SOUTHLAKE, Texas, May 5, 2015 /PRNewswire/ -- Sabre
Corporation (NASDAQ: SABR) today announced financial results for
the quarter ended March 31, 2015.
"The first quarter marked a strong start to the year," said
Tom Klein, Sabre President and
CEO. "Sabre's growth is being fueled by a strong pipeline of
innovative, mission-critical solutions across all of our
businesses, as demonstrated by our new long-term agreements with
customers like Wyndham Hotel Group and LATAM Airlines Group, which
we announced today. This quarter's momentum increases our
confidence that we will achieve our full-year objectives."
Q1 2015 Financial Summary
Sabre consolidated first quarter revenue increased 6.6% to
$710 million, compared to
$666 million for the same period last
year.
Net income from continuing operations totaled $49 million, compared to $22 million in the first quarter of 2014.
Consolidated Adjusted EBITDA was $244
million, a 15.3% increase from $211
million in the prior year first quarter. The increase in
consolidated Adjusted EBITDA is the result of 33.7% growth in
Airline and Hospitality Solutions Adjusted EBITDA and an 8.0%
increase in Travel Network Adjusted EBITDA.
For the quarter, Sabre reported Income from continuing
operations of $0.18 per share and
Adjusted Net Income from continuing operations (Adjusted EPS) of
$0.27 per share.
Cash flow from operations totaled $132
million, compared to $94
million in the first quarter of 2014. Free Cash Flow was
$70 million, compared to $45 million in the year ago period. Adjusted
Capital Expenditures, which includes capitalized implementation
costs, totaled $76 million, compared
to $57 million in the first quarter
of 2014.
|
Three Months Ended
March 31,
|
|
|
Financial Highlights
(in thousands; unaudited):
|
2015
|
|
|
2014
|
|
%
Change
|
|
|
Total Company
(Continuing Operations):
|
|
|
Revenue
|
$
|
710,348
|
|
|
$
|
666,415
|
|
|
6.6
|
|
|
Income (loss) from
continuing operations
|
$
|
49,330
|
|
|
$
|
21,959
|
|
|
124.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA*
|
$
|
243,586
|
|
|
$
|
211,263
|
|
|
15.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow from
Operations
|
$
|
131,773
|
|
|
$
|
94,322
|
|
|
39.7
|
|
|
Capital
Expenditures
|
$
|
61,912
|
|
|
$
|
49,658
|
|
|
24.7
|
|
|
Adjusted Capital
Expenditures*
|
$
|
76,239
|
|
|
$
|
57,311
|
|
|
33.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow*
|
$
|
69,861
|
|
|
$
|
44,664
|
|
|
56.4
|
|
|
Adjusted Free Cash
Flow*
|
$
|
84,090
|
|
|
$
|
60,969
|
|
|
37.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt (total
debt, less cash)
|
$
|
2,632,432
|
|
|
$
|
3,443,016
|
|
|
|
|
|
Net Debt / LTM
Adjusted EBITDA
|
|
3.0
|
x
|
|
|
4.4
|
x
|
|
|
|
|
Airline and
Hospitality Solutions:
|
|
|
Revenue
|
$
|
204,900
|
|
|
$
|
176,717
|
|
|
15.9
|
|
|
Passengers
Boarded
|
|
126,092
|
|
|
|
117,616
|
|
|
7.2
|
|
|
Operating
Income
|
$
|
28,491
|
|
|
$
|
26,462
|
|
|
7.7
|
|
|
Adjusted
EBITDA*
|
$
|
71,488
|
|
|
$
|
53,460
|
|
|
33.7
|
|
|
Travel
Network:
|
|
|
Revenue
|
$
|
507,930
|
|
|
$
|
491,726
|
|
|
3.3
|
|
|
Air
Bookings
|
|
91,423
|
|
|
|
89,045
|
|
|
2.7
|
|
|
Non-air
Bookings
|
|
14,011
|
|
|
|
13,598
|
|
|
3.0
|
|
|
Total
Bookings
|
|
105,434
|
|
|
|
102,643
|
|
|
2.7
|
|
|
Bookings
Share
|
|
35.7
|
%
|
|
|
35.4
|
%
|
|
|
|
|
Operating
Income
|
$
|
197,251
|
|
|
$
|
184,517
|
|
|
6.9
|
|
|
Adjusted
EBITDA*
|
$
|
232,087
|
|
|
$
|
214,843
|
|
|
8.0
|
|
|
*indicates non-GAAP
financial measure; see descriptions and reconciliations
below
|
Sabre Airline and Hospitality Solutions
First quarter 2015 Airline and Hospitality Solutions revenue
increased 15.9% to $205 million from
$177 million in the prior year
period. The increase was driven by a 7.2% increase in passengers
boarded through the SabreSonic® Customer Sales &
Service (CSS) solution and strong growth in Sabre Hospitality
Solutions.
Sabre Airline and Hospitality Solutions Adjusted EBITDA
increased 33.7% to $71 million from
$53 million in the prior year period.
