☐ ☐ ☐ ☒
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934March 31,June 30, 2018¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 BermudaBermuda 98-0505105 (State or other jurisdiction of
incorporation or organization) (I.R.S. Employer
Identification Number)
Langley, Berkshire, SL3 8AG, United Kingdomx☒ No ¨x☒ No ¨ Large accelerated filer x ☒ Accelerated filer ¨ ☐ Non-accelerated filer ¨ ☐ Smaller reporting company ¨ ☐ Emerging growth company¨ (Do not check if a smaller reporting company) Emerging growth company ☐ ¨¨☐ No xMay 2,August 1, 2018, there were 126,032,141126,207,216 shares of the Registrants’ common shares, par value $0.0025 per share, outstanding.
| | | Page | | ||||
| | | | 1 | | | ||
PART I. FINANCIAL INFORMATION | | |||||||
| | | | 3 | | | ||
| | | | 3 | | | ||
| | | | 4 | | | ||
| | | | 5 | | | ||
| | | | 6 | | | ||
| | | | 8 | | | ||
| | | | 9 | | | ||
| | | | | | |||
| | | | | | |||
| | | | | | |||
PART II. OTHER INFORMATION | | |||||||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | | | |||
| | | | 55 | ||||
| | | | |
Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management’s good faith belief with respect to future events and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. The factors listed1
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
Three Months | Three Months | |||||||
Ended | Ended | |||||||
March 31, | March 31, | |||||||
(in $ thousands, except share data) | 2018 | 2017 | ||||||
Net revenue | $ | 677,838 | $ | 650,763 | ||||
Costs and expenses | ||||||||
Cost of revenue | 426,397 | 386,837 | ||||||
Selling, general and administrative | 125,200 | 111,301 | ||||||
Depreciation and amortization | 48,577 | 52,909 | ||||||
Total costs and expenses | 600,174 | 551,047 | ||||||
Operating income | 77,664 | 99,716 | ||||||
Interest expense, net | (14,935 | ) | (30,275 | ) | ||||
Loss on early extinguishment of debt | (27,661 | ) | — | |||||
Other expense | (93 | ) | (846 | ) | ||||
Income before income taxes | 34,975 | 68,595 | ||||||
Provision for income taxes | (3,491 | ) | (12,732 | ) | ||||
Net income from continuing operations | 31,484 | 55,863 | ||||||
Income from discontinued operations, net of tax | 27,747 | — | ||||||
Net income | 59,231 | 55,863 | ||||||
Net (income) loss attributable to non-controlling interest in subsidiaries | (402 | ) | 243 | |||||
Net income attributable to the Company | $ | 58,829 | $ | 56,106 | ||||
Income per share – Basic: | ||||||||
Income per share – continuing operations | $ | 0.25 | $ | 0.45 | ||||
Income per share – discontinued operations | 0.22 | — | ||||||
Basic income per share | $ | 0.47 | $ | 0.45 | ||||
Weighted average common shares outstanding – Basic | 125,428,257 | 124,081,175 | ||||||
Income per share – Diluted: | ||||||||
Income per share – continuing operations | $ | 0.25 | $ | 0.45 | ||||
Income per share – discontinued operations | 0.22 | — | ||||||
Diluted income per share | $ | 0.47 | $ | 0.45 | ||||
Weighted average common shares outstanding – Diluted | 126,131,201 | 125,516,945 | ||||||
Cash dividends declared per common share | $ | 0.075 | $ | 0.075 |
(in $ thousands, except share data) | | | Three Months Ended June 30, 2018 | | | Three Months Ended June 30, 2017 | | | Six Months Ended June 30, 2018 | | | Six Months Ended June 30, 2017 | | ||||||||||||
Net revenue | | | | $ | 662,008 | | | | | $ | 612,107 | | �� | | | $ | 1,339,846 | | | | | $ | 1,262,870 | | |
Costs and expenses | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenue | | | | | 427,792 | | | | | | 369,708 | | | | | | 854,189 | | | | | | 756,545 | | |
Selling, general and administrative | | | | | 142,355 | | | | | | 114,055 | | | | | | 267,555 | | | | | | 225,356 | | |
Depreciation and amortization | | | | | 49,568 | | | | | | 53,648 | | | | | | 98,145 | | | | | | 106,557 | | |
Total costs and expenses | | | | | 619,715 | | | | | | 537,411 | | | | | | 1,219,889 | | | | | | 1,088,458 | | |
Operating income | | | | | 42,293 | | | | | | 74,696 | | | | | | 119,957 | | | | | | 174,412 | | |
Interest expense, net | | | | | (23,605) | | | | | | (32,943) | | | | | | (38,540) | | | | | | (63,218) | | |
Loss on early extinguishment of debt | | | | | — | | | | | | — | | | | | | (27,661) | | | | | | — | | |
Gain on sale of a subsidiary | | | | | — | | | | | | 1,217 | | | | | | — | | | | | | 1,217 | | |
Other expense | | | | | (371) | | | | | | (846) | | | | | | (464) | | | | | | (1,692) | | |
Income before income taxes | | | | | 18,317 | | | | | | 42,124 | | | | | | 53,292 | | | | | | 110,719 | | |
Provision for income taxes | | | | | (11,312) | | | | | | (7,758) | | | | | | (14,803) | | | | | | (20,490) | | |
Net income from continuing operations | | | | | 7,005 | | | | | | 34,366 | | | | | | 38,489 | | | | | | 90,229 | | |
Income from discontinued operations, net of tax | | | | | — | | | | | | — | | | | | | 27,747 | | | | | | — | | |
Net income | | | | | 7,005 | | | | | | 34,366 | | | | | | 66,236 | | | | | | 90,229 | | |
Net (income) loss attributable to non-controlling interest in subsidiaries | | | | | (861) | | | | | | 561 | | | | | | (1,263) | | | | | | 804 | | |
Net income attributable to the Company | | | | $ | 6,144 | | | | | $ | 34,927 | | | | | $ | 64,973 | | | | | $ | 91,033 | | |
Income per share – Basic: | | | | | | | | | | | | | | | | | | | | | | | | | |
Income per share – continuing operations | | | | $ | 0.05 | | | | | $ | 0.28 | | | | | $ | 0.30 | | | | | $ | 0.73 | | |
Income per share – discontinued operations | | | | | — | | | | | | — | | | | | | 0.22 | | | | | | — | | |
Basic income per share | | | | $ | 0.05 | | | | | $ | 0.28 | | | | | $ | 0.52 | | | | | $ | 0.73 | | |
Weighted average common shares outstanding – Basic | | | | | 126,043,518 | | | | | | 124,357,929 | | | | | | 125,737,328 | | | | | | 124,219,917 | | |
Income per share – Diluted: | | | | | | | | | | | | | | | | | | | | | | | | | |
Income per share – continuing operations | | | | $ | 0.05 | | | | | $ | 0.28 | | | | | $ | 0.29 | | | | | $ | 0.72 | | |
Income per share – discontinued operations | | | | | — | | | | | | — | | | | | | 0.22 | | | | | | — | | |
Diluted income per share | | | | $ | 0.05 | | | | | $ | 0.28 | | | | | $ | 0.51 | | | | | $ | 0.72 | | |
Weighted average common shares outstanding – Diluted | | | | | 126,979,505 | | | | | | 125,756,484 | | | | | | 126,504,293 | | | | | | 125,634,628 | | |
Cash dividends declared per common share | | | | $ | 0.075 | | | | | $ | 0.075 | | | | | $ | 0.150 | | | | | $ | 0.150 | | |
(unaudited)
Three Months | Three Months | |||||||
Ended | Ended | |||||||
March 31, | March 31, | |||||||
(in $ thousands) | 2018 | 2017 | ||||||
Net income | $ | 59,231 | $ | 55,863 | ||||
Other comprehensive income, net of tax | ||||||||
Currency translation adjustment, net of tax | 4,270 | 4,337 | ||||||
Amortization of actuarial loss to net income, net of tax | 2,473 | 2,599 | ||||||
Other comprehensive income, net of tax | 6,743 | 6,936 | ||||||
Comprehensive income | 65,974 | 62,799 | ||||||
Comprehensive (income) loss attributable to non-controlling interest in subsidiaries | (402 | ) | 243 | |||||
Comprehensive income attributable to the Company | $ | 65,572 | $ | 63,042 |
(in $ thousands) | | | Three Months Ended June 30, 2018 | | | Three Months Ended June 30, 2017 | | | Six Months Ended June 30, 2018 | | | Six Months Ended June 30, 2017 | |||||||||||
Net income | | | | $ | 7,005 | | | | | $ | 34,366 | | | | | $ | 66,236 | | | | | $ | 90,229 |
Other comprehensive (loss) income, net of tax | | | | | | | | | | | | | | | | | | | | | | | |
Currency translation adjustment, net of tax | | | | | (10,855) | | | | | | 11,962 | | | | | | (6,585) | | | | | | 16,299 |
Amortization of actuarial loss to net income, net of tax | | | | | 2,580 | | | | | | 2,605 | | | | | | 5,053 | | | | | | 5,204 |
Other comprehensive (loss) income, net of tax | | | | | (8,275) | | | | | | 14,567 | | | | | | (1,532) | | | | | | 21,503 |
Comprehensive (loss) income | | | | | (1,270) | | | | | | 48,933 | | | | | | 64,704 | | | | | | 111,732 |
Comprehensive (income) loss attributable to non-controlling interest in subsidiaries | | | | | (861) | | | | | | 561 | | | | | | (1,263) | | | | | | 804 |
Comprehensive (loss) income attributable to the Company | | | | $ | (2,131) | | | | | $ | 49,494 | | | | | $ | 63,441 | | | | | $ | 112,536 |
|
(unaudited)
March 31, | December 31, | |||||||
(in $ thousands, except share data) | 2018 | 2017 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 127,165 | $ | 122,039 | ||||
Accounts receivable (net of allowances for doubtful accounts of $9,566 and $10,245, respectively) | 270,663 | 206,524 | ||||||
Other current assets | 142,526 | 109,724 | ||||||
Total current assets | 540,354 | 438,287 | ||||||
Property and equipment, net | 435,354 | 431,741 | ||||||
Goodwill | 1,090,515 | 1,089,590 | ||||||
Trademarks and tradenames | 313,097 | 313,097 | ||||||
Other intangible assets, net | 509,700 | 496,180 | ||||||
Deferred income taxes | 22,864 | 12,796 | ||||||
Other non-current assets | 77,358 | 76,808 | ||||||
Total assets | $ | 2,989,242 | $ | 2,858,499 | ||||
Liabilities and equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 80,147 | $ | 73,278 | ||||
Accrued expenses and other current liabilities | 576,770 | 509,068 | ||||||
Current portion of long-term debt | 54,089 | 64,291 | ||||||
Total current liabilities | 711,006 | 646,637 | ||||||
Long-term debt | 2,169,035 | 2,165,722 | ||||||
Deferred income taxes | 35,307 | 34,899 | ||||||
Other non-current liabilities | 200,890 | 203,562 | ||||||
Total liabilities | 3,116,238 | 3,050,820 | ||||||
Commitments and contingencies (Note 13) | ||||||||
Shareholders’ equity (deficit): | ||||||||
Preference shares ($0.0025 par value; 225,000,000 shares authorized; no shares issued and outstanding as of March 31, 2018 and December 31, 2017) | — | — | ||||||
Common shares ($0.0025 par value; 560,000,000 shares authorized; 127,260,153 shares and 126,967,010 shares issued; 125,630,319 shares and 125,346,613 shares outstanding as of March 31, 2018 and December 31, 2017, respectively) | 318 | 317 | ||||||
Additional paid in capital | 2,695,766 | 2,700,133 | ||||||
Treasury shares, at cost 1,629,834 shares and 1,620,397 shares as of March 31, 2018 and December 31, 2017, respectively) | (24,867 | ) | (24,755 | ) | ||||
Accumulated deficit | (2,662,560 | ) | (2,722,375 | ) | ||||
Accumulated other comprehensive loss | (148,878 | ) | (155,621 | ) | ||||
Total shareholders’ equity (deficit) | (140,221 | ) | (202,301 | ) | ||||
Equity attributable to non-controlling interest in subsidiaries | 13,225 | 9,980 | ||||||
Total equity (deficit) | (126,996 | ) | (192,321 | ) | ||||
Total liabilities and equity | $ | 2,989,242 | $ | 2,858,499 |
(in $ thousands, except share data) | | | June 30, 2018 | | | December 31, 2017 | | ||||||
Assets | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents | | | | $ | 183,510 | | | | | $ | 122,039 | | |
Accounts receivable (net of allowances for doubtful accounts of $8,913 and $10,245, respectively) | | | | | 262,407 | | | | | | 206,524 | | |
Other current assets | | | | | 125,071 | | | | | | 109,724 | | |
Total current assets | | | | | 570,988 | | | | | | 438,287 | | |
Property and equipment, net | | | | | 490,806 | | | | | | 431,741 | | |
Goodwill | | | | | 1,086,193 | | | | | | 1,089,590 | | |
Trademarks and tradenames | | | | | 313,097 | | | | | | 313,097 | | |
Other intangible assets, net | | | | | 470,200 | | | | | | 496,180 | | |
Deferred income taxes | | | | | 22,394 | | | | | | 12,796 | | |
Other non-current assets | | | | | 72,735 | | | | | | 76,808 | | |
Total assets | | | | $ | 3,026,413 | | | | | $ | 2,858,499 | | |
Liabilities and equity | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable | | | | $ | 79,037 | | | | | $ | 73,278 | | |
Accrued expenses and other current liabilities | | | | | 570,171 | | | | | | 509,068 | | |
Current portion of long-term debt | | | | | 56,527 | | | | | | 64,291 | | |
Total current liabilities | | | | | 705,735 | | | | | | 646,637 | | |
Long-term debt | | | | | 2,216,331 | | | | | | 2,165,722 | | |
Deferred income taxes | | | | | 37,571 | | | | | | 34,899 | | |
Other non-current liabilities | | | | | 197,496 | | | | | | 203,562 | | |
Total liabilities | | | | | 3,157,133 | | | | | | 3,050,820 | | |
Commitments and contingencies (Note 13) | | | | | | | | | | | | | |
Shareholders’ equity (deficit): | | | | | | | | | | | | | |
Preference shares ($0.0025 par value; 225,000,000 shares authorized; no shares issued and outstanding as of June 30, 2018 and December 31, 2017) | | | | | — | | | | | | — | | |
Common shares ($0.0025 par value; 560,000,000 shares authorized; 127,876,316 shares and 126,967,010 shares issued; 126,137,333 shares and 125,346,613 shares outstanding as of June 30, 2018 and December 31, 2017, respectively) | | | | | 319 | | | | | | 317 | | |
Additional paid in capital | | | | | 2,694,541 | | | | | | 2,700,133 | | |
Treasury shares, at cost (1,738,983 shares and 1,620,397 shares as of June 30, 2018 and December 31, 2017, respectively) | | | | | (26,792) | | | | | | (24,755) | | |
Accumulated deficit | | | | | (2,656,416) | | | | | | (2,722,375) | | |
Accumulated other comprehensive loss | | | | | (157,153) | | | | | | (155,621) | | |
Total shareholders’ equity (deficit) | | | | | (145,501) | | | | | | (202,301) | | |
Equity attributable to non-controlling interest in subsidiaries | | | | | 14,781 | | | | | | 9,980 | | |
Total equity (deficit) | | | | | (130,720) | | | | | | (192,321) | | |
Total liabilities and equity | | | | $ | 3,026,413 | | | | | $ | 2,858,499 | | |
|
(unaudited)
Three Months | Three Months | |||||||
Ended | Ended | |||||||
March 31, | March 31, | |||||||
(in $ thousands) | 2018 | 2017 | ||||||
Operating activities | ||||||||
Net income | $ | 59,231 | $ | 55,863 | ||||
Income from discontinued operations, net of tax | (27,747 | ) | — | |||||
Net income from continuing operations | 31,484 | 55,863 | ||||||
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 48,577 | 52,909 | ||||||
Amortization of customer loyalty payments | 22,343 | 18,795 | ||||||
Impairment of long-lived assets | 491 | 685 | ||||||
Amortization of debt finance costs and debt discount | 1,890 | 2,673 | ||||||
Loss on early extinguishment of debt | 27,661 | — | ||||||
Unrealized loss (gain) on foreign exchange derivative instruments | 242 | (7,701 | ) | |||||
Unrealized gain on interest rate derivative instruments | (10,430 | ) | (226 | ) | ||||
Equity-based compensation | 5,056 | 8,006 | ||||||
Deferred income taxes | (9,836 | ) | 152 | |||||
