Release Details
Sabre Reports Fourth Quarter and Full Year 2014 Results
"2014 was a year of significant strategic progress," said
Q4 2014 Financial Summary
Continued strong revenue growth in Airline and Hospitality Solutions, and a modest decline in Travel Network, resulted in Sabre consolidated fourth quarter revenue of
Consolidated net income from continuing operations for the fourth quarter of 2014 totaled
For the fourth quarter of 2014, Sabre reported income from continuing operations of
Cash Flow from Operations totaled
Three Months Ended |
Twelve Months Ended |
||||||||||||||||||||
Financial Highlights (Unaudited, in thousands): |
2014 |
2013 |
% Change |
2014 |
2013 |
% Change |
|||||||||||||||
|
|||||||||||||||||||||
Revenue |
$ |
646,142 |
$ |
626,921 |
3.1 |
$ |
2,631,417 |
$ |
2,523,546 |
4.3 |
|||||||||||
Income (loss) from continuing operations |
$ |
41,230 |
$ |
(8,550) |
582.2 |
$ |
110,873 |
52,066 |
112.9 |
||||||||||||
Adjusted EBITDA* |
$ |
198,674 |
$ |
194,017 |
2.4 |
$ |
840,028 |
$ |
778,754 |
7.9 |
|||||||||||
Cash Flow from Operations |
$ |
100,855 |
$ |
(28,642) |
452.1 |
$ |
387,659 |
$ |
228,232 |
69.9 |
|||||||||||
Capital Expenditures |
$ |
73,015 |
$ |
54,833 |
33.2 |
$ |
227,227 |
$ |
209,523 |
8.4 |
|||||||||||
Adjusted Capital Expenditures* |
$ |
83,224 |
$ |
64,961 |
28.1 |
$ |
265,038 |
$ |
268,337 |
(1.2) |
|||||||||||
Free Cash Flow* |
$ |
27,840 |
$ |
(83,475) |
133.4 |
$ |
160,432 |
$ |
18,709 |
757.5 |
|||||||||||
Adjusted Free Cash Flow* |
$ |
39,903 |
$ |
39,897 |
0.0 |
$ |
293,375 |
$ |
181,715 |
61.4 |
|||||||||||
Net Debt (total debt, less cash) |
$ |
2,940,927 |
$ |
3,442,675 |
|||||||||||||||||
Net Debt / LTM Adjusted EBITDA |
3.5 |
x |
4.4 |
x |
|||||||||||||||||
Airline and Hospitality Solutions: |
|||||||||||||||||||||
Revenue |
$ |
214,502 |
$ |
188,952 |
13.5 |
$ |
786,478 |
$ |
711,745 |
10.5 |
|||||||||||
Passengers Boarded |
125,102 |
119,660 |
4.5 |
510,713 |
478,088 |
6.8 |
|||||||||||||||
Operating Income |
$ |
58,773 |
$ |
47,495 |
23.7 |
$ |
176,730 |
$ |
135,755 |
30.2 |
|||||||||||
Adjusted EBITDA* |
$ |
84,961 |
$ |
67,590 |
25.7 |
$ |
282,648 |
$ |
213,075 |
32.7 |
|||||||||||
Travel Network: |
|||||||||||||||||||||
Revenue |
$ |
434,444 |
$ |
440,393 |
(1.4) |
$ |
1,854,785 |
$ |
1,821,498 |
1.8 |
|||||||||||
Air Bookings |
70,817 |
70,008 |
1.2 |
321,962 |
314,275 |
2.4 |
|||||||||||||||
Non-air Bookings |
12,848 |
12,769 |
0.6 |
54,122 |
53,503 |
1.2 |
|||||||||||||||
Total Bookings |
83,665 |
82,777 |
1.1 |
376,084 |
367,778 |
2.3 |
|||||||||||||||
Bookings Share |
35.5 |
% |
35.7 |
% |
35.7 |
% |
35.8 |
% |
|||||||||||||
Operating Income |
$ |
142,233 |
$ |
162,052 |
(12.2) |
$ |
657,326 |
$ |
667,498 |
(1.5) |
|||||||||||
Adjusted EBITDA* |
$ |
172,040 |
$ |
189,940 |
(9.4) |
$ |
778,677 |
$ |
772,208 |
0.8 |
|||||||||||
*indicates non-GAAP financial measure; see descriptions and reconciliations below |
Fourth quarter 2014 Airline and Hospitality Solutions revenue increased 13.5% to
In the fourth quarter of 2014, Hospitality Solutions announced the launch of the SynXis Enterprise Platform. This exciting launch included the introduction of the SynXis Property Manager, a hotel property management solution that seamlessly integrates with the industry leading SynXis Central Reservation System. Wyndham Hotel Group, the world's largest and most diverse hotel company, became the first mega-hotel company to leverage the cloud-based SaaS reservations, revenue management and enhanced security solutions of the SynXis Enterprise Platform. As part of the agreement,
Airline Solutions posted a record sales year in 2014 that included a long-term agreement to provide the SabreSonic CSS passenger reservations system to American Airlines, the world's largest passenger carrier, as well as an agreement to provide a broad suite of solutions to airberlin, one of
