SOUTHLAKE, Texas–(BUSINESS WIRE)–July 22, 2004–Sabre Holdings Corporation (NYSE:TSG)
-- 2Q 2004 Diluted EPS (Adjusted) of $0.47
-- 2Q 2004 Diluted EPS (GAAP) of $0.42
-- 2Q 2004 Revenue of $551 million
-- Travelocity reaches quarterly profitability: achieves
operating earnings of about $10 million (Adjusted); $1 million
(GAAP)
-- Analyst call today at 9 a.m. CDT, at
www.sabre-holdings.com/investor/
Sabre Holdings Corporation (NYSE:TSG) today announced financial results for the second quarter, 2004.
The company reported second quarter diluted earnings per share of $0.47 on an adjusted basis. On a GAAP basis, earnings per share were $0.42. Revenue for the second quarter was $551 million, an increase of about nine percent year-over-year.
“We had another great quarter,” said Sam Gilliland, president and CEO, Sabre Holdings. “The company achieved significant earnings growth, doubling our earnings over the same period last year. Much of that earnings growth came from an increase in travel demand, company-wide cost management, and the profitability turnaround at Travelocity, which improved its operating earnings by over $20 million on a year-over-year basis.”
SABRE HOLDINGS 2Q 2004 FINANCIAL HIGHLIGHTS
(Note: See attached schedules for full financial details and reconciliations of non-GAAP financial measures to GAAP, including adjusting items)
Revenue: Second quarter revenue was $551 million, an increase of 8.6 percent from $507 million in the year-ago quarter.
Operating income: Second quarter operating income, on an adjusted basis, was $105 million. On a GAAP basis, operating income was $88 million.
Net earnings: Second quarter net earnings (adjusted) were $66 million, or $0.47 per share on a diluted basis. On a GAAP basis, second quarter net earnings were $59 million, or $0.42 per share on a diluted basis.
Adjusted EBITDA: For the second quarter, adjusted earnings before interest, taxes, depreciation, and amortization was $122 million.
Cash/Debt: The company balance sheet as of June 30, 2004 reflected cash and marketable securities of more than $1.0 billion. Total debt at the end of the quarter was $591 million, which includes notes and bonds payable of $432 million and a $159 million capital lease obligation.
SABRE HOLDINGS BUSINESS REVIEW
TRAVELOCITY
In line with company projections, Travelocity achieved profitability in the second quarter on both an adjusted and GAAP basis. Travelocity operating income on an adjusted basis was about $10 million, and $1 million on a GAAP basis.
Second quarter revenue from Travelocity was $126 million, a 28.2 percent increase compared to $98 million in the second quarter of 2003. Transaction revenue for the quarter was $107 million, an increase of 49.3 percent, year-over-year. Non-transaction revenue, which includes advertising, corporate, and international joint ventures, was $18 million, a decrease of 30.0 percent.
Second quarter non-air transaction revenue grew 94.5 percent, year-over-year. Packaging revenue grew 158.2 percent, year-over-year. In addition, hotel room nights across the Travelocity network were up 59.2 percent, year-over-year.
SABRE TRAVEL NETWORK
Second quarter revenue from the Sabre Travel Network business was $407 million, an increase of 5.1 percent from $388 million in the year-ago quarter. Global travel bookings were 101 million for the second quarter, an increase of 13.8 percent, compared with 89 million in the year-ago quarter.
SABRE AIRLINE SOLUTIONS
Second quarter revenue from Sabre Airline Solutions was $61 million, an increase of 6.9 percent, compared to $57 million in the year-ago quarter. Similar to the first quarter, revenue growth in the second quarter was primarily due to strong volume through the reservation system hosting (Passenger Solutions) business.
RECENT BUSINESS HIGHLIGHTS
Sabre Holdings
-- Entered into a new agreement with Carnival Corporation that
ensures all Carnival cruise line brands around the world are
available to all Sabre Holdings distribution channels.
-- Repurchased approximately 1.4 million shares of common stock
(approximately $35 million) in the second quarter, as part of
a $100 million stock repurchase program that was approved in
April 2004.
-- Announced a quarterly cash dividend of $0.075 per share on
July 20. The dividend is payable on August 16, 2004 to
shareholders of record at the close of regular trading on July
30, 2004.
Travelocity
-- Launched Last Minute Deals and Total Trip through the WCT
affiliate network.
