SOUTHLAKE, Texas, Nov 03, 2005 (BUSINESS WIRE) — Sabre Holdings Corporation (NYSE:TSG):
— 3Q 2005 diluted EPS (Adjusted) of $0.50
— 3Q 2005 diluted EPS (GAAP) of $0.45
— 3Q 2005 revenue of $700 million, up 29 percent year-over-year
— Travelocity revenue up 98 percent including lastminute.com
— Travelocity adjusted operating income of $43 million; GAAP operating income of $31 million; adjusted EBITDA of $50 million
— Sabre Travel Network adjusted operating income of $59 million; GAAP operating income of $56 million; adjusted EBITDA of $70 million
— Sabre Airline Solutions nearly quadruples operating income; GAAP operating income of $10 million; adjusted EBITDA of $16 million
— Note: Analyst call today at 9:00 a.m. CST, at www.sabre-holdings.com/investor/index.html.
Sabre Holdings Corporation (NYSE:TSG) today announced financial results for the third quarter 2005.
The company reported revenue for the third quarter of $700 million, up 29 percent, year-over-year. Diluted earnings per share were $0.50 on an adjusted basis, compared to $0.41 per share in the year-ago quarter. On a GAAP basis, diluted earnings per share were $0.45 compared to $0.49 per share in the year-ago quarter.
“Across our portfolio, we delivered excellent revenue and earnings results in the third quarter,” said Sam Gilliland, chairman and CEO, Sabre Holdings. “Travelocity, with the acquisition of lastminute.com, continued to drive healthy top and bottom line metrics including year-over-year profit improvement of more than $30 million. As expected, our Travel Network business drove solid margins and our Airline Solutions unit nearly quadrupled operating income year-over-year.”
SABRE HOLDINGS 3Q 2005 FINANCIAL HIGHLIGHTS
(Note: See attached schedules for full financial details, reconciliations of non-GAAP financial measures, and a description of adjusting items. Results include lastminute.com from July 20, 2005.)
Revenue: Third quarter revenue was $700 million, an increase of 29 percent from $544 million in the year-ago quarter. Lastminute.com added $100 million in revenue during the quarter following its acquisition on July 20. Excluding lastminute.com, revenue for the third quarter increased 10 percent year-over-year.
Operating income: Excluding adjusting items, operating income for the third quarter was $112 million, compared to $90 million in the year-ago quarter. Operating income on a GAAP basis was $100 million, an increase of 29 percent from the same period last year.
Net earnings: For the third quarter, net earnings, excluding adjusting items, were $65 million, or $0.50 per share, compared to $56 million, or $0.41 per share in the third quarter of 2004. On a GAAP basis, third quarter net earnings were $58 million, or $0.45 per share on a diluted basis, compared to $67 million, or $0.49 per share on a diluted basis in the year-ago quarter. (Note: GAAP earnings for the third quarter of 2004 included the positive impact from the reversal of an $18 million tax accrual.)
Adjusted EBITDA: For the third quarter, adjusted earnings before interest, taxes, depreciation, and amortization were $138 million.
Cash/Debt: The company balance sheet as of Sept. 30, 2005 reflected cash and marketable securities of $595 million. Total debt at the end of the quarter was $1.4 billion, which included bridge financing for lastminute.com of $800 million, notes and bonds payable of $430 million, and a $160 million capital lease obligation.
SABRE HOLDINGS BUSINESS REVIEW
TRAVELOCITY
(Note: Results include lastminute.com from July 20, 2005.)
For the third quarter, Travelocity global gross travel booked was $2.1 billion, an increase of 76 percent year-over-year, or 34 percent excluding lastminute.com. Total global revenue for the quarter was $276 million, year-over-year growth of 98 percent, to which lastminute.com contributed $100 million.
On a geographic basis, gross travel booked for Travelocity included the following:
TRAVELOCITY 3Q05 3Q04 Y/Y Growth ------------------------------ ------------- ------------ ------------ Gross Travel Booked (millions) North America $1,586 $1,223 30% Europe $564 (1) N/A N/A Total Gross Travel Booked $2,150 $1,223 76% (1) lastminute.com Total Transaction Value converted to Travelocity Gross Travel Booked methodology.