The increase in Adjusted EBITDA is the result of strong revenue
growth and technology platform scale benefits, resulting in an
Adjusted EBITDA margin of 34.9%, compared to 30.3% for the prior
year quarter.
In the quarter, Wyndham Hotel Group selected the
SynXis® Central Reservations Solution to power
distribution and reservations for its 7,500 global properties. In
December 2014, Wyndham Hotel Group
announced that it would transition its 4,500 North American
properties to the SynXis Property Manager Solution. These combined
agreements make Wyndham Hotel Group the first hotel company to
fully leverage the cloud-based SaaS reservations, property
management and enhanced security solutions of the SynXis Enterprise
Platform. Also in the first quarter, Four Seasons Hotels &
Resorts contracted to migrate its properties to the SynXis Central
Reservations Solution.
Today, Sabre announced LATAM Airlines Group would extend their
use of SabreSonic CSS reservations across its entire network
including LAN Airlines, which is a current SabreSonic CSS customer,
as well as TAM Airlines, which will migrate to SabreSonic CSS. TAM
is Brazil's largest airline.
Combined, LATAM Airlines Group is one of the top ten largest
airlines in the world, with more than 67 million passengers boarded
annually.
With the addition of the expanded LATAM agreement, Sabre Airline
Solutions' implementation pipeline represents more than 290 million
passengers boarded annually to be implemented in 2015 through 2017,
up from 250 million at year end.
Sabre Travel Network
First quarter Travel Network revenue increased 3.3% to
$508 million, compared to
$492 million for the same period in
2014. Bookings increased 2.7%, with increasing momentum as the
quarter progressed. Continued sales success resulted in strong
Sabre bookings growth of 10% in Europe, Middle
East and Africa (EMEA),
compared to less than one percent growth for the EMEA
market overall.
First quarter 2015 Travel Network Adjusted EBITDA increased 8.0%
to $232 million.
Refinancing Activity
Early in the second quarter, Sabre redeemed $480 million of 8.5% 2019 maturity bonds. These
bonds were redeemed through the issuance of $530 million, 5.375% senior secured notes due in
2023, which substantially covered the redeemed notes' principal,
accrued interest and related fees, premiums and expenses.
Dividend
Sabre's Board of Directors has declared a quarterly dividend of
$0.09 cents per share on the
Company's common stock. The dividend will be payable on
June 30, 2015, to stockholders of
record on June 19, 2015.
Business Outlook and Financial Guidance
Sabre reiterated full-year guidance for 2015.
- In Airline and Hospitality Solutions, Sabre expects 2015
revenue growth of between 9% and 11%. Passengers boarded are
expected to increase approximately 10% in 2015, including strong
growth in the fourth quarter related to scheduled SabreSonic CSS
customer implementations.
- In Travel Network, Sabre expects 2015 revenue growth of 4% or
more, driven by bookings growth of approximately 3%.
- 2015 Adjusted Net Income and Adjusted EPS guidance remain
unchanged at $275 million to $290
million and $1.00 to $1.06,
respectively. Free Cash Flow and Adjusted Free Cash Flow
guidance are unchanged at more than $250
million and more than $300
million, respectively.
In summary, for the full year 2015, Sabre continues to expect
the following results from continuing operations:
Full Year 2015
Guidance
|
Sabre
|
($ millions,
except for EPS)
|
Revenue
|
$2,770 -
$2,800
|
|
|
Adjusted
EBITDA
|
$895 -
$910
|
|
|
Adjusted Net
Income
|
$275 -
$290
|
|
|
Adjusted
EPS
|
$1.00 -
$1.06
|
Conference Call
Sabre will conduct its first quarter 2015 investor conference
call today at 9:00 a.m. Eastern
Time. The live webcast, including accompanying slide
presentation, can be accessed via the Sabre Investor Relations
website at investors.sabre.com. A recording of the call will
be archived for replay following the conference call.
About the Company
Sabre® is a leading technology provider to the
global travel and tourism industry. Sabre's software, data, mobile
and distribution solutions are used by hundreds of airlines and
thousands of hotels to manage vital operations, such as passenger
and guest reservations, revenue management, and flight, network and
crew management. Sabre also operates the world's leading travel
marketplace, processing more than $110
billion of annual travel spend. Headquartered in
Southlake, Texas, USA, Sabre
operates in approximately 60 countries around the world.
Website Information
We routinely post important information for investors on our
website, www.sabre.com, in the Investor Relations section. We
intend to use this website as a means of disclosing material,
non-public information and for complying with our disclosure
obligations under Regulation FD. Accordingly, investors should
monitor the Investor Relations section of our website, in addition
to following our press releases, SEC filings, public conference
calls, presentations and webcasts. The information contained on, or
that may be accessed through, our website is not incorporated by
reference into, and is not a part of, this document.
Supplemental Financial Information
In conjunction with today's earnings report, a file of
supplemental financial information will be available on the
Investor Relations section of our website, www.sabre.com.