Sabre Travel Network
Fourth quarter Travel Network revenue declined 1.4% to
Fourth quarter 2014 Travel Network Adjusted EBITDA declined 9.4% to
Consistent with Sabre's stated strategy, the Company has made significant progress toward exiting the online travel agency business. As a result, Sabre has reclassified and is reporting all of the businesses associated with the
On
Additionally, on
FY 2014 Financial Summary
For the full year 2014, Sabre reported total consolidated revenue of
Airline and Hospitality Solutions revenue increased 10.5% to
Travel Network revenue increased 1.8% to
2014 consolidated net income from continuing operations totaled
Full year Travel Network Adjusted EBITDA increased 0.8% to
Sabre reported income from continuing operations of
Cash Flow from Operations totaled
Business Outlook and Financial Guidance
The Company has provided full-year guidance for 2015 for continuing operations below.
- 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 particularly strong growth in the fourth quarter related to scheduled customer implementations.
- In Travel Network, Sabre expects 2015 revenue growth of 4% or more, driven by bookings growth of approximately 3%. Bookings growth is expected be stronger in the back half of the year versus the first half - as the business anniversaries headwinds in the first quarter - and new business win implementations are completed throughout the year.
For the full year 2015, Sabre expects the following results from continuing operations:
Full Year 2015 Guidance |
|
($ millions, except for EPS) |
|
Revenue |
|
Adjusted EBITDA |
|
Adjusted Net Income |
|
Adjusted EPS |
|
Conference Call
The Company will conduct its fourth quarter and full year 2014 investor conference call today at
Investor Day
The Company plans to hold an investor day at the NASDAQ MarketSite in
About the Company
Sabre® is the 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
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,
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 "expect," "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
Contacts |
|
Media |
Investors |
|
|
682-605-3864 |
682-605-0214 |
|
||||||||||||||||
CONSOLIDATED STATEMENT OF OPERATIONS |
||||||||||||||||
(In thousands, except share amounts) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
Three Months Ended |
Year Ended |
|||||||||||||||
2014 |
2013 |
2014 |
2013 |
|||||||||||||
Revenue |
$ |
646,142 |
$ |
626,921 |
$ |
2,631,417 |
$ |
2,523,546 |
||||||||
Cost of revenue |
426,809 |
436,401 |
1,742,478 |
1,705,163 |
||||||||||||
Selling, general and administrative |
115,578 |
104,944 |
468,152 |
429,290 |
||||||||||||
Restructuring charges (adjustments) |
46 |
8,163 |
(558) |
8,163 |
||||||||||||
Operating income |
103,709 |
77,413 |
421,345 |
380,930 |
||||||||||||
Other income (expense): |
||||||||||||||||
Interest expense, net |
(51,545) |
(65,036) |
(218,877) |
(274,689) |
||||||||||||
Loss on extinguishment of debt |
— |
— |
(33,538) |
(12,181) |
||||||||||||
Joint venture equity income |
2,715 |
4,476 |
12,082 |
12,350 |
||||||||||||
Other, net |
(63,021) |
4,038 |
(63,860) |
(305) |
||||||||||||
Total other expense, net |
(111,851) |
(56,522) |
(304,193) |
(274,825) |
||||||||||||
(Loss) income from continuing operations before income taxes |
(8,142) |
20,891 |
117,152 |
106,105 |
||||||||||||
(Benefit) provision for income taxes |
(49,372) |
29,441 |
6,279 |
54,039 |
||||||||||||
Income (loss) from continuing operations |
41,230 |
(8,550) |
110,873 |
52,066 |
||||||||||||
Income (loss) from discontinued operations, net of tax |
5,734 |
36,038 |
(38,918) |
(149,697) |
||||||||||||
Net income (loss) |
46,964 |
27,488 |
71,955 |