-- Announced that Travelocity Europe, its joint venture with
Otto, acquired travelchannel.de, a leading German online
travel site.
-- Launched enhanced technologies in the Travelocity Business
service center that automate the corporate travel reservation
process from beginning to end.
-- Honored with a prestigious 2004 Stevie Award for Best New
Product or Service in 2003 by the American Business Awards
organization for the innovative Travelocity TotalPrice for
Cars.
Sabre Travel Network
-- Rolled out several new features for Jurni Network, including
new packaging capabilities based on Travelocity's Total Trip
dynamic packaging technology.
-- Signed a five-year GDS subscriber agreement with Expedia,
Inc., in which Sabre Travel Network expects to process a
meaningful portion of Expedia's GDS bookings through the Sabre
system.
Sabre Airline Solutions
-- Announced a multi-year, $10 million-plus agreement with Air
One, the second largest and fastest growing airline in Italy,
to deploy the SabreSonic new generation passenger suite to
power Air One's reservations, check-in and web capabilities.
-- Signed a multi-year contract with Aeroflot Russian Airlines,
which has the largest booking and flight control centers in
Eastern Europe, for the entire SabreSonic suite of products.
SABRE HOLDINGS OUTLOOK
3Q 2004
For the third quarter 2004, the company projects revenue to be in the range of $545 million to $565 million. Diluted earnings per share are expected to be in the range of $0.37 to $0.40 on an adjusted basis, and in the range of $0.31 to $0.34 on a GAAP basis.
Adjusting items in the third quarter, net of tax and minority interest, are projected to be approximately $8 million. This estimate includes stock compensation and amortization of intangible assets.
Full Year 2004
The company updated its revenue and earnings projections for 2004. The company now expects:
-- Total company revenue growth of approximately 7 percent to 9
percent on an adjusted basis, year-over-over, versus previous
guidance of 5 percent to 10 percent
-- Total company revenue growth of approximately 5 percent to 7
percent on a GAAP basis, year-over-year, versus previous
guidance of 3 percent to 7 percent
-- 2004 earnings per share on an adjusted basis in the range of
$1.40 to $1.50 versus previous guidance of $1.30 to $1.35
-- 2004 earnings per share on a GAAP basis in the range of $1.21
to $1.31 versus previous guidance of $1.09 to $1.14
About Sabre Holdings Corporation
Sabre Holdings, an S&P 500 company, is a world leader in travel commerce, retailing travel products and providing distribution and technology solutions for the travel industry. Sabre Holdings supports travelers, travel agents, corporations and travel suppliers through its companies: Travelocity, Sabre Travel Network, and Sabre Airline Solutions. Headquartered in Southlake, Texas, in the Dallas-Fort Worth Metroplex, the company has more than 6,000 employees in 43 countries. Full year 2003 revenues totaled $2.05 billion. Sabre Holdings is traded on the New York Stock Exchange under the symbol TSG. More information is available at www.sabre-holdings.com.
Statements in this report and the exhibit hereto which are not purely historical facts, including statements about forecasted financial performance or other statements about anticipations, beliefs, expectations, hopes, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on forward-looking statements. All forward-looking statements are based upon information available to the Company on the date this report was submitted. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Any forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including risks or uncertainties related to the Company’s revenues being highly dependent on the travel and transportation industries; structural changes within the travel industry, such as the financial instability or bankruptcy of many of the air carriers; or geopolitical developments, such as the risk of terrorist attacks. The Company may not succeed in addressing these and other risks. Further information regarding factors that could affect our financial and other results can be found in the risk factors section of our most recent filing on Form 10-Q with the Securities and Exchange Commission.