Note on Non-GAAP Financial Measures
This press release includes unaudited non-GAAP financial
measures, including Adjusted Net Income, Adjusted EBITDA, Adjusted
EPS, Adjusted Capital Expenditures, Free Cash Flow, Adjusted Free
Cash Flow and the ratios based on these financial measures. We
present non-GAAP measures when our management believes that the
additional information provides useful information about our
operating performance. Non-GAAP financial measures do not have any
standardized meaning and are therefore unlikely to be comparable to
similar measures presented by other companies. The presentation of
non-GAAP financial measures is not intended to be a substitute for,
and should not be considered in isolation from, the financial
measures reported in accordance with GAAP. See
"Non-GAAP Financial Measures" below for an explanation of the
non-GAAP measures and "Tabular Reconciliations for non-GAAP
Measures" below for a reconciliation of the non-GAAP financial
measures to the comparable GAAP measures.
Forward-looking statements
Certain statements herein are forward-looking statements about
trends, future events, uncertainties and our plans and expectations
of what may happen in the future. Any statements that are not
historical or current facts are forward-looking statements. In many
cases, you can identify forward-looking statements by terms such as
"confidence," "expect," "anticipate," "assume," "may," "will,"
"should," "would," "intend," "believe," "potential" or the negative
of these terms or other comparable terminology. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause Sabre's actual results, performance or
achievements to be materially different from any future results,
performances or achievements expressed or implied by the
forward-looking statements. The potential risks and uncertainties
include, among others, dependency on transaction volumes in the
global travel industry, particularly air travel transaction
volumes, adverse global and regional economic and political
conditions, including, but not limited to, conditions in
Venezuela and Russia, exposure to pricing pressure in the
Travel Network business, the implementation and effects of new
agreements, dependence on maintaining and renewing contracts with
customers and other counterparties, dependence on relationships
with travel buyers, changes affecting travel supplier customers,
travel suppliers' usage of alternative distribution models,
reliance on fourth-party distributor partners and joint ventures to
extend our GDS services to certain regions and competition in the
travel distribution market and solutions markets. More
information about potential risks and uncertainties that could
affect our business and results of operations is included in the
"Risk Factors" and "Forward-Looking Statements" sections included
in our Annual Report on Form 10-K filed with the SEC on
March 3, 2015. Although we believe
that the expectations reflected in the forward-looking statements
are reasonable, we cannot guarantee future events, results,
actions, levels of activity, performance or achievements. Readers
are cautioned not to place undue reliance on these forward-looking
statements. Unless required by law, Sabre undertakes no obligation
to publicly update or revise any forward-looking statements to
reflect circumstances or events after the date they are made.
Contacts
|
|
Media
|
Investors
|
Nancy St.
Pierre
|
Barry
Sievert
|
682-605-3864
|
682-605-0214
|
nancy.st.pierre@sabre.com
|
barry.sievert@sabre.com
|
SABRE
CORPORATION
|
CONSOLIDATED
STATEMENT OF OPERATIONS
|
(In thousands,
except share amounts; unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2015
|
|
|
2014
|
|
Revenue
|
|
$
|
710,348
|
|
|
$
|
666,415
|
|
Cost of revenue
(1) (2)
|
|
|
468,998
|
|
|
|
451,970
|
|
Selling, general and
administrative (2)
|
|
|
122,358
|
|
|
|
110,738
|
|
Operating
income
|
|
|
118,992
|
|
|
|
103,707
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(46,453)
|
|
|
|
(63,944)
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
(2,980)
|
|
Joint venture equity
income
|
|
|
8,519
|
|
|
|
2,441
|
|
Other, net
|
|
|
(4,445)
|
|
|
|
(2,354)
|
|
Total other expense,
net
|
|
|
(42,379)
|
|
|
|
(66,837)
|
|
Income from
continuing operations before income taxes
|
|
|
76,613
|
|
|
|
36,870
|
|
Provision for income
taxes
|
|
|
27,283
|
|
|
|
14,911
|
|
Income from
continuing operations
|
|
|
49,330
|
|
|
|
21,959
|
|
Income (loss) from
discontinued operations, net of tax
|
|
|
158,911
|
|
|
|
(24,056)
|
|
Net income
(loss)
|
|
|
208,241
|
|
|
|
(2,097)
|
|
Net income
attributable to noncontrolling interests
|
|
|
747
|
|
|
|
746
|
|
Net income (loss)
