Travelocity Reports Record Pro Forma Profit Inc. (Nasdaq: TVLY), the leading travel Web site, today announced record pro forma profit of $0.09 per fully diluted share.
These results reflect the Company`s success in expanding its customer base, managing expenses and diversifying its revenue stream. 
For the quarter ended September 30, 2001, revenues were $78.5 million,compared to $53.4 million for the third quarter of last year and $82.3 million for the prior quarter. 
The projected revenue run rate for the third quarter prior to September 11 would have exceeded the Company`s prior guidance of $85 million.  Gross travel bookings for the quarter were $784.8 million compared to $649.5 million for the same quarter a year ago and $879.0 million for the prior quarter. 
For the nine month period, gross travel bookings were 42% higher than the prior year.  Gross profit margin increased to 67.7%compared to 62.1% for the third quarter of last year and 67.4% for the second quarter of this year.  Profit before special items and Sabre interest was $4.9 million, or $0.09 per fully diluted share for the third quarter of this year, compared toa profit before special items and Sabre interest of $4.5 million, or $0.08 perfully diluted share reported in the prior quarter.   
  On a GAAP basis, the Company reported a loss before Sabre interest and incometaxes of $13.3 million, or $0.27 per fully diluted share for the third quarter, compared to a loss before Sabre interest and income taxes of $31.3 million, or $0.64 per fully diluted share, for the third quarter of lastyear. 
Beginning January 1, 2002, the Company will not be required to report goodwill amortization in its GAAP financial statements, which will result in closer conformance of pro forma and GAAP results.
“In responding to September`s crisis, our customer service staff and database were tremendous assets in helping us address our highest priority—getting our customers to their final destinations, and the Internet was avaluable resource for providing continuous updates,” said Terrell B. Jones,president and chief executive officer of Travelocity.  “As you would expect,the number of calls to our centers increased dramatically, so we deployed anautomated voice response system with cancellation and refund capabilities to alleviate hold times.  Customer service combined with technology and strong online capabilities proves that travel on the Internet works, and is testimonyto the resilience of our business model.”  “Despite these very difficult weeks since September 11, we were again very successful with our revenue diversification strategy for the quarter,“commented Ramesh Punwani, chief financial officer of Travelocity.  “Non-airtransaction revenues grew 7% sequentially to 32% of total transactionrevenues.  Another attribute of our business model is our ability to manage expenses in line with projected revenue levels and preserve cash flow, whichled to our earlier announcement of expense reductions for the fourth quarter.”  “Based on current information and given the recent booking trends in all travel categories, we expect fourth quarter pro forma results to be the sameas or slightly better than third quarter pro forma results,” continued Punwani.  “With $107 million in cash and marketable securities, our strongbalance sheet will support continuedgrowth.”

Management will review third quarter results during a conference call scheduled for today at 4:00 p.m. CDT.  The call can be accessed by dialing888-396-9926, passcode `Travelocity`, or by clicking on the link `3QConference Call - 10/17 4 pm CDT` at the bottom of the home page of theCompany`s Web site at . 

About Travelocity Inc. (Nasdaq: TVLY), a database-driven travel marketingand transaction company, provides Internet and wireless reservationsinformation for more than 700 airlines, more than 50,000 hotels and more than50 car rental companies.  In addition, offers more than6,500 vacation packages, tour and cruise departures and a vast database ofdestination and interest information. employs more than1,000 customer service professionals, has sold more than 18 million airlinetickets and has registered more than 30 million members.