Financial Schedules to Follow
Sabre Holdings Corporation
Condensed Consolidated Statements of Income - Unadjusted
(Unaudited - In millions except per share amounts)
Three months ended Six months ended
June 30, June 30,
-------------------------- ----------------------------
2004 2003 Percent 2004 2003 Percent
--------- ------- -------- ---------- -------- --------
Revenues
Sabre Travel
Network $407.4 $387.8 5.1% $818.2 $822.4 (0.5%)
Travelocity 125.5 98.0 28.2% 237.0 184.6 28.4%
Sabre Airline
Solutions 60.5 56.6 6.9% 120.2 114.2 5.3%
Elimination
of
intersegment
revenues (42.5) (35.1) 21.1% (84.8) (70.2) 20.8%
--------- ------- ---------- --------
Total
revenues 550.9 507.2 8.6% 1,090.7 1,051.0 3.8%
Operating
expenses 462.5 466.8 (0.9%) 932.7 906.7 2.9%
--------- ------- ---------- --------
Operating
income 88.4 40.4 119.0% 157.9 144.3 9.5%
Other income
(expense)
Interest
income
(expense)
net (3.1) (1.3) (135.3%) (6.3) (2.4) (163.9%)
Other, net 6.0 (29.9) (119.9%) 6.3 (29.5) (121.3%)
Minority
interest 0.1 0.0 162.1% 0.2 (0.6) (131.4%)
--------- ------- ---------- --------
Income before
provision for
income taxes 91.4 9.2 898.0% 158.1 111.8 41.4%
Provision for
income taxes 32.4 2.3 1286.4% 56.1 40.1 40.0%
--------- ------- ---------- --------
Net earnings $58.9 $6.8 764.7% $102.0 $71.7 42.2%
========= ======= ========== ========
Operating
Margin 16.1% 8.0% 14.5% 13.7%
Earnings per
share- basic $0.43 $0.05 $0.74 $0.50
Earnings per
share-
diluted $0.42 $0.05 $0.73 $0.50
Weighted
average
shares -basic 137.4 142.4 138.3 142.3
Weighted
average
shares
-diluted 140.0 143.1 139.8 142.8
Sabre Holdings Corporation
Condensed Consolidated Statements of Income - Adjusted
(Unaudited - In millions except per share amounts)
Three months ended Six months ended
June 30, June 30,
-------------------------- --------------------------
2004 2003 Percent 2004 2003 Percent
------- ------- ---------- -------- -------- --------
Revenues
Sabre Travel
Network $407.4 $387.8 5.1% $818.2 $786.0 4.1%
Travelocity 125.5 98.0 28.2% 237.0 184.6 28.4%
Sabre Airline
Solutions 60.5 56.6 6.9% 120.2 114.2 5.3%
Elimination
of
intersegment
revenues (42.5) (35.1) 21.1% (84.8) (70.2) 20.8%
------- ------- -------- --------
Total
revenues 550.9 507.2 8.6% 1,090.7 1,014.6 7.5%
Operating
expenses 446.4 452.9 (1.4%) 903.1 877.6 2.9%
------- ------- -------- --------
Operating
income 104.5 54.3 92.5% 187.6 136.9 37.0%
Other income
(expense)
Interest
income
(expense)
net (3.1) (1.3) (135.3%) (6.3) (2.4) (163.9%)
Other, net 1.0 (1.9) (155.4%) 1.4 (1.2) (213.3%)
Minority
interest (0.7) (0.8) (5.9%) (1.5) (2.2) (33.3%)
------- ------- -------- --------
Income before
provision for
income taxes 101.7 50.3 102.2% 181.1 131.1 38.2%
Provision for
income taxes 36.2 17.9 101.6% 64.6 47.2 36.8%
------- ------- -------- --------
Net earnings $65.5 $32.4 102.5% $116.6 $83.9 38.9%
======= ======= ======== ========
Operating
margin 19.0% 10.7% 17.2% 13.5%
Earnings per
share- basic $0.48 $0.23 $0.84 $0.59
Earnings per
share- diluted $0.47 $0.23 $0.83 $0.59
Weighted
average shares
-basic 137.4 142.4 138.3 142.3
Weighted
average shares
-diluted 140.0 143.1 139.8 142.8
Sabre Holdings Corporation
Reconciliation of Unadjusted Results to Adjusted Net Earnings
Three and Six Months ended June 30, 2004
(Unaudited, in millions, except percents)
Three months ended Six months ended
June 30, June 30,
-----------------------------------------------------
2004 2003 Change(a) 2004 2003 Change(a)
------- ------- --------- -------- ------- ----------
Unadjusted
operating
income $88.4 $40.4 119.0% $157.9 $144.3 9.5%
Adjustments to
operating
income:
Travelocity
intangible
amortization
and stock
compensation $8.7 $11.4 (23.9%) $18.1 $23.4 (22.5%)
Sabre Pacific,
DCS, Nexion
intang. amort.