(97,631) |
||||||||||||
Net income attributable to noncontrolling interests |
564 |
728 |
2,732 |
2,863 |
||||||||||||
Net income (loss) attributable to |
46,400 |
26,760 |
69,223 |
(100,494) |
||||||||||||
Preferred stock dividends |
— |
9,485 |
11,381 |
36,704 |
||||||||||||
Net income (loss) attributable to common shareholders |
$ |
46,400 |
$ |
17,275 |
$ |
57,842 |
$ |
(137,198) |
||||||||
Basic net income (loss) per share attributable to common shareholders: |
||||||||||||||||
Income (loss) from continuing operations |
$ |
0.15 |
$ |
(0.11) |
$ |
0.41 |
$ |
0.07 |
||||||||
Income (loss) from discontinued operations |
0.02 |
0.20 |
(0.16) |
(0.84) |
||||||||||||
Net income (loss) per common share |
$ |
0.17 |
$ |
0.10 |
$ |
0.24 |
$ |
(0.77) |
||||||||
Diluted net income (loss) per share attributable to common shareholders: |
||||||||||||||||
Income (loss) from continuing operations |
$ |
0.15 |
$ |
(0.10) |
$ |
0.39 |
$ |
0.07 |
||||||||
Income (loss) income from discontinued operations |
0.02 |
0.19 |
(0.16) |
(0.81) |
||||||||||||
Net income (loss) per common share |
$ |
0.17 |
$ |
0.09 |
$ |
0.23 |
$ |
(0.74) |
||||||||
Weighted-average common shares outstanding: |
||||||||||||||||
Basic |
266,014 |
178,262 |
238,633 |
178,125 |
||||||||||||
Diluted |
274,064 |
185,436 |
246,747 |
184,978 |
||||||||||||
Dividend per common share |
$ |
0.09 |
$ |
— |
$ |
0.18 |
$ |
— |
||||||||
|
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands, except share amounts) |
||||||||
(Unaudited) |
||||||||
December 31, |
||||||||
2014 |
2013 |
|||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ |
155,679 |
$ |
308,236 |
||||
Restricted cash |
720 |
2,359 |
||||||
Accounts receivable, net |
362,911 |
400,912 |
||||||
Prepaid expenses and other current assets |
34,121 |
49,269 |
||||||
Current deferred income taxes |
182,277 |
41,431 |
||||||
Other receivables, net |
29,893 |
35,157 |
||||||
Assets held for sale |
112,558 |
43,005 |
||||||
Total current assets |
878,159 |
880,369 |
||||||
Property and equipment, net |
551,276 |
496,200 |
||||||
Investments in joint ventures |
145,320 |
132,137 |
||||||
Goodwill |
2,153,499 |
2,138,175 |
||||||
Trademarks and brandnames, net |
238,500 |
249,288 |
||||||
Other intangible assets, net |
241,486 |
311,522 |
||||||
Other assets, net |
509,764 |
470,529 |
||||||
Noncurrent assets held for sale |
— |
77,488 |
||||||
Total assets |
$ |
4,718,004 |
$ |
4,755,708 |
||||
Liabilities, temporary equity and stockholders' equity (deficit) |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ |
114,301 |
$ |
107,623 |
||||
Travel supplier liabilities and related deferred revenue |
3,554 |
152,891 |
||||||
Accrued compensation and related benefits |
83,828 |
109,621 |
||||||
Accrued subscriber incentives |
145,581 |
142,767 |
||||||
Deferred revenues |
167,827 |
136,218 |
||||||
Litigation settlement liability and related deferred revenue |
73,252 |
38,920 |
||||||
Other accrued liabilities |
189,612 |
264,231 |
||||||
Current portion of debt |
22,435 |
86,117 |
||||||
Liabilities held for sale |
96,544 |
110,253 |
||||||
Total current liabilities |
896,934 |
1,148,641 |
||||||
Deferred income taxes |
61,577 |
10,253 |
||||||
Other noncurrent liabilities |
613,710 |
270,959 |
||||||
Long-term debt |
3,061,400 |
3,643,548 |
||||||
Series A Redeemable Preferred Stock |
— |
634,843 |
||||||
Stockholders' equity (deficit) |
||||||||
Common Stock |
2,682 |
1,786 |
||||||
Additional paid-in capital |
1,931,796 |
880,619 |
||||||
Treasury Stock |
(5,297) |
— |
||||||
Retained deficit |
(1,775,616) |
(1,785,554) |
||||||
Accumulated other comprehensive loss |
(69,803) |
(49,895) |
||||||
Noncontrolling interest |
621 |
508 |
||||||
Total stockholders' equity (deficit) |
84,383 |
(952,536) |
||||||