Customer loyalty payments | (27,366 | ) | (16,755 | ) | ||||
Pension liability contribution | (338 | ) | (595 | ) | ||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (62,768 | ) | (49,198 | ) | ||||
Other current assets | (8,057 | ) | (4,075 | ) | ||||
Accounts payable, accrued expenses and other current liabilities | 53,750 | 37,449 | ||||||
Other | 10,398 | (2,960 | ) | |||||
Net cash provided by operating activities of continuing operations | $ | 83,097 | $ | 95,022 | ||||
Investing activities | ||||||||
Property and equipment additions | $ | (36,663 | ) | $ | (23,609 | ) | ||
Net cash used in investing activities | $ | (36,663 | ) | $ | (23,609 | ) |
(in $ thousands) | | | Six Months Ended June 30, 2018 | | | Six Months Ended June 30, 2017 | |||||
Operating activities | | | | | | | | | | | |
Net income | | | | $ | 66,236 | | | | | $ | 90,229 |
Income from discontinued operations, net of tax | | | | | (27,747) | | | | | | — |
Net income from continuing operations | | | | | 38,489 | | | | | | 90,229 |
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: | | | | | | | | | | | |
Depreciation and amortization | | | | | 98,145 | | | | | | 106,557 |
Amortization of customer loyalty payments | | | | | 44,491 | | | | | | 37,452 |
Impairment of long-lived assets | | | | | 11,643 | | | | | | 685 |
Amortization of debt finance costs and debt discount | | | | | 2,751 | | | | | | 5,369 |
Gain on sale of a subsidiary | | | | | — | | | | | | (1,217) |
Loss on early extinguishment of debt | | | | | 27,661 | | | | | | — |
Unrealized loss (gain) on foreign exchange derivative instruments | | | | | 20,838 | | | | | | (20,920) |
Unrealized (gain) loss on interest rate derivative instruments | | | | | (12,826) | | | | | | 3,001 |
Equity-based compensation | | | | | 11,904 | | | | | | 15,522 |
Deferred income taxes | | | | ��� | (7,489) | | | | | | 203 |
Customer loyalty payments | | | | | (55,675) | | | | | | (35,385) |
Pension liability contribution | | | | | (704) | | | | | | (1,202) |
Changes in assets and liabilities: | | | | | | | | | | | |
Accounts receivable, net | | | | | (55,615) | | | | | | (41,349) |
Other current assets | | | | | (8,340) | | | | | | 3,346 |
Accounts payable, accrued expenses and other current liabilities | | | | | 75,981 | | | | | | 11,479 |
Other | | | | | 11,032 | | | | | | 4,837 |
Net cash provided by operating activities | | | | $ | 202,286 | | | | | $ | 178,607 |
Investing activities | | | | | | | | | | | |
Property and equipment additions | | | | $ | (74,466) | | | | | $ | (46,829) |
Sale of subsidiary, net of cash disposed | | | | | — | | | | | | (3,433) |
Net cash used in investing activities | | | | $ | (74,466) | | | | | $ | (50,262) |
|
(unaudited)
Three Months | Three Months | |||||||
Ended | Ended | |||||||
March 31, | March 31, | |||||||
(in $ thousands) | 2018 | 2017 | ||||||
Financing activities | ||||||||
Proceeds from term loans | $ | 1,400,000 | $ | — | ||||
Proceeds from issuance of senior secured notes | 745,000 | — | ||||||
Repayment of term loans | (2,153,750 | ) | (5,938 | ) | ||||
Repayment of capital lease obligations and other indebtedness | (8,000 | ) | (9,511 | ) | ||||
Debt finance costs and lender fees | (17,381 | ) | — | |||||
Dividend to shareholders | (9,427 | ) | (9,306 | ) | ||||
Proceeds from share issuance under employee share purchase plan and stock options | 2,088 | 632 | ||||||
Treasury share purchase related to vesting of equity awards | (235 | ) | (128 | ) | ||||
Net cash used in financing activities | $ | (41,705 | ) | $ | (24,251 | ) | ||
Effect of changes in exchange rates on cash and cash equivalents | 397 | 307 | ||||||
Net increase in cash and cash equivalents | 5,126 | 47,469 | ||||||
Cash and cash equivalents at beginning of period | 122,039 | 139,938 | ||||||
Cash and cash equivalents at end of period | $ | 127,165 | $ | 187,407 | ||||
Supplemental disclosures of cash flow information | ||||||||
Interest payments, net of capitalized interest | $ | 31,530 | $ | 30,126 | ||||
Income tax payments, net of refunds | 11,902 | 3,905 | ||||||
Non-cash capital lease additions | 2,164 | 1,651 | ||||||
Non-cash purchase of property and equipment | 4,220 | — |
(in $ thousands) | | | Six Months Ended June 30, 2018 | | | Six Months Ended June 30, 2017 | | ||||||
Financing activities | | | | | | | | | | | | | |
Proceeds from term loans | | | | $ | 1,400,000 | | | | | $ | — | | |
Proceeds from issuance of senior secured notes | | | | | 745,000 | | | | | | — | | |
Repayment of term loans | | | | | (2,153,750) | | | | | | (11,875) | | |
Repayment of capital lease obligations and other indebtedness | | | | | (18,978) | | | | | | (19,490) | | |
Debt finance costs and lender fees | | | | | (21,524) | | | | | | — | | |
Dividend to shareholders | | | | | (19,037) | | | | | | (18,857) | | |
Purchase of non-controlling interest in a subsidiary | | | | | — | | | | | | (1,063) | | |
Proceeds from share issuance under employee share purchase plan and stock options | | | | | 6,080 | | | | | | 1,116 | | |
Treasury share purchase related to vesting of equity awards | | | | | (2,581) | | | | | | (2,383) | | |
Other | | | | | (680) | | | | | | — | | |
Net cash used in financing activities | | | | $ | (65,470) | | | | | $ | (52,552) | | |
Effect of changes in exchange rates on cash and cash equivalents | | | | | (879) | | | | | | 782 | | |
Net increase in cash and cash equivalents | | | | | 61,471 | | | | | | 76,575 | | |
Cash and cash equivalents at beginning of period | | | | | 122,039 | | | | | | 139,938 | | |
Cash and cash equivalents at end of period | | | | $ | 183,510 | | | | | $ | 216,513 | | |
Supplemental disclosures of cash flow information | | | | | | | | | | | | | |
Interest payments, net of capitalized interest | | | | $ | 40,512 | | | | | $ | 56,447 | | |
Income tax payments, net of refunds | | | | | 26,131 | | | | | | 14,457 | | |
Non-cash capital lease asset additions | | | | | 61,766 | | | | | | 12,174 | | |
Non-cash purchase of property and equipment | | | | | 4,220 | | | | | | — | | |
(unaudited)
Accumulated | Non- | |||||||||||||||||||||||||||||||||||
Additional | Other | Controlling | Total | |||||||||||||||||||||||||||||||||
Common Shares | Paid in | Treasury Shares | Accumulated | Comprehensive | Interest in | Equity | ||||||||||||||||||||||||||||||
(in $ thousands, except share data) | Number | Amount | Capital | Number | Amount | Deficit | Loss | Subsidiaries | (Deficit) | |||||||||||||||||||||||||||
Balance as of December 31, 2017 | 126,967,010 | $ | 317 | $ | 2,700,133 | 1,620,397 | $ | (24,755 | ) | $ | (2,722,375 | ) | $ | (155,621 | ) | $ | 9,980 | $ | (192,321 | ) | ||||||||||||||||
Change in accounting policy for revenue recognition (see Note 3) | — | — | — | — | — | 986 | — | — | 986 | |||||||||||||||||||||||||||
Dividend to shareholders ($0.075 per common share) | — | — | (9,699 | ) | — | — | — | — | — | (9,699 | ) | |||||||||||||||||||||||||
Equity-based compensation | 293,143 | 1 | 7,342 | — | — | — | — | 956 | 8,299 | |||||||||||||||||||||||||||
Purchase of a non-controlling interest in a subsidiary | — | — | (1,887 | ) | — | — | — | — | 1,887 | — | ||||||||||||||||||||||||||
Treasury shares purchased in relation to vesting of equity awards | — | — | — | 17,445 | (235 | ) | — | — | — | (235 | ) | |||||||||||||||||||||||||
Treasury shares issued in relation to vesting of equity awards | — | — | (123 | ) | (8,008 | ) | 123 | — | — | — | — | |||||||||||||||||||||||||
Comprehensive income, net of tax | — | — | — | — | — | 58,829 | 6,743 | 402 | 65,974 | |||||||||||||||||||||||||||
Balance as of March 31, 2018 | 127,260,153 | $ | 318 | $ | 2,695,766 | 1,629,834 | $ | (24,867 | ) | $ | (2,662,560 | ) | $ | (148,878 | ) | $ | 13,225 | $ | (126,996 | ) |
Accumulated | Non- | |||||||||||||||||||||||||||||||||||
Additional | Other | Controlling | Total | |||||||||||||||||||||||||||||||||
Common Shares | Paid in | Treasury Shares | Accumulated | Comprehensive | Interest in | Equity | ||||||||||||||||||||||||||||||
(in $ thousands, except share data) | Number | Amount | Capital | Number | Amount | Deficit | Loss | Subsidiaries | (Deficit) | |||||||||||||||||||||||||||
Balance as of December 31, 2016 | 124,941,233 | $ | 312 | $ | 2,708,836 | 908,872 | $ | (14,166 | ) | $ | (2,864,838 | ) | $ | (190,072 | ) | $ | 24,146 | $ | (335,782 | ) | ||||||||||||||||
Dividend to shareholders ($0.075 per common share) | — | — | (10,054 | ) | — | — | — | — | — | (10,054 | ) | |||||||||||||||||||||||||
Equity-based compensation | 59,388 | — | 7,168 | — | — | — | — | 1,182 | 8,350 | |||||||||||||||||||||||||||
Treasury shares purchased in relation to vesting of equity awards | — | — | — | 8,916 | (128 | ) | — | — | — | (128 | ) | |||||||||||||||||||||||||
Comprehensive income (loss), net of tax | — | — | — | — | — | 56,106 | 6,936 | (243 | ) | 62,799 | ||||||||||||||||||||||||||
Balance as of March 31, 2017 | 125,000,621 | $ | 312 | $ | 2,705,950 | 917,788 | $ | (14,294 | ) | $ | (2,808,732 | ) | $ | (183,136 | ) | $ | 25,085 | $ | (274,815 | ) |
| | | Common Shares | | | Additional Paid in Capital | | | Treasury Shares | | | Accumulated Deficit | | | Accumulated Other Comprehensive Loss | | | Non- Controlling Interest in Subsidiaries | | | Total Equity (Deficit) | | |||||||||||||||||||||||||||||||||
(in $ thousands, except share data) | | | Number | | | Amount | | | Number | | | Amount | | ||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2017 | | | | | 126,967,010 | | | | | $ | 317 | | | | | $ | 2,700,133 | | | | | | 1,620,397 | | | | | $ | (24,755) | | | | | $ | (2,722,375) | | | | | $ | (155,621) | | | | | $ | 9,980 | | | | | $ | (192,321) | | |
Change in accounting policy for revenue recognition (see Note 3) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 986 | | | | | | — | | | | | | — | | | | | | 986 | | |
Dividend to shareholders ($0.150 per common share) | | | | | — | | | | | | — | | | | | | (19,579) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (19,579) | | |
Equity-based compensation | | | | | 909,306 | | | | | | 2 | | | | | | 16,418 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,651 | | | | | | 18,071 | | |
Purchase of a non-controlling interest in a subsidiary | | | | | — | | | | | | — | | | | | | (1,887) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,887 | | | | | | — | | |
Treasury shares purchased in relation to vesting of equity awards | | | | | — | | | | | | — | | | | | | — | | | | | | 154,232 | | | | | | (2,581) | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,581) | | |
Treasury shares issued in relation to vesting of equity awards | | | | | — | | | | | | — | | | | | | (544) | | | | | | (35,646) | | | | | | 544 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Comprehensive income, net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 64,973 | | | | | | (1,532) | | | | | | 1,263 | | | | | | 64,704 | | |
Balance as of June 30, 2018 | | | | | 127,876,316 | | | | | $ | 319 | | | | | $ | 2,694,541 | | | | | | 1,738,983 | | | | | $ | (26,792) | | | | | $ | (2,656,416) | | | | | $ | (157,153) | | | | | $ | 14,781 | | | | | $ | (130,720) | | |
|
| | | Common Shares | | | Additional Paid in Capital | | | Treasury Shares | | | Accumulated Deficit | | | Accumulated Other Comprehensive Loss | | | Non- Controlling Interest in Subsidiaries | | | Total Equity (Deficit) | | |||||||||||||||||||||||||||||||||
(in $ thousands, except share data) | | | Number | | | Amount | | | Number | | | Amount | | ||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2016 | | | | | 124,941,233 | | | | | $ | 312 | | | | | $ | 2,708,836 | | | | | | 908,872 | | | | | $ | (14,166) | | | | | $ | (2,864,838) | | | | | $ | (190,072) | | | | | $ | 24,146 | | | | | $ | (335,782) | | |
Dividend to shareholders ($0.150 per common share) | | | | | — | | | | | | — | | | | | | (19,816) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (19,816) | | |
Purchase of non-controlling interest in a subsidiary | | | | | — | | | | | | — | | | | | | (47) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,016) | | | | | | (1,063) | | |
Sale of shares in a subsidiary | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (15,539) | | | | | | (15,539) | | |
Equity-based compensation | | | | | 520,919 | | | | | | 1 | | | | | | 14,034 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,332 | | | | | | 16,367 | | |
Treasury shares purchased in relation to vesting of equity awards | | | | | — | | | | | | — | | | | | | — | | | | | | 189,311 | | | | | | (2,383) | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,383) | | |
Treasury shares issued in relation to vesting of equity awards | | | | | — | | | | | | — | | | | | | (639) | | | | | | (41,009) | | | | | | 639 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Comprehensive income, net of tax | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 91,033 | | | | | | 21,503 | | | | | | (804) | | | | | | 111,732 | | |
Balance as of June 30, 2017 | | | | | 125,462,152 | | | | | $ | 313 | | | | | $ | 2,702,368 | | | | | | 1,057,174 | | | | | $ | (15,910) | | | | | $ | (2,773,805) | | | | | $ | (168,569) | | | | | $ | 9,119 | | | | | $ | (246,484) | | |
|
(unaudited)
Basis of Presentation
(unaudited)
TRAVELPORT WORLDWIDE LIMITED
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
Financial Instruments
TRAVELPORT WORLDWIDE LIMITED
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
3. Revenue
Three Months Ended | ||||
March 31, | ||||
(in $ thousands) | 2018 | |||
Air | $ | 472,935 | ||
Beyond Air | 179,751 | |||
Travel Commerce Platform(1) | 652,686 | |||
Technology Services | 25,152 | |||
Net revenue | $ | 677,838 |
(in $ thousands) | | | Three Months Ended June 30, 2018 | | | Six Months Ended June 30, 2018 | | ||||||
Air | | | | $ | 443,947 | | | | | $ | 916,882 | | |
Beyond Air | | | | | 194,021 | | | | | | 373,772 | | |
Travel Commerce Platform(1) | | | | | 637,968 | | | | | | 1,290,654 | | |
Technology Services | | | | | 24,040 | | | | | | 49,192 | | |
Net revenue | | | | $ | 662,008 | | | | | $ | 1,339,846 | | |
|
12
(unaudited)
(in $ thousands) | | | Three Months Ended June 30, 2018 | | | Six Months Ended June 30, 2018 | | ||||||
Asia Pacific | | | | $ | 144,991 | | | | | $ | 286,542 | | |
Europe | | | | | 223,340 | | | | | | 467,782 | | |
Latin America and Canada | | | | | 29,456 | | | | | | 59,315 | | |
Middle East and Africa | | | | | 81,663 | | | | | | 160,769 | | |
International | | | | | 479,450 | | | | | | 974,408 | | |
United States | | | | | 158,518 | | | | | | 316,246 | | |
Travel Commerce Platform(1) | | | | $ | 637,968 | | | | | $ | 1,290,654 | | |
|