attributable to Sabre Corporation
|
|
|
207,494
|
|
|
|
(2,843)
|
|
Preferred stock
dividends
|
|
|
—
|
|
|
|
9,146
|
|
Net income (loss)
attributable to common shareholders
|
|
$
|
207,494
|
|
|
$
|
(11,989)
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share attributable to common shareholders:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
|
0.18
|
|
|
$
|
0.07
|
|
Income (loss) from
discontinued operations
|
|
|
0.59
|
|
|
|
(0.13)
|
|
Net income (loss) per
common share
|
|
$
|
0.77
|
|
|
$
|
(0.07)
|
|
Diluted net income
(loss) per share attributable to common shareholders:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
|
0.18
|
|
|
$
|
0.06
|
|
Income (loss) from
discontinued operations
|
|
|
0.57
|
|
|
|
(0.13)
|
|
Net income (loss) per
common share
|
|
$
|
0.75
|
|
|
$
|
(0.06)
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
269,184
|
|
|
|
178,702
|
|
Diluted
|
|
|
276,688
|
|
|
|
187,727
|
|
|
|
|
|
|
|
|
|
|
Dividends per common
share
|
|
$
|
0.09
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
(1) Includes
amortization of upfront incentive consideration
|
|
$
|
11,172
|
|
|
$
|
11,047
|
|
(2) Includes
stock-based compensation as follows:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
|
3,533
|
|
|
$
|
1,386
|
|
Selling, general and
administrative
|
|
|
5,261
|
|
|
|
2,213
|
|
SABRE
CORPORATION
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands,
except share amounts; unaudited)
|
|
|
|
March 31,
2015
|
|
|
December 31,
2014
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
458,557
|
|
|
$
|
155,679
|
|
Restricted
cash
|
|
|
496
|
|
|
|
720
|
|
Accounts receivable,
net
|
|
|
422,490
|
|
|
|
362,911
|
|
Prepaid expenses and
other current assets
|
|
|
35,455
|
|
|
|
34,121
|
|
Current deferred
income taxes
|
|
|
184,295
|
|
|
|
182,277
|
|
Other receivables,
net
|
|
|
35,332
|
|
|
|
29,893
|
|
Assets held for
sale
|
|
|
—
|
|
|
|
112,558
|
|
Total current
assets
|
|
|
1,136,625
|
|
|
|
878,159
|
|
Property and
equipment, net of accumulated depreciation of $845,790 and
$792,161
|
|
|
545,493
|
|
|
|
551,276
|
|
Investments in joint
ventures
|
|
|
154,805
|
|
|
|
145,320
|
|
Goodwill
|
|
|
2,153,152
|
|
|
|
2,153,499
|
|
Trademarks and
brandnames, net of accumulated amortization of $90,268 and
$87,554
|
|
|
235,786
|
|
|
|
238,500
|
|
Other intangible
assets, net of accumulated amortization of $993,861 and
$975,701
|
|
|
223,326
|
|
|
|
241,486
|
|
Other assets,
net
|
|
|
518,293
|
|
|
|
509,764
|
|
Total
assets
|
|
$
|
4,967,480
|
|
|
$
|
4,718,004
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
142,542
|
|
|
$
|
117,855
|
|
Accrued compensation
and related benefits
|
|
|
54,889
|
|
|
|
83,828
|
|
Accrued subscriber
incentives
|
|
|
170,841
|
|
|
|
145,581
|
|
Deferred
revenues
|
|
|
184,886
|
|
|
|
167,827
|
|
Litigation settlement
liability and related deferred revenue
|
|
|
69,194
|
|
|
|
73,252
|
|
Other accrued
liabilities
|
|
|
191,978
|
|
|
|
189,612
|
|
Current portion of
debt
|
|
|
417,232
|
|
|
|
22,435
|
|
Liabilities held for
sale
|
|
|
—
|
|
|
|
96,544
|
|
Total current
liabilities
|
|
|
1,231,562
|
|
|
|
896,934
|
|
Deferred income
taxes
|
|
|
181,169
|
|
|
|
61,577
|
|
Other noncurrent
liabilities
|
|
|
605,801
|
|
|
|
613,710
|
|
Long-term
debt
|
|
|
2,662,166
|
|
|
|
3,061,400
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
Common Stock: $0.01
par value; 450,000,000 authorized shares; 271,994,071
and 268,237,547 shares issued,
271,280,037 and 267,800,161 outstanding at March 31,
2015 and December 31, 2014,
respectively
|
|
|
2,720
|
|
|
|
2,682
|
|
Additional paid-in
capital
|
|
|
1,956,593
|
|
|
|
1,931,796
|
|
Treasury Stock, at
cost, 714,034 and 437,386 shares at March 31, 2015 and
December 31, 2014,
respectively
|
|
|
(11,425)
|
|
|
|
(5,297)
|
|
Retained
deficit
|
|
|
(1,592,513)
|
|
|
|
(1,775,616)
|
|
Accumulated other
comprehensive loss
|
|
|
(70,162)
|
|
|
|
(69,803)
|
|
Noncontrolling
interest
|
|
|
1,569
|
|
|
|
621
|
|
Total stockholders'
equity
|
|
|
286,782
|
|
|
|
84,383
|
|
Total liabilities and
stockholders' equity
|
|
$
|
4,967,480
|
|
|
$
|
4,718,004
|
|
SABRE
CORPORATION
|
CONSOLIDATED
STATEMENT OF CASH FLOWS
|
(In thousands;
unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2015
|
|
|
2014
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
208,241
|
|
|
$
|
(2,097)
|
|
Adjustments to
reconcile net income (loss) to cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
90,061
|
|
|
|
81,634
|
|
Amortization of
upfront incentive consideration
|
|
|
11,172
|
|
|
|
11,047
|
|
Litigation-related
credits
|
|
|
(16,786)
|
|
|
|
(5,156)
|
|
Stock-based
compensation expense
|
|
|
8,794
|
|
|
|
