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Bermuda
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98-0505105
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(State or other jurisdiction of
incorporation or organization) |
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(I.R.S. Employer
Identification Number) |
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Smaller reporting company ☐
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(Do not check if a smaller reporting company)
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Page
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PART I. FINANCIAL INFORMATION
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| | |||||
| | | | 1 | | | |
| | | | 3 | | | |
| | | | 3 | | | |
| | | | 4 | | | |
| | | | 5 | | | |
| | | | 6 | | | |
| | | | 8 | | | |
| | | | 9 | | | |
| | | | 19 | | | |
| | | | 33 | | | |
| | | | 34 | | | |
PART II. OTHER INFORMATION
|
| | | | | | |
| | | | 35 | | | |
| | | | 35 | | | |
| | | | 35 | | | |
| | | | 35 | | | |
| | | | 35 | | | |
| | | | 35 | | | |
| | | | 35 | | | |
| | | | 36 | | |
(in $ millions, except share data)
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| |
Three Months
Ended March 31, 2015 |
| |
Three Months
Ended March 31, 2014 |
| ||||||
Net revenue
|
| | | $ | 572 | | | | | $ | 572 | | |
Costs and expenses | | | | ||||||||||
Cost of revenue
|
| | | | 349 | | | | | | 353 | | |
Selling, general and administrative
|
| | | | 128 | | | | | | 88 | | |
Depreciation and amortization
|
| | | | 61 | | | | | | 56 | | |
Total costs and expenses
|
| | | | 538 | | | | | | 497 | | |
Operating income
|
| | | | 34 | | | | | | 75 | | |
Interest expense, net
|
| | | | (39) | | | | | | (83) | | |
Loss on early extinguishment of debt
|
| | | | — | | | | | | (5) | | |
Other income
|
| | | | 6 | | | | | | — | | |
Income (loss) before income taxes and share of losses in equity method investments
|
| | | | 1 | | | | | | (13) | | |
Provision for income taxes
|
| | | | (8) | | | | | | (10) | | |
Share of losses in equity method investments
|
| | | | — | | | | | | (4) | | |
Net loss
|
| | | | (7) | | | | | | (27) | | |
Net income attributable to non-controlling interest in subsidiaries
|
| | | | (1) | | | | | | (2) | | |
Net loss attributable to the Company
|
| | | $ | (8) | | | | | $ | (29) | | |
Loss per share – Basic and Diluted: | | | | ||||||||||
Loss per share
|
| | | $ | (0.07) | | | | | $ | (0.46) | | |
Weighted average common shares outstanding
|
| | | | 121,411,360 | | | | | | 63,303,635 | | |
Cash dividends declared per Common Share
|
| | | $ | 0.075 | | | | | | — | | |
(in $ millions)
|
| |
Three Months
Ended March 31, 2015 |
| |
Three Months
Ended March 31, 2014 |
| ||||||||
Net loss
|
| | | $ | (7) | | | | | $ | (27) | | | ||
Other comprehensive loss, net of tax | | | | ||||||||||||
Currency translation adjustment, net of tax
|
| | | | (6) | | | | | | 1 | | | ||
Changes in gain on available-for-sale securities, net of tax
|
| | | | (6) | | | | | | — | | | ||
Unrealized loss on cash flow hedges, net of tax
|
| | | | — | | | | | | (1) | | | ||
Unrealized loss on equity investments, net of tax
|
| | | | — | | | | | | (1) | | | ||
Other comprehensive loss, net of tax
|
| | | | (12) | | | | | | (1) | | | ||
Comprehensive loss
|
| | | | (19) | | | | | | (28) | | | ||
Comprehensive income attributable to non-controlling interest in
subsidiaries |
| | | | (1) | | | | | | (2) | | | ||
Comprehensive loss attributable to the Company
|
| | | $ | (20) | | | | | $ | (30) | | | ||
|
(in $ millions, except share data)
|
| |
March 31,
2015 |
| |
December 31,
2014 |
| ||||||||
Assets | | | | ||||||||||||
Current assets: | | | | ||||||||||||
Cash and cash equivalents
|
| | | $ | 107 | | | | | $ | 139 | | | ||
Accounts receivable (net of allowances for doubtful accounts of $15 and $14)
|
| | | | 234 | | | | | | 184 | | | ||
Deferred income taxes
|
| | | | 5 | | | | | | 5 | | | ||
Other current assets
|
| | | | 97 | | | | | | 84 | | | ||
Total current assets
|
| | | | 443 | | | | | | 412 | | | ||
Property and equipment, net
|
| | | | 400 | | | | | | 414 | | | ||
Goodwill
|
| | | | 996 | | | | | | 997 | | | ||
Trademarks and tradenames
|
| | | | 314 | | | | | | 314 | | | ||
Other intangible assets, net
|
| | | | 601 | | | | | | 619 | | | ||
Cash held as collateral
|
| | | | 24 | | | | | | 26 | | | ||
Deferred income taxes