assets. The opening and closing balances of the Company’s accounts receivables and contract liabilities (current and non-current) are as follows:Whereperformance obligation has been satisfied but not yet invoiced at the reporting date, a contract assetcustomer when that right is recognizedconditioned on the balance sheet. WhereCompany’s future performance obligations. Contract liabilities represent the Company’s obligation to transfer services to a performance obligationcustomer for which the entity has received consideration (or the amount is due) from the customer.yet been satisfied but an invoice has been raised at the reporting date, ahave contract liability is recognized on the balance sheet. Contract Liabilities (in $ thousands) Accounts
Receivable, net(1) Deferred Revenue
(current)(1) Deferred Revenue
(non-current) Balance as of March 31, 2018 $ 231,336 $ 32,186 $ 6,367 Balance as of January 1, 2018 174,765 32,010 6,056 Increase $ 56,571 $ 176 $ 311 Contract Liabilities (in $ thousands)
Receivable, net(1)
(current)(1)
(non-current)(1) Balance as of June 30, 2018 $ 219,735 $ 32,398 $ 5,678 Balance as of January 1, 2018 174,765 32,010 6,056 Increase $ 44,970 $ 388 $ (378)
TRAVELPORT WORLDWIDE LIMITED
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
Remaining Performance Obligations
TRAVELPORT WORLDWIDE LIMITED
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
5. Other Current Assets
March 31, | December 31, | |||||||
(in $ thousands) | 2018 | 2017 | ||||||
Client funds | $ | 34,125 | $ | 15,774 | ||||
Sales and use tax receivables | 32,309 | 30,163 | ||||||
Prepaid expenses | 28,268 | 24,271 | ||||||
Prepaid incentives | 16,236 | 16,677 | ||||||
Derivative assets | 22,238 | 15,233 | ||||||
Other | 9,350 | 7,606 | ||||||
$ | 142,526 | $ | 109,724 |
(in $ thousands) | | | June 30, 2018 | | | December 31, 2017 | | ||||||
Client funds | | | | $ | 26,922 | | | | | $ | 15,774 | | |
Sales and use tax receivables | | | | | 32,003 | | | | | | 30,163 | | |
Prepaid expenses | | | | | 26,651 | | | | | | 24,271 | | |
Prepaid incentives | | | | | 16,546 | | | | | | 16,677 | | |
Derivative assets | | | | | 13,587 | | | | | | 15,233 | | |
Other | | | | | 9,362 | | | | | | 7,606 | | |
| | | | $ | 125,071 | | | | | $ | 109,724 | | |
|
March 31, 2018 | December 31, 2017 | |||||||||||||||||||||||
Accumulated | Accumulated | |||||||||||||||||||||||
(in $ thousands) | Cost | depreciation | Net | Cost | depreciation | Net | ||||||||||||||||||
Capitalized software | $ | 1,074,053 | $ | (850,777 | ) | $ | 223,276 | $ | 1,029,772 | $ | (829,416 | ) | $ | 200,356 | ||||||||||
Computer equipment | 346,769 | (217,089 | ) | 129,680 | 346,846 | (207,484 | ) | 139,362 | ||||||||||||||||
Building and leasehold improvements | 33,389 | (13,745 | ) | 19,644 | 32,834 | (12,972 | ) | 19,862 | ||||||||||||||||
Construction in progress | 62,754 | — | 62,754 | 72,161 | — | 72,161 | ||||||||||||||||||
$ | 1,516,965 | $ | (1,081,611 | ) | $ | 435,354 | $ | 1,481,613 | $ | (1,049,872 | ) | $ | 431,741 |
| | | June 30, 2018 | | | December 31, 2017 | | ||||||||||||||||||||||||||||||
(in $ thousands) | | | Cost | | | Accumulated depreciation | | | Net | | | Cost | | | Accumulated depreciation | | | Net | | ||||||||||||||||||
Capitalized software | | | | $ | 1,077,117 | | | | | $ | (859,076) | | | | | $ | 218,041 | | | | | $ | 1,029,772 | | | | | $ | (829,416) | | | | | $ | 200,356 | | |
Computer equipment | | | | | 341,566 | | | | | | (164,739) | | | | | | 176,827 | | | | | | 346,846 | | | | | | (207,484) | | | | | | 139,362 | | |
Building and leasehold improvements | | | | | 32,619 | | | | | | (14,068) | | | | | | 18,551 | | | | | | 32,834 | | | | | | (12,972) | | | | | | 19,862 | | |
Construction in progress | | | | | 77,387 | | | | | | — | | | | | | 77,387 | | | | | | 72,161 | | | | | | — | | | | | | 72,161 | | |
| | | | $ | 1,528,689 | | | | | $ | (1,037,883) | | | | | $ | 490,806 | | | | | $ | 1,481,613 | | | | | $ | (1,049,872) | | | | | $ | 431,741 | | |
|
The Company recorded depreciation expense (including depreciation on assets under capital leases) of $78 million and $86 million during the six months ended June 30, 2018 and 2017, respectively.
TRAVELPORT WORLDWIDE LIMITED
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
7. Intangible Assets
January 1, | Foreign | March 31, | ||||||||||||||||||
(in $ thousands) | 2018 | Additions | Retirements | Exchange | 2018 | |||||||||||||||
Non-Amortizable Assets: | ||||||||||||||||||||
Goodwill | $ | 1,089,590 | $ | — | $ | — | $ | 925 | $ | 1,090,515 | ||||||||||
Trademarks and tradenames | 313,097 | — | — | — | 313,097 | |||||||||||||||
Other Intangible Assets: | ||||||||||||||||||||
Acquired intangible assets | 743,549 | — | — | 6 | 743,555 | |||||||||||||||
Accumulated amortization | (461,666 | ) | (10,166 | ) | — | (32 | ) | (471,864 | ) | |||||||||||
Acquired intangible assets, net | 281,883 | (10,166 | ) | — | (26 | ) | 271,691 | |||||||||||||
Customer loyalty payments | 380,841 | 45,126 | (10,551 | ) | 2,008 | 417,424 | ||||||||||||||
Accumulated amortization | (166,544 | ) | (22,343 | ) | 10,315 | (843 | ) | (179,415 | ) | |||||||||||
Customer loyalty payments, net | 214,297 | 22,783 | (236 | ) | 1,165 | 238,009 | ||||||||||||||
Other intangible assets, net | $ | 496,180 | $ | 12,617 | $ | (236 | ) | $ | 1,139 | $ | 509,700 |
(in $ thousands) | | | January 1, 2018 | | | Additions | | | Retirements | | | Foreign Exchange | | | June 30, 2018 | | |||||||||||||||
Non-Amortizable Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Goodwill | | | | $ | 1,089,590 | | | | | $ | — | | | | | $ | — | | | | | $ | (3,397) | | | | | $ | 1,086,193 | | |
Trademarks and tradenames | | | | | 313,097 | | | | | | — | | | | | | — | | | | | | — | | | | | | 313,097 | | |
Other Intangible Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired intangible assets | | | | | 743,549 | | | | | | — | | | | | | — | | | | | | (41) | | | | | | 743,508 | | |
Accumulated amortization | | | | | (461,666) | | | | | | (20,332) | | | | | | — | | | | | | (27) | | | | | | (482,025) | | |
Acquired intangible assets, net | | | | | 281,883 | | | | | | (20,332) | | | | | | — | | | | | | (68) | | | | | | 261,483 | | |
Customer loyalty payments | | | | | 380,841 | | | | | | 53,956 | | | | | | (35,865) | | | | | | (3,404) | | | | | | 395,528 | | |
Accumulated amortization | | | | | (166,544) | | | | | | (44,491) | | | | | | 22,885 | | | | | | 1,339 | | | | | | (186,811) | | |
Customer loyalty payments, net | | | | | 214,297 | | | | | | 9,465 | | | | | | (12,980) | | | | | | (2,065) | | | | | | 208,717 | | |
Other intangible assets, net | | | | $ | 496,180 | | | | | $ | (10,867) | | | | | $ | (12,980) | | | | | $ | (2,133) | | | | | $ | 470,200 | | |
|
January 1, | Foreign | March 31, | ||||||||||||||||||
(in $ thousands) | 2017 | Additions | Retirements | Exchange | 2017 | |||||||||||||||
Non-Amortizable Assets: | ||||||||||||||||||||
Goodwill | $ | 1,079,951 | $ | — | $ | — | $ | 2,364 | $ | 1,082,315 | ||||||||||
Trademarks and tradenames | 313,097 | — | — | — | 313,097 | |||||||||||||||
Other Intangible Assets: | ||||||||||||||||||||
Acquired intangible assets | 1,127,059 | — | (368,715 | ) | 26 | 758,370 | ||||||||||||||
Accumulated amortization | (804,089 | ) | (10,392 | ) | 368,715 | (52 | ) | (445,818 | ) | |||||||||||
Acquired intangible assets, net | 322,970 | (10,392 | ) | — | (26 | ) | 312,552 | |||||||||||||
Customer loyalty payments | 358,259 | 28,354 | (12,908 | ) | 2,076 | 375,781 | ||||||||||||||
Accumulated amortization | (169,622 | ) | (18,795 | ) | 12,908 | (2,074 | ) | (177,583 | ) | |||||||||||
Customer loyalty payments, net | 188,637 | 9,559 | — | 2 | 198,198 | |||||||||||||||
Other intangible assets, net | $ | 511,607 | $ | (833 | ) | $ | — | $ | (24 | ) | $ | 510,750 |
(in $ thousands) | | | January 1, 2017 | | | Additions | | | Retirements | | | Foreign Exchange | | | June 30, 2017 | | |||||||||||||||
Non-Amortizable Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Goodwill | | | | $ | 1,079,951 | | | | | $ | — | | | | | $ | — | | | | | $ | 6,039 | | | | | $ | 1,085,990 | | |
Trademarks and tradenames | | | | | 313,097 | | | | | | — | | | | | | — | | | | | | — | | | | | | 313,097 | | |
Other Intangible Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquired intangible assets | | | | | 1,127,059 | | | | | | — | | | | | | (368,715) | | | | | | 171 | | | | | | 758,515 | | |
Accumulated amortization | | | | | (804,089) | | | | | | (20,523) | | | | | | 368,715 | | | | | | (237) | | | | | | (456,134) | | |
Acquired intangible assets, net | | | | | 322,970 | | | | | | (20,523) | | | | | | — | | | | | | (66) | | | | | | 302,381 | | |
Customer loyalty payments | | | | | 358,259 | | | | | | 42,512 | | | | | | (40,803) | | | | | | 4,874 | | | | | | 364,842 | | |
Accumulated amortization | | | | | (169,622) | | | | | | (37,452) | | | | | | 36,403 | | | | | | (2,596) | | | | | | (173,267) | | |
Customer loyalty payments, net | | | | | 188,637 | | | | | | 5,060 | | | | | | (4,400) | | | | | | 2,278 | | | | | | 191,575 | | |
Other intangible assets, net | | | | $ | 511,607 | | | | | $ | (15,463) | | | | | $ | (4,400) | | | | | $ | 2,212 | | | | | $ | 493,956 | | |
|
TRAVELPORT WORLDWIDE LIMITED
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
8. Other Non-Current Assets
March 31, | December 31, | |||||||
(in $ thousands) | 2018 | 2017 | ||||||
Prepaid incentives | $ | 35,349 | $ | 35,645 | ||||
Pension assets | 9,985 | 8,674 | ||||||
Supplier prepayments | 8,461 | 10,983 | ||||||
Derivative assets | 7,740 | 3,503 | ||||||
Deferred financing costs | 1,828 | 1,930 | ||||||
Other | 13,995 | 16,073 | ||||||
$ | 77,358 | $ | 76,808 |
(in $ thousands) | | | June 30, 2018 | | | December 31, 2017 | | ||||||
Prepaid incentives | | | | $ | 34,143 | | | | | $ | 35,645 | | |
Pension assets | | | | | 9,580 | | | | | | 8,674 | | |
Supplier prepayments | | | | | 6,163 | | | | | | 10,983 | | |
Derivative assets | | | | | 8,369 | | | | | | 3,503 | | |
Deferred financing costs | | | | | 1,724 | | | | | | 1,930 | | |
Other | | | | | 12,756 | | | | | | 16,073 | | |
| | | | $ | 72,735 | | | | | $ | 76,808 | | |
|
March 31, | December 31, | |||||||
(in $ thousands) | 2018 | 2017 | ||||||
Accrued commissions and incentives | $ | 356,856 | $ | 282,954 | ||||
Accrued payroll and related | 61,631 | 70,234 | ||||||
Deferred revenue | 55,683 | 48,096 | ||||||
Income tax payable | 35,113 | 32,986 | ||||||
Customer prepayments | 34,125 | 15,774 | ||||||
Derivative liabilities | 1,397 | 292 | ||||||
Accrued interest expense | 4,131 | 12,010 | ||||||
Pension and post-retirement benefit liabilities | 1,699 | 1,628 | ||||||
Other | 26,135 | 45,094 | ||||||
$ | 576,770 | $ | 509,068 |
(in $ thousands) | | | June 30, 2018 | | | December 31, 2017 | | ||||||
Accrued commissions and incentives | | | | $ | 336,055 | | | | | $ | 282,954 | | |
Accrued payroll and related | | | | | 65,938 | | | | | | 70,234 | | |
Deferred revenue | | | | | 60,125 | | | | | | 48,096 | | |
Income tax payable | | | | | 28,977 | | | | | | 32,986 | | |
Customer prepayments | | | | | 26,922 | | | | | | 15,774 | | |
Derivative liabilities | | | | | 11,453 | | | | | | 292 | | |
Accrued interest expense | | | | | 20,329 | | | | | | 12,010 | | |
Pension and post-retirement benefit liabilities | | | | | 1,650 | | | | | | 1,628 | | |
Other | | | | | 18,722 | | | | | | 45,094 | | |
| | | | $ | 570,171 | | | | | $ | 509,068 | | |
|
TRAVELPORT WORLDWIDE LIMITED
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
11. Long-Term Debt
Interest | March 31, | December 31, | ||||||||||
(in $ thousands) | rate | Maturity | 2018 | 2017 | ||||||||
Senior Secured Credit Agreement | ||||||||||||
Term loans – (2018 Credit Agreement)(1) | L+2.50% | March 2025 | $ | 1,385,934 | $ | — | ||||||
Term loans – (2014 Credit Agreement)(2) | L+2.75% | September 2021 | — | 2,124,439 | ||||||||
Revolver borrowings – (2018 Credit Agreement) | L+2.25% | September 2022 | — | — | ||||||||
Revolver borrowings – (2014 Credit Agreement) | L+2.50% | September 2022 | — | — | ||||||||
Senior Secured Notes | ||||||||||||
Senior secured notes(3) | 6.00% | March 2026 | 737,404 | — | ||||||||
Capital leases and other indebtedness | 99,786 | 105,574 | ||||||||||
Total debt | 2,223,124 | 2,230,013 | ||||||||||
Less: current portion | 54,089 | 64,291 | ||||||||||
Long-term debt | $ | 2,169,035 | $ | 2,165,722 |
(in $ thousands) | | | Interest rate | | | Maturity | | | June 30, 2018 | | | December 31, 2017 | | |||||||||
Senior Secured Credit Agreement | | | | | | | | | | | | | | | | | | | | | | |
Term loans – (2018 Credit Agreement)(1) | | | L+2.50% | | | | | March 2025 | | | | | $ | 1,386,456 | | | | | $ | — | | |
Term loans – (2014 Credit Agreement)(2) | | | L+2.75% | | | | | September 2021 | | | | | | — | | | | | | 2,124,439 | | |
Revolver borrowings – (2018 Credit Agreement) | | | L+2.25% | | | | | September 2022 | | | | | | — | | | | | | — | | |
Revolver borrowings – (2014 Credit Agreement) | | | L+2.50% | | | | | September 2022 | | | | | | — | | | | | | — | | |
Senior Secured Notes | | | | | | | | | | | | | | | | | | | | | | |
Senior secured notes(3) | | | 6.00% | | | | | March 2026 | | | | | | 737,640 | | | | | | — | | |
Capital leases and other indebtedness | | | | | | | | | | | | | | 148,762 | | | | | | 105,574 | | |
Total debt | | | | | | | | | | | | | | 2,272,858 | | | | | | 2,230,013 | | |
Less: current portion | | | | | | | | | | | | | | 56,527 | | | | | | 64,291 | | |
Long-term debt | | | | | | | | | | | | | $ | 2,216,331 | | | | | $ | 2,165,722 | | |
|
alongtogether with the proceeds from the issuance of senior secured notes (discussed below) and cash on the balance sheet, to repay the outstanding balance remaining of the term loans under the previous senior secured credit agreement (the “2014 Credit Agreement”) and to pay the related transaction expenses and fees.Upon the repayment in full of the obligations, the 2014 Credit
TRAVELPORT WORLDWIDE LIMITED
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
Further, during the threesix months ended March 31,June 30, 2018, the Company (i) repaid a quarterly installment of $6 million principal amount of term loans outstanding under the 2014 Credit Agreement, (ii) amortized $1$2 million of each of debt finance costs and $1 million of debt discount, (iii) repaid $7$18 million under its capital lease obligations and entered into $2 million of new capital leases arrangements for information technology assets resulting in a $62 million increase in capital lease obligations and (iv) repaid $1 million under its other indebtedness obligations.