3,599
|
|
Allowance for doubtful
accounts
|
|
|
3,355
|
|
|
|
1,416
|
|
Deferred income
taxes
|
|
|
27,388
|
|
|
|
6,967
|
|
Joint venture equity
income
|
|
|
(8,519)
|
|
|
|
(2,441)
|
|
Amortization of debt
issuance costs
|
|
|
1,536
|
|
|
|
1,682
|
|
Debt modification
costs
|
|
|
—
|
|
|
|
3,290
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
2,980
|
|
Other
|
|
|
4,952
|
|
|
|
8,133
|
|
(Income) loss from
discontinued operations
|
|
|
(158,911)
|
|
|
|
24,056
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts and other
receivables
|
|
|
(70,827)
|
|
|
|
(41,012)
|
|
Prepaid expenses and
other current assets
|
|
|
(3,388)
|
|
|
|
5,903
|
|
Capitalized
implementation costs
|
|
|
(14,327)
|
|
|
|
(7,653)
|
|
Upfront incentive
consideration
|
|
|
(6,523)
|
|
|
|
(17,250)
|
|
Other
assets
|
|
|
(7,189)
|
|
|
|
(6,710)
|
|
Accrued compensation
and related benefits
|
|
|
(27,317)
|
|
|
|
(30,528)
|
|
Accounts payable and
other accrued liabilities
|
|
|
60,172
|
|
|
|
25,077
|
|
Deferred revenue
including upfront solution fees
|
|
|
29,889
|
|
|
|
31,385
|
|
Cash provided by
operating activities
|
|
|
131,773
|
|
|
|
94,322
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
Additions to property
and equipment
|
|
|
(61,912)
|
|
|
|
(49,658)
|
|
Other investing
activities
|
|
|
148
|
|
|
|
—
|
|
Cash used in investing
activities
|
|
|
(61,764)
|
|
|
|
(49,658)
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
Proceeds of borrowings
from lenders
|
|
|
—
|
|
|
|
148,307
|
|
Payments on borrowings
from lenders
|
|
|
(5,614)
|
|
|
|
(169,847)
|
|
Debt modification and
issuance costs
|
|
|
—
|
|
|
|
(3,290)
|
|
Net proceeds
(payments) on the settlement of equity-based awards
|
|
|
9,781
|
|
|
|
(779)
|
|
Cash dividends paid to
common shareholders
|
|
|
(24,391)
|
|
|
|
—
|
|
Other financing
activities
|
|
|
(2,057)
|
|
|
|
(2,993)
|
|
Cash used in financing
activities
|
|
|
(22,281)
|
|
|
|
(28,602)
|
|
Cash Flows from
Discontinued Operations
|
|
|
|
|
|
|
|
|
Cash used in operating
activities
|
|
|
(18,156)
|
|
|
|
(35,985)
|
|
Cash provided by (used
in) investing activities
|
|
|
278,834
|
|
|
|
(2,177)
|
|
Cash provided by (used
in) discontinued operations
|
|
|
260,678
|
|
|
|
(38,162)
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
(5,528)
|
|
|
|
220
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
|
|
302,878
|
|
|
|
(21,880)
|
|
Cash and cash
equivalents at beginning of period
|
|
|
155,679
|
|
|
|
308,236
|
|
Cash and cash
equivalents at end of period
|
|
$
|
458,557
|
|
|
$
|
286,356
|
|
Non-GAAP Financial Measures
We have included both financial measures compiled in accordance
with GAAP and certain non-GAAP financial measures in this earnings
release, including Adjusted Gross Margin, Adjusted Net Income,
Adjusted EBITDA, Adjusted Capital Expenditures, Free Cash Flow,
Adjusted Free Cash Flow and ratios based on these financial
measures.
We define Adjusted Gross Margin as operating income adjusted for
selling, general and administrative expenses, amortization of
upfront incentive consideration, and the cost of revenue portion of
depreciation and amortization, restructuring and other costs, and
stock-based compensation.
We define Adjusted Net Income as income from continuing
operations adjusted for acquisition-related amortization, loss on
extinguishment of debt, other, net, restructuring and other costs,
acquisition-related costs, litigation costs, stock-based
compensation, management fees and the tax impact of net income
adjustments.
We define Adjusted EBITDA as Adjusted Net Income adjusted for
depreciation and amortization of property and equipment,
amortization of capitalized implementation costs, amortization of
upfront incentive consideration, interest expense, net, and
remaining provision for income taxes.
We define Adjusted EPS as Adjusted Net Income divided by the
applicable share count.
We define Adjusted Capital Expenditures as additions to property
and equipment and capitalized implementation costs during the
periods presented.
We define Free Cash Flow as cash provided by operating
activities less cash used in additions to property and equipment.
We define Adjusted Free Cash Flow as Free Cash Flow plus the cash
flow effect of restructuring and other costs, acquisition-related
costs, litigation settlement, other litigation costs and management
fees.
These non-GAAP financial measures are key metrics used by
management and our board of directors to monitor our ongoing core
operations because historical results have been significantly
impacted by events that are unrelated to our core operations as a
result of changes to our business and the regulatory environment.