|
| | | | 9 | | | | | | 9 | | | ||
Other non-current assets
|
| | | | 104 | | | | | | 101 | | | ||
Total assets
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| | | $ | 2,891 | | | | | $ | 2,892 | | | ||
Liabilities and equity | | | | ||||||||||||
Current liabilities: | | | | ||||||||||||
Accounts payable
|
| | | $ | 68 | | | | | $ | 73 | | | ||
Accrued expenses and other current liabilities
|
| | | | 449 | | | | | | 426 | | | ||
Current portion of long-term debt
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| | | | 56 | | | | | | 56 | | | ||
Total current liabilities
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| | | | 573 | | | | | | 555 | | | ||
Long-term debt
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| | | | 2,375 | | | | | | 2,384 | | | ||
Deferred income taxes
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| | | | 56 | | | | | | 54 | | | ||
Other non-current liabilities
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| | | | 241 | | | | | | 237 | | | ||
Total liabilities
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| | | | 3,245 | | | | | | 3,230 | | | ||
Commitments and contingencies (Note 9) | | | | ||||||||||||
Shareholders’ equity (deficit): | | | | ||||||||||||
Preference shares ($0.0025 par value; 225,000,000 shares authorized; no shares issued and outstanding as of both March 31, 2015 and December 31, 2014)
|
| | | | — | | | | | | — | | | ||
Common shares ($0.0025 par value; 560,000,000 shares authorized; 121,411,360 shares issued and outstanding as of both March 31, 2015 and December 31, 2014)
|
| | | | — | | | | | | — | | | ||
Additional paid in capital
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| | | | 2,718 | | | | | | 2,715 | | | ||
Accumulated deficit
|
| | | | (2,906) | | | | | | (2,898) | | | ||
Accumulated other comprehensive loss
|
| | | | (186) | | | | | | (174) | | | ||
Total shareholders’ equity (deficit)
|
| | | | (374) | | | | | | (357) | | | ||
Equity attributable to non-controlling interest in subsidiaries
|
| | | | 20 | | | | | | 19 | | | ||
Total equity (deficit)
|
| | | | (354) | | | | | | (338) | | | ||
Total liabilities and equity
|
| | | $ | 2,891 | | | | | $ | 2,892 | | | ||
|
(in $ millions)
|
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Three Months
Ended March 31, 2015 |
| |
Three Months
Ended March 31, 2014 |
| ||||||||
Operating activities | | | | ||||||||||||
Net loss
|
| | | $ | (7) | | | | | $ | (27) | | | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | | | | ||||||||||||
Depreciation and amortization
|
| | | | 61 | | | | | | 56 | | | ||
Amortization of customer loyalty payments
|
| | | | 18 | | | | | | 18 | | | ||
Gain on sale of available-for-sale securities
|
| | | | (6) | | | | | | — | | | ||
Amortization of debt finance costs
|
| | | | 1 | | | | | | 3 | | | ||
Accrual of repayment fee and amortization of debt discount
|
| | | | 1 | | | | | | 3 | | | ||
Loss on early extinguishment of debt
|
| | | | — | | | | | | 5 | | | ||
Loss (gain) on foreign exchange derivative instruments
|
| | | | 11 | | | | | | (1) | | | ||
Payment-in-kind interest
|
| | | | — | | | | | | 6 | | | ||
Share of losses in equity method investments
|
| | | | — | | | | | | 4 | | | ||
Equity-based compensation
|
| | | | 12 | | | | | | 1 | | | ||
Deferred income taxes
|
| | | | 2 | | | | | | 3 | | | ||
Customer loyalty payments
|
| | | | (23) | | | | | | (26) | | | ||
Pension liability contribution
|
| | | | (1) | | | | | | — | | | ||
Changes in assets and liabilities: | | | | ||||||||||||
Accounts receivable
|
| | | | (51) | | | | | | (55) | | | ||
Other current assets
|
| | | | (13) | | | | | | 4 | | | ||
Accounts payable, accrued expenses and other current liabilities
|
| | | | 8 | | | | | | 42 | | | ||
Other
|
| | | | (2) | | | | | | (13) | | | ||
Net cash provided by operating activities
|
| | | $ | 11 | | | | | $ | 23 | | | ||
Investing activities | | | | ||||||||||||
Property and equipment additions
|
| | | $ | (27) | | | | | $ | (26) | | | ||
Proceeds from sale of available-for-sale securities
|
| | | | 6 | | | | | | — | | | ||
Purchase of equity method investment
|
| | | | — | | | | | | (10) | | | ||
Net cash used in investing activities
|
| | | $ | (21) | | | | | $ | (36) | | | ||
|
(in $ millions)
|
| |
Three months
Ended March 31, 2015 |
| |
Three months
Ended March 31, 2014 |
| ||||||
Financing activities | | | | ||||||||||