Capital Leases | ||||||||||||
(in $ thousands) | Term | Senior Secured | and Other | |||||||||
Year ending March 31, | Loans | Notes | Indebtedness | |||||||||
2019 | $ | 10,500 | $ | — | $ | 43,589 | ||||||
2020 | 14,000 | — | 29,951 | |||||||||
2021 | 14,000 | — | 16,638 | |||||||||
2022 | 14,000 | — | 8,260 | |||||||||
2023 | 14,000 | — | 1,348 | |||||||||
Thereafter | 1,333,500 | 745,000 | — | |||||||||
1,400,000 | 745,000 | 99,786 | ||||||||||
Less: Unamortized debt finance cost | (7,110 | ) | (7,596 | ) | — | |||||||
Less: Unamortized debt discount | (6,956 | ) | — | — | ||||||||
Total debt | $ | 1,385,934 | $ | 737,404 | $ | 99,786 |
(in $ thousands) Year ending June 30, | | | Term Loans | | | Senior Secured Notes | | | Capital Leases and Other Indebtedness | | |||||||||
2019 | | | | $ | 14,000 | | | | | $ | — | | | | | $ | 42,527 | | |
2020 | | | | | 14,000 | | | | | | — | | | | | | 42,064 | | |
2021 | | | | | 14,000 | | | | | | — | | | | | | 35,485 | | |
2022 | | | | | 14,000 | | | | | | — | | | | | | 28,140 | | |
2023 | | | | | 14,000 | | | | | | — | | | | | | 546 | | |
Thereafter | | | | | 1,330,000 | | | | | | 745,000 | | | | | | — | | |
| | | | | 1,400,000 | | | | | | 745,000 | | | | | | 148,762 | | |
Less: Unamortized debt finance cost | | | | | (6,846) | | | | | | (7,360) | | | | | | — | | |
Less: Unamortized debt discount | | | | | (6,698) | | | | | | — | | | | | | — | | |
Total debt | | | | $ | 1,386,456 | | | | | $ | 737,640 | | | | | $ | 148,762 | | |
|
Three Months | Three Months | |||||||
Ended March 31, | Ended March 31, | |||||||
(in $ thousands) | 2018 | 2017 | ||||||
Balance as of January 1 | $ | 14,708 | $ | 22,855 | ||||
Capitalization of debt finance costs | 14,799 | — | ||||||
Amortization | (914 | ) | (1,417 | ) | ||||
Write-off on early extinguishment of debt | (12,059 | ) | — | |||||
Balance as of March 31 | $ | 16,534 | $ | 21,438 |
(in $ thousands) | | | Six Months Ended June 30, 2018 | | | Six Months Ended June 30, 2017 | | ||||||
Balance as of January 1 | | | | $ | 14,708 | | | | | $ | 22,855 | | |
Capitalization of debt finance costs | | | | | 14,799 | | | | | | — | | |
Amortization | | | | | (1,518) | | | | | | (2,847) | | |
Write-off on early extinguishment of debt | | | | | (12,059) | | | | | | — | | |
Balance as of June 30 | | | | $ | 15,930 | | | | | $ | 20,008 | | |
|
TRAVELPORT WORLDWIDE LIMITED
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
Debt Covenants and Guarantees
Average | ||||||
Notional Amount | Interest | |||||
($ in thousands) | Period | Rate | ||||
1,400,000 | February 2017 to February 2019 | 1.4010% | ||||
1,200,000 | February 2019 to February 2020 | 2.1906% | ||||
400,000 | February 2020 to February 2021 | 2.1925% |
Notional Amount ($ in thousands) | | | Period | | | Average Interest Rate | | |||
1,400,000 | | | February 2017 to February 2019 | | | | | 1.4010% | | |
1,200,000 | | | February 2019 to February 2020 | | | | | 2.1906% | | |
400,000 | | | February 2020 to February 2021 | | | | | 2.1925% | | |
100,000 | | | February 2021 to February 2022 | | | | | 3.0655% | | |
(in $ thousands) | | | June 30, 2018 | | | December 31, 2017 | | ||||||
Interest rate swap contracts | | | | $ | 3,100,000 | | | | | $ | 3,000,000 | | |
Foreign currency contracts | | | | | 439,926 | | | | | | 373,487 | | |
(unaudited)
Fair Value Asset | Fair Value (Liability) | |||||||||||||||||||
Balance Sheet | March 31, | December 31, | Balance Sheet | March 31, | December 31, | |||||||||||||||
(in $ thousands) | Location | 2018 | 2017 | Location | 2018 | 2017 | ||||||||||||||
Interest rate swap contracts | Other current assets | $ | 10,940 | $ | 4,799 | Accrued expenses and other current liabilities | $ | — | $ | — | ||||||||||
Interest rate swap contracts | Other non-current assets | 7,740 | 3,503 | Other non-current liabilities | — | (51 | ) | |||||||||||||
Foreign currency contracts | Other current assets | 11,298 | 10,434 | Accrued expenses and other current liabilities | (1,397 | ) | (292 | ) | ||||||||||||
Total fair value of derivative assets (liabilities) | $ | 29,978 | $ | 18,736 | $ | (1,397 | ) | $ | (343 | ) |
As of March 31, 2018, the net notional amounts of the Company’s derivative contracts and the periods covered by them are as follows:
March 31, | December 31, | |||||||
(in $ thousands) | 2018 | 2017 | ||||||
Interest rate swap contracts (varying contracts and periods as discussed above) | $ | 3,000,000 | $ | 3,000,000 | ||||
Foreign currency contracts (covering the period until March 2019) | 409,652 | 373,487 |
| | | | | | Fair Value Asset | | | | | | Fair Value (Liability) | | ||||||||||||||||||
(in $ thousands) | | | Balance Sheet Location | | | June 30, 2018 | | | December 31, 2017 | | | Balance Sheet Location | | | June 30, 2018 | | | December 31, 2017 | | ||||||||||||
Interest rate swap contracts | | | Other current assets | | | | $ | 12,830 | | | | | $ | 4,799 | | | | Accrued expenses and other current liabilities | | | | $ | — | | | | | $ | — | | |
Interest rate swap contracts | | | Other non-current assets | | | | | 8,369 | | | | | | 3,503 | | | | Other non-current liabilities | | | | | (122) | | | | | | (51) | | |
Foreign currency contracts | | | Other current assets | | | | | 757 | | | | | | 10,434 | | | | Accrued expenses and other current liabilities | | | | | (11,453) | | | | | | (292) | | |
Total fair value of derivative assets (liabilities) | | | | | | | $ | 21,956 | | | | | $ | 18,736 | | | | | | | | $ | (11,575) | | | | | $ | (343) | | |
|
Three Months Ended | Three Months Ended | |||||||
(in $ thousands) | March 31, 2018 | March 31, 2017 | ||||||
Net derivative asset (liability) opening balance | $ | 18,393 | $ | (19,196 | ) | |||
Total gain for the period included in net income | 16,281 | 2,284 | ||||||
(Proceeds from) payments on settlement of derivative contracts | (6,093 | ) | 5,136 | |||||
Net derivative asset (liability) closing balance | $ | 28,581 | $ | (11,776 | ) |
(in $ thousands) | | | Six Months Ended June 30, 2018 | | | Six Months Ended June 30, 2017 | | ||||||
Net derivative asset (liability) opening balance | | | | $ | 18,393 | | | | | $ | (19,196) | | |
Total gain for the period included in net income | | | | | 3,098 | | | | | | 6,529 | | |
(Proceeds from) payments on settlement of derivative contracts | | | | | (11,110) | | | | | | 10,851 | | |
Net derivative asset (liability) closing balance | | | | $ | 10,381 | | | | | $ | (1,816) | | |
|
Amount of Gain | ||||||||||
Recorded in Net Income | ||||||||||
Three Months Ended | ||||||||||
Location of Gain Recorded | March 31, | |||||||||
(in $ thousands) | in Statement of Operations | 2018 | 2017 | |||||||
Interest rate swap contracts | Interest expense, net | $ | 11,222 | $ | 226 | |||||
Foreign currency contracts | Selling, general and administrative | 5,059 | 2,058 | |||||||
$ | 16,281 | $ | 2,284 |
| | | | | | Amount of Gain (Loss) Recorded in Net Income | | |||||||||||||||||||||
| | | | | | Three Months Ended June 30, | | | Six Months Ended June 30, | | ||||||||||||||||||
(in $ thousands) | | | Statement of Operations Location | | | 2018 | | | 2017 | | | 2018 | | | 2017 | | ||||||||||||
Interest rate swap contracts | | | Interest expense, net | | | | $ | 4,866 | | | | | $ | (4,880) | | | | | | 16,088 | | | | | | (4,654) | | |
Foreign currency contracts | | | Selling, general and administrative | | | | | (18,049) | | | | | | 9,125 | | | | | | (12,990) | | | | | | 11,183 | | |
| | | | | | | $ | (13,183) | | | | | $ | 4,245 | | | | | | 3,098 | | | | | | 6,529 | | |
|
(unaudited)
March 31, 2018 | December 31, 2017 | |||||||||||||||||
(in $ thousands) | Fair Value Hierarchy | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Asset (liability) | ||||||||||||||||||
Derivative assets | Level 2 | $ | 29,978 | $ | 29,978 | $ | 18,736 | $ | 18,736 | |||||||||
Derivative liabilities | Level 2 | (1,397 | ) | (1,397 | ) | (343 | ) | (343 | ) | |||||||||
Total debt | Level 2 | (2,223,124 | ) | (2,249,765 | ) | (2,230,013 | ) | (2,258,893 | ) |
| | | | | | June 30, 2018 | | | December 31, 2017 | | ||||||||||||||||||
(in $ thousands) | | | Fair Value Hierarchy | | | Carrying Amount | | | Fair Value | | | Carrying Amount | | | Fair Value | | ||||||||||||
Asset (liability) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivative assets | | | Level 2 | | | | $ | 21,956 | | | | | $ | 21,956 | | | | | $ | 18,736 | | | | | $ | 18,736 | | |
Derivative liabilities | | | Level 2 | | | | | (11,575) | | | | | | (11,575) | | | | | | (343) | | | | | | (343) | | |
Total debt | | | Level 2 | | | | | (2,272,858) | | | | | | (2,293,401) | | | | | | (2,230,013) | | | | | | (2,258,893) | | |
TRAVELPORT WORLDWIDE LIMITED
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
14. Equity
Dividend | Record | Payment | Amount | |||||||
Declaration Date | Per Share | Date | Date | (in $ thousands) | ||||||
February 16, 2018 | $0.075 | March 1, 2018 | March 15, 2018 | $9,406 |
Declaration Date | | | Dividend Per Share | | | Record Date | | | Payment Date | | | Amount (in $ thousands) | | ||||||
February 16, 2018 | | | | $ | 0.075 | | | | March 1, 2018 | | | March 15, 2018 | | | | $ | 9,406 | | |
May 2, 2018 | | | | | 0.075 | | | | June 7, 2018 | | | June 21, 2018 | | | | | 9,459 | | |
Weighted Average | ||||||||
Grant Date | ||||||||
(in dollars, except number of RSUs) | Number | Fair Value | ||||||
Balance as of January 1, 2018 | 1,526,280 | $ | 13.01 | |||||
Granted at fair market value | 794,679 | $ | 14.35 | |||||
Vested(1) | (36,259 | ) | $ | 13.07 | ||||
Forfeited | (129,551 | ) | $ | 12.96 | ||||
Balance as of March 31, 2018 | 2,155,149 | $ | 13.50 |
(in dollars, except number of RSUs) | | | Number | | | Weighted Average Grant Date Fair Value | | ||||||
Balance as of January 1, 2018 | | | | | 1,526,280 | | | | | $ | 13.01 | | |
Granted at fair market value | | | | | 857,133 | | | | | $ | 14.62 | | |
Vested(1) | | | | | (427,673) | | | | | $ | 12.94 | | |
Forfeited | | | | | (168,966) | | | | | $ | 13.06 | | |
Balance as of June 30, 2018 | | | | | 1,786,774 | | | | | $ | 13.79 | | |
|
TRAVELPORT WORLDWIDE LIMITED
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
three months ended March 31,first quarter of 2018, as part of its annual grant program, the Company granted 1,246,803 PSUs. The PSUs cliff-vest at the end of approximately three years from the date of the grant based on the satisfaction of certain performance conditions and continued employment of the employee during the vesting period. The ultimate number of PSUs that will vest also depends on the Company’s ranking within a group of companies based on achievement of its total shareholder’s return (“TSR”) during the applicable performance period compared to the TSR of the companies within the selected group. However, the total number of PSUs that will ultimately vest will not exceed 200% of the original grant. Each reporting period, the Company assesses the probability of vesting, and, if there is any change in such probability, the Company records the cumulative effect of the adjustment in the current reporting period. All of the PSUs arewill be settled in the Company’s common shares. PSUs accrue dividend equivalents associated with the underlying common shares as dividends are declared by the Company. Dividends will generally be paid to holders of PSUs in cash upon the vesting of the associated PSUs and will be forfeited should the PSUs not vest. The PSUs do not have an exercise price. For PSUs earned based on a market condition, the Company utilizes a Monte Carlo simulation to determine the fair value of these awards at the date of grant. Certain of the Company’s outstanding PSUs may be settled by the issuance of common shares held as treasury shares. In line with the Company’s accounting policy, the compensation costs related to the PSUs are expensed on a straight-line basis.threesix months ended March 31,June 30, 2018: Weighted Average Grant Date (in dollars, except number of PSUs) Number Fair Value Balance as of January 1, 2018 2,694,999 $ 13.10 Granted at fair market value 1,444,522 $ 16.33 Forfeited (351,937 ) $ 12.94 Balance as of March 31, 2018(1) 3,787,584 $ 14.32 (in dollars, except number of PSUs) Number
Average
Grant Date
Fair Value Balance as of January 1, 2018 2,694,999 $ 13.10 Granted at fair market value 1,444,522 $ 16.33 Forfeited (441,794) $ 12.93 Vested(1) (11,290) $ 15.50 3,686,437 $ 14.33
Stock Options
Weighted Average | ||||||||||||||||
Weighted Average | Remaining | Aggregate | ||||||||||||||
Exercise Price | Contractual Terms | Intrinsic Value | ||||||||||||||
Number of Options | (in dollars) | (in years) | (in $ thousands) | |||||||||||||
Balance as of January 1, 2018 | 2,352,928 | $ | 13.51 | |||||||||||||
Forfeited | (107,410 | ) | $ | 13.55 | ||||||||||||
