TRAVELPORT WORLDWIDE LTD LANGLEY, U.K., May 9, 2017 /PRNewswire/ -- Travelport Worldwide Limited (NYSE: TVPT) announced today its financial results for the first quarter ended March 31, 2017.
Highlights
-- Net revenue increased 7% to $651 million and net income increased to $56
million
-- Income per share (diluted) of $0.45 and net cash provided by operating
activities of $95 million
-- Travel Commerce Platform revenue increased 7%, with revenue growth
across all regions
-- Air revenue increased 7% to $474 million, primarily driven by strong
market growth and seasonal effects
-- Beyond Air revenue increased 9% to $148 million, including eNett net
revenue growth of 22% to $41 million
-- Adjusted EBITDA increased 9% to $169 million and Adjusted Income per
Share (diluted) increased 24% to $0.51
-- Free Cash Flow increased by $68 million to $71 million
-- Completed post period-end divestiture of 51% stake in India-based
technology development company IGT Solutions Private Ltd. (IGTS)
-- Anticipate full year 2017 earnings and cash flow to be towards the
higher end of guidance ranges
Gordon Wilson, President and CEO of Travelport, commented:
"We have started 2017 well with a particularly strong performance in Asia Pacific, the world's fastest growing and largest travel region, where we grew our air market share and saw our highest level of quarterly revenue growth for over five years. I am delighted that our leadership positions in airline content and merchandising, hospitality, mobile commerce and commercial payments are translating into greater revenue from existing customers, as well as new business wins across multiple geographies. We continue to invest in implementing these new wins, as well as in new product and capability extensions that will expand our focused areas of market leadership and support future growth. Given our positive start to the year, we are confident in our outlook for 2017 and expect our full year earnings and cash flow to come in towards the higher end of our guidance ranges."
Summary
Three months ended
March 31,
---------
(in $ thousands, except per
share amounts) 2017 2016 Change
--------------------------- ---- ---- ------
Net revenue 650,763 609,263 7%
Operating income 98,870 79,868 24%
Net income 55,863 17,181 *
Income per share - diluted $0.45 $0.13 *
-------------------------- ----- ----- ---
Adjusted EBITDA 168,553 154,140 9%
Adjusted Operating Income 107,241 96,464 11%
Adjusted Net Income 64,357 50,955 26%
Adjusted Income per Share -
diluted $0.51 $0.41 24%
--------------------------- ----- ----- ---
Net cash provided by operating
activities 95,022 26,204 *
Free Cash Flow 71,413 3,683 *
Cash dividend per share $0.075 $0.075 -
----------------------- ------ ------ ---
* 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 10 to 13 of this press release for additional information, including reconciliations of such non-GAAP financial measures.
Discussion of Results
Net Revenue
Net revenue is comprised
of:
Three Months Ended Change
March 31,
---------
(in $ thousands) 2017 2016 $ %
--------------- ---- ---- --- ---
Air $474,475 $443,884 $30,591 7
Beyond Air 147,585 135,002 12,583 9
------- ------- ------ ---
Travel Commerce Platform 622,060 578,886 43,174 7
Technology Services 28,703 30,377 (1,674) (6)
------ ------ ------ ---
Net Revenue $650,763 $609,263 $41,500 7
======== ======== ======= ===
Net revenue increased by $42 million, or 7%, to $651 million primarily due to growth in Travel Commerce Platform revenue of $43 million, or 7%. Within Travel Commerce Platform revenue, Air revenue increased by $31 million, or 7%, mainly due to growth in air segments. Beyond Air revenue increased by $13 million, or 9%. Within Beyond Air, net revenue for eNett increased by 22% to $41 million primarily due to an increase in the volume of payments settled with existing customers and new customer wins. Technology Services revenue decreased by $2 million, or 6%, primarily due to lower development revenue and a reduction in hosting activities.
