Attached files
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8-K - FORM 8-K - Travelport LTD | y91136e8vk.htm |
EX-99.1 - EX-99.1 - Travelport LTD | y91136exv99w1.htm |
Exhibit 99.2
UNAUDITED PRO FORMA
CONSOLIDATED CONDENSED FINANCIAL INFORMATION
CONSOLIDATED CONDENSED FINANCIAL INFORMATION
On May 5, 2011, Travelport Limited (the Company or Travelport) completed the sale of its
Gullivers Travel Associates business comprising of the legal entities
of Columbus Technology
Developments Limited and GTA Holdco Limited and its wholly owned subsidiaries,
together with the business of GTA Americas LLC and OctopusTravel.com
(USA) Limited (collectively these
entities are referred to as the GTA Business) to Kuoni Travel Holding Limited (Kuoni) for gross
cash consideration of $720 million, subject to certain closing
adjustments based on minimum cash and working capital targets. After deducting transaction costs from the cash proceeds
received from the sale of its GTA Business, the
Company repaid $655 million of indebtedness outstanding under its senior secured credit agreement.
The sale of the GTA Business (the Sale Transaction) will be accounted for and presented as
discontinued operations in Travelports consolidated financial statements. The unaudited pro forma
consolidated condensed financial information of Travelport has been
adjusted to reflect the Sale Transaction. As a result, Travelports historical consolidated balance sheet and
consolidated statements of operations have been adjusted on a pro forma basis to reflect the Sale
Transaction. The unaudited pro forma consolidated condensed financial
information
includes:
| an unaudited pro forma consolidated condensed balance sheet as of December 31, 2010 after giving effect to the Sale Transaction as if it had occurred on December 31, 2010; | |
| unaudited pro forma consolidated condensed statements of operations for the years ended December 31, 2010, 2009 and 2008 after giving effect to the Sale Transaction as if it had occurred on January 1, 2008; and | |
| Notes to the unaudited pro forma consolidated condensed financial information. |
Material nonrecurring charges or credits and the related tax effects which result directly from the
Sale Transaction and which will be included in the operating results of the Company within
twelve months following the transaction are not included in the unaudited pro forma consolidated
condensed statements of operations, but are disclosed in the notes to the unaudited pro forma
consolidated condensed financial information contained herein.
The
unaudited pro forma consolidated condensed financial information as of and for the
years presented herein have been derived primarily from the historical audited consolidated
financial statements of the Company as of and for the years ended December 31, 2010, 2009 and 2008,
included in its Annual Report on Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission (SEC) on March 31, 2011.
These financial statements were prepared in
accordance with accounting principles generally accepted in the United States of America. The
unaudited pro forma consolidated condensed financial information is based upon available
information and assumptions the Company believes are reasonable under the circumstances as of
the date of this filing. Assumptions underlying the pro forma adjustments are described in the
accompanying notes, which should be read in conjunction with the unaudited pro forma consolidated
condensed financial information.
The unaudited pro forma consolidated condensed financial information has been provided
for information only and should not be considered indicative of the Companys financial
position or results of operations had the Sale Transaction occurred as of the dates indicated. In
addition, the unaudited pro forma consolidated condensed financial information does not
represent the future financial position or results of operations of the Company. The
unaudited pro forma consolidated condensed financial information should be read in
conjunction with the Companys audited consolidated financial statements as of December 31, 2010
and for the years ended December 31, 2010, 2009 and 2008, which are included in the Annual Report
on Form 10-K for the year ended December 31, 2010, filed with the SEC on March 31, 2011.