Total liabilities, temporary equity and stockholders' equity (deficit) |
$ |
4,718,004 |
$ |
4,755,708 |
|
||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
Year Ended December 31, |
||||||||
2014 |
2013 |
|||||||
Operating Activities |
||||||||
Net income (loss) |
$ |
71,955 |
$ |
(97,631) |
||||
Adjustments to reconcile net income (loss) to cash provided by operating activities: |
||||||||
Depreciation and amortization |
289,630 |
287,038 |
||||||
Amortization of upfront incentive consideration |
45,358 |
36,649 |
||||||
Litigation related (credits) charges |
(41,672) |
8,156 |
||||||
Stock-based compensation expense |
20,094 |
3,387 |
||||||
Provision for doubtful accounts |
10,356 |
5,178 |
||||||
Deferred income taxes |
(3,829) |
13,941 |
||||||
Joint venture equity income |
(12,082) |
(12,350) |
||||||
Dividends received from joint venture investments |
2,261 |
10,560 |
||||||
Amortization of debt issuance costs |
6,316 |
7,104 |
||||||
Debt modification costs |
3,290 |
14,003 |
||||||
Loss on extinguishment of debt |
33,538 |
12,181 |
||||||
Other |
6,023 |
(4,653) |
||||||
Loss from discontinued operations |
38,918 |
149,697 |
||||||
Changes in operating assets and liabilities: |
||||||||
Accounts and other receivables |
(7,295) |
(23,169) |
||||||
Prepaid expenses and other current assets |
6,948 |
(3,649) |
||||||
Capitalized implementation costs |
(37,811) |
(58,814) |
||||||
Upfront incentive consideration |
(50,936) |
(48,569) |
||||||
Other assets |
(78,873) |
(56,663) |
||||||
Accrued compensation and related benefits |
(5,301) |
9,372 |
||||||
Accounts payable and other accrued liabilities |
56,328 |
(15,275) |
||||||
Deferred revenue including upfront solution fees |
38,643 |
(5,682) |
||||||
Pension and other postretirement benefits |
(4,200) |
(2,579) |
||||||
Cash provided by operating activities |
387,659 |
228,232 |
||||||
Investing Activities |
||||||||
Additions to property and equipment |
(227,227) |
(209,523) |
||||||
Acquisition, net of cash acquired |
(31,799) |
(30,200) |
||||||
Other investing activities |
235 |
(276) |
||||||
Cash used in investing activities |
(258,791) |
(239,999) |
||||||
Financing Activities |
||||||||
Proceeds of borrowings from lenders |
148,307 |
2,540,063 |
||||||
Payments on borrowings from lenders |
(802,664) |
(2,261,061) |
||||||
Proceeds from issuance of common stock in initial public offering, net |
672,137 |
— |
||||||
Prepayment fee and debt modification and issuance costs |
(30,490) |
(19,116) |
||||||
Acquisition-related contingent consideration paid |
(27,000) |
— |
||||||
Cash dividends paid to common shareholders |
(47,904) |
— |
||||||
Other financing activities |
15,669 |
2,286 |
||||||
Cash (used in) provided by financing activities |
(71,945) |
262,172 |
||||||
Cash Flows from Discontinued Operations |
||||||||
Net cash used by operating activities |
(205,988) |
(85,140) |
||||||
Net cash (used in) provided by investing activities |
(1,965) |
13,993 |
||||||
Net cash used in discontinued operations |
(207,953) |
(71,147) |
||||||
Effect of exchange rate changes on cash and cash equivalents |
(1,527) |
2,283 |
||||||
(Decrease) increase in cash and cash equivalents |
(152,557) |
181,541 |
||||||
Cash and cash equivalents at beginning of period |
308,236 |
$ |
126,695 |
|||||
Cash and cash equivalents at end of period |
$ |
155,679 |
$ |
308,236 |
||||
Non-GAAP Financial Measures
We have included both financial measures compiled in accordance with GAAP and certain non-GAAP financial measures in this press release, including Adjusted Net Income, Adjusted EBITDA, Adjusted Net Income from Continuing Operations per Share (Adjusted EPS), Adjusted Capital Expenditures, Free Cash Flow, Adjusted Free Cash Flow and ratios based on these financial measures.