The table below sets forth Travel Commerce Platform revenue by region:
Three Months Ended March 31,
----------------------------
(in $ thousands) 2017 2016 % Change
--------------- ---- ---- --------
Asia Pacific $151,015 $128,495 18
Europe 202,416 194,847 4
Latin America and Canada 28,782 28,036 3
Middle East and Africa 83,553 73,450 14
------ ------ ---
International 465,766 424,828 10
United States 156,294 154,058 1
------- ------- ---
Travel Commerce Platform $622,060 $578,886 7
======== ======== ===
The table below sets forth Travel Commerce Platform Reported Segments and global RevPas by region:
Segments (in thousands)
----------------------
Three Months Ended March 31,
----------------------------
2017 2016 % Change
---- ---- --------
Asia Pacific 19,208 16,989 13
Europe 23,497 23,133 2
Latin America and Canada 4,626 4,550 2
Middle East and Africa 9,476 9,721 (3)
----- ----- ---
International 56,807 54,393 4
United States 36,390 35,580 2
------ ------ ---
Travel Commerce Platform Reported
Segments 93,197 89,973 4
====== ====== ===
RevPas (in $)
------------
Three Months Ended March 31,
----------------------------
2017 2016 % Change
---- ---- --------
International $8.20 $7.81 5
United States $4.30 $4.33 (1)
----- ----- ---
Travel Commerce Platform RevPas $6.67 $6.43 4
===== ===== ===
Reported Segments increased by 3 million, or 4%. United States Reported Segments increased 2% and International Reported Segments increased 4% with increases in both Air and Beyond Air segments. Travel Commerce Platform RevPas increased 4% to $6.67, driving a $22 million increase in Travel Commerce Platform revenue. International RevPas increased 5% to $8.20, and United States RevPas decreased marginally by 1% to $4.30.
International Travel Commerce Platform revenue increased by $41 million, with Asia Pacific contributing primarily to this increase. Revenue from Asia Pacific increased 18% mainly due to a 13% increase in Reported Segments and growth in payment solutions in Beyond Air.
Adjusted EBITDA
Adjusted EBITDA increased by $14 million, or 9%, to $169 million mainly due to the following:
-- $42 million growth in net revenue; offset by:
-- $30 million increase within cost of revenue (excluding a $6 million net
decrease related to items that are excluded from net income to determine
Adjusted EBITDA) primarily due to increased travel distribution costs
per segment and commission costs from our payment solutions business and
an increase in Reported Segments
Operating Income
Operating income increased by $19 million to $99 million mainly due to the following:
-- $14 million increase in Adjusted EBITDA
-- $8 million related to revenue deferred in previous years, offset by:
-- $2 million increase in amortization of customer loyalty payments
Net Income
Net income increased by $39 million to $56 million due to the following:
-- $19 million increase in operating income
-- $25 million decrease in interest expense, net, resulting from an
unrealized loss on interest rate derivative contracts recognized in
2016, lower interest rates and a lower debt balance, offset by:
-- $5 million increase in provision for income taxes
Adjusted Net Income
Adjusted Net Income increased by $13 million to $64 million mainly due to the following:
-- $39 million increase in net income, offset by:
-- $17 million decrease in unrealized loss on interest rate derivative
contracts recognized in 2016, which is excluded to determine Adjusted
Net Income and
-- $8 million decrease in corporate and restructuring, equity-based
compensation and other costs, which are excluded to determine Adjusted
Net Income
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased by $69 million to $95 million, primarily due to an increase in operating income, improved working capital and lower interest and customer loyalty payments in 2017.
Free Cash Flow
Free Cash Flow increased by $68 million to a cash inflow of $71 million, primarily due to an increase in net cash provided by operating activities.
Net Debt
Net Debt decreased from $2,205 million as of December 31, 2016 to $2,146 million as of March 31, 2017 and is comprised of $2,333 million in total debt less $187 million in cash and cash equivalents. The decrease in total debt of $12 million and increase of $47 million in the cash and cash equivalents balance as of March 31, 2017 compared to December 31, 2016 resulted in a decrease of $59 million in the Net Debt balance.
Full Year 2017 Financial Guidance
The following forward-looking statements, as well as those made elsewhere within this press release, reflect expectations as of May 9, 2017. We assume no obligation to update these statements. Results may be materially different and are affected by many factors detailed in this release and in Travelport's quarterly and annual Securities and Exchange Commission ("SEC") filings and/or furnishings, which are available on the SEC's website at www.sec.gov.