and def. comp. $3.1 $2.3 33.8% $6.3 $4.6 35.4%
Subscriber
settlement
agreement $0.0 $0.0 0.0% $0.0 ($36.5) (100.0%)
Gradient
intangible
amortization
and stock
compensation $1.0 $1.0 (1.2%) $2.0 $2.1 (0.7%)
Gradient
intangible
amortization -
impairment $3.2 $0.0 0.0% $3.2 $0.0 0.0%
Restructuring
charges $0.0 ($0.9) (100.0%) $0.0 ($0.9) (100.0%)
------- ------- -------- -------
Adjusted
operating
income $104.5 $54.3 92.5% $187.6 $137.0 37.0%
Unadjusted other
income and
minority
interest $2.9 ($31.2) (109.4%) $0.2 ($32.5) (100.5%)
Adjustments to
other income
and minority
interest:
Realized loss
on disposal of
Hotels.com
warrants $0.0 $0.1 (100.0%) $0.0 $0.4 (100.0%)
Impact of
adjusting
items on
minority
interests ($0.8) ($0.8) 1.3% ($1.7) ($1.6) 2.1%
Travelocity
shareholder
settlement $1.1 $0.0 0.0% $1.1 $0.0 0.0%
ARC arbitration
settlement ($6.0) $0.0 0.0% ($6.0) $0.0 0.0%
Loss on
refinancing of
headquarters
facility $0.0 $27.9 (100.0%) $0.0 $27.9 (100.0%)
------- ------- -------- -------
Adjusted income
before
provision for
income taxes $101.7 $50.3 102.2% $181.1 $131.1 38.1%
Unadjusted
provision for
income taxes $32.4 $2.3 1286.4% $56.1 $40.1 40.0%
Adjustments to
taxes $3.7 $15.6 (76.1%) $8.4 $7.1 19.0%
------- ------- -------- -------
Adjusted
provision for
income taxes $36.2 $17.9 101.6% $64.6 $47.2 36.8%
Adjusted net
earnings $65.5 $32.4 102.5% $116.6 $83.9 38.9%
======= ======= ======== =======
(a) Percents shown reflect changes in unrounded figures and may not
agree to the percent changes in figures after rounding.
Sabre Holdings Corporation
Sabre Travel Network
Bookings Summary - 2Q 2004
(millions)
2Q04 2Q03 % Change YTD04 YTD03 % Change
------ ------ -------- ----- ----- --------
Total Bookings 101.4 89.1 13.8% 206.4 182.8 12.9%
Geographic
US 52.6 49.6 6.2% 108.5 100.4 8.0%
International 48.7 39.5 23.3% 97.9 82.4 18.7%
--------- ------- ------ ------
101.4 89.1 13.8% 206.4 182.8 12.9%
Channel
Traditional
Agency 91.3 80.3 13.6% 186.3 165.0 12.9%
Consumer on-
line 10.1 8.8 15.5% 20.0 17.9 12.3%
--------- ------- ------ ------
101.4 89.1 13.8% 206.4 182.8 12.9%
Air/Non-Air
Air 89.2 78.3 13.9% 182.2 161.7 12.7%
Non-Air 12.2 10.8 12.9% 24.2 21.1 14.5%
--------- ------- ------ ------
101.4 89.1 13.8% 206.4 182.8 12.9%
Direct/Non-
Direct
Direct 83.3 78.5 6.1% 171.6 159.5 7.6%
Non-Direct 18.1 10.6 70.8% 34.8 23.3 49.1%
--------- ------- ------ ------
101.4 89.1 13.8% 206.4 182.8 12.9%
Sabre Holdings Corporation
Non-GAAP Financials Reconciliations
($ in millions)
Sabre Holdings Revenue
Reconciliation 3Q 2004 Guidance
-----------------------
Low High 3Q 2003
------- ------- -------
GAAP Revenue $545.4 $565.1 $526.8
Growth % 3.5% 7.3%
Less: subscriber
settlement - - (7.8)
------- ------- -------
Adjusted Revenue $545.4 $565.1 $519.0
Growth % 5.1% 8.9%
Operating Income
Reconciliations
Sabre Holdings
2Q 2004 2Q 2003
-------- -------
GAAP Operating Income $88.4 $40.4
GAAP operating
margin 16.1% 8.0%
Add: Amortization of
intangibles, stock
compensation and
transaction fees
from merger &
acquisition activity 12.9 14.8
Add: Impairment of
intangibles 3.2 -
Less: restructuring
charge - (0.9)
------- -------
Adjusted Operating
Income $104.5 $54.3
Adjusted Operating
margin 19.0% 10.7%
Travelocity