We define Adjusted Net Income as income (loss) from continuing operations adjusted for impairment, acquisition related amortization, loss on extinguishment of debt, other, net, restructuring and other costs, litigation and taxes, including penalties, stock-based compensation, management fees, and 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 (benefit) for income taxes. This Adjusted EBITDA metric differs from (i) the EBITDA metric referenced in the section entitled "—Liquidity and Capital Resources—Senior Secured Credit Facilities" in Part I, Item 2 of our Quarterly Report on Form 10-Q, which is calculated for the purposes of compliance with our debt covenants, and (ii) the Pre-VCP EBITDA and EBITDA metrics referenced in the section entitled "Compensation Discussion and Analysis" in our prospectus filed with the
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, litigation settlement and tax payments for certain items, 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 and ratios based on these 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 Net Income, Adjusted EBITDA, Adjusted EPS, Adjusted Capital Expenditures, Free Cash Flow and Adjusted Free Cash Flow 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 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 EBITDA does 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 and management fees which reduced the cash available to us;
- 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 these non-GAAP financial measures differently, which reduces their usefulness as comparative measures.
Tabular Reconciliations for Non-GAAP Measures |
||||||||||||||||
(In thousands, except share amounts; Unaudited) |
||||||||||||||||
Reconciliation of Net Income (loss) to Adjusted Net Income, Adjusted Net Income from Continuing Operations per Share, and to Adjusted EBITDA |
||||||||||||||||
Three Months Ended |
Year Ended |
|||||||||||||||
2014 |
2013 |
2014 |
2013 |
|||||||||||||
Net income (loss) attributable to common shareholders |
$ |
46,400 |
$ |
17,275 |
$ |
57,842 |
$ |
(137,198) |
||||||||
Net loss from discontinued operations, net of tax |
(5,734) |
(36,038) |
38,918 |
149,697 |
||||||||||||
Net income attributable to noncontrolling interests(1) |
564 |
728 |
2,732 |
2,863 |
||||||||||||
Preferred stock dividends |
— |
9,485 |
11,381 |
36,704 |
||||||||||||
Income from continuing operations |
41,230 |
(8,550) |
110,873 |
52,066 |
||||||||||||
Adjustments: |
||||||||||||||||
Acquisition related amortization(3a) |
22,639 |
33,016 |
99,383 |
132,685 |
||||||||||||
Loss on extinguishment of debt |
— |
— |
33,538 |
12,181 |
||||||||||||
Other, net (5) |
63,021 |
(4,038) |
63,860 |
305 |
||||||||||||
Restructuring and other costs (6) |
1,636 |
19,231 |
10,470 |
27,921 |
||||||||||||
Litigation and taxes, including penalties(7) |
2,775 |
6,835 |
14,144 |
18,514 |
||||||||||||
Stock-based compensation |
6,245 |
2,049 |
20,094 |
3,387 |
||||||||||||
Management fees(8) |
— |
1,414 |
23,701 |
8,761 |
||||||||||||
Tax impact of net income adjustments(9) |
(77,626) |
(21,145) |
(143,586) |
(73,633) |
||||||||||||
Adjusted Net Income from continuing operations |
$ |
59,920 |
$ |
28,812 |
$ |
232,477 |
$ |
182,187 |
||||||||
Adjusted Net Income from continuing operations per share |
$ |
0.22 |
$ |
0.16 |
$ |
0.94 |
$ |
0.98 |
||||||||
Weighted-average shares outstanding adjusted for assumed inclusion of common stock equivalents |
274,064 |
185,436 |
246,747 |
184,978 |
||||||||||||
Adjusted Net Income from continuing operations |
59,920 |
28,812 |
232,477 |