Exercised | (290,160 | ) | $ | 9.92 | ||||||||||||
Expired | (40,984 | ) | $ | 15.53 | ||||||||||||
Balance as of March 31, 2018 | 1,914,374 | $ | 14.01 | 7.24 | $ | 4,506 | ||||||||||
Exercisable as of March 31, 2018 | 841,211 | $ | 14.45 | 6.55 | $ | 1,618 | ||||||||||
Expected to vest as of March 31, 2018 | 1,073,163 | $ | 13.66 | 7.78 | $ | 2,888 |
| | | Number of Options | | | Weighted Average Exercise Price (in dollars) | | | Weighted Average Remaining Contractual Terms (in years) | | | Aggregate Intrinsic Value (in $ thousands) | | ||||||||||||
Balance as of January 1, 2018 | | | | | 2,352,928 | | | | | $ | 13.51 | | | | | | | | | | | | | | |
Forfeited | | | | | (157,403) | | | | | $ | 13.67 | | | | | | | | | | | | | | |
Exercised | | | | | (461,805) | | | | | $ | 10.98 | | | | | | | | | | | | | | |
Expired | | | | | (43,914) | | | | | $ | 15.56 | | | | | | | | | | | | | | |
Balance as of June 30, 2018 | | | | | 1,689,806 | | | | | $ | 14.13 | | | | | | 7.24 | | | | | $ | 7,449 | | |
Exercisable as of June 30, 2018 | | | | | 909,890 | | | | | $ | 14.44 | | | | | | 7.03 | | | | | $ | 3,730 | | |
Expected to vest as of June 30, 2018 | | | | | 779,916 | | | | | $ | 13.77 | | | | | | 7.48 | | | | | $ | 3,719 | | |
|
(unaudited)
Three Months Ended March 31, | ||||||||
(in $ thousands, except for share data) | 2018 | 2017 | ||||||
Numerator – Basic and Diluted Income per Share: | ||||||||
Net income from continuing operations | $ | 31,484 | $ | 55,863 | ||||
Net (income) loss attributable to non-controlling interest in subsidiaries | (402 | ) | 243 | |||||
Net income from continuing operations attributable to the Company | $ | 31,082 | $ | 56,106 | ||||
Denominator – Basic Income per Share: | ||||||||
Weighted average common shares outstanding | 125,428,257 | 124,081,175 | ||||||
Income per share from continuing operations – Basic | $ | 0.25 | $ | 0.45 | ||||
Denominator – Diluted Income per Share: | ||||||||
Number of common shares used for basic income per share from continuing operations | 125,428,257 | 124,081,175 | ||||||
Weighted average effect of dilutive securities | ||||||||
RSUs / PSUs | 604,051 | 1,342,130 | ||||||
Stock options | 98,893 | 93,640 | ||||||
Weighted average common shares outstanding | 126,131,201 | 125,516,945 | ||||||
Income per share from continuing operations – Diluted | $ | 0.25 | $ | 0.45 |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | | ||||||||||||||||||
(in $ thousands, except for share data) | | | 2018 | | | 2017 | | | 2018 | | | 2017 | | ||||||||||||
Numerator – Basic and Diluted Income per Share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income from continuing operations | | | | $ | 7,005 | | | | | $ | 34,366 | | | | | $ | 38,489 | | | | | $ | 90,229 | | |
Net (income) loss attributable to non-controlling interest in subsidiaries | | | | | (861) | | | | | | 561 | | | | | | (1,263) | | | | | | 804 | | |
Net income from continuing operations attributable to the Company | | | | $ | 6,144 | | | | | $ | 34,927 | | | | | $ | 37,226 | | | | | $ | 91,033 | | |
Denominator – Basic Income per Share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average common shares outstanding | | | | | 126,043,518 | | | | | | 124,357,929 | | | | | | 125,737,328 | | | | | | 124,219,917 | | |
Income per share from continuing operations – Basic | | | | $ | 0.05 | | | | | $ | 0.28 | | | | | $ | 0.30 | | | | | $ | 0.73 | | |
Denominator – Diluted Income per Share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Number of common shares used for basic income per share from continuing operations | | | | | 126,043,518 | | | | | | 124,357,929 | | | | | | 125,737,328 | | | | | | 124,219,917 | | |
Weighted average effect of dilutive securities | | | | | | | | | | | | | | | | | | | | | | | | | |
RSUs/PSUs | | | | | 761,415 | | | | | | 1,305,282 | | | | | | 688,282 | | | | | | 1,321,912 | | |
Stock options | | | | | 174,572 | | | | | | 93,273 | | | | | | 78,683 | | | | | | 92,799 | | |
Weighted average common shares outstanding | | | | | 126,979,505 | | | | | | 125,756,484 | | | | | | 126,504,293 | | | | | | 125,634,628 | | |
Income per share from continuing operations – Diluted | | | | $ | 0.05 | | | | | $ | 0.28 | | | | | $ | 0.29 | | | | | $ | 0.72 | | |
|
This release of the indemnity provision did not have any impact on the consolidated condensed statements of cash flows.
Technology Services
Three Months | ||||||||||||||||
Ended March 31, | Change | |||||||||||||||
(in $ thousands, except share data, Reported Segments and RevPas) | 2018 | 2017 | $ | % | ||||||||||||
Net revenue | $ | 677,838 | $ | 650,763 | 27,075 | 4 | ||||||||||
Operating income | 77,664 | 99,716 | (22,052 | ) | (22 | ) | ||||||||||
Net income | 59,231 | 55,863 | 3,368 | 6 | ||||||||||||
Income per share – diluted (in $) | 0.47 | 0.45 | 0.02 | 4 | ||||||||||||
Adjusted EBITDA(1) | 154,177 | 168,553 | (14,376 | ) | (9 | ) | ||||||||||
Adjusted Operating Income(2) | 93,436 | 107,241 | (13,805 | ) | (13 | ) | ||||||||||
Adjusted Net Income(3) | 54,938 | 64,357 | (9,419 | ) | (15 | ) | ||||||||||
Adjusted Income per Share – diluted(4) (in $) | 0.44 | 0.51 | (0.07 | ) | (15 | ) | ||||||||||
Net cash provided by operating activities | 83,097 | 95,022 | (11,925 | ) | (13 | ) | ||||||||||
Free Cash Flow(5) | 46,434 | 71,413 | (24,979 | ) | (35 | ) | ||||||||||
Reported Segments (in thousands) | 92,321 | 93,197 | (876 | ) | (1 | ) | ||||||||||
Travel Commerce Platform RevPas (in $) | 7.07 | 6.67 | 0.40 | 6 |
(in $ thousands, except share data, Reported Segments and RevPas) | | | Three Months Ended June 30, | | | Change | | | Six Months Ended June 30, | | | Change | | ||||||||||||||||||||||||||||||||||||
| 2018 | | | 2017 | | | | | | | | | % | | | 2018 | | | 2017 | | | | | | | | | % | | ||||||||||||||||||||
Net revenue | | | | $ | 662,008 | | | | | $ | 612,107 | | | | | $ | 49,901 | | | | | | 8 | | | | | $ | 1,339,846 | | | | | $ | 1,262,870 | | | | | | 76,976 | | | | | | 6 | | |
Operating income | | | | | 42,293 | | | | | | 74,696 | | | | | | (32,403) | | | | | | (43) | | | | | | 119,957 | | | | | | 174,412 | | | | | | (54,455) | | | | | | (31) | | |
Net income | | | | | 7,005 | | | | | | 34,366 | | | | | | (27,361) | | | | | | (80) | | | | | | 66,236 | | | | | | 90,229 | | | | | | (23,993) | | | | | | (27) | | |
Income per share – diluted (in $) | | | | | 0.05 | | | | | | 0.28 | | | | | | (0.23) | | | | | | (83) | | | | | | 0.51 | | | | | | 0.72 | | | | | | (0.21) | | | | | | (29) | | |
Adjusted EBITDA(1) | | | | | 156,923 | | | | | | 147,006 | | | | | | 9,917 | | | | | | 7 | | | | | | 311,100 | | | | | | 315,559 | | | | | | (4,459) | | | | | | (1) | | |
Adjusted Operating Income(2) | | | | | 95,556 | | | | | | 84,832 | | | | | | 10,724 | | | | | | 13 | | | | | | 188,992 | | | | | | 192,073 | | | | | | (3,081) | | | | | | (2) | | |
Adjusted Net Income(3) | | | | | 51,928 | | | | | | 50,006 | | | | | | 1,922 | | | | | | 4 | | | | | | 106,866 | | | | | | 114,363 | | | | | | (7,497) | | | | | | (7) | | |
Adjusted Income per Share – diluted(4) (in $) | | | | | 0.41 | | | | | | 0.40 | | | | | | 0.01 | | | | | | 2 | | | | | | 0.84 | | | | | | 0.91 | | | | | | (0.07) | | | | | | (9) | | |
Net cash provided by operating activities | | | | | 119,189 | | | | | | 83,585 | | | | | | 35,604 | | | | | | 43 | | | | | | 202,286 | | | | | | 178,607 | | | | | | 23,679 | | | | | | 13 | | |
Free Cash Flow(5) | | | | | 81,386 | | | | | | 60,365 | | | | | | 21,021 | | | | | | 35 | | | | | | 127,820 | | | | | | 131,778 | | | | | | (3,958) | | | | | | (3) | | |
Reported Segments (in thousands) | | | | | 86,931 | | | | | | 86,381 | | | | | | 550 | | | | | | 1 | | | | | | 179,252 | | | | | | 179,578 | | | | | | (326) | | | | | | — | | |
Travel Commerce Platform RevPas (in $) | | | | | 7.34 | | | | | | 6.76 | | | | | | 0.58 | | | | | | 9 | | | | | | 7.20 | | | | | | 6.71 | | | | | | 0.49 | | | | | | 7 | | |
Three Months Ended | ||||||||
March 31, | ||||||||
(in $ thousands) | 2018 | 2017 | ||||||
Net income | $ | 59,231 | $ | 55,863 | ||||
Adjustments: | ||||||||
Amortization of acquired intangible assets(1) | 10,166 | 10,392 | ||||||
Loss on early extinguishment of debt | 27,661 | — | ||||||
Equity-based compensation and related taxes | 4,833 | 7,786 | ||||||
Corporate and restructuring costs(2) | 1,215 | 5,656 | ||||||
Impairment of long-lived assets(3) | 491 | 685 | ||||||
Income from discontinued operations | (27,747 | ) | — | |||||
Other – non cash(4) | (11,363 | ) | (16,374 | ) | ||||
Tax adjustments(5) | (9,549 | ) | 349 | |||||
Adjusted Net Income | 54,938 | 64,357 | ||||||
Adjustments: | ||||||||
Interest expense, net(6) | 25,365 | 30,501 | ||||||
Other expense(7) | 93 | — | ||||||
Remaining provision for income taxes | 13,040 | 12,383 | ||||||
Adjusted Operating Income | 93,436 | 107,241 | ||||||
Adjustments: | ||||||||
Depreciation and amortization of property and equipment | 38,398 | 42,517 | ||||||
Amortization of customer loyalty payments | 22,343 | 18,795 | ||||||
Adjusted EBITDA | $ | 154,177 | $ | 168,553 |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | | ||||||||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | 2018 | | | 2017 | | ||||||||||||
Net income | | | | $ | 7,005 | | | | | $ | 34,366 | | | | | $ | 66,236 | | | | | $ | 90,229 | | |
Adjustments: | | | | | | | | | | | | | | | | | | | | | | | | | |
Amortization of acquired intangible assets(1) | | | | | 10,166 | | | | | | 10,131 | | | | | | 20,332 | | | | | | 20,523 | | |
Gain on sale of a subsidiary | | | | | — | | | | | | (1,217) | | | | | | — | | | | | | (1,217) | | |
Loss on early extinguishment of debt | | | | | — | | | | | | — | | | | | | 27,661 | | | | | | — | | |
Equity-based compensation and related taxes | | | | | 7,211 | | | | | | 7,893 | | | | | | 12,044 | | | | | | 15,679 | | |
Corporate and restructuring costs(2) | | | | | 4,017 | | | | | | 5,024 | | | | | | 5,232 | | | | | | 10,680 | | |
Impairment of long-lived assets(3) | | | | | 11,152 | | | | | | — | | | | | | 11,643 | | | | | | 685 | | |
Income from discontinued operations | | | | | — | | | | | | — | | | | | | (27,747) | | | | | | — | | |
Other – non cash(4) | | | | | 18,321 | | | | | | (8,839) | | | | | | 6,958 | | | | | | (25,213) | | |
Tax adjustments(5) | | | | | (5,944) | | | | | | 2,648 | | | | | | (15,493) | | | | | | 2,997 | | |
Adjusted Net Income | | | | | 51,928 | | | | | | 50,006 | | | | | | 106,866 | | | | | | 114,363 | | |
Adjustments: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense, net(6) | | | | | 26,001 | | | | | | 29,716 | | | | | | 51,366 | | | | | | 60,217 | | |
Other expense(7) | | | | | 371 | | | | | | — | | | | | | 464 | | | | | | — | | |
Remaining provision for income taxes | | | | | 17,256 | | | | | | 5,110 | | | | | | 30,296 | | | | | | 17,493 | | |
Adjusted Operating Income | | | | | 95,556 | | | | | | 84,832 | | | | | | 188,992 | | | | | | 192,073 | | |
Adjustments: | | | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization of property and equipment | | | | | 39,219 | | | | | | 43,517 | | | | | | 77,617 | | | | | | 86,034 | | |
Amortization of customer loyalty payments | | | | | 22,148 | | | | | | 18,657 | | | | | | 44,491 | | | | | | 37,452 | | |
Adjusted EBITDA | | | | $ | 156,923 | | | | | $ | 147,006 | | | | | $ | 311,100 | | | | | $ | 315,559 | | |
|
Three Months Ended | ||||||||
March 31, | ||||||||
(in $) | 2018 | 2017 | ||||||
Income per share – diluted | $ | 0.47 | $ | 0.45 | ||||
Per share adjustments to net income to determine Adjusted Income per Share – diluted | (0.03 | ) | 0.06 | |||||
Adjusted Income per Share – diluted | $ | 0.44 | $ | 0.51 |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | | ||||||||||||||||||
(in $) | | | 2018 | | | 2017 | | | 2018 | | | 2017 | | ||||||||||||
Income per share – diluted | | | | $ | 0.05 | | | | | $ | 0.28 | | | | | $ | 0.51 | | | | | $ | 0.72 | | |
Per share adjustments to net income to determine Adjusted Income per Share – diluted | | | | | 0.36 | | | | | | 0.12 | | | | | | 0.33 | | | | | | 0.19 | | |
Adjusted Income per Share – diluted | | | | $ | 0.41 | | | | | $ | 0.40 | | | | | $ | 0.84 | | | | | $ | 0.91 | | |
|
Factors Affecting Results of Operations
Three Months Ended | ||||||||
March 31, | ||||||||
(in percentages) | 2018 | 2017 | ||||||
Asia Pacific | 22 | 24 | ||||||
Europe | 37 | 33 | ||||||
Latin America and Canada | 5 | 5 | ||||||
Middle East and Africa | 12 | 13 | ||||||
International | 76 | 75 | ||||||
United States | 24 | 25 | ||||||
Travel Commerce Platform | 100 | 100 |
| | | Six Months Ended June 30, | | |||||||||
(in percentages) | | | 2018 | | | 2017 | | ||||||
Asia Pacific | | | | | 22 | | | | | | 24 | | |
Europe | | | | | 36 | | | | | | 32 | | |
Latin America and Canada | | | | | 5 | | | | | | 5 | | |
Middle East and Africa | | | | | 12 | | | | | | 13 | | |