Proceeds from revolver borrowings
|
| | | $ | — | | | | | $ | 50 | | |
Repayment of term loans
|
| | | | (6) | | | | | | (4) | | |
Repayment of capital lease obligations
|
| | | | (8) | | | | | | (7) | | |
Release of cash provided as collateral
|
| | | | 2 | | | | | | — | | |
Dividend to shareholders
|
| | | | (9) | | | | | | — | | |
Payment related to early extinguishment of debt
|
| | | | — | | | | | | (3) | | |
Proceeds from settlement of derivative instruments
|
| | | | — | | | | | | 3 | | |
Net cash (used in) provided by financing activities
|
| | | $ | (21) | | | | | $ | 39 | | |
Effect of changes in exchange rates on cash and cash equivalents
|
| | | | (1) | | | | | | — | | |
Net (decrease) increase in cash and cash equivalents
|
| | | | (32) | | | | | | 26 | | |
Cash and cash equivalents at beginning of period
|
| | | | 139 | | | | | | 154 | | |
Cash and cash equivalents at end of period
|
| | | $ | 107 | | | | | $ | 180 | | |
Supplemental disclosure of cash flow information | | | | ||||||||||
Interest payments
|
| | | $ | 38 | | | | | $ | 57 | | |
Income tax payments, net
|
| | | | 7 | | | | | | 7 | | |
Non-cash exchange of debt for equity
|
| | | | — | | | | | | 135 | | |
Non-cash capital lease additions
|
| | | | 4 | | | | | | 5 | | |
| | |
Common Shares
|
| |
Additional
Paid in Capital |
| |
Accumulated
Deficit |
| |
Accumulated
Other Comprehensive Loss |
| |
Non-
Controlling Interest in Subsidiaries |
| |
Total
Equity (Deficit) |
| |||||||||||||||||||||||||||||||
(in $ millions, except share data)
|
| |
Number
|
| |
Amount
|
| |||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2014
|
| | | | 121,411,360 | | | | | $ | — | | | | | $ | 2,715 | | | | | $ | (2,898) | | | | | $ | (174) | | | | | $ | 19 | | | | | $ | (338) | | | |||||||
Dividend to shareholders
|
| | | | — | | | | | | — | | | | | | (9) | | | | | | — | | | | | | — | | | | | | — | | | | | | (9) | | | |||||||
Equity-based compensation
|
| | | | — | | | | | | — | | | | | | 12 | | | | | | — | | | | | | — | | | | | | — | | | | | | 12 | | | |||||||
Comprehensive loss, net of tax
|
| | | | — | | | | | | — | | | | | | — | | | | | | (8) | | | | | | (12) | | | | | | 1 | | | | | | (19) | | | |||||||
Balance as of March 31, 2015
|
| | | | 121,411,360 | | | | | $ | — | | | | | $ | 2,718 | | | | | $ | (2,906) | | | | | $ | (186) | | | | | $ | 20 | | | | | $ | (354) | | | |||||||
|
(in $ millions)
|
| |
March 31,
2015 |
| |
December 31,
2014 |
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Sales and use tax receivables
|
| | | $ | 31 | | | | | $ | 28 | | | ||
Prepaid expenses
|
| | | | 24 | | | | | | 20 | | | ||
Restricted cash
|
| | | | 20 | | | | | | 9 | | | ||
Prepaid incentives
|
| | | | 16 | | | | | | 13 | | | ||
Available-for-sale securities
|
| | | | — | | | | | | 6 | | | ||
Other
|
| | | | 6 | | | | | | 8 | | | ||
| | | | $ | 97 | | | | | $ | 84 | | | ||
|
| | |
March 31, 2015
|
| |
December 31, 2014
|
| ||||||||||||||||||||||||||||||||||||
(in $ millions)
|
| |
Cost
|
| |
Accumulated
depreciation |
| |
Net
|
| |
Cost
|
| |
Accumulated
depreciation |
| |
Net
|
| ||||||||||||||||||||||||
Capitalized software
|
| | | $ | 800 | | | | | $ | (583) | | | | | $ | 217 | | | | | $ | 772 | | | | | $ | (554) | | | | | $ | 218 | | | ||||||
Computer equipment
|
| | | | 298 | | | | | | (184) | | | | | | 114 | | | | | | 297 | | | | | | (175) | | | | | | 122 | | | ||||||
Building and leasehold improvements
|
| | | | 22 | | | | | | (8) | | | | | | 14 | | | | | | 24 | | | | | | (9) | | | | | | 15 | | | ||||||
Construction in progress
|
| | | | 55 | | | | | | — | | | | | | 55 | | | | | | 59 | | | | | | — | | | | | | 59 | | | ||||||
| | | | $ | 1,175 | | | | | $ | (775) | | | | | $ | 400 | | | | | $ | 1,152 | | | | | $ | (738) | | | | | $ | 414 | | | ||||||
|
(in $ millions)
|
| |
January 1,
2015 |
| |
Additions
|
| |
Retirements
|
| |
Foreign
Exchange |
| |
March 31,
2015 |
| ||||||||||||||||||||
Non-Amortizable Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||
Goodwill
|
| | | $ | 997 | | | | | $ | — | | | | | $ | — | | | | | $ | (1) | | | | | $ | 996 | | | |||||
Trademarks and tradenames
|
| | | | 314 | | | | | | — | | | | | | — | | | | | | — | | | | | | 314 | | | |||||
Other Intangible Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||
Acquired intangible assets
|
| | | | 1,129 | | | | | | — | | | | | | (2) | | | | | | — | | | | | | 1,127 | | | |||||