1
TRAVELPORT LIMITED
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
Pro Forma Adjustments | ||||||||||||||||
Historical | GTA | Other | Pro Forma | |||||||||||||
(in $ millions) | December 31, 2010(1) | Business(2) | Adjustments(3) | December 31, 2010 | ||||||||||||
Assets |
||||||||||||||||
Current assets: |
||||||||||||||||
Cash and cash equivalents |
242 | (148 | ) | 127 | (4) | 221 | ||||||||||
Accounts receivable (net of allowances for
doubtful accounts of $35) |
348 | (187 | ) | | 161 | |||||||||||
Deferred income taxes |
5 | (1 | ) | | 4 | |||||||||||
Other current assets |
204 | (19 | ) | (5 | )(4-e) | 180 | ||||||||||
Total current assets |
799 | (355 | ) | 122 | 566 | |||||||||||
Property and equipment, net |
521 | (37 | ) | | 484 | |||||||||||
Goodwill |
1,277 | (291 | ) | | 986 | |||||||||||
Trademarks and tradenames |
413 | (99 | ) | | 314 | |||||||||||
Other intangible assets, net |
1,048 | (279 | ) | | 769 | |||||||||||
Investment in Orbitz Worldwide |
91 | | | 91 | ||||||||||||
Non-current deferred income taxes |
5 | (1 | ) | | 4 | |||||||||||
Other non-current assets |
346 | (4 | ) | (8 | )(5-f) | 334 | ||||||||||
Total assets |
4,500 | (1,066 | ) | 114 | 3,548 | |||||||||||
Liabilities and equity |
||||||||||||||||
Current liabilities: |
||||||||||||||||
Accounts payable |
183 | (111 | ) | | 72 | |||||||||||
Accrued expenses and other current liabilities |
809 | (335 | ) | (1 | )(4-e) | 473 | ||||||||||
Current portion of long-term debt |
18 | | (10 | )(4-c) | 8 | |||||||||||
Total current liabilities |
1,010 | (446 | ) | (11 | ) | 553 | ||||||||||
Long-term debt |
3,796 | | (645 | )(4-c) | 3,151 | |||||||||||
Deferred income taxes |
133 | (96 | ) | | 37 | |||||||||||
Other non-current liabilities |
233 | (13 | ) | | 220 | |||||||||||
Total liabilities |
5,172 | (555 | ) | (656 | ) | 3,961 | ||||||||||
Commitments and contingencies |
||||||||||||||||
Shareholders equity: |
||||||||||||||||
Common shares $1.00 par value; 12,000 shares
authorized; 12,000 shares issued and
outstanding |
| | | | ||||||||||||
Additional paid in capital |
1,011 | | 3 | (5-e) | 1,014 | |||||||||||
Accumulated deficit |
(1,686 | ) | | 332 | (5) | (1,354 | ) | |||||||||
Accumulated other comprehensive loss |
(9 | ) | (79 | ) | 3 | (5-d) | (85 | ) | ||||||||
Travelports net investment in the GTA Business |
| (432 | ) | 432 | | |||||||||||
Total shareholders equity |
(684 | ) | (511 | ) | 770 | (425 | ) | |||||||||
Equity attributable to non-controlling interest
in subsidiaries |
12 | | | 12 | ||||||||||||
Total equity |
(672 | ) | (511 | ) | 770 | (413 | ) | |||||||||
Total liabilities and equity |
4,500 | (1,066 | ) | 114 | 3,548 | |||||||||||
See
Notes to the unaudited pro forma consolidated condensed financial
information.
2
TRAVELPORT LIMITED
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
Historical | Pro Forma Adjustments | Pro Forma | ||||||||||||||
Year Ended | GTA | Other | Year Ended | |||||||||||||
(in $ millions) | December 31, 2010(1) | Business(2) | Adjustments(3) | December 31, 2010 | ||||||||||||
Net revenue |
2,290 | (294 | ) | | 1,996 | |||||||||||
Costs and expenses |
||||||||||||||||
Cost of revenue |
1,164 | (45 | ) | | 1,119 | |||||||||||
Selling, general and administrative |
547 | (165 | ) | | 382 | |||||||||||
Restructuring charges |
13 | (2 | ) | | 11 | |||||||||||
Depreciation and amortization |
252 | (42 | ) | | 210 | |||||||||||
Total costs and expenses |
1,976 | (254 | ) | | 1,722 | |||||||||||
Operating income |
314 | (40 | ) | | 274 | |||||||||||
Interest expense, net |
(272 | ) | (8 | ) | 31 | (6) | (249 | ) | ||||||||
Gain on early extinguishment of debt |
2 | | | 2 | ||||||||||||
Income from continuing operations before income
taxes and equity in losses of investment in
Orbitz Worldwide |
44 | (48 | ) | 31 | 27 | |||||||||||
Provision for income taxes |
(60 | ) | 13 | | (47 | ) | ||||||||||
Equity in losses of investment in Orbitz Worldwide |
(28 | ) | | | (28 | ) | ||||||||||
Net loss from continuing operations |
(44 | ) | (35 | ) | 31 | (48 | ) | |||||||||
Net loss from continuing operations attributable
to non-controlling interest in subsidiaries |
1 | | | 1 | ||||||||||||
Net loss from continuing operations attributable
to the Company |
(43 | ) | (35 | ) | 31 | (47 | ) | |||||||||
See Notes to the unaudited pro forma consolidated condensed financial information
3
TRAVELPORT LIMITED
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
Historical | Pro Forma Adjustments | Pro Forma | ||||||||||||||
Year Ended | GTA | Other | Year Ended | |||||||||||||