International | | | | | 75 | | | | | | 74 | | |
United States | | | | | 25 | | | | | | 26 | | |
Travel Commerce Platform | | | | | 100 | | | | | | 100 | | |
|
Customer
Results of Operations
Three Months Ended March 31, 2018 Compared to Three Months Ended March 31, 2017
We have adopted new guidance on pension costs from January 1, 2018 (see Note 2—Recently Issued Accounting Pronouncements—Pension to our consolidated condensed financial statements included in this Quarterly Report on Form 10-Q). In accordance with the guidance, we have presented interest costs, expected return on plan assets and amortization of actuarial gain or loss components of net periodic pension and post-retirement benefit costs separately outside of operating income. For the three months ended March 31, 2017, we reclassified $1 million from selling, general and administrative expense to other expense within the consolidated condensed statement of operations.
Three Months Ended | ||||||||||||||||
March 31, | Change | |||||||||||||||
(in $ thousands, except share data) | 2018 | 2017 | $ | % | ||||||||||||
Net revenue | $ | 677,838 | $ | 650,763 | $ | 27,075 | 4 | |||||||||
Costs and expenses | ||||||||||||||||
Cost of revenue | 426,397 | 386,837 | 39,560 | 10 | ||||||||||||
Selling, general and administrative | 125,200 | 111,301 | 13,899 | 12 | ||||||||||||
Depreciation and amortization | 48,577 | 52,909 | (4,332 | ) | (8 | ) | ||||||||||
Total costs and expenses | 600,174 | 551,047 | 49,127 | 9 | ||||||||||||
Operating income | 77,664 | 99,716 | (22,052 | ) | (22 | ) | ||||||||||
Interest expense, net | (14,935 | ) | (30,275 | ) | 15,340 | 51 | ||||||||||
Loss on early extinguishment of debt | (27,661 | ) | — | (27,661 | ) | * | ||||||||||
Other expense | (93 | ) | (846 | ) | 753 | 89 | ||||||||||
Income before income taxes | 34,975 | 68,595 | (33,620 | ) | (49 | ) | ||||||||||
Provision for income taxes | (3,491 | ) | (12,732 | ) | 9,241 | 73 | ||||||||||
Net income from continuing operations | 31,484 | 55,863 | (24,379 | ) | (44 | ) | ||||||||||
Income from discontinued operations, net of tax | 27,747 | — | 27,747 | * | ||||||||||||
Net income | $ | 59,231 | $ | 55,863 | $ | 3,368 | 6 |
Net Revenue
On January 1, 2018, we adopted new guidance on revenue recognition applying the modified retrospective method to all contracts. Results for the three and six months ended March 31,June 30, 2018 are presented under the new revenue recognition guidance, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under previous revenue recognition guidance. We recorded a reduction of $1 million to our accumulated deficit balance as of January 1, 2018, representing the cumulative impact of adopting the new revenue recognition guidance, which primarily relates to the timing of recognition of hotel reservations in our Beyond Air revenue. TheFor the three months ended June 30, 2018, there was an immaterial impact to net revenue for the quarter ended March 31, 2018 was a decrease of less than $1 million as a result of applying the new revenue recognition guidance (see Note 3–3—Revenue to our consolidated condensed financial statements included in this Quarterly Report on Form 10-Q).
| | | Three Months Ended June 30, | | | Change | |||||||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | $ | | | % | |||||||||||
Net revenue | | | | $ | 662,008 | | | | | $ | 612,107 | | | | | $ | 49,901 | | | | | | 8 |
Costs and expenses | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenue | | | | | 427,792 | | | | | | 369,708 | | | | | | 58,084 | | | | | | 16 |
Selling, general and administrative | | | | | 142,355 | | | | | | 114,055 | | | | | | 28,300 | | | | | | 25 |
Depreciation and amortization | | | | | 49,568 | | | | | | 53,648 | | | | | | (4,080) | | | | | | (8) |
Total costs and expenses | | | | | 619,715 | | | | | | 537,411 | | | | | | 82,304 | | | | | | 15 |
Operating income | | | | | 42,293 | | | | | | 74,696 | | | | | | (32,403) | | | | | | (43) |
Interest expense, net | | | | | (23,605) | | | | | | (32,943) | | | | | | 9,338 | | | | | | 28 |
Gain on sale of a subsidiary | | | | | — | | | | | | 1,217 | | | | | | (1,217) | | | | | | (100) |
Other expense | | | | | (371) | | | | | | (846) | | | | | | 475 | | | | | | 56 |
Income before income taxes | | | | | 18,317 | | | | | | 42,124 | | | | | | (23,807) | | | | | | (57) |
Provision for income taxes | | | | | (11,312) | | | | | | (7,758) | | | | | | (3,554) | | | | | | (46) |
Net income | | | | $ | 7,005 | | | | | $ | 34,366 | | | | | $ | (27,361) | | | | | | (80) |
|
Three Months Ended | ||||||||||||||||
March 31, | Change | |||||||||||||||
(in $ thousands) | 2018 | 2017 | $ | % | ||||||||||||
Air | $ | 472,935 | $ | 474,475 | $ | (1,540 | ) | — | ||||||||
Beyond Air | 179,751 | 147,585 | 32,166 | 22 | ||||||||||||
Travel Commerce Platform | 652,686 | 622,060 | 30,626 | 5 | ||||||||||||
Technology Services | 25,152 | 28,703 | (3,551 | ) | (12 | ) | ||||||||||
Net revenue | $ | 677,838 | $ | 650,763 | $ | 27,075 | 4 |
| | | Three Months Ended June 30, | | | Change | |||||||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | $ | | | % | |||||||||||
Air | | | | $ | 443,947 | | | | | $ | 423,654 | | | | | $ | 20,293 | | | | | | 5 |
Beyond Air | | | | | 194,021 | | | | | | 160,107 | | | | | | 33,914 | | | | | | 21 |
Travel Commerce Platform | | | | | 637,968 | | | | | | 583,761 | | | | | | 54,207 | | | | | | 9 |
Technology Services | | | | | 24,040 | | | | | | 28,346 | | | | | | (4,306) | | | | | | (15) |
Net revenue | | | | $ | 662,008 | | | | | $ | 612,107 | | | | | $ | 49,901 | | | | | | 8 |
|
Travel Commerce Platform
Three Months Ended | ||||||||||||||||
March 31, | Change | |||||||||||||||
2018 | 2017 | % | ||||||||||||||
Travel Commerce Platform RevPas (in $) | $ | 7.07 | $ | 6.67 | $ | 0.40 | 6 | |||||||||
Reported Segments (in thousands) | 92,321 | 93,197 | (876 | ) | (1 | ) |
| | | Three Months Ended June 30, | | | Change | | ||||||||||||||||||
| | | 2018 | | | 2017 | | | | | | | | | % | | |||||||||
Travel Commerce Platform RevPas (in $) | | | | $ | 7.34 | | | | | $ | 6.76 | | | | | $ | 0.58 | | | | | | 9 | | |
Reported Segments (in thousands) | | | | | 86,931 | | | | | | 86,381 | | | | | | 550 | | | | | | 1 | | |
| | | Three Months Ended June 30, | | | Change | | ||||||||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | $ | | | % | | ||||||||||||
Asia Pacific | | | | $ | 144,991 | | | | | $ | 141,725 | | | | | $ | 3,266 | | | | | | 2 | | |
Europe | | | | | 223,340 | | | | | | 180,594 | | | | | | 42,746 | | | | | | 24 | | |
Latin America and Canada | | | | | 29,456 | | | | | | 27,574 | | | | | | 1,882 | | | | | | 7 | | |
Middle East and Africa | | | | | 81,663 | | | | | | 77,912 | | | | | | 3,751 | | | | | | 5 | | |
International | | | | | 479,450 | | | | | | 427,805 | | | | | | 51,645 | | | | | | 12 | | |
United States | | | | | 158,518 | | | | | | 155,956 | | | | | | 2,562 | | | | | | 2 | | |
Travel Commerce Platform | | | | $ | 637,968 | | | | | $ | 583,761 | | | | | $ | 54,207 | | | | | | 9 | | |
|
| | | Segments (in thousands) | | | RevPas (in $) | | ||||||||||||||||||||||||||||||||||||||||||
| | | Three Months Ended June 30, | | | Change | | | Three Months Ended June 30, | | | Change | | ||||||||||||||||||||||||||||||||||||
| | | 2018 | | | 2017 | | | | | | | | | % | | | 2018 | | | 2017 | | | $ | | | % | | |||||||||||||||||||||
Asia Pacific | | | | | 16,240 | | | | | | 17,697 | | | | | | (1,457) | | | | | | (8) | | | | | $ | 8.93 | | | | | $ | 8.01 | | | | | | 0.92 | | | | | | 11 | | |
Europe | | | | | 21,232 | | | | | | 19,864 | | | | | | 1,368 | | | | | | 7 | | | | | $ | 10.52 | | | | | $ | 9.09 | | | | | | 1.43 | | | | | | 16 | | |
Latin America and Canada | | | | | 4,728 | | | | | | 4,530 | | | | | | 198 | | | | | | 4 | | | | | $ | 6.23 | | | | | $ | 6.09 | | | | | | 0.14 | | | | | | 2 | | |
Middle East and Africa | | | | | 9,492 | | | | | | 9,441 | | | | | | 51 | | | | | | 1 | | | | | $ | 8.60 | | | | | $ | 8.25 | | | | | | 0.35 | | | | | | 4 | | |
International | | | | | 51,692 | | | | | | 51,532 | | | | | | 160 | | | | | | — | | | | | $ | 9.28 | | | | | $ | 8.30 | | | | | | 0.98 | | | | | | 12 | | |
United States | | | | | 35,239 | | | | | | 34,849 | | | | | | 390 | | | | | | 1 | | | | | $ | 4.50 | | | | | $ | 4.48 | | | | | | 0.02 | | | | | | 1 | | |
Travel Commerce Platform | | | | | 86,931 | | | | | | 86,381 | | | | | | 550 | | | | | | 1 | | | | | $ | 7.34 | | | | | $ | 6.76 | | | | | | 0.58 | | | | | | 9 | | |
|
| | | Three Months Ended June 30, | | | Change | | ||||||||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | $ | | | % | | ||||||||||||
Commissions | | | | $ | 349,135 | | | | | $ | 289,464 | | | | | $ | 59,671 | | | | | | 21 | | |
Technology costs | | | | | 78,657 | | | | | | 80,244 | | | | | | (1,587) | | | | | | (2) | | |
Cost of revenue | | | | $ | 427,792 | | | | | $ | 369,708 | | | | | $ | 58,084 | | | | | | 16 | | |
|
| | | Three Months Ended June 30, | | | Change | | ||||||||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | $ | | | % | | ||||||||||||
Workforce | | | | $ | 89,654 | | | | | $ | 92,611 | | | | | $ | (2,957) | | | | | | (3) | | |
Non-workforce | | | | | 19,916 | | | | | | 20,593 | | | | | | (677) | | | | | | (3) | | |
Sub-total | | | | | 109,570 | | | | | | 113,204 | | | | | | (3,634) | | | | | | (3) | | |
Non-core corporate costs | | | | | 32,785 | | | | | | 851 | | | | | | 31,934 | | | | | | * | | |
SG&A | | | | $ | 142,355 | | | | | $ | 114,055 | | | | | $ | 28,300 | | | | | | 25 | | |
|
| | | Three Months Ended June 30, | | | Change | | ||||||||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | $ | | | % | | ||||||||||||
Depreciation on property and equipment | | | | $ | 39,402 | | | | | $ | 43,517 | | | | | $ | (4,115) | | | | | | (9) | | |
Amortization of acquired intangible assets | | | | | 10,166 | | | | | | 10,131 | | | | | | 35 | | | | | | — | | |
Total depreciation and amortization | | | | $ | 49,568 | | | | | $ | 53,648 | | | | | $ | (4,080) | | | | | | (8) | | |
|
| | | Six Months Ended June 30, | | | Change | | ||||||||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | $ | | | % | | ||||||||||||
Net revenue | | | | $ | 1,339,846 | | | | | $ | 1,262,870 | | | | | $ | 76,976 | | | | | | 6 | | |
Costs and expenses | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenue | | | | | 854,189 | | | | | | 756,545 | | | | | | 97,644 | | | | | | 13 | | |
Selling, general and administrative | | | | | 267,555 | | | | | | 225,356 | | | | | | 42,199 | | | | | | 19 | | |
Depreciation and amortization | | | | | 98,145 | | | | | | 106,557 | | | | | | (8,412) | | | | | | (8) | | |
Total costs and expenses | | | | | 1,219,889 | | | | | | 1,088,458 | | | | | | 131,431 | | | | | | 12 | | |
Operating income | | | | | 119,957 | | | | | | 174,412 | | | | | | (54,455) | | | | | | (31) | | |
Interest expense, net | | | | | (38,540) | | | | | | (63,218) | | | | | | 24,678 | | | | | | 39 | | |
Loss on early extinguishment of debt | | | | | (27,661) | | | | | | — | | | | | | (27,661) | | | | | | * | | |
Gain on sale of a subsidiary | | | | | — | | | | | | 1,217 | | | | | | (1,217) | | | | | | 100 | | |
Other expense | | | | | (464) | | | | | | (1,692) | | | | | | 1,228 | | | | | | 73 | | |
Income before income taxes | | | | | 53,292 | | | | | | 110,719 | | | | | | (57,427) | | | | | | (52) | | |
Provision for income taxes | | | | | (14,803) | | | | | | (20,490) | | | | | | 5,687 | | | | | | 28 | | |
Net income from continuing operations | | | | | 38,489 | | | | | | 90,229 | | | | | | (51,740) | | | | | | (57) | | |
Income from discontinued operations, net of tax | | | | | 27,747 | | | | | | — | | | | | | 27,747 | | | | | | * | | |
Net income | | | | $ | 66,236 | | | | | $ | 90,229 | | | | | $ | (23,993) | | | | | | (27) | | |
|
| | | Six Months Ended June 30, | | | Change | |||||||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | $ | | | % | |||||||||||
Air | | | | $ | 916,882 | | | | | $ | 898,129 | | | | | $ | 18,753 | | | | | | 2 |
Beyond Air | | | | | 373,772 | | | | | | 307,692 | | | | | | 66,080 | | | | | | 21 |
Travel Commerce Platform | | | | | 1,290,654 | | | | | | 1,205,821 | | | | | | 84,833 | | | | | | 7 |
Technology Services | | | | | 49,192 | | | | | | 57,049 | | | | | | (7,857) | | | | | | (14) |
Net revenue | | | | $ | 1,339,846 | | | | | $ | 1,262,870 | | | | | $ | 76,976 | | | | | | 6 |
|
| | | Six Months Ended June 30, | | | Change | | ||||||||||||||||||
| | | 2018 | | | 2017 | | | | | | | | | % | | |||||||||
Travel Commerce Platform RevPas (in $) | | | | $ | 7.20 | | | | | $ | 6.71 | | | | | $ | 0.49 | | | | | | 7 | | |
Reported Segments (in thousands) | | | | | 179,252 | | | | | | 179,578 | | | | | | (326) | | | | | | — | | |
June 30, 2018 compared to the six months ended June 30, 2017.