Accumulated amortization
|
| | | | (687) | | | | | | (19) | | | | | | 2 | | | | | | — | | | | | | (704) | | | |||||
Acquired intangible assets, net
|
| | | | 442 | | | | | | (19) | | | | | | — | | | | | | — | | | | | | 423 | | | |||||
Customer loyalty payments
|
| | | | 334 | | | | | | 20 | | | | | | (32) | | | | | | — | | | | | | 322 | | | |||||
Accumulated amortization
|
| | | | (157) | | | | | | (18) | | | | | | 32 | | | | | | (1) | | | | | | (144) | | | |||||
Customer loyalty payments, net
|
| | | | 177 | | | | | | 2 | | | | | | — | | | | | | (1) | | | | | | 178 | | | |||||
Other intangible assets, net
|
| | | $ | 619 | | | | | $ | (17) | | | | | $ | — | | | | | $ | (1) | | | | | $ | 601 | | | |||||
|
(in $ millions)
|
| |
January 1,
2014 |
| |
Additions
|
| |
Retirements
|
| |
Foreign
Exchange |
| |
March 31,
2014 |
| ||||||||||||||||||||
Non-Amortizable Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||
Goodwill
|
| | | $ | 986 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 986 | | | |||||
Trademarks and tradenames
|
| | | | 314 | | | | | | — | | | | | | — | | | | | | — | | | | | | 314 | | | |||||
Other Intangible Assets: | | | | | | | ||||||||||||||||||||||||||||||
Acquired intangible assets
|
| | | | 1,129 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,129 | | | |||||
Accumulated amortization
|
| | | | (610) | | | | | | (19) | | | | | | — | | | | | | — | | | | | | (629) | | | |||||
Acquired intangible assets, net
|
| | | | 519 | | | | | | (19) | | | | | | — | | | | | | — | | | | | | 500 | | | |||||
Customer loyalty payments
|
| | | | 306 | | | | | | 43 | | | | | | (28) | | | | | | — | | | | | | 321 | | | |||||
Accumulated amortization
|
| | | | (154) | | | | | | (18) | | | | | | 28 | | | | | | — | | | | | | (144) | | | |||||
Customer loyalty payments, net
|
| | | | 152 | | | | | | 25 | | | | | | — | | | | | | — | | | | | | 177 | | | |||||
Other intangible assets, net
|
| | | $ | 671 | | | | | $ | 6 | | | | | $ | — | | | | | $ | — | | | | | $ | 677 | | | |||||
|
(in $ millions)
|
| |
March 31,
2015 |
| |
December 31,
2014 |
| ||||||||
Accrued commissions and incentives
|
| | | $ | 270 | | | | | $ | 260 | | | ||
Accrued payroll and related
|
| | | | 51 | | | | | | 59 | | | ||
Deferred revenue
|
| | | | 27 | | | | | | 27 | | | ||
Derivative contracts
|
| | | | 25 | | | | | | 16 | | | ||
Customer prepayments
|
| | | | 20 | | | | | | 9 | | | ||
Accrued interest expense
|
| | | | 17 | | | | | | 18 | | | ||
Income tax payable
|
| | | | 16 | | | | | | 16 | | | ||
Pension and post-retirement benefit liabilities
|
| | | | 2 | | | | | | 2 | | | ||
Other
|
| | | | 21 | | | | | | 19 | | | ||
| | | | $ | 449 | | | | | $ | 426 | | | ||
|
(in $ millions)
|
| |
Interest
rate |
| |
Maturity
|
| |
March 31,
2015 |
| |
December 31,
2014 |
| ||||||||
Secured debt | | | | | | | | | | | | | | | | | | | | ||
Senior Secured Credit Agreement | | | | | | | | | | | | | | | | | | | | ||
Term loans
|
| | | | | | | | | | | | | | | | | | | ||
Dollar denominated(1)
|
| |
L+4.75%
|
| |
September 2021
|
| | | $ | 2,342 | | | | | $ | 2,347 | | | ||
Revolver borrowings
|
| | | | | ||||||||||||||||
Dollar denominated
|
| |
L+5.00%
|
| |
September 2019
|
| | | | — | | | | | | — | | | ||
Capital leases
|
| | | | | | | | | | 89 | | | | | | 93 | | | ||
Total debt
|
| | | | | | | | | | 2,431 | | | | | | 2,440 | | | ||
Less: current portion
|
| | | | | | | | | | 56 | | | | | | 56 | | | ||
Long-term debt
|
| | | | | | | | | $ | 2,375 | | | | | $ | 2,384 | | | ||
|
| | | | | |
Fair Value (Liability)
|
| |||||||||||
(in $ millions)
|
| |
Balance Sheet Location
|
| |
March 31,
2015 |
| |
December 31,
2014 |
| ||||||||
Foreign currency contracts
|
| |
Accrued expenses and other current liabilities
|
| | | $ | (25) | | | | | $ | (16) | | | ||
Foreign currency contracts
|
| | Other non-current liabilities | | | | | (1) | | | | | | — | | | ||
| | | | | | | $ | (26) | | | | | $ | (16) | | | ||
|
(in $ millions)
|
| |
Three Months Ended
March 31, 2015 |
| |
Three Months Ended
March 31, 2014 |
| ||||||||
Net derivative (liability) asset opening balance
|
| | | $ | (16) | | | | | $ | 10 | | | ||
Total (loss) gain for the period included in net loss
|
| | | | (16) | | | | | | 2 | | | ||
Total loss for period accounted through other comprehensive loss
|
| | | | — | | | | | | (1) | | | ||
Settlement of foreign currency derivative contracts
|