(in $ millions) | December 31, 2009(1) | Business(2) | Adjustments(3) | December 31, 2009 | ||||||||||||
Net revenue |
2,248 | (267 | ) | | 1,981 | |||||||||||
Costs and expenses |
||||||||||||||||
Cost of revenue |
1,090 | (41 | ) | | 1,049 | |||||||||||
Selling, general and administrative |
567 | (165 | ) | | 402 | |||||||||||
Restructuring charges |
19 | (4 | ) | | 15 | |||||||||||
Depreciation and amortization |
243 | (56 | ) | | 187 | |||||||||||
Impairment of goodwill and intangible assets |
833 | (833 | ) | | | |||||||||||
Other income |
(5 | ) | | | (5 | ) | ||||||||||
Total costs and expenses |
2,747 | (1,099 | ) | | 1,648 | |||||||||||
Operating (loss) income |
(499 | ) | 832 | | 333 | |||||||||||
Interest expense, net |
(286 | ) | (11 | ) | 33 | (6) | (264 | ) | ||||||||
Gain on early extinguishment of debt |
10 | | | 10 | ||||||||||||
(Loss) income from continuing operations
before income taxes and equity in losses of
investment in Orbitz Worldwide |
(775 | ) | 821 | 33 | 79 | |||||||||||
Benefit (provision) for income taxes |
68 | (91 | ) | | (23 | ) | ||||||||||
Equity in losses of investment in Orbitz
Worldwide |
(162 | ) | | | (162 | ) | ||||||||||
Net loss from continuing operations |
(869 | ) | 730 | 33 | (106 | ) | ||||||||||
Net income from continuing operations
attributable to non-controlling interest in
subsidiaries |
(2 | ) | | | (2 | ) | ||||||||||
Net loss from continuing operations
attributable to the Company |
(871 | ) | 730 | 33 | (108 | ) | ||||||||||
See Notes to the unaudited pro forma consolidated condensed financial information
4
TRAVELPORT LIMITED
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
Historical | Pro Forma Adjustments | Pro Forma | ||||||||||||||
Year Ended | GTA | Other | Year Ended | |||||||||||||
(in $ millions) | December 31, 2008(1) | Business(2) | Adjustments(3) | December 31, 2008 | ||||||||||||
Net revenue |
2,527 | (356 | ) | | 2,171 | |||||||||||
Costs and expenses |
||||||||||||||||
Cost of revenue |
1,257 | (71 | ) | | 1,186 | |||||||||||
Selling, general and administrative |
649 | (171 | ) | | 478 | |||||||||||
Restructuring charges |
27 | (4 | ) | | 23 | |||||||||||
Depreciation and amortization |
263 | (63 | ) | | 200 | |||||||||||
Other expense |
7 | | | 7 | ||||||||||||
Total costs and expenses |
2,203 | (309 | ) | | 1,894 | |||||||||||
Operating income |
324 | (47 | ) | | 277 | |||||||||||
Interest expense, net |
(342 | ) | (14 | ) | 55 | (6) | (301 | ) | ||||||||
Gain on early extinguishment of debt |
29 | | | 29 | ||||||||||||
Income from continuing operations before income
taxes and equity in losses of investment in
Orbitz Worldwide |
11 | (61 | ) | 55 | 5 | |||||||||||
Provision for income taxes |
(43 | ) | 16 | | (27 | ) | ||||||||||
Equity in losses of investment in Orbitz Worldwide |
(144 | ) | | | (144 | ) | ||||||||||
Net loss from continuing operations |
(176 | ) | (45 | ) | 55 | (166 | ) | |||||||||
Net income from continuing operations
attributable to non-controlling interest in
subsidiaries |
(3 | ) | | | (3 | ) | ||||||||||
Net loss from continuing operations attributable
to the Company |
(179 | ) | (45 | ) | 55 | (169 | ) | |||||||||
See Notes to the unaudited pro forma consolidated condensed financial information
5
TRAVELPORT LIMITED
NOTES TO THE PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
NOTES TO THE PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
1. | Represents balances as reported in the audited consolidated balance sheet as of December 31, 2010 and in the audited consolidated statements of operations for each of the years ended December 31, 2010, 2009 and 2008 included within the Companys Annual Report on Form 10-K for the year ended December 31, 2010 filed with the SEC on March 31, 2011. | |
2. | Balances represent the audited GTA Business financial position as of December 31, 2010 and its audited results of operations for each of the years ended December 31, 2010, 2009 and 2008. | |
3. | Includes material charges, credits and related tax effects directly attributable to the Sale Transaction and are factually supportable. The balance sheet adjustments give effect to all events directly attributable to the Sale Transaction regardless of whether the adjustments have a continuing impact or are nonrecurring (including profit or loss on disposal of the GTA Business). The statements of operations adjustments give effect to events directly attributable to the Sale Transaction and have a continuing impact. Material nonrecurring charges or credits directly attributable to the Sale Transaction which will impact the results of operations during the next 12 months are not included in the pro forma consolidated condensed statements of operations including profit or loss on disposal of GTA Business. | |