2Q 2004 2Q 2003
------- -------
GAAP Operating Income
(Loss) $0.9 ($22.3)
GAAP operating
margin 0.7%
Add: amortization of
intangibles and
transaction fees 7.4 8.5
from merger &
acquisition activity
Add: stock compensation 1.3 3.0
Less: Restructuring
charges - (0.0)
------- -------
Adjusted Operating
Income (Loss) $9.6 ($10.9)
Adjusted Operating
margin 7.7%
Net Earnings
Reconciliation 3Q 2004 Guidance
-----------------------
2Q 2004 2Q 2003 Low High
--------- -------
GAAP Net Earnings $58.9 $6.8 $43.7 $47.9
Adjustments, net of
taxes:
Add: Amortization of
intangibles, stock
compensation and
transaction fees
from merger &
acquisition activity 7.5 8.7 7.7 7.7
Add: Impairment of
intangibles 2.1 - - -
Less: One-time
settlements (3.0) - - -
Add: Loss on refinancing
of headquarters facility - 17.4 - -
Less: Restructuring
charge - (0.6) - -
------- ------- ------- -------
Adjusted net earnings $65.5 $32.4 $51.4 $55.6
GAAP EPS $0.42 $0.05 $0.31 $0.34
Adjusted EPS $0.47 $0.23 $0.37 $0.40
Diluted share count
(millions) 140.0 143.1 139.0
Adjusted EBITDA
Reconciliation
2Q 2004
--------
GAAP Net Earnings $58.9
Add: Taxes 32.4
Add: Interest Expense 6.4
Less: Interest Income (3.3)
Less: Other, net (6.0)
Less: Minority Interest (0.1)
Add: Depreciation &
Amortization 33.6
-------
Adjusted EBITDA $122.1
Sabre Holdings Corporation
Non-GAAP Financials Reconciliations
($ in millions)
Sabre Holdings Revenue
Reconciliation FY 2004 Guidance
--------------------
Low High FY 2003
---------- --------- ---------
GAAP Revenue $2,140.9 $2,180.9 $2,045.2
Growth % 4.7% 6.6%
Less: subscriber
settlement - - (44.3)
--------- --------- ---------
Adjusted Revenue $2,140.9 $2,180.9 $2,000.9
Growth % 7.0% 9.0%
Operating Income
Reconciliations
Sabre Holdings
GAAP Operating
Income
GAAP
operating
margin
Add: Amortization of intangibles, stock
compensation and transaction fees from
merger & acquisition activity
Add: Impairment
of intangibles
Less:
restructuring
charge
Adjusted
Operating
Income
Adjusted
Operating
margin
Travelocity
GAAP Operating
Income (Loss)
GAAP
operating
margin
Add: amortization of intangibles
and transaction fees
from merger &
acquisition
activity
Add: stock
compensation
Less:
Restructuring
charges
Adjusted
Operating
Income (Loss)
Adjusted
Operating
margin
Net Earnings
Reconciliation FY 2004 Guidance
--------------------
Low High
------ ------
GAAP Net
Earnings $168.1 $182.0
Adjustments, net
of taxes:
Add: Amortization of intangibles,
stock compensation and transaction
fees from merger & acquisition
activity 27.7 27.7
Add: Impairment
of intangibles 2.1 2.1
Less: One-time
settlements (3.0) (3.0)
Add: Loss on refinancing of
headquarters facility - -
Less:
Restructuring
charge - -
--------- ---------
Adjusted net
earnings $194.9 $208.8
GAAP EPS $1.21 $1.31
Adjusted EPS $1.40 $1.50
Diluted share
count (millions) 139.2
Adjusted EBITDA
Reconciliation
GAAP Net
Earnings
Add: Taxes
Add: Interest
Expense
Less: Interest
Income
Less: Other, net
Less: Minority
Interest
Add: Depreciation & Amortization
Adjusted EBITDA
CONTACT: Sabre Holdings
Media Contact
Michael Berman, 682-605-2397
michael.berman@sabre-holdings.com
or
Investor Relations
Karen Fugate, 682-605-2343
karen.fugate@sabre-holdings.com
SOURCE: Sabre Holdings