182,187 |
||||||||||||
Adjustments: |
||||||||||||||||
Depreciation and amortization of property and equipment(3b) |
37,983 |
33,238 |
157,592 |
123,414 |
||||||||||||
Amortization of capitalized implementation costs(3c) |
8,790 |
8,431 |
35,859 |
34,143 |
||||||||||||
Amortization of upfront incentive consideration(4) |
12,181 |
7,913 |
45,358 |
36,649 |
||||||||||||
Interest expense, net |
51,545 |
65,036 |
218,877 |
274,689 |
||||||||||||
Remaining provision (benefit) for income taxes |
28,255 |
50,587 |
149,865 |
127,672 |
||||||||||||
Adjusted EBITDA |
$ |
198,674 |
$ |
194,017 |
$ |
840,028 |
$ |
778,754 |
Reconciliation of Adjusted Capital Expenditures: |
||||||||||||||||
Three Months Ended |
Year Ended |
|||||||||||||||
2014 |
2013 |
2014 |
2013 |
|||||||||||||
Additions to property and equipment |
$ |
73,015 |
$ |
54,833 |
$ |
227,227 |
$ |
209,523 |
||||||||
Capitalized implementation costs |
10,209 |
10,128 |
37,811 |
58,814 |
||||||||||||
Adjusted capital expenditures |
$ |
83,224 |
$ |
64,961 |
$ |
265,038 |
$ |
268,337 |
Reconciliation of Adjusted Free Cash Flow: |
||||||||||||||||
Three Months Ended |
Year Ended |
|||||||||||||||
2014 |
2013 |
2014 |
2013 |
|||||||||||||
Cash provided by operating activities |
$ |
100,855 |
$ |
(28,642) |
$ |
387,659 |
$ |
228,232 |
||||||||
Cash used in investing activities |
(73,015) |
(54,833) |
(258,791) |
(239,999) |
||||||||||||
Cash (used in) provided by financing activities |
(12,656) |
(12,545) |
(71,945) |
262,172 |
||||||||||||
Three Months Ended |
Year Ended |
|||||||||||||||
2014 |
2013 |
2014 |
2013 |
|||||||||||||
Cash provided by operating activities |
$ |
100,855 |
$ |
(28,642) |
$ |
387,659 |
$ |
228,232 |
||||||||
Additions to property and equipment |
(73,015) |
(54,833) |
(227,227) |
(209,523) |
||||||||||||
Free Cash Flow |
27,840 |
(83,475) |
160,432 |
18,709 |
||||||||||||
Adjustments: |
||||||||||||||||
Restructuring and other costs (6)(10) |
1,727 |
11,069 |
18,353 |
19,758 |
||||||||||||
Litigation settlement and tax payments for certain items (7)(11) |
7,562 |
104,055 |
76,745 |
115,973 |
||||||||||||
Other litigation costs (7)(10) |
2,774 |
6,835 |
14,144 |
18,514 |
||||||||||||
Management fees (8)(10) |
— |
1,413 |
23,701 |
8,761 |
||||||||||||
Adjusted Free Cash Flow |
$ |
39,903 |
$ |
39,897 |
$ |
293,375 |
$ |
181,715 |
Reconciliation of Adjusted Gross Margin and Adjusted EBITDA by Segment: |
||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||
Travel Network |
Airline and Hospitality Solutions |
Eliminations |
Corporate |
Total |
||||||||||||||||
Operating income (loss) |
$ |
142,233 |
$ |
58,773 |
$ |
— |
$ |
(97,298) |
$ |
103,708 |
||||||||||
Add back: |
||||||||||||||||||||
Selling, general and administrative |
25,249 |
17,640 |
(8) |
72,698 |
115,579 |
|||||||||||||||
Restructuring charges |
46 |
46 |
||||||||||||||||||
Cost of revenue adjustments: |
||||||||||||||||||||
Depreciation and amortization(3a) |
13,590 |
25,892 |
— |
5,873 |
45,355 |
|||||||||||||||
Amortization of upfront incentive consideration(4) |
12,181 |
— |
— |
— |
12,181 |
|||||||||||||||
Restructuring and other costs (6) |
— |
— |
— |
769 |
769 |
|||||||||||||||
Stock-based compensation |
— |
— |
— |
2,521 |
2,521 |
|||||||||||||||
Adjusted Gross Margin |
193,253 |
102,305 |
(8) |
(15,391) |
280,159 |
|||||||||||||||
Selling, general and administrative |
(25,249) |
(17,640) |
8 |
(72,698) |
(115,579) |
|||||||||||||||
Joint venture equity income |
2,715 |
2,715 |
||||||||||||||||||
Joint venture intangible amortization(3a) |
801 |
801 |
||||||||||||||||||
