Travelport Limited, a leading provider of critical transaction processing for the global travel industry, today announces its financial results for the first quarter ended March 31, 2011.
($ in millions)
Net Revenue – Q1 2011: $531 (2010: $536)
Operating Income – Q1 2011: $79 (2010: $72)
Adjusted EBITDA – Q1 2011: $147 (2010: $142)
Cash generated by continuing operations – Q1 2011: $61 (2010: cash used of $21)
Announced ground-breaking merchandising agreements with Air Canada and British Airways
Signed global Travelport Universal API agreement with Hogg Robinson Group
Secured numerous contract renewals
Post Quarter End Highlights:
Completed sale of GTA business
Repaid $655 million of indebtedness
Signed merchandising agreement with Qantas
Commenting on developments, Jeff Clarke, President and CEO of Travelport, said:
“I’m pleased with Travelport’s Q1 growth in operating income and cash flow given the market and industry headwinds.
“Travelport continues to invest in new and innovative travel distribution technologies, including our Travelport Universal API, Travelport Universal Desktop and Travelport ePricing products.”
Financial Highlights for First Quarter 2011
Travelport’s main business is its global distribution system (GDS), which includes the Worldspan and Galileo brands and the Company’s Airline IT Solutions business.
On March 5, 2011, Travelport reached an agreement to sell its Gullivers Travel Associates (“GTA”) business to Kuoni Travel Holdings Limited for a gross consideration of $720 million, subject to certain closing working capital adjustments based on cash, working capital and indebtedness targets. The transaction completed on May 5, 2011. As a result, the assets and liabilities of our GTA business are classified as held for sale on our consolidated condensed balance sheets, and the results of operations are presented as discontinuing operations in our consolidated condensed statements of operations and consolidated condensed statements of cash flows.
Travelport’s Net Revenue of $531 million for the first quarter of 2011 represented a $5 million decrease compared to the corresponding period in the prior year. Operating Income and EBITDA were $79 million and $135 million, respectively, for the first quarter of 2011, with an increase of 10% in Operating Income and an increase of 13% in EBITDA compared to 2010. Adjusted EBITDA was $147 million for the first quarter of 2011, a 4% increase compared to 2010. Net Revenue decreased compared to the prior year as a result of a decrease in transaction processing revenue in the Middle East and Africa, partially offset by increases in Europe and Asia Pacific. Operating Income improved $7 million (10%) with a reduction in selling, general and administrative costs, partially offset by increases in cost of revenue and depreciation expense.
First quarter 2011 interest costs of $77 million were $11 million higher than for 2010 due to higher interest rates arising from amendments to our senior secured credit agreement in the fourth quarter of 2010.
During the three months ended March 31, 2011, Travelport generated $61 million in cash from continuing operations, an $82 million improvement over 2010. This increase is primarily attributable to $78 million of incremental cash generated from operating working capital.
Travelport’s net debt as of March 31, 2011 was $3,451 million, which comprised debt of $3,860 million less $174 million in cash and cash equivalents, less $98 million in cash and cash equivalents of discontinuing operations and less $137 million of restricted cash provided as collateral.
Travelport currently owns approximately 48% of the outstanding equity of Orbitz Worldwide. Travelport accounts for its investment in Orbitz Worldwide under the equity method of accounting. During the quarter ended March 31, 2011, Travelport recorded a $5 million loss from its investment in Orbitz Worldwide.