Three Months Ended | ||||||||||||||||
March 31, | Change | |||||||||||||||
(in $ thousands) | 2018 | 2017 | $ | % | ||||||||||||
Asia Pacific | $ | 141,551 | $ | 151,015 | $ | (9,464 | ) | (6 | ) | |||||||
Europe | 244,442 | 202,416 | 42,026 | 21 | ||||||||||||
Latin America and Canada | 29,859 | 28,782 | 1,077 | 4 | ||||||||||||
Middle East and Africa | 79,106 | 83,553 | (4,447 | ) | (5 | ) | ||||||||||
International | 494,958 | 465,766 | 29,192 | 6 | ||||||||||||
United States | 157,728 | 156,294 | 1,434 | 1 | ||||||||||||
Travel Commerce Platform | $ | 652,686 | $ | 622,060 | $ | 30,626 | 5 |
| | | Six Months Ended June 30, | | | Change | | ||||||||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | $ | | | % | | ||||||||||||
Asia Pacific | | | | $ | 286,542 | | | | | $ | 292,740 | | | | | $ | (6,198) | | | | | | (2) | | |
Europe | | | | | 467,782 | | | | | | 383,010 | | | | | | 84,772 | | | | | | 22 | | |
Latin America and Canada | | | | | 59,315 | | | | | | 56,356 | | | | | | 2,959 | | | | | | 5 | | |
Middle East and Africa | | | | | 160,769 | | | | | | 161,465 | | | | | | (696) | | | | | | — | | |
International | | | | | 974,408 | | | | | | 893,571 | | | | | | 80,837 | | | | | | 9 | | |
United States | | | | | 316,246 | | | | | | 312,250 | | | | | | 3,996 | | | | | | 1 | | |
Travel Commerce Platform | | | | $ | 1,290,654 | | | | | $ | 1,205,821 | | | | | $ | 84,833 | | | | | | 7 | | |
|
Segments(in thousands) | RevPas(in $) | |||||||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||
March 31, | Change | March 31, | Change | |||||||||||||||||||||||||||||
2018 | 2017 | % | 2018 | 2017 | $ | % | ||||||||||||||||||||||||||
Asia Pacific | 16,168 | 19,208 | (3,040 | ) | (16 | ) | $ | 8.76 | $ | 7.86 | 0.90 | 11 | ||||||||||||||||||||
Europe | 25,647 | 23,497 | 2,150 | 9 | $ | 9.53 | $ | 8.61 | 0.92 | 11 | ||||||||||||||||||||||
Latin America and Canada | 4,710 | 4,626 | 84 | 2 | $ | 6.34 | $ | 6.22 | 0.12 | 2 | ||||||||||||||||||||||
Middle East and Africa | 9,628 | 9,476 | 152 | 2 | $ | 8.22 | $ | 8.82 | (0.60 | ) | (7 | ) | ||||||||||||||||||||
International | 56,153 | 56,807 | (654 | ) | (1 | ) | $ | 8.81 | $ | 8.20 | 0.61 | 8 | ||||||||||||||||||||
United States | 36,168 | 36,390 | (222 | ) | (1 | ) | $ | 4.36 | $ | 4.30 | 0.06 | 1 | ||||||||||||||||||||
Travel Commerce Platform | 92,321 | 93,197 | (876 | ) | (1 | ) | $ | 7.07 | $ | 6.67 | 0.40 | 6 |
| | | Segments (in thousands) | | | RevPas (in $) | | ||||||||||||||||||||||||||||||||||||||||||
| | | Six Months Ended June 30, | | | Change | | | Six Months Ended June 30, | | | Change | | ||||||||||||||||||||||||||||||||||||
| | | 2018 | | | 2017 | | | | | | | | | % | | | 2018 | | | 2017 | | | $ | | | % | | |||||||||||||||||||||
Asia Pacific | | | | | 32,408 | | | | | | 36,905 | | | | | | (4,497) | | | | | | (12) | | | | | $ | 8.84 | | | | | $ | 7.93 | | | | | | 0.91 | | | | | | 11 | | |
Europe | | | | | 46,879 | | | | | | 43,361 | | | | | | 3,518 | | | | | | 8 | | | | | $ | 9.98 | | | | | $ | 8.83 | | | | | | 1.15 | | | | | | 13 | | |
Latin America and Canada | | | | | 9,438 | | | | | | 9,156 | | | | | | 282 | | | | | | 3 | | | | | $ | 6.28 | | | | | $ | 6.16 | | | | | | 0.12 | | | | | | 2 | | |
Middle East and Africa | | | | | 19,120 | | | | | | 18,917 | | | | | | 203 | | | | | | 1 | | | | | $ | 8.41 | | | | | $ | 8.54 | | | | | | (0.13) | | | | | | (1) | | |
International | | | | | 107,845 | | | | | | 108,339 | | | | | | (494) | | | | | | — | | | | | $ | 9.04 | | | | | $ | 8.25 | | | | | | 0.79 | | | | | | 10 | | |
United States | | | | | 71,407 | | | | | | 71,239 | | | | | | 168 | | | | | | — | | | | | $ | 4.43 | | | | | $ | 4.38 | | | | | | 0.05 | | | | | | 1 | | |
Travel Commerce Platform | | | | | 179,252 | | | | | | 179,578 | | | | | | (326) | | | | | | — | | | | | $ | 7.20 | | | | | $ | 6.71 | | | | | | 0.49 | | | | | | 7 | | |
|
International
Our International Travel Commerce Platform revenue increased by $29$81 million, or 6%9%, due to an 8%a 10% increase in RevPas offset by a 1% decrease inwith Reported Segments.Segments remaining stable. The increase in RevPas was a result of revenue growth in Air and growth primarily in payment solutions in Beyond Air. The increase in Air was
Netherlands, partially offset by decrease in Russia.
5%, primarily due to a 3% increase in Reported Segments and a 2% increase in RevPas, both mainly driven by growth in Air.
years, offset by revenue growth in Air and payment solutions in Beyond Air.
$4 million, or 1%, due to a 1% increase in RevPas with Reported Segments remaining stable. RevPas increased primarily due to revenue growth in Air.
Three Months Ended | ||||||||||||||||
March 31, | Change | |||||||||||||||
(in $ thousands) | 2018 | 2017 | $ | % | ||||||||||||
Commissions | $ | 349,951 | $ | 302,789 | $ | 47,162 | 16 | |||||||||
Technology costs | 76,446 | 84,048 | (7,602 | ) | (9 | ) | ||||||||||
Cost of revenue | $ | 426,397 | $ | 386,837 | $ | 39,560 | 10 |
| | | Six Months Ended June 30, | | | Change | | ||||||||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | $ | | | % | | ||||||||||||
Commissions | | | | $ | 699,086 | | | | | $ | 592,253 | | | | | $ | 106,833 | | | | | | 18 | | |
Technology costs | | | | | 155,103 | | | | | | 164,292 | | | | | | (9,189) | | | | | | (6) | | |
Cost of revenue | | | | $ | 854,189 | | | | | $ | 756,545 | | | | | $ | 97,644 | | | | | | 13 | | |
|
Selling, General and Administrative (SG&A)
Three Months Ended | ||||||||||||||||
March 31, | Change | |||||||||||||||
(in $ thousands) | 2018 | 2017 | $ | % | ||||||||||||
Workforce | $ | 103,333 | $ | 84,529 | $ | 18,804 | 22 | |||||||||
Non-workforce | 16,510 | 21,182 | (4,672 | ) | (22 | ) | ||||||||||
Sub-total | 119,843 | 105,711 | 14,132 | 13 | ||||||||||||
Non-core corporate costs | 5,357 | 5,590 | (233 | ) | (4 | ) | ||||||||||
SG&A | $ | 125,200 | $ | 111,301 | $ | 13,899 | 12 |
| | | Six Months Ended June 30, | | | Change | |||||||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | $ | | | % | |||||||||||
Workforce | | | | $ | 192,987 | | | | | $ | 177,140 | | | | | $ | 15,847 | | | | | | 9 |
Non-workforce | | | | | 36,426 | | | | | | 41,775 | | | | | | (5,349) | | | | | | (13) |
Sub-total | | | | | 229,413 | | | | | | 218,915 | | | | | | 10,498 | | | | | | 5 |
Non-core corporate costs | | | | | 38,142 | | | | | | 6,441 | | | | | | 31,701 | | | | | | * |
SG&A | | | | $ | 267,555 | | | | | $ | 225,356 | | | | | $ | 42,199 | | | | | | 19 |
|
contracts offset by $5 million of lower corporate and restructuring costs and $4 million of lower equity-based compensation and related taxes.
Three Months Ended | ||||||||||||||||
March 31, | Change | |||||||||||||||
(in $ thousands) | 2018 | 2017 | $ | % | ||||||||||||
Depreciation on property and equipment | $ | 38,411 | $ | 42,517 | $ | (4,106 | ) | (10 | ) | |||||||
Amortization of acquired intangible assets | 10,166 | 10,392 | (226 | ) | (2 | ) | ||||||||||
Total depreciation and amortization | $ | 48,577 | $ | 52,909 | $ | (4,332 | ) | (8 | ) |
| | | Six Months Ended June 30, | | | Change | |||||||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | $ | | | % | |||||||||||
Depreciation on property and equipment | | | | $ | 77,813 | | | | | $ | 86,034 | | | | | $ | (8,221) | | | | | | (10) |
Amortization of acquired intangible assets | | | | | 20,332 | | | | | | 20,523 | | | | | | (191) | | | | | | (1) |
Total depreciation and amortization | | | | $ | 98,145 | | | | | $ | 106,557 | | | | | $ | (8,412) | | | | | | (8) |
|
six months ended June 30, 2017.