We believe that these non-GAAP financial measures are used by
investors, analysts and other interested parties as measures of
financial performance and to evaluate our ability to service debt
obligations, fund capital expenditures and meet working capital
requirements. Adjusted Capital Expenditures includes cash flows
used in investing activities, for property and equipment, and cash
flows used in operating activities, for capitalized implementation
costs. Our management uses this combined metric in making product
investment decisions and determining development resource
requirements. We also believe that Adjusted Gross Margin, Adjusted
Net Income, Adjusted EBITDA, Adjusted EPS and Adjusted Capital
Expenditures assist investors in company-to-company and
period-to-period comparisons by excluding differences caused by
variations in capital structures (affecting interest expense), tax
positions and the impact of depreciation and amortization expense.
In addition, amounts derived from Adjusted EBITDA are a primary
component of certain covenants under our senior secured credit
facilities.
Adjusted Gross Margin, Adjusted Net Income, Adjusted EBITDA,
Adjusted EPS, Adjusted Capital Expenditures, Free Cash Flow,
Adjusted Free Cash Flow and ratios based on these financial
measures are not recognized terms under GAAP. These non-GAAP
financial measures and ratios based on them have important
limitations as analytical tools, and should not be viewed in
isolation and do not purport to be alternatives to net income as
indicators of operating performance or cash flows from operating
activities as measures of liquidity. These non-GAAP financial
measures and ratios based on them exclude some, but not all, items
that affect net income or cash flows from operating activities and
these measures may vary among companies. Our use of these measures
has limitations as an analytical tool, and you should not consider
them in isolation or as substitutes for analysis of our results as
reported under GAAP. Some of these limitations are:
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and Adjusted Gross Margin and Adjusted EBITDA do not
reflect cash requirements for such replacements;
- Adjusted Net Income and Adjusted EBITDA do not reflect changes
in, or cash requirements for, our working capital needs;
- Adjusted EBITDA does not reflect the interest expense or the
cash requirements necessary to service interest or principal
payments on our indebtedness;
- Adjusted EBITDA does not reflect tax payments that may
represent a reduction in cash available to us;
- Free Cash Flow and Adjusted Free Cash Flow do not reflect the
cash requirements necessary to service the principal payments on
our indebtedness;
- Free Cash Flow and Adjusted Free Cash Flow do not reflect
payments related to restructuring, litigation, acquisition-related
and management fees;
- Free Cash Flow and Adjusted Free Cash Flow remove the impact of
accrual-basis accounting on asset accounts and non-debt liability
accounts; and
- other companies, including companies in our industry, may
calculate Adjusted Gross Margin, Adjusted Net Income, Adjusted
EBITDA, Adjusted EPS, Adjusted Capital Expenditures, Free Cash Flow
or Adjusted Free Cash Flow differently, which reduces their
usefulness as comparative measures.
Tabular
Reconciliations for Non-GAAP Measures
|
(In thousands,
except per share amounts; unaudited)
|
|
Reconciliation of
Net Income (Loss) to Adjusted Net Income from Continuing Operations
and Adjusted EBITDA
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2015
|
|
|
2014
|
|
Net income (loss)
attributable to common shareholders
|
|
$
|
207,494
|
|
|
$
|
(11,989)
|
|
(Income) loss from
discontinued operations, net of tax
|
|
|
(158,911)
|
|
|
|
24,056
|
|
Net income
attributable to noncontrolling interests(1)
|
|
|
747
|
|
|
|
746
|
|
Preferred stock
dividends
|
|
|
—
|
|
|
|
9,146
|
|
Income from
continuing operations
|
|
|
49,330
|
|
|
|
21,959
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Acquisition related
amortization(2a)
|
|
|
21,675
|
|
|
|
32,889
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
2,980
|
|
Other, net
(4)
|
|
|
4,445
|
|
|
|
2,354
|
|
Restructuring and
other costs (5)
|
|
|
—
|
|
|
|
1,556
|
|
Acquisition-related
costs(6)
|
|
|
1,811
|
|
|
|
—
|
|
Litigation
costs(7)
|
|
|
3,436
|
|
|
|
4,546
|
|
Stock-based
compensation
|
|
|
8,794
|
|
|
|
3,599
|
|
Management
fees(8)
|
|
|
—
|
|
|
|
1,932
|
|
Tax impact of net
income adjustments
|
|
|
(14,557)
|
|
|
|
(19,443)
|
|
Adjusted Net Income
from continuing operations
|
|
$
|
74,934
|
|
|
$
|
52,372
|