Selling, general and administrative adjustments: |
||||||||||||||||||||
Depreciation and amortization(3) |
520 |
296 |
— |
22,442 |
23,258 |
|||||||||||||||
Restructuring and other costs (6) |
— |
— |
— |
821 |
821 |
|||||||||||||||
Litigation and taxes, including penalties(7) |
2,775 |
2,775 |
||||||||||||||||||
Stock-based compensation |
— |
— |
— |
3,724 |
3,724 |
|||||||||||||||
Management fees(8) |
— |
— |
— |
— |
- |
|||||||||||||||
Adjusted EBITDA |
$ |
172,040 |
$ |
84,961 |
$ |
— |
$ |
(58,327) |
$ |
198,674 |
||||||||||
Three Months Ended |
||||||||||||||||||||
Travel Network |
Airline and Hospitality Solutions |
Eliminations |
Corporate |
Total |
||||||||||||||||
Operating income (loss) |
$ |
162,052 |
$ |
47,495 |
$ |
— |
$ |
(132,135) |
$ |
77,413 |
||||||||||
Add back: |
||||||||||||||||||||
Selling, general and administrative |
$ |
24,188 |
$ |
11,754 |
$ |
(6) |
$ |
69,008 |
104,944 |
|||||||||||
Restructuring charges |
8,163 |
8,163 |
||||||||||||||||||
Cost of revenue adjustments: |
||||||||||||||||||||
Depreciation and amortization(3) |
14,072 |
19,900 |
— |
16,965 |
50,937 |
|||||||||||||||
Amortization of upfront incentive consideration(4) |
7,913 |
— |
— |
— |
7,913 |
|||||||||||||||
Restructuring and other costs (6) |
— |
— |
— |
7,375 |
7,375 |
|||||||||||||||
Stock-based compensation |
— |
— |
— |
789 |
789 |
|||||||||||||||
Adjusted Gross Margin |
208,225 |
79,149 |
(6) |
(29,835) |
257,533 |
|||||||||||||||
Selling, general and administrative |
(24,188) |
(11,754) |
6 |
(69,008) |
(104,944) |
|||||||||||||||
Joint venture equity income |
4,477 |
4,477 |
||||||||||||||||||
Joint venture intangible amortization(3a) |
801 |
801 |
||||||||||||||||||
Selling, general and administrative adjustments: |
||||||||||||||||||||
Depreciation and amortization(3) |
625 |
195 |
— |
22,128 |
22,948 |
|||||||||||||||
Restructuring and other costs (6) |
— |
— |
— |
3,693 |
3,693 |
|||||||||||||||
Litigation and taxes, including penalties(7) |
6,835 |
6,835 |
||||||||||||||||||
Stock-based compensation |
— |
— |
— |
1,260 |
1,260 |
|||||||||||||||
Management fees(8) |
— |
— |
— |
1,414 |
1,414 |
|||||||||||||||
Adjusted EBITDA |
$ |
189,940 |
$ |
67,590 |
$ |
— |
$ |
(63,513) |
$ |
194,017 |
Reconciliation of Adjusted Gross Margin and Adjusted EBITDA by Segment: |
||||||||||||||||||||
Fiscal Year Ended |
||||||||||||||||||||
Travel Network |
Airline and Hospitality Solutions |
Eliminations |
Corporate |
Total |
||||||||||||||||
Operating income (loss) |
$ |
657,326 |
$ |
176,730 |
$ |
— |
$ |
(412,711) |
$ |
421,345 |
||||||||||
Add back: |
||||||||||||||||||||
Selling, general and administrative |
102,059 |
56,195 |
(17) |
309,915 |
468,152 |
|||||||||||||||
Restructuring charges |
— |
— |
— |
(558) |
(558) |
|||||||||||||||
Cost of revenue adjustments: |
||||||||||||||||||||
Depreciation and amortization(3) |
58,533 |
104,926 |
— |
34,950 |
198,409 |
|||||||||||||||
Amortization of upfront incentive consideration(4) |
45,358 |
— |
— |
— |
45,358 |
|||||||||||||||
Restructuring and other costs (6) |
— |
— |
— |
6,042 |
6,042 |
|||||||||||||||
Stock-based compensation |
— |
— |
— |
8,044 |
8,044 |
|||||||||||||||
Adjusted Gross Margin |
863,276 |
337,851 |
(17) |
(54,318) |
1,146,792 |
|||||||||||||||
Selling, general and administrative |
(102,059) |
(56,195) |
17 |
(309,915) |
(468,152) |
|||||||||||||||
Joint venture equity income |
12,082 |
— |
— |
— |
12,082 |
|||||||||||||||
Joint venture intangible amortization(3a) |
3,204 |
— |
— |
— |
3,204 |
|||||||||||||||
Selling, general and administrative adjustments: |