Other Travelocity global metrics for the third quarter (year-over-year):
— Total air transaction revenue grew 40 percent
— Total non-air transaction revenue grew 137 percent
— Total packaging revenue grew 120 percent
— Packaging revenue as a percent of total transaction revenue was 26 percent
— Hotel room nights sold across the Travelocity network were 4.6 million, growth of 94 percent year-over-year
SABRE TRAVEL NETWORK
Third quarter revenue from the Sabre Travel Network business was $403 million, an increase of 4 percent from $388 million in the year-ago quarter. Global transactions in the quarter were 86 million, growth of 4 percent year-over-year. Through the first nine months of the year, global transactions were up 4 percent, year-over-year.
SABRE AIRLINE SOLUTIONS
Third quarter revenue from Sabre Airline Solutions was $67 million, an increase of 11 percent from $60 million in the year-ago quarter. Revenue was driven by growth across each line of business — airline products and services, reservations and departure control solutions and consulting services — and included several wins in key growth regions — China, the Middle East, and India.
RECENT BUSINESS HIGHLIGHTS
— Signed a five-year deal with low-cost leader AirTran Airways to distribute AirTran fares through all Sabre channels, and for Travelocity to be the sole supplier of hotel, cruise and vacation packages to the AirTran website.
— Accelerated lastminute.com integration plans including launching Travelocity merchant hotels on lastminute.com and consolidating technology and content platforms in France and Scandinavia.
— Launched the “Meet Me In” travel tool, a patent-pending product on Site59 that enables family and friends to easily connect by traveling from two different departure cities to a common destination with a convenient, discounted travel package.
— Added Hyatt Hotels to the many companies that provide special business travel discounts to Travelocity Business corporate customers.
— Announced that SynXis, our leading technology source for more than 7,000 hotels, resorts, and destinations, was selected by Disneyland Resort Hotels(R) as its new distribution partner for the three resort hotels in Anaheim, CA.
— Signed additional agreements with airlines across the Airline Solutions portfolio including Jet Airways, Swiss International Air Lines Ltd., Turkish Airlines and Gulf Air.
— Declared a quarterly cash dividend of $0.09 payable on Nov. 29, 2005, to shareholders of record at the close of regular trading on the New York Stock Exchange on Nov. 11, 2005.
SABRE HOLDINGS OUTLOOK
4Q 2005
For the fourth quarter 2005, the company projects revenue to be in the range of $619 million to $638 million. Diluted earnings per share are projected to be in the range of $0.16 to $0.19 on an adjusted basis, and $0.07 to $0.10 on a GAAP basis.
Full Year 2005
— Year-over-year revenue growth, including lastminute.com, is now projected to be approximately 18 percent.
— Diluted earnings per share on an adjusted basis reiterated in range of $1.45 to $1.50.
— Diluted earnings per share on a GAAP basis are projected to be in the range of $1.31 to $1.36, an increase from previous guidance of $1.27 to $1.32.
About Sabre Holdings Corporation
Sabre Holdings connects people with the world’s greatest travel possibilities by retailing travel products and providing distribution and technology solutions for the travel industry. Sabre Holdings supports travelers, travel agents, corporations, government agencies and travel suppliers through its companies: Travelocity, Sabre Travel Network and Sabre Airline Solutions. Headquartered in Southlake, Texas, the company has approximately 9,000 employees in 45 countries. Full year 2004 revenues totaled $2.1 billion. Sabre Holdings, an S&P 500 company, is traded on the NYSE under the symbol TSG. More information is available at http://www.sabre-holdings.com.
Statements in this release which are not purely historical facts or which necessarily depend upon future events, 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 Sabre Holdings Corporation on the date this report was submitted. Sabre Holdings Corporation 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 Sabre Holdings Corporation revenues being subject to adverse changes to our travel supplier relationships and potential substantial decreases in travel transaction volumes. Sabre Holdings Corporation 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 Sabre Holdings Corporation’s most recent filing on Form 10-Q with the Securities and Exchange Commission.
