UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2016

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-36640

Travelport Worldwide Limited

(Exact name of registrant as specified in its charter)

	Bermuda			98-0505105
	(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

Axis One, Axis Park
Langley, Berkshire, SL3 8AG, United Kingdom
(Address of principal executive offices, including zip code)

+44-1753-288-000
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☒			Accelerated filer ☐			Non-accelerated filer ☐			Smaller reporting company ☐
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~August 4,~~November 3, 2016, there were ~~123,920,248~~124,032,361 shares of the Registrants’ common shares, par value $0.0025 per share, outstanding.

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FORWARD-LOOKING STATEMENTS

The forward-looking statements contained herein involve risks and uncertainties. Many of the statements appear, in particular, in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements identify prospective information. Important factors could cause actual results to differ, possibly materially, from those in the forward-looking statements. In some cases you can identify forward-looking statements by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “potential,” “should,” “will,” and “would” or other similar words. You should read statements that contain these words carefully because they discuss our future priorities, goals, strategies, actions to improve business performance, market growth assumptions and expectations, new products, product pricing, changes to our business processes, future business opportunities, capital expenditures, financing needs, financial position and other information that is not historical information. References within this Quarterly Report on Form 10-Q to “we,” “our,” “us” or “Travelport” refer to Travelport Worldwide Limited, a Bermuda company, and its consolidated subsidiaries.

The following list represents some, but not necessarily all, of the factors that could cause actual results to differ from historical results of continuing operations or those anticipated or predicted by these forward-looking statements:

•

factors affecting the level of travel activity, particularly air travel volume, including security concerns, pandemics, general economic conditions, natural disasters and other disruptions;

•

our ability to obtain travel provider inventory from travel providers, such as airlines, hotels, car rental companies, cruise lines and other travel providers;

•

our ability to maintain existing relationships with travel agencies and to enter into new relationships on acceptable financial and other terms;

•

our ability to develop and deliver products and services that are valuable to travel agencies and travel providers and generate new revenue streams;

•

the impact on travel provider capacity and inventory resulting from consolidation of the airline industry;

•

our ability to grow adjacencies, such as payment solutions and mobile commerce;

•

general economic and business conditions in the markets in which we operate, including fluctuations in currencies, particularly in the U.S. dollar, and the economic conditions in the eurozone;

•

the impact on business conditions both in the United Kingdom (“U.K.”) and worldwide as a result of the U.K.’s decision to leave the European Union (“E.U.”).;

•

pricing, regulatory and other trends in the travel industry;

•

the impact our outstanding indebtedness may have on the way we operate our business;

•

our ability to achieve expected cost savings from our efforts to improve operational efficiency; and

•

maintenance and protection of our information technology and intellectual property.

We caution you that the foregoing list of important factors may not contain all of the factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this report may not in fact occur.

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 listed in the section captioned “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 18,

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2016, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed with the SEC on May 5, 2016, our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, filed with the SEC on August 4, 2016, and this Quarterly Report on Form 10-Q, as well as any other cautionary language in this Quarterly Report on Form 10-Q, provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described in the forward-looking statements. You should be aware that the occurrence of the events described in these risk factors and elsewhere in this report could have an adverse effect on our business, results of operations, financial position and cash flows.

Forward-looking statements speak only as of the date the statements are made. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect thereto or with respect to other forward-looking statements. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

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PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

TRAVELPORT WORLDWIDE LIMITED

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited)