| | | | 6 | | | | | | (1) | | | ||
Net derivative (liability) asset closing balance
|
| | | $ | (26) | | | | | $ | 10 | | | ||
|
| | |
Amount of Gain (Loss)
Recognized in Other Comprehensive Loss |
| | | | |
Amount of Gain (Loss)
Recorded in Net Loss |
| ||||||||||||||||||||||
| | |
Three Months
Ended March 31, |
| | | | |
Three Months
Ended March 31, |
| ||||||||||||||||||||||
(in $ millions)
|
| |
2015
|
| |
2014
|
| |
Statement of Operations Location
|
| |
2015
|
| |
2014
|
| ||||||||||||||||
Derivatives designated as hedging instruments:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Interest rate caps
|
| | | $ | — | | | | | $ | (1) | | | | Interest expense, net | | | | $ | — | | | | | $ | — | | | ||||
Derivatives not designated as hedging instruments:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Foreign currency contracts
|
| | | | N/A | | | | | | N/A | | | |
Selling, general and administrative
|
| | | | (16) | | | | | | 2 | | | ||||
| | | | | | | | | | | | | | | | | | | $ | (16) | | | | | $ | 2 | | | ||||
|
| | | | | |
March 31, 2015
|
| |
December 31, 2014
|
| ||||||||||||||||||
(in $ millions)
|
| |
Fair Value
Hierarchy |
| |
Carrying
Amount |
| |
Fair
Value |
| |
Carrying
Amount |
| |
Fair
Value |
| ||||||||||||
Asset (liability) | | | | | | | ||||||||||||||||||||||
Available-for-sale securities
|
| |
Level 1
|
| | | | — | | | | | | — | | | | | | 6 | | | | | | 6 | | |
Derivative liabilities
|
| |
Level 2
|
| | | | (26) | | | | | | (26) | | | | | | (16) | | | | | | (16) | | |
Total debt
|
| |
Level 2
|
| | | | (2,431) | | | | | | (2,474) | | | | | | (2,440) | | | | | | (2,461) | | |
| | |
Three Months
Ended March 31, |
| |
Change
|
| ||||||||||||||||||
(in $ millions, except share data, Reported Segments and RevPas)
|
| |
2015
|
| |
2014
|
| | | | | | | |
%
|
| |||||||||
Net revenue
|
| | | $ | 572 | | | | | $ | 572 | | | | | $ | — | | | | | | — | | |
Operating income
|
| | | | 34 | | | | | | 75 | | | | | | (41) | | | | | | (54) | | |
Net loss
|
| | | | (7) | | | | | | (27) | | | | | | 20 | | | | | | 74 | | |
Loss per share – diluted (in $)
|
| | | | (0.07) | | | | | | (0.46) | | | | | | 0.39 | | | | | | 85 | | |
Adjusted EBITDA(1)
|
| | | | 137 | | | | | | 151 | | | | | | (14) | | | | | | (9) | | |
Adjusted Net Income(2)
|
| | | | 30 | | | | | | 3 | | | | | | 27 | | | | | | * | | |
Adjusted Income per Share – diluted(3) (in $)
|
| | | | 0.24 | | | | | | 0.05 | | | | | | 0.19 | | | | | | * | | |
Net cash provided by operating activities
|
| | | | 11 | | | | | | 23 | | | | | | (12) | | | | | | (52) | | |
Adjusted Free Cash Flow(4)
|
| | | | (21) | | | | | | (4) | | | | | | (17) | | | | | | * | | |
Reported Segments (in millions)
|
| | | | 95 | | | | | | 97 | | | | | | (2) | | | | | | (2) | | |
Travel Commerce Platform RevPas (in $)
|
| | | $ | 5.73 | | | | | $ | 5.61 | | | | | $ | 0.12 | | | | | | 2 | | |
| | |
Three Months
Ended March 31, |
| |||||||||||
(in $ millions)
|
| |
2015
|
| |
2014
|
| ||||||||
Net loss
|
| | | $ | (7) | | | | | $ | (27) | | | ||
Adjustments: | | | | ||||||||||||
Amortization of intangible assets(1)
|
| | | | 19 | | | | | | 19 | | | ||
Loss on early extinguishment of debt
|
| | | | — | | | | | | 5 | | | ||
Share of losses in equity method investments
|
| | | | — | | | | | | 4 | | | ||
Gain on sale of available-for-sale securities
|
| | | | (6) | | | | | | — | | | ||
Equity-based compensation
|
| | | | 12 | | | | | | 1 | | | ||
Corporate and restructuring costs(2)
|
| | | | 2 | | | | | | 3 | | | ||
Other – non cash(3)
|
| | | | 10 | | | | | | (2) | | | ||
Adjusted Net Income
|
| | | | 30 | | | | | | 3 | | | ||
Adjustments: | | | | ||||||||||||
Depreciation and amortization of property and equipment
|
| | | | 42 | | | | | | 37 | | | ||
Amortization of customer loyalty payments
|
| | | | 18 | | | | | | 18 | | | ||
Interest expense, net
|
| | | | 39 | | | | | | 83 | | | ||
Provision for income taxes
|
| | | | 8 | | | | | | 10 | | | ||
Adjusted EBITDA
|
| | | $ | 137 | | | | | $ | 151 | | | ||
|
| | |
Three Months Ended
March 31, |
| |||||||||||
(in percentages)
|
| |
2015
|
| |
2014
|
| ||||||||
Asia Pacific
|
| | | | 22 | | | | | | 19 | | | ||
Europe
|
| | | | 31 | | | | | | 33 | | | ||
Latin America and Canada
|
| | | | 4 | | | | | | 4 | | | ||
Middle East and Africa
|
| | | | 13 | | | | | | 13 | | | ||
International
|
| | | | 70 | | | | | | 69 | | | ||
United States
|
| | | | 30 | | | | | | 31 | | | ||