Our guidance for the full year 2017 is unchanged, as detailed below, although we expect Adjusted EBITDA, Adjusted Net Income, Adjusted Income per Share (diluted) and Free Cash Flow to be towards the higher end of our guidance ranges.
(in $ millions, except per
share amounts) FY 2017 Growth
Guidance
Net revenue $2,425 - $2,475 3% - 5%
Adjusted EBITDA (1) $585 - $595 2% - 4%
Adjusted Net Income (1) $165 - $175 7% - 13%
Adjusted Income per Share -
diluted (2) $1.29 - $1.37 5% - 12%
Free Cash Flow (3) $165 - $185 (14)% - (3)%
----------------- ----------- -----------
Travelport continues to anticipate that eNett, its commercial payments business, will grow net revenue by at least 20% in 2017. This is subject to exchange rate movements given that eNett's net revenue is largely denominated in currencies other than the U.S. dollar.
(1) Adjusted EBITDA guidance consists of
Adjusted Net Income guidance
excluding expected depreciation and
amortization of property and
equipment and expected amortization
of customer loyalty payments of
$240 million to $250 million,
expected interest expense, net
(excluding the impact of unrealized
gain (loss) on interest rate
derivative instruments) of $120
million to $125 million and
expected related income taxes of
$50 million to $55 million.
Adjusted Net Income guidance
excludes the expected impact of
amortization of intangible assets
of approximately $40 million,
expected equity-based compensation
and related taxes and corporate and
restructuring costs of $55 million
to $65 million and expected income
tax benefit related to these
adjustments of $5 million to $10
million. We are unable to reconcile
Adjusted EBITDA and Adjusted Net
Income to net income (loss)
determined under U.S. GAAP due to
the unavailability of information
required to reasonably predict
certain reconciling items such as
loss on early extinguishment of
debt, impairment of long-lived
assets, unrealized gains or losses
on foreign currency and interest
rate derivative instruments, and
the related tax impact of these
adjustments.
(2) Adjusted Income per Share -diluted
guidance consists of Adjusted Net
Income divided by our expected
weighted average number of dilutive
common shares for 2017 of
approximately 127.5 million.
(3) Free Cash Flow guidance reflects
expected net cash provided by
operating activities for 2017 of
$295 million to $325 million less
cash additions to property and
equipment of $130 million to $140
million.
This guidance assumes spot foreign exchange rates as of May 2, 2017, together with the impact of foreign exchange rate hedges undertaken during 2016 as part of our rolling hedging program.
Impact of Foreign Exchange Movements
Our results of operations are reported in U.S. dollars. With approximately 91% of our net revenue denominated in U.S. dollars in the first quarter of 2017, exchange rate movements in this currency have a low impact on our net revenue. Of our costs and expenses in the first quarter of 2017, excluding depreciation on property and equipment, amortization of customer loyalty payments, amortization of acquired intangible assets and non-core corporate costs, approximately 71% were denominated in U.S. dollars.
We employ foreign exchange forward contracts to hedge our 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 over year impact of foreign exchange movements had a positive impact to Adjusted EBITDA for the first quarter of 2017.
Dividend
On May 5, 2017, Travelport's Board of Directors declared a cash dividend of $0.075 per common share for the first quarter of 2017. The dividend will be payable on June 15, 2017 to shareholders on record as at market close on June 1, 2017.
Investor Day
Travelport will hold an Investor Day on Tuesday, May 23, 2017 in New York, NY. In addition to management presentations, Travelport will also be conducting product demonstrations of some of its key solutions and innovations. For attendance in person, please contact Travelport's investor relations team for further details.
A live webcast of the presentation and accompanying slides will be available via the Investor Center section of Travelport's website at ir.travelport.com/investor-day, where a replay will also be available and will remain for one year thereafter.
Conference Call
The Company's first quarter 2017 earnings conference call will be held later today (on May 9, 2017) beginning at 8:30 a.m. (Eastern Time).
A live audiocast of the presentation and accompanying slides will be available via the Investor Center section of Travelport's website at ir.travelport.com. Please visit the site or click the following link to pre-register: https://www.webcaster4.com/Webcast/Page/1138/20529.
A replay of the audiocast will be available on the Investor Center section of Travelport's website shortly after the end of the earnings call, where it will remain for one year thereafter.
