assets, certain litigation
and related costs, and other non-cash items such as unrealized
foreign currency gains (losses) on earnings hedges, and unrealized
gains (losses) on interest rate derivative instruments, along with
any income tax related to these exclusions. Tax impacts not
related to core operations have also been excluded.
Adjusted Operating Income (Loss) is defined as
Adjusted EBITDA less depreciation and amortization of property and
equipment and amortization of customer loyalty payments.
Capital Expenditures is defined as cash paid for property
and equipment plus repayments in relation to capital leases and
other indebtedness.
Customer Loyalty Payments are payments made to travel
agencies or travel providers with an objective of increasing the
number of travel bookings using the Company's Travel Commerce
Platform and to improve the travel agencies or travel providers'
loyalty, which are instrumented through agreements with a term over
a year. Under the contractual terms, the travel agency or
travel provider commits to achieve certain economic objectives for
the Company. Such costs are specifically identifiable to
individual contracts with travel agencies or travel providers,
which have determinable contractual lives. Due to the
contractual nature of the payments, the Company believes that such
assets are appropriately classified as intangible assets.
Free Cash Flow is defined as net cash provided by
(used in) operating activities, less cash used for additions to
property and equipment.
Net Debt is defined as total debt comprising of current
and non-current portion of long-term debt minus cash, cash
equivalents and restricted cash.
Reported Segments means travel provider revenue
generating units (net of cancellations) sold by the Company's
travel agency network, geographically presented by region based
upon the point of sale location.
Travel Commerce Platform RevPas
("RevPas") represents Travel Commerce Platform revenue per
segment and is computed by dividing Travel Commerce Platform
revenue by the total number of Reported Segments.
TRAVELPORT WORLDWIDE
LIMITED
NON-GAAP FINANCIAL
MEASURES
(unaudited)
Non-GAAP Financial Measures
We utilize non–GAAP (or adjusted) financial measures, including
Adjusted EBITDA, Adjusted Operating Income (Loss), Adjusted Net
Income (Loss) and Adjusted Income (Loss) per Share – diluted, to
provide useful supplemental information to assist investors in
understanding and assessing our performance and financial results
on the same basis that management uses internally. These
adjusted financial measures provide investors greater transparency
with respect to the key metrics used by management to evaluate our
core operations, forecast future results, determine future capital
investment allocations and understand business trends within the
industry. Adjusted Operating Income (Loss) and Adjusted
Income (Loss) per Share – diluted metrics are also used by our
Board of Directors to determine incentive compensation for future
periods. Management believes the adjusted financial measures
assist investors in the comparison of financial results between
periods as such measures exclude certain items that management
believes are not reflective of our core operating performance
consistent with how management reviews the business. These non–GAAP
financial measures have limitations as analytical tools and should
not be considered in isolation or as a substitute for analysis of
Travelport's results as reported under U.S. GAAP.
Adjusted Net Income (Loss), Adjusted Income (Loss) per Share –
diluted, Adjusted Operating Income and Adjusted EBITDA are
supplemental measures of operating performance that do not
represent, and should not be considered as, alternatives to net
income (loss), or net income (loss) per share – diluted, as
determined under U.S. GAAP. In addition, these measures may
not be comparable to similarly named measures used by other
companies.
We believe Adjusted Income (Loss) per Share – diluted is a
useful measure for our investors as it represents, on a per share
basis, our consolidated results, taking into account depreciation
and amortization on property and equipment and amortization of
customer loyalty payments, as well as other items which are not
allocated to the operating businesses such as interest expense
(excluding unrealized gains (losses) on interest rate derivative
instruments), certain components of net periodic pension and
post-retirement benefit costs and related income taxes but
excluding the effects of certain expenses not directly tied to the
core operations of our businesses. Adjusted Income (Loss) per
Share – diluted has similar limitations as Adjusted Net Income
(Loss), Adjusted Operating Income (Loss) and Adjusted EBITDA and
may not be comparable to similarly named measures used by other
companies. In addition, Adjusted Net Income (Loss) does not
include all items that affect our net income (loss) and net income
(loss) per share for the period. Therefore, we believe it is
important to evaluate these measures along with our consolidated
condensed statements of operations.
We believe our important measure of liquidity is Free Cash
Flow. This measure is a useful indicator of our ability to
generate cash to meet our liquidity demands. We use Free Cash
Flow to conduct and evaluate our operating liquidity. We
believe it typically presents an alternate measure of cash flows
since purchases of property and equipment are a necessary component
of our ongoing operations and it provides useful information
regarding how cash provided by operating activities compares to the
property and equipment investments required to maintain and grow
our platform. We believe Free Cash Flow provides investors
with an understanding of how assets are performing and measures
management's effectiveness in managing cash. Free Cash Flow
is a non–GAAP measure and may not be comparable to similarly named
measures used by other companies. This measure has limitation
in that it does not represent the total increase or decrease in the
cash balance for the period, nor does it represent residual cash
flow for discretionary expenditures. This measure should not
be considered as a measure of liquidity or cash flows from
operations as determined under U.S. GAAP.
We use Capital Expenditures to determine our total cash spent on
acquisition of property and equipment and cash repayment of capital
lease obligation and other indebtedness. We believe this
measure provides management and investors an understanding of total
capital invested in the development of our platform. Capital
Expenditures is a non–GAAP measure and may not be comparable to
similarly named measures used by other entities. This measure
has limitation in that it aggregates cash flows from investing and
financing activities as determined under U.S. GAAP.
Management uses Net Debt to review our overall liquidity,
financial flexibility, capital structure and leverage.
Further, we believe, certain debt rating agencies, creditors and
credit analysts monitor our Net Debt as part of their assessment of
our business. Net Debt is a non–GAAP measure and is not a
measurement of our indebtedness under U.S. GAAP and should not be
considered in isolation or as an alternative to assess our total
debt or any other measures derived in accordance with U.S.
GAAP.
View original
content:http://www.prnewswire.com/news-releases/travelport-worldwide-limited-reports-fourth-quarter-and-full-year-2018-results-300799952.html
SOURCE Travelport Worldwide Limited