||||||||||||||||||||
Depreciation and amortization(3) |
2,174 |
992 |
— |
88,055 |
91,221 |
|||||||||||||||
Restructuring and other costs (6) |
— |
— |
— |
4,986 |
4,986 |
|||||||||||||||
Litigation and taxes, including penalties(7) |
— |
— |
— |
14,144 |
14,144 |
|||||||||||||||
Stock-based compensation |
— |
— |
— |
12,050 |
12,050 |
|||||||||||||||
Management fees(8) |
— |
— |
— |
23,701 |
23,701 |
|||||||||||||||
Adjusted EBITDA |
$ |
778,677 |
$ |
282,648 |
$ |
— |
$ |
(221,297) |
$ |
840,028 |
||||||||||
Fiscal Year Ended |
||||||||||||||||||||
Travel Network |
Airline and Hospitality Solutions |
Eliminations |
Corporate |
Total |
||||||||||||||||
Operating income (loss) |
$ |
667,498 |
$ |
135,755 |
$ |
— |
$ |
(422,323) |
$ |
380,930 |
||||||||||
Add back: |
||||||||||||||||||||
Selling, general and administrative |
106,392 |
51,538 |
(140) |
271,500 |
429,290 |
|||||||||||||||
Restructuring charges |
— |
— |
— |
8,163 |
8,163 |
|||||||||||||||
Cost of revenue adjustments: |
||||||||||||||||||||
Depreciation and amortization(3) |
50,254 |
75,093 |
— |
67,076 |
192,423 |
|||||||||||||||
Amortization of upfront incentive consideration(4) |
36,649 |
— |
— |
— |
36,649 |
|||||||||||||||
Restructuring and other costs (6) |
— |
— |
— |
11,491 |
11,491 |
|||||||||||||||
Stock-based compensation |
— |
— |
— |
1,356 |
1,356 |
|||||||||||||||
Adjusted Gross Margin |
860,793 |
262,386 |
(140) |
(62,737) |
1,060,302 |
|||||||||||||||
Selling, general and administrative |
(106,392) |
(51,538) |
140 |
(271,500) |
(429,290) |
|||||||||||||||
Joint venture equity income |
12,350 |
— |
— |
— |
12,350 |
|||||||||||||||
Joint venture intangible amortization(3a) |
3,204 |
— |
— |
— |
3,204 |
|||||||||||||||
Selling, general and administrative adjustments: |
||||||||||||||||||||
Depreciation and amortization(3) |
2,253 |
2,227 |
— |
90,135 |
94,615 |
|||||||||||||||
Restructuring and other costs (6) |
— |
— |
— |
8,267 |
8,267 |
|||||||||||||||
Litigation and taxes, including penalties(7) |
— |
— |
— |
18,514 |
18,514 |
|||||||||||||||
Stock-based compensation |
— |
— |
— |
2,031 |
2,031 |
|||||||||||||||
Management fees(8) |
— |
— |
— |
8,761 |
8,761 |
|||||||||||||||
Adjusted EBITDA |
$ |
772,208 |
$ |
213,075 |
$ |
— |
$ |
(206,529) |
$ |
778,754 |
Non-GAAP Footnotes |
||
(1) |
Net income (loss) attributable to non-controlling interests represents an adjustment to include earnings allocated to non-controlling interest held in (i) Sabre Travel Network Middle East of 40% for all periods presented and (ii) Sabre Seyahat Dagitim Sistemleri A.S. of 40% beginning in |
|
(2) |
Not used |
|
(3) |
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. |
|
(4) |
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. |
|
(5) |
In 2014, other, net primarily includes a fourth quarter charge of |
|
(6) |
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. |
|
(7) |
Litigation settlement and tax payments for certain items represent charges or settlements associated with airline antitrust litigation. |
|
(8) |
We paid an annual management fee to |
|
(9) |
In 2014, the tax impact on net income adjustments includes a |
|
(10) |
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. |
|
(11) |
Includes payment credits used by American Airlines to pay for purchases of our technology services during the years ended |
Logo - http://photos.prnewswire.com/prnh/20131216/DA33636LOGO-b
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/sabre-reports-fourth-quarter-and-full-year-2014-results-300037389.html
SOURCE
News Provided by Acquire Media