| JACKSON: The nature of our
assets is one reason for Sabre's financial strength. We have businesses
that are in very different stages of financial maturity, so we're in the
fortunate position of being diversified in that respect. Our business of
providing global distribution system (GDS) services to travel agencies generates
excess cash flow, and we use this cash flow to invest in travel marketing
businesses and technologies that will drive value for both our customers
and our shareholders.
We have been able to produce the revenue and earnings growth to appeal to "growth" investors. We also generate substantial free cash flow, which is an important characteristic for other types of investors. Our success in the future will be about how we maintain our travel marketing leadership position and use our financial assets to reinvest to drive long-term growth.
JACKSON: Corporate development is an important capability in our financial toolbox. Mergers and acquisitions (M&A) give us an alternative way to acquire talent, product capability and customers.
We have worked hard not only to build the financial tools that make a good M&A shop, but also to build the teamwork across Sabre necessary to integrate companies successfully. We can maintain a company's autonomy or integrate it very quickly - depending on the nature of the acquisition and on where Sabre's capabilities lie.
M&A are also about divestiture. In 2001, we divested our airline infrastructure outsourcing business, which allowed us to focus on faster-growing travel marketing and distribution and airline solutions businesses. At the same time, we reduced our data-processing costs by signing a service contract for EDS to manage our IT systems. And we agreed to jointly market key IT solutions and services with EDS to the travel industry. These agreements are important to our future growth.
Corporate development is vital because of the pace of change in our industry and at Sabre. And we know that our ability to effectively sort and prioritize different opportunities and fit them within our financial strategy is looked at very closely by our shareholders and the Wall Street community.