4. | Represents the net increase in cash and cash equivalents balance as a result of the Sale Transaction as set out below: |
(in $ millions) | ||||
Gross cash
consideration on the sale of the GTA Business |
720 | |||
Less: Estimated working capital adjustment |
(55 | )(a) | ||
Proceeds
from the sale of the GTA Business after the working capital adjustment |
665 | |||
Less: Estimated transaction costs |
(20 | )(b) | ||
Less: Repayment of debt |
(655 | )(c) | ||
Add: Cash adjustment |
133 | (d) | ||
Add: Net cash on settlement of derivative contracts |
4 | (e) | ||
Net increase in cash and cash equivalents |
127 | |||
(a) | In accordance with the terms of the share purchase agreement (SPA) with Kuoni, the gross purchase consideration is adjusted to leave a negative working capital balance (excluding cash and deferred income taxes) of $185 million within the GTA Business. This adjustment assumes a reduction to the gross cash consideration based upon a negative working capital balance of $240 million as of December 31, 2010. | |
(b) | The Company estimates the Sale Transaction costs to be approximately $20 million. |
(c) | Represents the amount of indebtedness under the Companys senior secured credit agreement repaid from the proceeds of the Sale Transaction. Set out below is a summary of the debt balances repaid: |
Amount to be | ||||||||
(in $ millions) | Maturity | Repaid | ||||||
Senior Secured Credit Agreement |
||||||||
Term loan facility |
||||||||
Dollar denominated |
August 2013 | 51 | ||||||
Euro denominated |
August 2013 | 19 | ||||||
Dollar denominated |
August 2015 | 451 | ||||||
Euro denominated |
August 2015 | 134 | ||||||
Total |
655 | |||||||
Upon repayment of $655 million of debt, the Company is no
longer required to make mandatory quarterly principal payments.
Therefore, this current portion of
long-term debt as of December 31, 2010, amounting to $10
million, has been reclassified from current liabilities to long-term debt.
(d) | In accordance with the terms of the SPA, a cash balance of $15 million is to remain with the GTA Business. The cash adjustment of $133 million is the difference between $148 million of cash and cash equivalents as of December 31, 2010 and $15 million of cash balance to be retained by the GTA Business. | ||
(e) | Represents the fair value of derivative assets and liabilities as of December 31, 2010. |
6
TRAVELPORT LIMITED
NOTES TO THE PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
NOTES TO THE PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
5. | Represents the gain on the Sale Transaction and the impact on the accumulated deficit of the Company as of December 31, 2010, as calculated below: |
(in $ millions) | ||||
Proceeds
from the sale of the GTA Business after the working capital adjustment |
665 | (a) | ||
Less: Estimated transaction costs |
(20 | )(a) | ||
Less: Net assets of the GTA Business |
(511 | )(b) | ||
Add: Cash adjustment |
133 | (c) | ||
Add:
Cumulative translation adjustment (CTA) relating to the GTA Business |
76 | (d) | ||
Equity-based compensation costs |
(3 | )(e) | ||
Gain on
sale of the GTA Business |
340 | |||
Deferred finance cost written off on repayment of debt |
(8 | )(f) | ||
Total impact on accumulated deficit |
332 | |||
(a) | See Note 4. | |
(b) | Represents the net assets of the GTA Business, comprising its total assets of $1,066 million less its total liabilities of $555 million. | |
(c) | See Note 4(d). | |
(d) | Represents the total amount of CTA relating to the GTA Business as of December 31, 2010 that is recognized in the statements of operations upon its sale and is computed as follows: |
(in $ millions) | ||||
CTA from the GTA Business |
79 | |||
CTA
directly attributable to the GTA Business, included in other
Travelport entities |
(3 | ) | ||
Total |
76 | |||
(e) | Represents charges for the accelerated vesting of certain equity-based compensation awards as a result of the Sale Transaction. | |
(f) | Represents additional debt issuance cost amortization as of December 31, 2010 due to the repayment of debt of $655 million (see Note 4(c)). |
6. | Represents interest savings due to the repayment of $655 million of debt. There is no tax implication on account of interest savings as the interest expense is recognized in a zero percent tax jurisdiction. |
7