(in $ thousands, except share data)	Three Months Ended June 30, 2016			Three Months Ended June 30, 2015			Six Months Ended June 30, 2016			Six Months Ended June 30, 2015			Three Months Ended September 30, 2016			Three Months Ended September 30, 2015			Nine Months Ended September 30, 2016			Nine Months Ended September 30, 2015
Net revenue		$	605,905		$	554,202		$	1,215,168		$	1,126,330		$	590,756		$	559,837		$	1,805,924		$	1,686,167
Costs and expenses
Cost of revenue			376,605			335,050			739,282			684,281			351,534			335,724			1,090,816			1,020,005
Selling, general and administrative			139,294			98,159			253,771			226,279			123,406			113,752			377,177			340,031
Depreciation and amortization			52,246			57,847			104,487			118,875			53,581			56,270			158,068			175,145
Total costs and expenses			568,145			491,056			1,097,540			1,029,435			528,521			505,746			1,626,061			1,535,181
Operating income			37,760			63,146			117,628			96,895			62,235			54,091			179,863			150,986
Interest expense, net			(45,113)			(38,751)			(100,008)			(78,140)			(29,813)			(40,346)			(129,821)			(118,486)
Loss on early extinguishment of debt			(2,671)			—			(2,671)			—			(955)			—			(3,626)			—
Gain on sale of shares of Orbitz Worldwide			—			—			—			6,271			—			—			—			6,271
(Loss) income before income taxes and share of losses in equity method investment			(10,024)			24,395			14,949			25,026
Income before income taxes and share of losses in equity method investment															31,467			13,745			46,416			38,771
Provision for income taxes			(4,405)			(7,792)			(12,197)			(15,550)			(10,063)			(8,453)			(22,260)			(24,003)
Share of losses in equity method investment			—			(194)			—			(175)			—			(342)			—			(517)
Net (loss) income			(14,429)			16,409			2,752			9,301
Net income															21,404			4,950			24,156			14,251
Net income attributable to non-controlling interest in subsidiaries			(402)			(1,081)			(998)			(2,114)			(566)			(1,270)			(1,564)			(3,384)
Net (loss) income attributable to the Company		$	(14,831)		$	15,328		$	1,754		$	7,187
(Loss) income per share – Basic:
(Loss) income per share		$	(0.12)		$	0.13		$	0.01		$	0.06
Net income attributable to the Company														$	20,838		$	3,680		$	22,592		$	10,867
Income per share – Basic:
Income per share														$	0.17		$	0.03		$	0.18		$	0.09
Weighted average common shares outstanding – Basic			123,825,030			122,269,482			123,771,642			121,842,792			123,920,699			122,495,392			123,821,339			122,062,715
(Loss) income per share – Diluted:
(Loss) income per share		$	(0.12)		$	0.12		$	0.01		$	0.06
Income per share – Diluted:
Income per share														$	0.17		$	0.03		$	0.18		$	0.09
Weighted average common shares outstanding – Diluted			123,990,177			122,717,897			123,912,681			122,672,763			124,291,687			122,724,141			124,209,052			122,563,359
Cash dividends declared per common share		$	0.075		$	0.075		$	0.15		$	0.15		$	0.075		$	0.075		$	0.225		$	0.225

See Notes to the Consolidated Condensed Financial Statements

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TRAVELPORT WORLDWIDE LIMITED

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) ~~INCOME~~
(unaudited)

(in $ thousands)
Three Months
Ended
June 30,
2016

Three Months
Ended
June 30,
2015

Six Months
Ended
June 30,
2016

Six Months
Ended
June 30,
2015

Net (loss) income $ (14,429) $ 16,409 $ 2,752 $ 9,301
Other comprehensive (loss) income, net of tax:
Currency translation adjustment, net of tax (4,799) (83) 2,660 (5,919)
Changes in gain on available-for-sale securities, net
of tax — — — (6,376)
Unrealized actuarial gain (loss) on defined benefit
plans, net of tax 2,251 (47) 4,502 (79)
Other comprehensive (loss) income, net of tax (2,548) (130) 7,162 (12,374)
Comprehensive (loss) income (16,977) 16,279 9,914 (3,073)
Comprehensive income attributable to non-controlling interest in subsidiaries (402) (1,081) (998) (2,114)
Comprehensive (loss) income attributable to the Company $ (17,379) $ 15,198 $ 8,916 $ (5,187)

(in $ thousands)	Three Months Ended September 30, 2016			Three Months Ended September 30, 2015			Nine Months Ended September 30, 2016			Nine Months Ended September 30, 2015
Net income		$	21,404		$	4,950		$	24,156		$	14,251
Other comprehensive income (loss), net of tax:
Currency translation adjustment, net of tax			2,475			(2,676)			5,135			(8,595)
Changes in gain on available-for-sale securities, net of tax			—			—			—			(6,376)
Unrealized actuarial gain (loss) on defined benefit plans, net of tax			2,472			(47)			6,974			(126)
Other comprehensive income (loss), net of tax			4,947			(2,723)			12,109			(15,097)
Comprehensive income (loss)			26,351			2,227			36,265			(846)
Comprehensive income attributable to non-controlling interest in subsidiaries			(566)			(1,270)			(1,564)			(3,384)
Comprehensive income (loss) attributable to the Company		$	25,785		$	957		$	34,701		$	(4,230)

