“Global travel industry growth was very healthy in the first quarter with our airline and hotel customers experiencing solid demand. Against this backdrop, Sabre’s portfolio of software and technology solutions, which are the broadest and deepest in the industry, continued to deliver value across the travel ecosystem,” said Tom Klein, Sabre CEO and President.
“Our relentless focus on delivering value and innovation to our customers delivered first quarter performance ahead of our plan. Looking ahead, we expect to meet or exceed our guidance for 2014 and are positioned well to grow our businesses in the years to come.”
Q1 2014 Financial Summary
Sabre reported Airline and Hospitality Solutions revenues that increased 8.8% to $177 million from $162 million in the first quarter of 2013. Travel Network revenues also increased, rising 3.5% to $492 million from $475 million for the same period of 2013. Sabre, excluding Travelocity, revenues increased 7.2% from the first quarter of 2013.
Sabre reported total consolidated revenues of $755 million for the quarter ended March 31, 2014, compared to $759 million for the first quarter of 2013. On an adjusted basis, which excludes the amortization of incentive payments paid under the Expedia strategic marketing agreement (Expedia SMA) related to the restructuring of Travelocity, Sabre reported consolidated adjusted revenues of $757 million for the quarter ended March 31, 2014, compared to $759 million for the first quarter of 2013.
Travelocity revenues declined as planned due to the 2013 business model change at Travelocity North America (described below), which is expected to result in a more stable and profitable Travelocity business going forward. Results also were impacted, and revenues reduced, by the sale during the quarter of the Travelocity Partner Network (TPN) business. These changes resulted in Travelocity revenues that totaled $94 million, compared to $143 million in the first quarter of 2013. On an adjusted basis, Travelocity revenues totaled $96 million, a 32.7% decline from the $143 million in the year ago period.
Consolidated net loss attributable to Sabre Corporation for the first quarter of 2014 totaled $2.8 million, compared to a net loss of $15.8 million in the year ago period.
Sabre Airline and Hospitality Solutions and Travel Network Adjusted EBITDA increased 30.8% and 2.2%, respectively, while Travelocity Adjusted EBITDA declined as expected due to the timing of the transition to the new business model in the North American Travelocity business. Total Company Adjusted EBITDA for the three months ended March 31, 2014 was $184 million, a 4.6% decline from $193 million in the prior year period. Excluding Travelocity, first quarter 2014 total Adjusted EBITDA increased 3.7 % to $209 million from $201 million in the year ago quarter.
For the first quarter of 2014, Sabre reported a loss per share from continuing operations of $0.06 per share. On an adjusted basis (Adjusted Net Income from continuing operations per share), Sabre reported first quarter 2014 diluted earnings of $0.18 per share.
Cash Flow from Operations was $72 million for the first quarter of 2014, compared to $92 million in the first quarter of 2013. Adjusted Capital Expenditures, which includes capitalized implementation costs, totaled $59 million for the first quarter of 2014, compared to $75 million in the year ago period. Adjusted Free Cash flow, which adjusts for the decline in working capital and restructuring costs related to the change in the Travelocity business model and dispositions as well as litigation and other costs (see reconciliation below), totaled $68 million in the first quarter of 2014, a 38.5% increase from $49 million of Adjusted Free Cash Flow in the first quarter of 2013.