Sabre Holdings Corporation
Condensed Consolidated Statement of Income - Unadjusted
(Unaudited - In millions except per share amounts)
Three months ended Nine months ended
Sept 30, Sept 30,
2005 2004 Percent 2005 2004 Percent
------- ------- ------- --------- --------- -------
Revenues
Sabre Travel
Network $402.6 $387.9 3.8% $1,251.4 $1,206.1 3.8%
Travelocity 276.2 139.5 98.0% 595.3 376.5 58.1%
Sabre Airline
Solutions 67.1 60.4 11.2% 196.8 180.7 8.9%
Elimination of
intersegment
revenues (46.2) (43.4) 6.5% (142.6) (128.2) 11.2%
------- ------- --------- ---------
Total revenues 699.7 544.4 28.5% 1,900.8 1,635.0 16.3%
Operating expenses 600.1 467.2 28.4% 1,647.0 1,399.9 17.6%
Operating income 99.6 77.2 29.0% 253.9 235.1 8.0%
Other income
(expense)
Interest income
(expense) net (10.5) (2.6) 309.8% (16.0) (8.9) 80.6%
Other, net 2.2 2.0 9.5% 13.4 8.3 61.3%
Minority interest 2.2 0.1 1806.7% 3.2 0.3 969.1%
------- ------- --------- ---------
Income before
provision for
income taxes 93.5 76.7 21.9% 254.5 234.8 8.4%
Provision for
income taxes 35.0 9.3 276.5% 94.4 65.4 44.3%
------- ------- --------- ---------
Net earnings $58.5 $67.4 (13.2%) $160.1 $169.4 (5.5%)
======= ======= ========= =========
Operating Margin 14.2% 14.2% 13.4% 14.4%
Earnings per share
- basic $0.45 $0.50 $1.23 $1.23
Earnings per share
- diluted $0.45 $0.49 $1.23 $1.22
Weighted average
shares - basic 129.3 135.5 129.6 137.4
Weighted average
shares - diluted 130.1 138.1 130.3 139.2
Sabre Holdings Corporation
Condensed Consolidated Statement of Income - Adjusted
(Unaudited - In millions except per share amounts)
Three months ended Nine months ended
Sept 30, Sept 30,
2005 2004 Percent 2005 2004 Percent
------- ------- -------- --------- --------- --------
Revenues
Sabre Travel
Network $402.6 $387.9 3.8% $1,251.4 $1,206.1 3.8%
Travelocity 276.2 139.5 98.0% 595.3 376.5 58.1%
Sabre Airline
Solutions 67.1 60.4 11.2% 196.8 180.7 8.9%
Elimination of
intersegment
revenues (46.2) (43.4) 6.5% (142.6) (128.2) 11.2%
------- ------- --------- ---------
Total revenues 699.7 544.4 28.5% 1,900.8 1,635.0 16.3%
Operating
expenses 587.6 454.6 29.3% 1,619.3 1,357.7 19.3%
------- ------- --------- ---------
Operating income 112.1 89.7 24.9% 281.6 277.3 1.5%
Other income
(expense)
Interest
income
(expense) net (10.5) (2.6) 309.8% (16.0) (8.9) 80.6%
Other, net (0.3) 0.6 (144.7%) 0.3 2.0 (84.3%)
Minority
interest 1.5 (0.7) (315.9%) 0.7 (2.2) (129.8%)
------- ------- --------- ---------
Income before
provision for
income taxes 102.8 87.1 18.1% 266.5 268.3 (0.7%)
Provision for
income taxes 38.2 31.1 22.9% 99.0 95.7 3.4%
------- ------- --------- ---------
Net earnings $64.6 $56.0 15.4% $167.5 $172.6 (2.9%)
======= ======= ========= =========
Operating margin 16.0% 16.5% 14.8% 17.0%
Earnings per
share - basic $0.50 $0.41 $1.29 $1.26
Earnings per
share - diluted $0.50 $0.41 $1.29 $1.24
Weighted average
shares - basic 129.3 135.5 129.6 137.4
Weighted average
shares -
diluted 130.1 138.1 130.3 139.2