See Notes to the Consolidated Condensed Financial Statements

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TRAVELPORT WORLDWIDE LIMITED

CONSOLIDATED CONDENSED BALANCE SHEETS
(unaudited)

(in $ thousands, except share data)	June 30, 2016			December 31, 2015			September 30, 2016			December 31, 2015
Assets
Current assets:
Cash and cash equivalents		$	126,937		$	154,841		$	138,400		$	154,841
Accounts receivable (net of allowances for doubtful accounts of $13,185 and $14,575)			241,526			205,686
Accounts receivable (net of allowances for doubtful accounts of $13,172 and $14,575)									245,257			205,686
Deferred income taxes			5,118			5,133			5,135			5,133
Other current assets			116,893			99,481			115,412			99,481
Total current assets			490,474			465,141			504,204			465,141
Property and equipment, net			429,842			459,848			421,065			459,848
Goodwill			1,083,841			1,067,415			1,085,155			1,067,415
Trademarks and tradenames			314,015			313,961			313,961			313,961
Other intangible assets, net			524,680			534,540			524,575			534,540
Deferred income taxes			10,288			10,348			10,525			10,348
Other non-current assets			48,106			54,176			44,544			54,176
Total assets		$	2,901,246		$	2,905,429		$	2,904,029		$	2,905,429
Liabilities and equity
Current liabilities:
Accounts payable		$	68,033		$	74,277		$	66,049		$	74,277
Accrued expenses and other current liabilities			451,282			430,650			494,338			430,650
Current portion of long-term debt			64,086			74,163			65,049			74,163
Total current liabilities			583,401			579,090			625,436			579,090
Long-term debt			2,346,696			2,363,035			2,293,340			2,363,035
Deferred income taxes			60,556			59,663			60,900			59,663
Other non-current liabilities			234,664			226,499			225,641			226,499
Total liabilities			3,225,317			3,228,287			3,205,317			3,228,287
Commitments and contingencies (Note 10)
Shareholders’ equity (deficit):
Preference shares ($0.0025 par value; 225,000,000 shares authorized; no shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively)			—			—
Common shares ($0.0025 par value; 560,000,000 shares authorized; 124,736,389 shares and 124,476,382 shares issued and 123,872,088 shares and 123,631,474 shares outstanding as of June 30, 2016 and December 31, 2015, respectively)			312			311
Preference shares ($0.0025 par value; 225,000,000 shares authorized; no shares issued and outstanding as of September 30, 2016 and December 31, 2015)									—			—
Common shares ($0.0025 par value; 560,000,000 shares authorized; 124,784,549 shares and 124,476,382 shares issued; 123,920,248 shares and 123,631,474 shares outstanding as of September 30, 2016 and December 31, 2015, respectively)									312			311
Additional paid in capital			2,714,321			2,715,538			2,710,753			2,715,538
Treasury shares, at cost (864,301 shares and 844,908 shares as of June 30, 2016 and December 31, 2015, respectively)			(13,533)			(13,331)
Treasury shares, at cost (864,301 shares and 844,908 shares as of September 30, 2016 and December 31, 2015, respectively)									(13,533)			(13,331)
Accumulated deficit			(2,879,904)			(2,881,658)			(2,859,066)			(2,881,658)
Accumulated other comprehensive loss			(170,345)			(177,507)			(165,398)			(177,507)
Total shareholders’ equity (deficit)			(349,149)			(356,647)			(326,932)			(356,647)
Equity attributable to non-controlling interest in subsidiaries			25,078			33,789			25,644			33,789
Total equity (deficit)			(324,071)			(322,858)			(301,288)			(322,858)
Total liabilities and equity		$	2,901,246		$	2,905,429		$	2,904,029		$	2,905,429

See Notes to the Consolidated Condensed Financial Statements

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TRAVELPORT WORLDWIDE LIMITED

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)