Travel Commerce Platform
|
| | | | 100 | | | | | | 100 | | | ||
|
| | |
Three Months Ended
March 31, |
| |
Change
|
| ||||||||||||||||||||||
(in $ millions)
|
| |
2015
|
| |
2014
|
| |
$
|
| |
%
|
| ||||||||||||||||
Net revenue
|
| | | $ | 572 | | | | | $ | 572 | | | | | $ | — | | | | | | — | | | ||||
Costs and expenses | | | | | | ||||||||||||||||||||||||
Cost of revenue
|
| | | | 349 | | | | | | 353 | | | | | | (4) | | | | | | (1) | | | ||||
Selling, general and administrative
|
| | | | 128 | | | | | | 88 | | | | | | 40 | | | | | | 44 | | | ||||
Depreciation and amortization
|
| | | | 61 | | | | | | 56 | | | | | | 5 | | | | | | 10 | | | ||||
Total costs and expenses
|
| | | | 538 | | | | | | 497 | | | | | | 41 | | | | | | 8 | | | ||||
Operating income
|
| | | | 34 | | | | | | 75 | | | | | | (41) | | | | | | (54) | | | ||||
Interest expense, net
|
| | | | (39) | | | | | | (83) | | | | | | 44 | | | | | | 52 | | | ||||
Loss on early extinguishment of debt
|
| | | | — | | | | | | (5) | | | | | | 5 | | | | | | 100 | | | ||||
Other income
|
| | | | 6 | | | | | | — | | | | | | 6 | | | | | | * | | | ||||
Income (loss) before income taxes and share of losses in equity method investment
|
| | | | 1 | | | | | | (13) | | | | | | 14 | | | | | | 109 | | | ||||
Provision for income taxes
|
| | | | (8) | | | | | | (10) | | | | | | 2 | | | | | | 20 | | | ||||
Share of losses in equity method investments
|
| | | | — | | | | | | (4) | | | | | | 4 | | | | | | 100 | | | ||||
Net loss
|
| | | $ | (7) | | | | | $ | (27) | | | | | $ | 20 | | | | | | 74 | | | ||||
|
| | |
Three Months Ended
March 31, |
| |
Change
|
| ||||||||||||||||||||||
(in $ millions)
|
| |
2015
|
| |
2014
|
| |
$
|
| |
%
|
| ||||||||||||||||
Air
|
| | | $ | 432 | | | | | $ | 445 | | | | | $ | (13) | | | | | | (3) | | | ||||
Beyond Air
|
| | | | 110 | | | | | | 97 | | | | | | 13 | | | | | | 14 | | | ||||
Travel Commerce Platform
|
| | | | 542 | | | | | | 542 | | | | | | — | | | | | | — | | | ||||
Technology Services
|
| | | | 30 | | | | | | 30 | | | | | | — | | | | | | — | | | ||||
Net revenue
|
| | | $ | 572 | | | | | $ | 572 | | | | | $ | — | | | | | | — | | | ||||
|
| | |
Three Months Ended
March 31, |
| |
Change
|
| ||||||||||||||||||
| | |
2015
|
| |
2014
|
| | | | | | | |
%
|
| |||||||||
Travel Commerce Platform RevPas (in $)
|
| | | $ | 5.73 | | | | | $ | 5.61 | | | | | $ | 0.12 | | | | | | 2 | | |
Reported Segments (in millions)
|
| | | | 95 | | | | | | 97 | | | | | | (2) | | | | | | (2) | | |
| | |
Three Months Ended
March 31, |
| |
Change
|
| ||||||||||||||||||||||
(in $ millions)
|
| |
2015
|
| |
2014
|
| |
$
|
| |
%
|
| ||||||||||||||||
Asia Pacific
|
| | | $ | 118 | | | | | $ | 101 | | | | | $ | 17 | | | | | | 16 | | | ||||
Europe
|
| | | | 166 | | | | | | 178 | | | | | | (12) | | | | | | (7) | | | ||||
Latin America and Canada
|
| | | | 24 | | | | | | 23 | | | | | | 1 | | | | | | 3 | | | ||||
Middle East and Africa
|
| | | | 73 | | | | | | 72 | | | | | | 1 | | | | | | 2 | | | ||||
International
|
| | | | 381 | | | | | | 374 | | | | | | 7 | | | | | | 2 | | | ||||
United States
|
| | | | 161 | | | | | | 168 | | | | | | (7) | | | | | | (4) | | | ||||
Travel Commerce Platform
|
| | | $ | 542 | | | | | $ | 542 | | | | | $ | — | | | | | | — | | | ||||
|
| | |
Segments (in millions)
|
| |
RevPas (in $)
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Three Months Ended
March 31, |
| |
Change
|
| |
Three Months Ended
March, 31 |
| |
Change
|
| ||||||||||||||||||||||||||||||||||||||||||||
| | |
2015
|
| |
2014
|
| | | | | | | |
%
|
| |
2015
|
| |
2014
|
| |
$
|
| |
%
|
| |||||||||||||||||||||||||||||
Asia Pacific
|
| | | | 17 | | | | | | 16 | | | | | | 1 | | | | | | 11 | | | | | $ | 7.04 | | | | | $ | 6.71 | | | | | $ | 0.33 | | | | | | 5 | | | ||||||||
Europe
|
| | | | 23 | | | | | | 25 | | | | | | (2) | | | | | | (10) | | | | | $ | 7.21 | | | | | $ | 6.97 | | | | | $ | 0.24 | | | | | | 3 | | | ||||||||
Latin America and Canada
|
| | | | 4 | | | | | | 4 | | | | | | — | | | | | | 7 | | | | | $ | 5.56 | | | | | $ | 5.75 | | | | | $ | (0.19) | | | | | | (3) | | | ||||||||
Middle East and Africa
|
| | | | 10 | | | | | | 10 | | | | | | — | | | | | | (2) | | | | | $ | 7.38 | | | | | $ | 7.12 | | | | | $ | 0.26 | | | | | | 4 | | | ||||||||
International
|
| | | | 54 | | | | | | 55 | | | | | | (1) | | | | | | (1) | | | | | $ | 7.06 | | | | | $ | 6.84 | | | | | $ | 0.22 | | | | | | 3 | | | ||||||||