Contacts
For further information, please contact:
Investors:
Majid Nazir
Vice President, Investor Relations
Tel: +44 (0)1753 288 857
majid.nazir@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 is a Travel Commerce Platform providing distribution, technology, payment, mobile and other solutions for the global travel and tourism industry. With a presence in approximately 180 countries, approximately 4,000 employees, our 2016 net revenue was over $2.3 billion.
Travelport is comprised of:
-- A Travel Commerce Platform through which it 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
marketplace. Travelport has a leadership position in airline
merchandising, hotel content and rate distribution, mobile travel
commerce and a pioneering B2B payment solution that addresses the needs
of travel intermediaries to efficiently and securely settle travel
transactions.
-- Technology Services through which it provides 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.
Travelport is headquartered in Langley, U.K. The Company is listed on the New York Stock Exchange and trades under the symbol "TVPT".
Forward-Looking Statements
Certain statements in this press release, including outlook and financial guidance, 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: 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 we operate, 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; our ability to obtain travel provider inventory from travel providers, such as airlines, hotels, car rental companies, cruise lines and other travel providers; our 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 our information technology and intellectual property; the impact on travel provider capacity and inventory resulting from consolidation of the airline industry; the impact our outstanding indebtedness may have on the way we operate our business; our ability to achieve expected cost savings from our efforts to improve operational and technology efficiency, including through our consolidation of multiple technology vendors and locations and the centralization of activities; 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 payment solutions and mobile commerce; and the impact on business conditions worldwide as a result of political decisions, including the United Kingdom's decision to leave the European Union. These and other potential risks and uncertainties that could cause actual results to differ are more fully detailed under the caption "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 21, 2017, and available on the SEC's website at www.sec.gov.
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.
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 CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months
Three Months
Ended Ended
March 31, March 31,
2017 2016
---- ----
(in $ thousands, except share
data)
-----------------------------
Net revenue $650,763 $609,263
-------- --------
Costs and expenses
Cost of revenue 386,837 362,677
Selling, general and
administrative 112,147 114,477
Depreciation and amortization 52,909 52,241
------ ------
Total costs and expenses 551,893 529,395
------- -------
Operating income 98,870 79,868
Interest expense, net (30,275) (54,895)
------- -------
Income before income taxes 68,595 24,973
Provision for income taxes (12,732) (7,792)
------- ------
Net income 55,863 17,181
Net loss (income) attributable
to non-controlling interest in
subsidiaries 243 (596)
--- ----
Net income attributable to the
Company $56,106 $16,585
======= =======
Income per share - Basic:
Income per share $0.45 $0.13
Weighted average common shares
outstanding - Basic 124,081,175 123,718,311
=========== ===========
Income per share - Diluted:
Income per share $0.45 $0.13
Weighted average common shares
outstanding - Diluted 125,516,945 123,778,407
=========== ===========
TRAVELPORT WORLDWIDE LIMITED
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
March 31, December 31,
(in $ thousands, except
share data) 2017 2016
----------------------- ---- ----
Assets
Current assets:
Cash and cash equivalents $187,407 $139,938
Accounts receivable (net of
allowances for doubtful
accounts of $12,720 and
$13,430) 267,785 218,224
Other current assets 99,286 84,089
------ ------
Total current assets 554,478 442,251
Property and equipment, net 414,639 431,046
Goodwill 1,082,315 1,079,951
Trademarks and tradenames 313,097 313,097
Other intangible assets, net 510,750 511,607
Deferred income taxes 9,366 9,213
Other non-current assets 48,460 46,764
------ ------
Total assets $2,933,105 $2,833,929
========== ==========
Liabilities and equity
Current liabilities:
Accounts payable $62,347 $59,219
Accrued expenses and other
current liabilities 527,862 478,560
Current portion of long-
term debt 62,441 63,558
------ ------
Total current liabilities 652,650 601,337
Long-term debt 2,270,788 2,281,210
Deferred income taxes 59,433 59,381
