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8-K - FORM 8-K - Travelport LTDy91136e8vk.htm
EX-99.1 - EX-99.1 - Travelport LTDy91136exv99w1.htm
Exhibit 99.2
UNAUDITED PRO FORMA
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 Travelport’s consolidated financial statements. The unaudited pro forma consolidated condensed financial information of Travelport has been adjusted to reflect the Sale Transaction. As a result, Travelport’s 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 Company’s 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 Company’s 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.

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TRAVELPORT LIMITED
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 )
Travelport’s 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.

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TRAVELPORT LIMITED
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

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TRAVELPORT LIMITED
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

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TRAVELPORT LIMITED
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

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TRAVELPORT LIMITED
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 Company’s 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 Company’s 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.

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TRAVELPORT LIMITED
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.

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