United States
|
| | | | 41 | | | | | | 42 | | | | | | (1) | | | | | | (3) | | | | | $ | 3.97 | | | | | $ | 4.01 | | | | | $ | (0.04) | | | | | | (1) | | | ||||||||
Travel Commerce Platform
|
| | | | 95 | | | | | | 97 | | | | | | (2) | | | | | | (2) | | | | | $ | 5.73 | | | | | $ | 5.61 | | | | | $ | 0.12 | | | | | | 2 | | | ||||||||
|
| | |
Three Months Ended
March 31, |
| |
Change
|
| ||||||||||||||||||||||
(in $ millions)
|
| |
2015
|
| |
2014
|
| |
$
|
| |
%
|
| ||||||||||||||||
Commissions
|
| | | $ | 270 | | | | | $ | 277 | | | | | $ | (7) | | | | | | (2) | | | ||||
Technology costs
|
| | | | 79 | | | | | | 76 | | | | | | 3 | | | | | | 4 | | | ||||
Cost of revenue
|
| | | $ | 349 | | | | | $ | 353 | | | | | $ | (4) | | | | | | (1) | | | ||||
|
| | |
Three Months Ended
March 31, |
| |
Change
|
| ||||||||||||||||||||||
(in $ millions)
|
| |
2015
|
| |
2014
|
| |
$
|
| |
%
|
| ||||||||||||||||
Workforce
|
| | | $ | 80 | | | | | $ | 75 | | | | | $ | 5 | | | | | | 7 | | | ||||
Non-workforce
|
| | | | 24 | | | | | | 11 | | | | | | 13 | | | | | | * | | | ||||
Sub-total
|
| | | | 104 | | | | | | 86 | | | | | | 18 | | | | | | 20 | | | ||||
Non-core corporate costs
|
| | | | 24 | | | | | | 2 | | | | | | 22 | | | | | | * | | | ||||
SG&A | | | | $ | 128 | | | | | $ | 88 | | | | | $ | 40 | | | | | | 44 | | | ||||
|
| | |
Three Months Ended
March 31, |
| |
Change
|
| ||||||||||||||||||||||
(in $ millions)
|
| |
2015
|
| |
2014
|
| |
$
|
| |
%
|
| ||||||||||||||||
Depreciation on property and equipment
|
| | | $ | 42 | | | | | $ | 37 | | | | | $ | 5 | | | | | | 17 | | | ||||
Amortization of acquired intangible assets
|
| | | | 19 | | | | | | 19 | | | | | | — | | | | | | (4) | | | ||||
Total depreciation and amortization
|
| | | $ | 61 | | | | | $ | 56 | | | | | $ | 5 | | | | | | 10 | | | ||||
|
(in $ millions)
|
| |
March 31,
2015 |
| |||
Cash and cash equivalents
|
| | | $ | 107 | | |
Cash held as collateral
|
| | | | 24 | | |
Revolving credit facility availability
|
| | | | 113 | | |
| | |
Asset (Liability)
|
| | ||||||||||||||
(in $ millions)
|
| |
March 31,
2015 |
| |
December 31,
2014 |
| |
Change
|
| |||||||||
Accounts Receivable, net
|
| | | $ | 234 | | | | | $ | 184 | | | | | $ | 50 | | |
Accrued commissions and incentives
|
| | | | (270) | | | | | | (260) | | | | | | (10) | | |
Deferred revenue and prepaid incentives, net
|
| | | | (11) | | | | | | (15) | | | | | | 4 | | |
Trading Working Capital
|
| | | | (47) | | | | | | (91) | | | | | | 44 | | |
Cash and cash equivalents
|
| | | | 107 | | | | | | 139 | | | | | | (32) | | |
Accounts payable and employee related
|
| | | | (119) | | | | | | (132) | | | | | | 13 | | |
Accrued interest
|
| | | | (17) | | | | | | (18) | | | | | | 1 | | |
Current portion of long-term debt
|
| | | | (56) | | | | | | (56) | | | | | | — | | |
Taxes
|
| | | | 20 | | | | | | 17 | | | | | | 3 | | |
Other liabilities, net
|
| | | | (18) | | | | | | (2) | | | | | | (16) | | |
Working Capital
|
| | | $ | (130) | | | | | $ | (143) | | | | | $ | 13 | | |
Consolidated Balance Sheets: | | | | | |||||||||||||||
Total current assets
|
| | | $ | 443 | | | | | $ | 412 | | | | |||||
Total current liabilities
|
| | | | (573) | | | | | | (555) | | | | |||||
Working Capital
|
| | | $ | (130) | | | | | $ | (143) | | | | |||||
|
| | |
March 31,
2015 |
| |
December 31,
2014 |
| |
Change
|
| |||||||||
Accounts receivable, net (in $ millions)
|
| | | $ | 234 | | | | | $ | 184 | | | | | $ | 50 | | |
Accounts receivable, net – Days Sales Outstanding (“DSO”)
|
| | | | 37 | | | | | | 37 | | | | | | — | | |
| | |
Three Months Ended
March 31, |
| |
Change
|
| |||||||||||||||
(in $ millions)
|
| |
2015
|
| |
2014
|
| |
$
|
| ||||||||||||
Cash provided by (used in): | | | | | ||||||||||||||||||
Operating activities
|
| | | $ | 11 | | | | | $ | 23 | | | | | $ | (12) | | | |||
Investing activities
|
| | | | (21) | | | | | | (36) | | | | | | 15 | | | |||
Financing activities
|
| | | | (21) | | | | | | 39 | | | | | | (60) | | | |||
Effect of exchange rate changes
|
| | | | (1) | | | | | | — | | | | | | (1) | | | |||
Net (decrease) increase in cash and cash equivalents
|
| | | $ | (32) | | | | | $ | 26 | | | | | $ | (58) | | | |||
|
| | |
Three Months Ended
March 31, |
| |||||||||||
(in $ millions)
|
| |
2015
|
| |
2014
|
| ||||||||
Adjusted EBITDA
|
| | | $ | 137 | | | | | $ | 151 | | | ||