Other non-current
liabilities 225,049 227,783
------- -------
Total liabilities 3,207,920 3,169,711
--------- ---------
Commitments and
contingencies
Shareholders' equity
(deficit):
Preference shares ($0.0025
par value; 225,000,000
shares authorized; no
shares issued and
outstanding as of March 31,
2017 and December 31, 2016) -
-
Common shares ($0.0025 par
value; 560,000,000 shares
authorized; 125,000,621
shares and 124,941,233
shares issued; 124,082,833
shares and 124,032,361
shares outstanding as of
March 31, 2017 and December
31, 2016, respectively) 312 312
Additional paid in capital 2,705,950 2,708,836
Treasury shares, at cost
(917,788 shares and 908,872
shares as of March 31, 2017
and December 31, 2016,
respectively) (14,294) (14,166)
Accumulated deficit (2,808,732) (2,864,838)
Accumulated other
comprehensive loss (183,136) (190,072)
-------- --------
Total shareholders' equity
(deficit) (299,900) (359,928)
Equity attributable to non-
controlling interest in
subsidiaries 25,085 24,146
------ ------
Total equity (deficit) (274,815) (335,782)
-------- --------
Total liabilities and equity $2,933,105 $2,833,929
========== ==========
TRAVELPORT WORLDWIDE LIMITED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(in $ thousands) Three Months Three Months
Ended Ended
March 31, March 31,
2017 2016
--- ---- ----
Operating activities
Net income $55,863 $17,181
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 52,909 52,241
Amortization of customer loyalty
payments 18,795 16,574
Impairment of long-lived assets 685 461
Amortization of debt finance
costs and debt discount 2,673 2,571
Gain on foreign exchange
derivative instruments (7,701) (11,074)
(Gain) loss on interest rate
derivative instruments (226) 16,456
Equity-based compensation 8,006 9,117
Deferred income taxes 152 (887)
Customer loyalty payments (16,755) (25,307)
Pension liability contribution (595) (1,118)
Changes in assets and
liabilities:
Accounts receivable (49,198) (49,424)
Other current assets (4,075) (23,251)
Accounts payable, accrued
expenses and other current
liabilities 37,449 27,232
Other (2,960) (4,568)
------ ------
Net cash provided by operating
activities 95,022 26,204
------ ------
Investing activities
Property and equipment additions (23,609) (22,521)
------- -------
Net cash used in investing
activities (23,609) (22,521)
Financing activities
Repayment of term loans (5,938) (9,405)
Repayment of capital lease
obligations and other
indebtedness (9,511) (12,079)
Proceeds from revolver
borrowings - 10,000
Repayment of revolver borrowings - (10,000)
Dividend to shareholders (9,306) (9,280)
Proceeds from share issuance
under employee share purchase
plan 632 -
Treasury share purchase related
to vesting of equity awards (128) (275)
---- ----
Net cash used in financing
activities (24,251) (31,039)
------- -------
Effect of changes in exchange
rate on cash and cash
equivalents 307 508
--- ---
Net increase (decrease) in cash
and cash equivalents 47,469 (26,848)
Cash and cash equivalents at
beginning of period 139,938 154,841
------- -------
Cash and cash equivalents at end
of period $187,407 $127,993
======== ========
Supplemental disclosures of cash
flow information
Interest payments, net of
capitalized interest $30,126 $37,480
Income tax payments, net of
refunds 3,905 4,549
Non-cash capital lease additions 1,651 6,779
TRAVELPORT WORLDWIDE LIMITED
NON-GAAP MEASURES
(unaudited)
Reconciliation of Net Income to Adjusted
Net Income, Adjusted Operating Income and
Adjusted EBITDA Three Months Ended
March 31,
---------
(in $ thousands) 2017 2016
--------------- ---- ----
Net income $55,863 $17,181
Adjustments:
Amortization of intangible assets 10,392 11,139
Equity-based compensation and related
taxes 7,786 9,101
Corporate and restructuring costs 5,656 7,409
Impairment of long-lived assets 685 461
Other - non cash (*) (16,374) 4,942
Tax impact of adjustments 349 722
--- ---
Adjusted Net Income 64,357 50,955
Adjustments:
Interest expense, net 30,501 38,439
Remaining provision for income taxes 12,383 7,070
------ -----
Adjusted Operating Income 107,241 96,464
Adjustments:
Depreciation and amortization of property
and equipment 42,517 41,102
Amortization of customer loyalty payments 18,795 16,574
------ ------
Adjusted EBITDA $168,553 $154,140
======== ========
______________________
(*) Other--non cash includes (i) unrealized gains on foreign currency exchange derivative contracts of $8 million and $11 million for the three months ended March 31, 2017 and 2016, respectively, and (ii) unrealized (gains) losses on interest rate derivative contracts of less than $(1) million and $16 million for the three months ended March 31, 2017 and 2016, respectively, (iii) $8 million related to revenue deferred in previous years for the three months ended March 31, 2017 and (iv) other gains of $1 million for the three months ended March 31, 2017.
