Third Quarter 2010 Summary:
Net Revenue of $582 million, a 2% increase over Q3 2009
Operating Income of $104 million, compared to an Operating Loss of $740 million for Q3 2009
Adjusted EBITDA of $175 million, marginally lower than Q3 2009
Year to Date 2010 Summary:
Net Revenue of $1,761 million, a 3% increase over 2009
Operating Income of $259 million, compared to an Operating Loss of $568 million for 2009
Adjusted EBITDA of $490 million, marginally lower than 2009
Cash generated by operations of $254 million, a 33% increase over 2009
Third Quarter Operational Highlights
Completed two major customer migrations
Positioned Travelport Universal Desktop™ for 2011 global roll-out
Grew GDS segments by 11% in Asia Pacific region
Commenting on developments, Jeff Clarke, CEO and president of Travelport, said:
"We have continued to make good progress in several key product areas within our GDS business and successfully completed the migration of two key customers, while our GTA business had another great quarter, delivering 29% growth in Segment Adjusted EBITDA.
"Overall, in Q3 we have seen slightly lower than anticipated growth in our GDS business. We continue to invest strongly in innovative new products and geographic expansion. Adjusted EBITDA grew 10% year-over-year on a constant currency basis and excluding the non-recurring impact of the Delta Northwest merger."
Financial Highlights Third Quarter and Q3 YTD 2010
Global Distribution Systems (GDS)
Travelport's main business is its global distribution system (GDS), which includes the Worldspan and Galileo brands and also the Company's Airline IT Solutions business.
Q3 2010: Net Revenue and Segment EBITDA for the GDS business were $488 million and $135 million, respectively, for the third quarter of 2010, with Net Revenue remaining flat and a decrease of 14% in Segment EBITDA compared to 2009. Segment Adjusted EBITDA for the GDS business was $145 million for the third quarter of 2010, a 10% reduction compared to 2009. Net Revenue remained in line with the prior year as a result of a 3% increase in segments, offset by a 14% decrease in Airline IT Solutions revenue due to the merger of Delta and Northwest.
Q3 YTD 2010: Net Revenue and Segment EBITDA for the GDS business were $1,544 million and $446 million, respectively, for the nine months ended September 30, 2010, representing a 2% increase in Net Revenue and a 6% decrease in Segment EBITDA compared to 2009. Segment Adjusted EBITDA for the GDS business was $462 million for 2010, a 7% reduction compared to 2009. Increased Net Revenue of 2% resulted from a 4% increase in segments compared to 2009, partially offset by an 11% decrease in Airline IT Solutions revenue due to the merger of Delta and Northwest.
Gullivers Travel Associates (GTA)
GTA is a leading global, multi-channel provider of hotel and ground services.
Q3 2010: Net Revenue and Segment EBITDA for the GTA business were $94 million and $40 million, respectively, for the third quarter of 2010. In the third quarter of 2009, GTA incurred a one-time, non-cash impairment charge of $833 million. Segment Adjusted EBITDA for GTA in the third quarter of 2010 was $40 million, representing a $9 million improvement compared to 2009. Total Transaction Value ("TTV") increased 18% in the quarter primarily due to a 23% growth in the number of room nights, offset by unfavorable exchange rate movements. Net Revenue increased 13% in the quarter due to the increase in TTV, partially offset by lower margin on sales and unfavourable exchange rate movements.
Q3 YTD 2010: Net Revenue and Segment EBITDA for the GTA business were $217 million and $61 million, respectively, for the nine months ended September 30, 2010. Segment Adjusted EBITDA for GTA in 2010 was $60 million, representing a $16 million improvement compared to 2009. TTV increased 18% in the nine months primarily due to a 19% growth in the number of room nights. Net Revenue increased 8% in the period due to the increase in TTV, partially offset by lower margin on sales.
Orbitz Worldwide
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 three and nine month periods ended September 30, 2010, Travelport recorded $8 million and $10 million, respectively, in earnings from our investment in Orbitz Worldwide.