|
Adjusted Net Income
from continuing operations per
share
|
|
$
|
0.27
|
|
|
$
|
0.28
|
|
Diluted
weighted-average common shares outstanding
|
|
|
276,688
|
|
|
|
187,727
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
from continuing operations
|
|
$
|
74,934
|
|
|
$
|
52,372
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization of property and equipment(2b)
|
|
|
61,663
|
|
|
|
40,449
|
|
Amortization of
capitalized implementation costs(2c)
|
|
|
7,524
|
|
|
|
9,097
|
|
Amortization of
upfront incentive consideration(3)
|
|
|
11,172
|
|
|
|
11,047
|
|
Interest expense,
net
|
|
|
46,453
|
|
|
|
63,944
|
|
Remaining provision
for income taxes
|
|
|
41,840
|
|
|
|
34,354
|
|
Adjusted
EBITDA
|
|
$
|
243,586
|
|
|
$
|
211,263
|
|
Reconciliation of
Adjusted Capital Expenditures:
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2015
|
|
|
2014
|
|
Additions to property
and equipment
|
|
$
|
61,912
|
|
|
$
|
49,658
|
|
Capitalized
implementation costs
|
|
|
14,327
|
|
|
|
7,653
|
|
Adjusted Capital
Expenditures
|
|
$
|
76,239
|
|
|
$
|
57,311
|
|
Reconciliation of
Adjusted Free Cash Flow:
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2015
|
|
|
2014
|
|
Cash provided by
operating activities
|
|
$
|
131,773
|
|
|
$
|
94,322
|
|
Cash used in
investing activities
|
|
|
(61,764)
|
|
|
|
(49,658)
|
|
Cash used in
financing activities
|
|
|
(22,281)
|
|
|
|
(28,602)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2015
|
|
|
2014
|
|
Cash provided by
operating activities
|
|
$
|
131,773
|
|
|
$
|
94,322
|
|
Additions to property
and equipment
|
|
|
(61,912)
|
|
|
|
(49,658)
|
|
Free Cash
Flow
|
|
|
69,861
|
|
|
|
44,664
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Restructuring and
other costs(5) (9)
|
|
|
280
|
|
|
|
5,190
|
|
Acquisition-related
costs(6) (9)
|
|
|
1,811
|
|
|
|
—
|
|
Litigation
settlement(7) (10)
|
|
|
8,702
|
|
|
|
4,637
|
|
Other litigation
costs(7) (9)
|
|
|
3,436
|
|
|
|
4,546
|
|
Management
fees(8) (9)
|
|
|
—
|
|
|
|
1,932
|
|
Adjusted Free Cash
Flow
|
|
$
|
84,090
|
|
|
$
|
60,969
|
|
Reconciliation of
Operating Income (Loss) to Adjusted Gross Margin and Adjusted
EBITDA by Segment:
|
|
|
Three Months Ended
March 31, 2015
|
|
|
Travel
Network
|
|
|
Airline
and
Hospitality
Solutions
|
|
|
Corporate
|
|
|
Total
|
|
Operating income
(loss)
|
$
|
197,251
|
|
|
$
|
28,491
|
|
|
$
|
(106,750)
|
|
|
$
|
118,992
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
21,884
|
|
|
|
17,979
|
|
|
|
82,495
|
|
|
|
122,358
|
|
Cost of revenue
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization(2)
|
|
13,812
|
|
|
|
42,729
|
|
|
|
8,126
|
|
|
|
64,667
|
|
Amortization of
upfront incentive consideration(3)
|
|
11,172
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11,172
|
|
Stock-based
compensation
|
|
—
|
|
|
|
—
|
|
|
|
3,533
|
|
|
|
3,533
|
|
Adjusted Gross
Margin
|
|
244,119
|
|
|
|
89,199
|
|
|
|
(12,596)
|
|
|
|
320,722
|
|
Selling, general and
administrative
|
|
(21,884)
|
|
|
|
(17,979)
|
|
|
|
(82,495)
|
|
|
|
(122,358)
|
|
Joint venture equity
income
|
|
8,519
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8,519
|
|
Joint venture
intangible amortization(2a)
|
|
801
|
|
|
|
—
|
|
|
|
—
|
|
|
|
801
|
|
Selling, general and
administrative adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization(2)
|
|
532
|
|
|
|
268
|
|
|
|
24,594
|
|
|
|
25,394
|
|
Acquisition-related
costs(6)
|
|
—
|
|
|
|
—
|
|
|
|
1,811
|
|
|
|
1,811
|
|
Litigation
costs(7)
|
|
—
|
|
|
|
—
|
|
|
|
3,436
|
|
|
|
3,436
|
|
Stock-based
compensation
|
|
—
|
|
|
|
—
|
|
|
|
5,261
|
|
|
|
5,261
|
|
Adjusted
EBITDA
|
$
|
232,087
|
|
|
$
|
71,488
|
|
|
$
|
(59,989)
|
|
|
$
|
243,586
|
|
|
|
|
Three Months Ended
March 31, 2014
|
|
|
Travel
Network
|
|
|
Airline
and
Hospitality
Solutions
|
|
|
Corporate
|
|
|
Total
|
|
Operating income
(loss)
|
$
|
184,517
|
|
|
$
|
26,462
|
|
|
$
|
(107,272)
|
|
|
$
|
103,707
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
25,672
|
|
|
|
12,395
|
|
|
|
72,671
|
|
|
|
110,738
|
|
Cost of revenue
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization(2)
|
|
15,412
|
|
|
|
26,683
|
|
|
|
16,714
|
|
|
|
58,809
|
|
Amortization of
upfront incentive consideration(3)
|
|
11,047
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11,047
|
|
Restructuring and
other costs (5)
|
|
—
|
|
|
|
—
|
|
|
|
1,178
|
|
|
|
1,178
|
|
Stock-based
compensation
|
|
—
|
|
|
|
—
|
|
|
|
1,386
|
|
|
|
1,386
|
|
Adjusted Gross
Margin
|
|
236,648
|
|
|
|
65,540
|
|
|
|
(15,323)
|
|
|
|
286,865
|
|
Selling, general and
administrative
|
|
(25,672)
|
|
|
|
(12,395)
|
|
|
|
(72,671)
|