Sabre Holdings Corporation
Reconciliation of Unadjusted Results to Adjusted Results
(Unaudited, In millions)
Three months ended Sept Nine months ended Sept
30, 30,
2005 2004 Change(a) 2005 2004 Change(a)
------- ------ --------- ------- ------- ---------
Unadjusted
operating income $99.6 $77.2 29.0% $253.9 $235.1 8.0%
Adjusting items:
Travelocity
intangible
amortization and
stock
compensation 11.5 8.8 30.8% 15.9 26.9 (40.8%)
Travel Network
intangible
amortization 3.9 3.5 12.6% 13.5 15.0 (9.9%)
Airline Solutions
intangible
amortization 0.6 0.3 67.4% 1.7 0.3 406.5%
Reversal of
accrual related
to sale of IT
business in 2001 (3.4) 0.0 -- (3.4) 0.0 --
------- ------ ------- -------
Adjusted operating
income $112.1 $89.7 24.9% $281.6 $277.3 1.5%
Unadjusted other
income and
minority interest ($6.1) ($0.4) 1270.8% $0.6 ($0.3) (319.9%)
Adjusting items:
Realized gain on
sale of Karavel
investment (0.7) 0.0 -- (21.3) 0.0 --
Impact of
adjusting items
on minority
interests (0.7) (0.8) (16.4%) (2.6) (2.5) 3.3%
(Gain)/loss on
lastminute.com
hedging activity (1.7) 0.0 -- 8.2 0.0 --
True-up of
previous gain on
sale of assets 0.0 (1.4) (100.0%) 0.0 (1.4) (100.0%)
Arbitration
Settlement 0.0 0.0 -- 0.0 (6.0) (100.0%)
Shareholder
Settlement 0.0 0.0 -- 0.0 1.1 (100.0%)
Adjusted income
before provision
for income taxes $102.8 $87.1 18.1% $266.5 $268.3 (0.7%)
Unadjusted
provision for
income taxes $35.0 $9.3 276.5% $94.4 $65.4 44.3%
Adjustment to taxes
for reversal of
tax accrual 0.0 17.9 (100.0%) 0.0 17.9 (100.0%)
Adjustments to
taxes for
adjusting items 3.2 3.9 (17.6%) 4.6 12.3 (63.2%)
------- ------ ------- -------
Adjusted provision
for income taxes $38.2 $31.1 22.9% $99.0 $95.7 3.4%
Adjusted net
earnings $64.6 $56.0 15.4% $167.5 $172.6 (2.9%)
======= ====== ======= =======
(a) Percents shown reflect changes in unrounded figures and may not
agree to the percent changes in figures after rounding.
Sabre Holdings Corporation
Sabre Travel Network
Transactions Summary
(millions)
3Q05 3Q04 % Change YTD05 YTD04 % Change
----- ----- --------- ------ ------ ---------
Transactions 85.6 82.1 4.2% 267.8 257.3 4.1%
Geographic
US 53.1 52.2 1.8% 168.1 164.1 2.4%
International 32.4 29.9 8.3% 99.7 93.2 7.0%
----- ----- ------ ------
85.6 82.1 4.2% 267.8 257.3 4.1%
Channel
Traditional Agency 74.3 71.9 3.3% 233.6 227.0 2.9%
Consumer on-line 11.3 10.3 10.2% 34.2 30.3 12.8%
----- ----- ------ ------
85.6 82.1 4.2% 267.8 257.3 4.1%
Air/Non-Air
Air 72.6 69.9 3.8% 229.6 221.2 3.8%
Non-Air 13.0 12.2 6.5% 38.2 36.2 5.7%
----- ----- ------ ------
85.6 82.1 4.2% 267.8 257.3 4.1%
Note: As of the first quarter, 2005, we are now counting as a
transaction, any travel reservation that generates a fee paid
directly to us including, but not limited to the following:
traditional booking fees paid by suppliers, non-traditional
transaction fees paid by suppliers, transaction fees paid by travel
agencies, and transaction fees paid by corporations related to our
online booking tool.