(vi)(vii) the impact of changes in the U.K. to the tax deductibility of interest.non–U.S.non-U.S. NOL carry forwards and U.S. tax credits werewas $197 million. We believe it is more likely than not that the benefit from such deferred tax assets will not be realized. Consequently, we have recorded a valuation allowanceallowances of $187 million against such deferred tax assets as of December 31, 2017.March 31,June 30, 2018, our estimate of our annual effective tax rate includes the impact of releasing a portion of the valuation allowance associated with both the U.S. and U.K. NOL carry forwards (see below). However, we have maintained a valuation allowance on the remaining deferred tax assets. Future realized earnings performance and changes in future earnings projections, among other factors, may cause an adjustment to the conclusion as to whether it is more likely than not that we will realize the benefit of the deferred tax assets will be realized.assets. This would impact the income tax expense in the period for which it is determined that these factors have changed.11–Long-term11—Long-Term Debt to our consolidated condensed financial statements included in this Quarterly Report on Form 10-Q), we expect that there will be future taxable income in the U.K. other than the reversal of deferred tax liabilities. Consequently, we have realized a benefit of $10 million following the release of the valuation allowance on deferred tax assets associated with our U.K. NOL carry forwards (see Note 4–4—Income Taxes to our consolidated condensed financial statements included in this Quarterly Report on Form 10-Q).March 31,June 30, 2018, our cash and cash equivalents and revolving credit facility availability were as follows: March 31, (in $ thousands) 2018 Cash and cash equivalents $ 127,165 Revolving credit facility availability 141,658 (in $ thousands)
2018 Cash and cash equivalents $ 183,510 Revolving credit facility availability 141,749
The table below sets out our working capital as of March 31,June 30, 2018 and December 31, 2017, as monitored by management, which is then reconciled to our working capital as presented in our consolidated condensed balance sheets:
Asset (Liability) | ||||||||||||
March 31, | December 31, | |||||||||||
(in $ thousands) | 2018 | 2017 | Change | |||||||||
Accounts receivable, net | $ | 270,663 | $ | 206,524 | $ | 64,139 | ||||||
Accrued commissions and incentives | (356,856 | ) | (282,954 | ) | (73,902 | ) | ||||||
Deferred revenue and prepaid incentives, net | (39,447 | ) | (31,419 | ) | (8,028 | ) | ||||||
Cash and cash equivalents | 127,165 | 122,039 | 5,126 | |||||||||
Accounts payable and employee related | (143,477 | ) | (145,140 | ) | 1,663 | |||||||
Accrued interest | (4,131 | ) | (12,010 | ) | 7,879 | |||||||
Current portion of long-term debt | (54,089 | ) | (64,291 | ) | 10,202 | |||||||
Taxes | (2,804 | ) | (2,823 | ) | 19 | |||||||
Other assets, net | 32,324 | 1,724 | 30,600 | |||||||||
Working Capital | $ | (170,652 | ) | $ | (208,350 | ) | $ | 37,698 | ||||
Consolidated Condensed Balance Sheets: | ||||||||||||
Total current assets | $ | 540,354 | $ | 438,287 | $ | 102,067 | ||||||
Total current liabilities | (711,006 | ) | (646,637 | ) | (64,369 | ) | ||||||
Working Capital | $ | (170,652 | ) | $ | (208,350 | ) | $ | 37,698 |
| | | Asset (Liability) | | | Change | | ||||||||||||
(in $ thousands) | | | June 30, 2018 | | | December 31, 2017 | | ||||||||||||
Accounts receivable, net | | | | $ | 262,407 | | | | | $ | 206,524 | | | | | $ | 55,883 | | |
Accrued commissions and incentives | | | | | (336,055) | | | | | | (282,954) | | | | | | (53,101) | | |
Deferred revenue and prepaid incentives, net | | | | | (43,579) | | | | | | (31,419) | | | | | | (12,160) | | |
Cash and cash equivalents | | | | | 183,510 | | | | | | 122,039 | | | | | | 61,471 | | |
Accounts payable and employee related | | | | | (146,625) | | | | | | (145,140) | | | | | | (1,485) | | |
Accrued interest | | | | | (20,329) | | | | | | (12,010) | | | | | | (8,319) | | |
Current portion of long-term debt | | | | | (56,527) | | | | | | (64,291) | | | | | | 7,764 | | |
Taxes | | | | | 3,026 | | | | | | (2,823) | | | | | | 5,849 | | |
Other assets, net | | | | | 19,425 | | | | | | 1,724 | | | | | | 17,701 | | |
Working Capital | | | | $ | (134,747) | | | | | $ | (208,350) | | | | | $ | 73,603 | | |
Consolidated Condensed Balance Sheets: | | | | | | | | | | | | | | | | | | | |
Total current assets | | | | $ | 570,988 | | | | | $ | 438,287 | | | | | $ | 132,701 | | |
Total current liabilities | | | | | (705,735) | | | | | | (646,637) | | | | | | (59,098) | | |
Working Capital | | | | $ | (134,747) | | | | | $ | (208,350) | | | | | $ | 73,603 | | |
|
accrued interest.
March 31, | December 31, | |||||||||||
2018 | 2017 | Change | ||||||||||
Accounts receivable, net(in $ thousands) | $ | 270,663 | $ | 206,524 | $ | 64,139 | ||||||
Accounts receivable, net – Days Sales Outstanding (“DSO”) | 38 | 37 | 1 |
| | | June 30, 2018 | | | December 31, 2017 | | | Change | | |||||||||
Accounts receivable, net (in $ thousands) | | | | $ | 262,407 | | | | | $ | 206,524 | | | | | $ | 55,883 | | |
Accounts receivable, net – Days Sales Outstanding (“DSO”) | | | | | 37 | | | | | | 37 | | | | | | — | | |
Cash Flows
Three Months Ended | ||||||||||||
March 31, | Change | |||||||||||
(in $ thousands) | 2018 | 2017 | $ | |||||||||
Cash provided by (used in): | ||||||||||||
Operating activities of continuing operations | $ | 83,097 | $ | 95,022 | $ | (11,925 | ) | |||||
Investing activities | (36,663 | ) | (23,609 | ) | (13,054 | ) | ||||||
Financing activities | (41,705 | ) | (24,251 | ) | (17,454 | ) | ||||||
Effect of exchange rate changes | 397 | 307 | 90 | |||||||||
Net increase in cash and cash equivalents | $ | 5,126 | $ | 47,469 | $ | (42,343 | ) |
| | | Six Months Ended June 30, | | | Change | | ||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | $ | | |||||||||
Cash provided by (used in): | | | | | | | | | | | | | | | | | | | |
Operating activities of continuing operations | | | | $ | 202,286 | | | | | $ | 178,607 | | | | | $ | 23,679 | | |
Investing activities | | | | | (74,466) | | | | | | (50,262) | | | | | | (24,204) | | |
Financing activities | | | | | (65,470) | | | | | | (52,552) | | | | | | (12,918) | | |
Effect of exchange rate changes | | | | | (879) | | | | | | 782 | | | | | | (1,661) | | |
Net increase in cash and cash equivalents | | | | $ | 61,471 | | | | | $ | 76,575 | | | | | $ | (15,104) | | |
|
During the six months ended June 30, 2017, cash used in investing activities of $50 million was due to $47 million of cash used in the purchase of property and equipment and a $3 million net cash outflow related to the sale of IGTS.
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
(in $ thousands) | 2018 | 2017 | Change | |||||||||
Cash additions to software developed for internal use | $ | 31,352 | $ | 17,882 | $ | 13,470 | ||||||
Cash additions to computer equipment and other | 5,311 | 5,727 | 416 | |||||||||
Property and equipment additions | $ | 36,663 | $ | 23,609 | $ | 13,054 |
| | | Six Months Ended June 30, | | | ||||||||||||||
(in $ thousands) | | | 2018 | | | 2017 | | | Change | | |||||||||
Cash additions to software developed for internal use | | | | $ | 64,020 | | | | | $ | 35,214 | | | | | $ | 28,806 | | |
Cash additions to computer equipment and other | | | | | 10,446 | | | | | | 11,615 | | | | | | (1,169) | | |
Property and equipment additions | | | | $ | 74,466 | | | | | $ | 46,829 | | | | | $ | 27,637 | | |
|
shareholders and (iii) $12 million of term loans repayments.
Free Cash Flow is a non-GAAP measure and may not be comparable to similarly named measures used by other companies. This measure has limitations in that it does not represent the total increase or decrease in the cash balance for the period, nor does it represent cash flow for discretionary expenditures. This measure should not be considered as a measure of liquidity or cash flows from operations as determined under U.S. GAAP. This measure is not measurement of our financial performance under U.S. GAAP and should not be considered in isolation or as alternative to net income (loss) or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flows from operating activities as a measure of liquidity.
Three Months Ended | ||||||||
March 31, | ||||||||
(in $ thousands) | 2018 | 2017 | ||||||
Net cash provided by operating activities | $ | 83,097 | $ | 95,022 | ||||
Property and equipment additions | (36,663 | ) | (23,609 | ) | ||||
Free Cash Flow | $ | 46,434 | $ | 71,413 |
| | | Six Months Ended June 30, | | |||||||||
(in $ thousands) | | | 2018 | | | 2017 | | ||||||
Net cash provided by operating activities | | | | $ | 202,286 | | | | | $ | 178,607 | | |
Less: capital expenditures on property and equipment additions | | | | | (74,466) | | | | | | (46,829) | | |
Free Cash Flow | | | | $ | 127,820 | | | | | $ | 131,778 | | |
|
Interest | March 31, | December 31, | ||||||||||
(in $ thousands) | rate | Maturity | 2018 | 2017 | ||||||||
Senior Secured Credit Agreement | ||||||||||||
Term loans – (2018 Credit Agreement)(1) | L+2.50% | March 2025 | $ | 1,385,934 | $ | — | ||||||
Term loans – (2014 Credit Agreement)(2) | L+2.75% | September 2021 | — | 2,124,439 | ||||||||
Revolver borrowings – (2018 Credit Agreement) | L+2.25% | September 2022 | — | — | ||||||||
Revolver borrowings – (2014 Credit Agreement) | L+2.50% | September 2022 | — | — | ||||||||
Senior Secured Notes | ||||||||||||
Senior Secured Notes (3) | 6.00% | March 2026 | 737,404 | — | ||||||||
Capital leases and other indebtedness | 99,786 | 105,574 | ||||||||||
Total debt | 2,223,124 | 2,230,013 | ||||||||||
Less: cash and cash equivalents | (127,165 | ) | (122,039 | ) | ||||||||
Net Debt(4) | $ | 2,095,959 | $ | 2,107,974 |
(in $ thousands) | | | Interest rate | | | Maturity | | �� | June 30, 2018 | | | December 31, 2017 | | ||||||
Senior Secured Credit Agreement | | | | | | | | | | | | | | | | | | | |
Term loans – (2018 Credit Agreement)(1) | | | L+2.50% | | | March 2025 | | | | $ | 1,386,456 | | | | | $ | — | | |
Term loans – (2014 Credit Agreement)(2) | | | L+2.75% | | | September 2021 | | | | | — | | | | | | 2,124,439 | | |
Revolver borrowings – (2018 Credit Agreement) | | | L+2.25% | | | September 2022 | | | | | — | | | | | | — | | |
Revolver borrowings – (2014 Credit Agreement) | | | L+2.50% | | | September 2022 | | | | | — | | | | | | — | | |
Senior Secured Notes | | | | | | | | | | | | | | | | | | | |
Senior Secured Notes(3) | | | 6.00% | | | March 2026 | | | | | 737,640 | | | | | | — | | |
Capital leases and other indebtedness | | | | | | | | | | | 148,762 | | | | | | 105,574 | | |
Total debt | | | | | | | | | | | 2,272,858 | | | | | | 2,230,013 | | |
Less: cash and cash equivalents | | | | | | | | | | | (183,510) | | | | | | (122,039) | | |
Net Debt(4) | | | | | | | | | | $ | 2,089,348 | | | | | $ | 2,107,974 | | |
|
alongtogether with the proceeds from the issuance of senior secured notes (discussed below) and cash on the balance sheet, to repay the outstanding balance remaining of the term loans under the 2014 Credit Agreement and pay the related transaction expenses and fees. Upon the repayment in full of the obligations, the 2014 Credit Agreement was terminated. We recorded the debt refinancing transaction as the issuance of new debt and extinguishment of prior debt and recognized a loss on early extinguishment of debt of $28 million in our consolidated condensed statements of operations for the threesix months ended March 31,June 30, 2018.
Borrowings under the 2018 Credit Agreement are subject to amortization and prepayment requirements. In addition, the 2018 Credit Agreement and the Indenture governing the senior secured notes contain various covenants, events of default and other provisions, including, under certain circumstances, a leverage ratio requirement under the 2018 Credit Agreement.
Average | ||||||
Notional Amount | Interest | |||||
($ in thousands) | Period | Rate | ||||
1,400,000 | February 2017 to February 2019 | 1.4010% | ||||
1,200,000 | February 2019 to February 2020 | 2.1906% | ||||
400,000 | February 2020 to February 2021 | 2.1925% |
Notional Amount ($ in thousands) | | | Period | | | Average Interest Rate | | |||
1,400,000 | | | February 2017 to February 2019 | | | | | 1.4010% | | |
1,200,000 | | | February 2019 to February 2020 | | | | | 2.1906% | | |
400,000 | | | February 2020 to February 2021 | | | | | 2.1925% | | |
100,000 | | | February 2021 to February 2022 | | | | | 3.0655% | | |
Foreign Currency Risk
Year Ending March 31, | ||||||||||||||||||||||||||||
(in $ thousands) | 2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | Total | |||||||||||||||||||||
Term loans | $ | 10,500 | $ | 14,000 | $ | 14,000 | $ | 14,000 | $ | 14,000 | $ | 1,333,500 | $ | 1,400,000 | ||||||||||||||
Senior secured notes | — | — | — | — | — | 745,000 | 745,000 | |||||||||||||||||||||
Capital leases and other indebtedness | 43,589 | 29,951 | 16,638 | 8,260 | 1,348 | — | 99,786 | |||||||||||||||||||||
Interest payments(1) | 74,179 | 107,233 | 106,943 | 105,621 | 104,857 | 254,770 | 753,603 | |||||||||||||||||||||
Total | $ | 128,268 | $ | 151,184 | $ | 137,581 | $ | 127,881 | $ | 120,205 | $ | 2,333,270 | $ | 2,998,389 |
| | | Year Ending June 30, | | |||||||||||||||||||||||||||||||||||||||
(in $ thousands) | | | 2019 | | | 2020 | | | 2021 | | | 2022 | | | 2023 | | | Thereafter | | | Total | | |||||||||||||||||||||
Term loans | | | | $ | 14,000 | | | | | $ | 14,000 | | | | | $ | 14,000 | | | | | $ | 14,000 | | | | | $ | 14,000 | | | | | $ | 1,330,000 | | | | | $ | 1,400,000 | | |
Senior secured notes | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 745,000 | | | | | | 745,000 | | |
Capital leases and other indebtedness | | | | | 42,527 | | | | | | 42,064 | | | | | | 35,485 | | | | | | 28,140 | | | | | | 546 | | | | | | — | | | | | | 148,762 | | |
Interest payments(1) | | | | | 110,177 | | | | | | 116,444 | | | | | | 114,886 | | | | | | 112,963 | | | | | | 110,493 | | | | | | 252,126 | | | | | | 817,089 | | |
Total | | | | $ | 166,704 | | | | | $ | 172,508 | | | | | $ | 164,371 | | | | | $ | 155,103 | | | | | $ | 125,039 | | | | | $ | 2,327,126 | | | | | $ | 3,110,851 | | |
|
Consumer Antitrust Class Action
On July 14, 2015 and July 17, 2015, approximately 24 plaintiffs filed purported class action lawsuits against us, Amadeus and Sabre in the United States District Court for the Southern District of New York (Gordon et al. v. Amadeus IT Group, S.A et al.). A consolidated, amended complaint was filed on October 2, 2015 (the “Amended Complaint”). The Amended Complaint alleged violations of the Sherman Act, state antitrust laws and state consumer protection laws by defendants beginning in 2006. In particular, the plaintiffs claimed there was a conspiracy among us and the other defendants to impose contract terms on airlines, which the plaintiffs allege had the effect of maintaining higher fees and restricting competition. On November 7, 2017, we entered into a settlement agreement with the plaintiffs, which received final approval by the court on April 23, 2018. The settlement resolved all pending claims against us in connection with the case, and the court dismissed the Amended Complaint in full, with prejudice, on April 23, 2018 and closed the case as of that date.
Other than as set forth above, there
| | | | TRAVELPORT WORLDWIDE LIMITED | |
| |||||
Date: | | By: /s/ Bernard Bot | |||
Executive Vice President and Chief Financial Officer | | ||||
| |||||
Date: | | By: /s/Antonios Basoukeas Antonios Basoukeas | |||
Chief Accounting Officer |
|
|