Interest payments
|
| | | | (38) | | | | | | (57) | | | ||
Tax payments
|
| | | | (7) | | | | | | (7) | | | ||
Customer loyalty payments
|
| | | | (23) | | | | | | (26) | | | ||
Changes in Trading Working Capital
|
| | | | (36) | | | | | | (11) | | | ||
Changes in accounts payable and employee related payables
|
| | | | (14) | | | | | | (19) | | | ||
Pensions liability contribution
|
| | | | (1) | | | | | | — | | | ||
Changes in other assets and liabilities
|
| | | | (4) | | | | | | (2) | | | ||
Other adjusting items(1)
|
| | | | (3) | | | | | | (6) | | | ||
Net cash provided by operating activities
|
| | | | 11 | | | | | | 23 | | | ||
Add: other adjusting items(1)
|
| | | | 3 | | | | | | 6 | | | ||
Less: capital expenditures on property and equipment additions
|
| | | | (27) | | | | | | (26) | | | ||
Less: repayment of capital lease obligations
|
| | | | (8) | | | | | | (7) | | | ||
Adjusted Free Cash Flow
|
| | | | (21) | | | | | | (4) | | | ||
Add: interest paid
|
| | | | 38 | | | | | | 57 | | | ||
Unlevered Adjusted Free Cash Flow
|
| | | $ | 17 | | | | | $ | 53 | | | ||
|
| | |
Three Months Ended
March 31, |
| |||||||||||
(in $ millions)
|
| |
2015
|
| |
2014
|
| ||||||||
Cash additions to software developed for internal use
|
| | | $ | 18 | | | | | $ | 24 | | | ||
Cash additions to computer equipment
|
| | | | 9 | | | | | | 2 | | | ||
Total
|
| | | $ | 27 | | | | | $ | 26 | | | ||
|
(in $ millions)
|
| |
Interest
rate |
| |
Maturity
|
| |
March 31,
2015 |
| |
December 31,
2014 |
| ||||||||||||
Secured debt | | | | | | ||||||||||||||||||||
Senior Secured Credit Agreement | | | | | | ||||||||||||||||||||
Term loans
|
| | | | | ||||||||||||||||||||
Dollar denominated(1)
|
| | | | L+4.75% | | | |
September 2021
|
| | | $ | 2,342 | | | | | $ | 2,347 | | | |||
Revolver borrowings
|
| | | | | ||||||||||||||||||||
Dollar denominated
|
| | | | L+5.00% | | | |
September 2019
|
| | | | — | | | | | | — | | | |||
Capital leases
|
| | | | | | | | | | | | | 89 | | | | | | 93 | | | |||
Total debt
|
| | | | | | | | | | | | | 2,431 | | | | | | 2,440 | | | |||
Less: cash and cash equivalents
|
| | | | | | | | | | | | | (107) | | | | | | (139) | | | |||
Less: cash held as collateral
|
| | | | | | | | | | | | | (24) | | | | | | (26) | | | |||
Net Debt(2)
|
| | | | | | | | | | | | $ | 2,300 | | | | | $ | 2,275 | | | |||
|
| | | | TRAVELPORT WORLDWIDE LIMITED | | |||
| Date: May 6, 2015 | | | By: | | | /s/ Philip Emery | |
| | | | | | |
Philip Emery
Executive Vice President and Chief Financial Officer |
|
| Date: May 6, 2015 | | | By: | | | /s/ Antonios Basoukeas | |
| | | | | | | Antonios Basoukeas Chief Accounting Officer |
|
|
Exhibit
No. |
| |
Description
|
|
| 3.1 | | | Amended and Restated Memorandum of Association of Travelport Worldwide Limited (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by Travelport Worldwide Limited on September 30, 2014). | |
| 3.2 | | | Amended and Restated Bye-laws of Travelport Worldwide Limited (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed by Travelport Worldwide Limited on September 30, 2014). | |
| 10.1 | | | Incremental Amendment, dated as of January 16, 2015, among Travelport Finance (Luxembourg) S.a.r.l., as borrower, Travelport Limited, UBS AG Stamford Branch, as incremental Revolving Credit Lender and additional L/C Issuer, Deutsche Bank AG New York Branch, as Administrative Agent and Collateral Agent, and consented and agreed to by Deutsche Bank AG New York Branch, Credit Suisse AG, Cayman Islands Branch, and Morgan Stanley Senior Funding, Inc., as the existing L/C Issuers (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Travelport Worldwide Limited on January 22, 2015). | |
| 31.1 | | | Certification of Chief Executive Officer Pursuant to Rules 13(a)-14(a) and 15(d)-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2 | | | Certification of Chief Financial Officer Pursuant to Rules 13(a)-14(a) and 15(d)-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32 | | | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | | | XBRL Instance Document | |
| 101.SCH | | | XBRL Taxonomy Extension Schema Document | |
| 101.CAL | | | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.LAB | | | XBRL Taxonomy Extension Labels Linkbase Document | |
| 101.PRE | | | XBRL Taxonomy Extension Presentation Linkbase Document | |
| 101.DEF | | | XBRL Taxonomy Extension Definition Linkbase Document | |