Updated historical quarterly transaction information available on
http://www.sabre-
holdings.com/investor/highlights/statistics/historical.html
Sabre Holdings Corporation
Non-GAAP Financials Reconciliations
($ in millions, except per share data)
Operating Income Reconciliations
Sabre Holdings
3Q 2005 3Q 2004
------- -------------
GAAP Operating Income $99.6 $77.2
GAAP Operating Margin 14.2% 14.2%
Add: amortization of intangibles 15.6 11.4
Add: stock compensation 0.4 1.2
Less: Reversal of accrual related to sale of IT
business in 2001 (3.4) --
------- ------
Adjusted Operating Income $112.1 $89.7
Adjusted Operating Margin 16.0% 16.5%
Sabre Travel Network
3Q 2005 3Q 2004
------- -------------
GAAP Operating Income $55.6 $74.1
GAAP Operating Margin 13.8% 19.1%
Add: amortization of intangibles 3.9 3.5
------- ------
Adjusted Operating Income $59.5 $77.6
Adjusted Operating Margin 14.8% 20.0%
Travelocity
3Q 2005 3Q 2004
------- -------------
GAAP Operating Income $31.3 $0.9
GAAP Operating Margin 11.3% 0.6%
Add: amortization of intangibles 11.1 7.6
Add: stock compensation 0.4 1.2
------- ------
Adjusted Operating Income $42.8 $9.7
Adjusted Operating Margin 15.5% 6.9%
Sabre Airline Solutions
3Q 2005 3Q 2004
------- -------------
GAAP Operating Income $10.3 $2.6
GAAP Operating Margin 15.4% 4.3%
Add: amortization of intangibles 0.6 0.3
------- ------
Adjusted Operating Income $10.9 $2.9
Adjusted Operating Margin 16.2% 4.8%
Net Earnings Reconciliation
3Q 2005 3Q 2004
------- -------------
GAAP Net Earnings $58.5 $67.4
Adjustments, net of taxes:
Add: amortization of intangibles and stock
compensation 9.8 7.4
Less: currency hedge associated with acquisition (1.1)
Less: tax reserve reversal (17.9)
Less: True-up of previous gain on sale of assets (0.5) (0.8)
Less: Reversal of accrual related to sale of IT
business in 2001 (2.2) --
------- ------
Adjusted Net Earnings $64.6 $56.0
GAAP EPS $0.45 $0.49
Adjusted EPS $0.50 $0.41
Diluted share count 130.1 138.1 million
Adjusted EBITDA Reconciliations
3Q 2005
-------
GAAP Net Earnings $58.5
Add: taxes 35.0
Add: interest expense 15.8
Less: interest income (5.3)
Less: other, net (including currency hedge
associated with acquisition) (2.2)
Less: minority interest (2.2)
Add: depreciation & amortization 38.8
-------
Adjusted EBITDA $138.4
Sabre Travel Network
3Q 2005
-------
GAAP Operating Income $55.6
Add: depreciation & amortization 14.5
-------
Adjusted EBITDA $70.1
Travelocity
3Q 2005
-------
GAAP Operating Income $31.3
Add: depreciation & amortization 18.6
-------
Adjusted EBITDA $49.9
Sabre Airline Solutions
3Q 2005
-------
GAAP Operating Income $10.3
Add: depreciation & amortization 5.7
-------
Adjusted EBITDA $16.0
2005 Guidance
---------------------------------------
Net Earnings Reconciliation 4Q 2005 FY 2005
Guidance Guidance
-------------- ---------------
Low High Low High
------ ------- ------- -------
GAAP Net Earnings $9.7 $13.6 $170.4 $176.9
Adjustments, net of taxes:
Add: amortization of intangibles and
stock compensation 11.1 11.1 29.5 29.5
Add: currency hedge associated with
acquisition -- -- 5.2 5.2
Less: Reversal of accrual related to
sale of IT business in 2001 -- -- (2.2) (2.2)
Less: realized gain on sale of
investment in Karavel -- -- (13.9) (13.9)
------ ------- ------- -------
Adjusted Net Earnings $20.9 $24.8 $189.0 $195.5
GAAP EPS $0.07 $0.10 $1.31 $1.36
Adjusted EPS $0.16 $0.19 $1.45 $1.50
Diluted share count 130.5 million 130.3 million
SOURCE: Sabre Holdings Corporation
Sabre Holdings Corporation, Southlake Media Contact: Michael Berman, 682-605-2397 michael.berman@sabre-holdings.com or Investor Relations Contact: Karen Fugate, 682-605-2343 karen.fugate@sabre-holdings.com
