Travelport Q Results Presentation

Transcription

1 Travelport Q Results Presentation August 4, 2011

2 Disclaimers Related to Forward-Looking Statements Certain items in this presentation and in today s discussion, including matters relating to revenue, net income and earnings, and percentages or calculations using these measures, capital structure, future business opportunities or growth rates and other financial measurements and non-financial statements in future periods, constitute forward-looking statements. These forwardlooking statements are based on management s current views with respect to future results and are subject to risks and uncertainties. These statements are not guarantees of future performance. Actual results may differ materially from those contemplated by forward-looking statements. Travelport Limited (the Company ) refers you to our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2010, filed on March 31, 2011, and as updated by our Quarterly Reports on Form 10- Q and Current Reports on Form 8-K, for additional discussion of these risks and uncertainties, as well as a cautionary statement regarding forward-looking statements. Forward-looking statements made during this presentation speak only as of today s date. Travelport expressly disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Related to Non-GAAP Financial Information Travelport analyzes its performance using Adjusted EBITDA and unlevered free cash flow, which are non-gaap measures. Such measures may not be comparable to similarly named measures used by other companies. The Company believes Adjusted EBITDA provides management with a more complete understanding of the underlying results and trends and an enhanced overall understanding of the Company s 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 one of the measures used by the Board of Directors to determine incentive compensation. Capital expenditures, which impact depreciation and amortization, interest expense and income tax expense, are reviewed separately by management. Adjusted EBITDA is disclosed so that investors have the same tools as those available to management when evaluating the results of Travelport. Adjusted EBITDA is a critical measure as it is required to calculate our key financial ratio under our credit agreement covenants. Adjusted EBITDA is defined as EBITDA adjusted to exclude the impact of purchase accounting, impairment of goodwill and intangibles assets, expenses incurred in conjunction with Travelport s separation from Cendant, expenses incurred to acquire and integrate Travelport s portfolio of businesses, costs associated with Travelport s restructuring efforts, non-cash equitybased compensation, and other adjustments made to exclude expenses management views as outside the normal course of operations. Unlevered free cash flow is defined as net cash provided by (used in) operations adjusted to exclude cash interest payments and include capital expenditures, all of which are GAAP measures included within the Statements of Cash Flows. The Company believes unlevered 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 its current and future financing and investing needs. 2

3 Q Highlights Gordon Wilson, President and CEO

4 Highlights Industry Aftermath of Japan tsunami and on-going Middle East unrest impact Continued upturn in global travel trends MIDT air segment volumes: Q2 +3%, H1 +2% Overall growth patchy according to customer segment and geography 10% 8% 6% 4% 2% - (2)% (4)% GDS Industry Global Segments 2011 Jan Feb Mar Apr May Jun Travelport Adjusted EBITDA in line with management expectations Orbitz was unable to sell AA tickets for majority H1 now resolved Travelport Q H Net Revenue 530 1,061 Adj. EBITDA Cash Generation Significant headway made on commercial objectives 4

5 Q Financial Results Philip Emery, CFO

6 Financial Highlights H1 Revenue marginally up versus prior year and in line with our expectations H1 Adjusted EBITDA 4% lower Adjusted EBITDA includes $(37)m and $(29)m of amortized upfront payments to travel agencies in H and H1 2010, respectively. Working capital includes $142m of GDS upfront payments as of June 30, 2011 H1 interest expense is higher due to higher interest rates arising from amendments made to our senior secured credit agreement in the fourth quarter of 2010 H1 net cash from operations of $98m marginally down over prior year. H1 unlevered free cash flow of $220m was $136m higher than prior year and represented 78% of Adjusted EBITDA Net Debt reduced by $655m following disposal of GTA and stands at $2,816m at June 30 In compliance with covenant ratio at June 30 6 ($ in millions, unless stated otherwise)

7 Travelport Summary Income Statements Q Better / (Worse) than prior year H Better / (Worse) than prior year Net revenue ,061 5 Adjusted EBITDA 136 (17) 283 (12) Operating income 66 (16) 145 (9) Interest expense, net (72) (9) (149) (20) Income from continuing operations 1 (6) (25) (4) (29) 7 Notes: (1) Income from continuing operations before income taxes and equity in earnings / losses of investment in Orbitz Worldwide ($ in millions, unless stated otherwise)

8 Net Revenue Bridge Net revenue Q Better / (Worse) than prior year H Better / (Worse) than prior year Transaction Processing Airline IT Solutions Travelport ,061 5 Q1 Revenue Q2 Revenue $1 $4 $(6) $6 $536 $530 $530 $531 $520 $520 $526 $530 Q Net Revenue Transaction Processing Airline IT Solutions Q Net Revenue Q Net Revenue Transaction Processing Airline IT Solutions Q Net Revenue 8 ($ in millions, unless stated otherwise)

9 Travelport Statements of Cash Flows Q Better / (Worse) than prior year Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities of Continuing Operations H Better / (Worse) than prior year Adjusted EBITDA 136 (17) 283 (12) Less: Cash interest payments (52) (31) (151) (40) Tax payments (6) (3) (9) 6 Changes in operating working capital (23) (46) 7 32 FASA liability payments (4) - (9) - Other non-operating and adjusting items (14) 7 (23) 6 Net cash provided by operating activities of continuing operations 37 (90) 98 (8) Reconciliation of Net Cash provided by Operating Activities of Continuing Operations to Unlevered Free Cash Flow Add cash interest payments Less capital expenditures (11) 9 (29) 104 Unlevered free cash flow 78 (50) ($ in millions, unless stated otherwise)