|
|
|
(110,738)
|
|
Joint venture equity
income
|
|
2,441
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,441
|
|
Joint venture
intangible amortization(2a)
|
|
801
|
|
|
|
—
|
|
|
|
—
|
|
|
|
801
|
|
Selling, general and
administrative adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization(2)
|
|
625
|
|
|
|
315
|
|
|
|
21,885
|
|
|
|
22,825
|
|
Restructuring and
other costs (5)
|
|
—
|
|
|
|
—
|
|
|
|
378
|
|
|
|
378
|
|
Litigation
costs(7)
|
|
—
|
|
|
|
—
|
|
|
|
4,546
|
|
|
|
4,546
|
|
Stock-based
compensation
|
|
—
|
|
|
|
—
|
|
|
|
2,213
|
|
|
|
2,213
|
|
Management
fees(8)
|
|
—
|
|
|
|
—
|
|
|
|
1,932
|
|
|
|
1,932
|
|
Adjusted
EBITDA
|
$
|
214,843
|
|
|
$
|
53,460
|
|
|
$
|
(57,040)
|
|
|
$
|
211,263
|
|
Non-GAAP
Footnotes
|
|
|
(1)
|
Net income
attributable to noncontrolling interests represents an adjustment
to include earnings allocated to noncontrolling interests held in
Sabre Travel Network Middle East of 40% for all periods presented
and in Sabre Seyahat Dagitim Sistemleri A.S. of 40% beginning in
April 2014 for the three months ended March 31,
2015.
|
(2)
|
Depreciation and
amortization expenses:
|
|
a.
|
Acquisition-related
amortization represents amortization of intangible assets from the
take-private transaction in 2007 as well as intangibles associated
with acquisitions since that date and amortization of the excess
basis in our underlying equity in joint ventures.
|
|
b.
|
Depreciation and
amortization of property and equipment includes software developed
for internal use.
|
|
c.
|
Amortization of
capitalized implementation costs represents amortization of upfront
costs to implement new customer contracts under our SaaS and hosted
revenue model.
|
(3)
|
Our Travel Network
business at times provides upfront incentive consideration to
travel agency subscribers at the inception or modification of a
service contract, which are capitalized and amortized to cost of
revenue over an average expected life of the service contract,
generally over three to five years. Such consideration is made with
the objective of increasing the number of clients or to ensure or
improve customer loyalty. Such service contract terms are
established such that the supplier and other fees generated over
the life of the contract will exceed the cost of the incentive
consideration provided upfront. Such service contracts with travel
agency subscribers require that the customer commit to achieving
certain economic objectives and generally have terms requiring
repayment of the upfront incentive consideration if those
objectives are not met.
|
(4)
|
Other, net primarily
represents foreign exchange gains and losses related to the
remeasurement of foreign currency denominated balances included in
our consolidated balance sheets into the relevant functional
currency.
|
(5)
|
Restructuring and
other costs represents charges associated with business
restructuring and associated changes implemented which resulted in
severance benefits related to employee terminations, integration
and facility opening or closing costs and other business
reorganization costs.
|
(6)
|
Acquisition-related
costs represent fees and expenses incurred associated with a
possible acquisition, as previously disclosed, within our Travel
Network segment.
|
(7)
|
Litigation settlement
and other litigation costs represent settlements or charges
associated with airline antitrust litigation.
|
(8)
|
We paid an annual
management fee, pursuant to a Management Services Agreement
("MSA"), to TPG Global, LLC ("TPG") and Silver Lake Management
Company ("Silver Lake") in an amount between (i) $5 million and
(ii) $7 million, the actual amount of which is calculated based
upon 1% of Adjusted EBITDA, earned by the company in such fiscal
year up to a maximum of $7 million. In addition, the MSA
provided for reimbursement of certain costs incurred by TPG and
Silver Lake, which are included in this line item. The MSA was
terminated in April 2014 in connection with our initial public
offering.
|
(9)
|
The adjustments to
reconcile cash provided by operating activities to Adjusted Free
Cash Flow reflect the amounts expensed in our statements of
operations in the respective periods adjusted for cash and non-cash
portions in instances where material.
|
(10)
|
Includes payment
credits used by American Airlines to pay for purchases of our
technology services. The payment credits were provided by us as
part of our litigation settlement with American
Airlines.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/sabre-reports-first-quarter-2015-results-300077289.html
SOURCE Sabre Corporation