Reconciliation of Adjusted EBITDA to Net
Cash Provided by Operating Activities and
Free Cash Flow Three Months Ended
March 31,
---------
(in $ thousands) 2017 2016
--------------- ---- ----
Adjusted EBITDA $168,553 $154,140
Add (Less):
Interest payments (30,126) (37,480)
Tax payments (3,905) (4,549)
Customer loyalty payments (16,755) (25,307)
Changes in working capital (13,588) (49,048)
Pensions liability contribution (595) (1,118)
Changes in other assets and liabilities (2,779) (7,108)
Other adjusting items (*) (5,783) (3,326)
------ ------
Net cash provided by operating activities 95,022 26,204
Less: capital expenditures on property
and equipment additions (23,609) (22,521)
------- -------
Free Cash Flow $71,413 $3,683
======= ======
______________________
(*) Other adjusting items relate to payments for costs included within operating income but excluded from Adjusted EBITDA, and during the three months ended March 31, 2017 and 2016, relate to payments for corporate and restructuring costs.
TRAVELPORT WORLDWIDE LIMITED
OPERATING STATISTICS
(unaudited)
Reconciliation
of Net
Debt
(in $
thousands) March 31, 2017 December 31, 2016
----------- -------------- -----------------
Current
portion
of long-
term debt $62,441 $63,558
Non-
current
portion
of long-
term debt 2,270,788 2,281,210
--------- ---------
Total debt 2,333,229 2,344,768
Less: Cash
and cash
equivalents (187,407) (139,938)
-------- --------
Net Debt $2,145,822 $2,204,830
========== ==========
Reconciliation of Income per Share -
Diluted to Adjusted Income per Share -
Diluted Three Months Ended
March 31,
---------
(in $) 2017 2016
----- ---- ----
Income per share - diluted $0.45 $0.13
Per share adjustments to net income to
determine Adjusted Income per Share -
diluted 0.06 0.28
---- ----
Adjusted Income per Share - diluted $0.51 $0.41
===== =====
Reconciliation of Capital Expenditures Three Months Ended
March 31,
---------
(in $ thousands) 2017 2016
--------------- ---- ----
Property and equipment additions $23,609 $22,521
Repayment of capital lease obligations
and other indebtedness 9,511 12,079
----- ------
Capital Expenditures $33,120 $34,600
======= =======
Other Metrics
Three Months Ended March 31,
----------------------------
(in thousands, except
where specified) 2017 2016 % Change
--------------------- ---- ---- --------
Transaction value
processed on the Travel
Commerce Platform $20,553,737 $20,133,265 2
Percent of Air segment
revenue from away
bookings 67% 68% (1)
Hotel room nights sold 16,250 15,673 4
Car rental days sold 22,242 21,927 1
Hospitality segments per
100 airline tickets
issued 41 43 (4)
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), 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) from continuing operations excluding amortization of acquired intangible assets, gain (loss) on early extinguishment of debt, and items that are excluded under our debt covenants, such as, 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.
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 of continuing operations, 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 and cash equivalents.
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 Net 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 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. These 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.
Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Share - diluted, Adjusted Operating Income (Loss) 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) 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 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 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 it provides investors with an understanding of how assets are performing and measures management's effectiveness in managing cash. Free Cash Flow is 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 do they represent residual cash flow for discretionary expenditures. This measure should not be considered as 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 not a measurement of our indebtedness under U.S. GAAP and should not be considered in isolation or as alternative to assess our total debt or any other measures derived in accordance with U.S. GAAP.
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.
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SOURCE Travelport Worldwide Limited