10 Travelport Consolidated Balance Sheets June 30, 2011 March 31, 2011 December 31, 2010 Goodwill and other intangibles 2,025 2,047 2,070 PP&E Working capital and other (122) (125) (154) Net debt (2,816) (3,451) (3,435) Net assets of GTA business held for sale Total assets less total liabilities (456) (664) (672) Equity (456) (664) (672) 10 Notes: (1) Excluding cash balances ($ in millions, unless stated otherwise)

11 Travelport Capitalization and Debt Maturities June 30, March 31, December 31, Security Maturity Non extended Term Loans Aug-13 $166 $234 $231 Extended Term Loans Aug-15 $1,378 $1,951 $1,930 Tranche S Term Loan (for Letters of Credit) Aug-15 $137 $137 $137 Bank Term Loan & Revolving Credit Facility $1,681 $2,322 $2,298 Capital Leases & Other $60 $47 $49 Senior Notes due 2014 Sep-14 $800 $795 $783 Senior Notes due 2016 Mar-16 $250 $250 $250 Senior Unsecured Notes $1,050 $1,045 $1,033 Senior Subordinated Notes Sep-16 $450 $446 $434 Total Travelport Limited Indebtedness $3,241 $3,860 $3,814 Comments 94% of current outstanding debt maturities in or after 2014 $655m of Term Loan debt repaid from GTA sale proceeds in May 2011 In compliance with covenant ratio at June 30 Schedule of Travelport Limited Debt Maturities $1,518 Less Collateralized Cash (for Letters of Credit) $(137) $(137) $(137) Less Cash & Cash Equivalents $(288) $(272) $(242) Net Debt $2,816 $3,451 $3,435 $812 $701 Covenant Net Debt / LTM Covenant Adjusted EBITDA 5.16x 5.37x 5.49x Maximum Covenant Ratio 5.75x 5.75x 5.75x $9 $11 $176 $ Thereafter 11 ($ in millions, unless stated otherwise)

12 Q Operational Review Gordon Wilson, President and CEO

13 Commercial Highlights Corporate travel continues to grow strongly as witnessed by our top global management companies Q2 +10% vs. prior year Majority of GDS European growth from German and Nordic regions BRIC region (Brazil, Russia, India and China) continues to grow for Travelport Q segments +3% 7% of overall segments H1 growth in Russia of over 70% Region Travlport GDS Segments (in millions) Q Q Better / (Worse) Better / (Worse) Americas % Europe % MEA (0.5) (5)% APAC % Global % RevPas Low cost carriers continued segment growth 15% higher in Q % of Travelport GDS Air segments Good H1 growth in Travelport GDS hotel bookings +7% Average Revenue per segment (RevPas) marginally up versus prior year in line with our expectations RevPas $8.00 $6.00 $4.00 $2.00 $0.00 Volume (Segments) 1% Average revenue per segment Flat $5.23 $5.24 Q Q Segments in Millions 13

14 World Leader of Informed Travel Choice - Air American Airlines New Content Deals with Germanwings Dragonair Alitalia Helvetic Airlines Frontier Airlines Implemented Merchandising Functionality with United Airlines Qantas 14

15 World Leader of Informed Travel Choice - Hotels Travelport Rooms and More TM Browser connectivity: integrates to GDS for chain hotels aggregates independent hotel content aggregators in one user experience for search, shopping and booking Currently offers c.200,000 unique properties 2012 target to double content providers Extends through uapi to corporate and mobile channels Enables travel agencies and other intermediaries to earn share of merchant margins Simple on-line registration for Travelport and non Travelport GDS users 15

16 Travel Distribution Strategy Aggregating the widest possible travel content Delivering content efficiently To be the leading provider of informed travel choice Providing content to the broadest audience Making content extensively accessible 16

17 Travelport Universal Desktop TM Comprehensive sales and marketing platform with customizable workflow automation and reporting Point of Sale promotion and differentiation designed for ancillary service sales as well as packaged offers All the information that travelers want at agent s fingertips Multi-source content and pricing across the breadth of the travel industry Visibility of the total cost of travel Content sourced from the Universal API 17

18 Travelport Universal API TM Industry first Efficient and effective travel content aggregation from multiple sources Innovative and extensive developer community engagement Providing access to Travel industry s most diverse and deepest content pool 18

19 Summary and Outlook Making significant headway on commercial objectives Growing geographic footprint H1 performance in line with management expectations Encouraging start to the second half 19 ($ in millions, unless stated otherwise)

20 Q&A

21 Appendix: Definitions Adjusted EBITDA: is defined as EBITDA adjusted to exclude the impact of purchase accounting, impairment of goodwill and intangibles assets, expenses incurred in conjunction with Travelport s separation from Cendant, expenses incurred to acquire and integrate Travelport s portfolio of businesses, costs associated with Travelport s restructuring efforts, non-cash equity-based compensation, and other adjustments made to exclude expenses management views as outside the normal course of operations Unlevered free cash flow: is defined as net cash provided by (used in) operating activities of continuing operations adjusted to exclude cash interest payments and include capital expenditures, all of which are GAAP measures included within the Statements of Cash Flows Net debt / LTM Adjusted EBITDA: Credit agreement definition of Net debt and Adjusted EBITDA includes certain adjustments to reported figures All figures are in USD $ millions unless otherwise stated 21

22 Appendix: Travelport by Numbers >160 country presence c.1,300 IT professionals 8 mainfames 100 firewalls >4,500 servers Per blink of an eye: >1 response Per second: >6 billion fare options available Per minute: >32 car rentals Per hour: >43 million transactions Per day: >77 million travel content searches Per month: c.30,000 device backups Per year: >$80 billion worth of bookings transacted 22

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