(in $ thousands)	Six Months Ended June 30, 2016			Six Months Ended June 30, 2015			Nine Months Ended September 30, 2016			Nine Months Ended September 30, 2015
Operating activities
Net income		$	2,752		$	9,301		$	24,156		$	14,251
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			104,487			118,875			158,068			175,145
Amortization of customer loyalty payments			34,261			36,267			55,193			50,797
Allowance for prepaid incentives			10,684			—			10,684			—
Gain on sale of shares of Orbitz Worldwide			—			(6,271)			—			(6,271)
Amortization of debt finance costs and debt discount			5,126			5,144			7,922			7,752
Loss on early extinguishment of debt			2,671			—			3,626			—
Loss (gain) on foreign exchange derivative instruments			2,451			(8,186)			3,159			(6,565)
Loss on interest rate derivative instruments			21,862			—			17,471			—
Share of losses in equity method investment			—			175			—			517
Equity-based compensation			16,222			18,980			21,760			24,681
Deferred income taxes			827			3,934			869			4,271
Customer loyalty payments			(43,922)			(42,211)			(56,533)			(55,679)
Pension liability contribution			(1,837)			(1,550)			(2,440)			(2,276)
Changes in assets and liabilities:
Accounts receivable			(37,454)			(47,661)			(38,802)			(49,091)
Other current assets			(19,072)			(5,331)			(15,501)			(39,233)
Accounts payable, accrued expenses and other current liabilities			3,896			(908)			19,315			31,963
Other			(22)			11,608			4,911			3,473
Net cash provided by operating activities		$	102,932		$	92,166		$	213,858		$	153,735
Investing activities
Property and equipment additions		$	(44,985)		$	(52,494)		$	(70,130)		$	(76,385)
Business acquired, net of cash			(15,009)			—			(15,009)			(60,533)
Proceeds from sale of shares of Orbitz Worldwide			—			6,271			—			6,271
Net cash used in investing activities		$	(59,994)		$	(46,223)		$	(85,139)		$	(130,647)

See Notes to the Consolidated Condensed Financial Statements

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TRAVELPORT WORLDWIDE LIMITED

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS—(Continued)
(unaudited)

(in $ thousands)	Six Months Ended June 30, 2016			Six Months Ended June 30, 2015			Nine Months Ended September 30, 2016			Nine Months Ended September 30, 2015
Financing activities
Proceeds from term loans		$	143,291		$	—		$	143,291		$	—
Repayment of term loans			(155,166)			(11,875)			(211,103)			(17,813)
Proceeds from revolver borrowings			10,000			—			10,000			30,000
Repayment of revolver borrowings			(10,000)			—			(10,000)			(30,000)
Repayment of capital lease obligations and other indebtedness			(23,542)			(16,067)			(34,206)			(25,589)
Debt finance costs and lender fees			(7,791)			—			(7,791)			—
Release of cash provided as collateral			—			4,336			—			25,886
Dividend to shareholders			(18,565)			(18,555)			(27,859)			(27,742)
Purchase of non-controlling interest in a subsidiary			(7,820)			—			(7,820)			—
Tax withholding for equity awards									—			(1,361)
Proceeds from share issuance under employee share purchase plan									1,580			—
Treasury share purchase related to vesting of equity awards			(1,004)			(14,480)			(1,004)			(13,119)
Net cash used in financing activities		$	(70,597)		$	(56,641)		$	(144,912)		$	(59,738)
Effect of changes in exchange rate on cash and cash equivalents			(245)			(1,252)			(248)			(1,010)
Net decrease in cash and cash equivalents			(27,904)			(11,950)			(16,441)			(37,660)
Cash and cash equivalents at beginning of period			154,841			138,986			154,841			138,986
Cash and cash equivalents at end of period		$	126,937		$	127,036		$	138,400		$	101,326
Supplemental disclosure of cash flow information
Supplemental disclosures of cash flow information
Interest payments, net of capitalized interest			86,854			72,732		$	110,988		$	109,168
Income tax payments, net of refunds			8,573			13,272			15,069			18,045
Non-cash capital leases additions			7,969			25,151			16,554			85,620
Non-cash purchase of property and equipment.			—			27,000			—			33,570

See Notes to the Consolidated Condensed Financial Statements

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TRAVELPORT WORLDWIDE LIMITED

CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN TOTAL EQUITY (DEFICIT)
(unaudited)

	Common Shares					Additional Paid in Capital				Treasury Shares					Accumulated Deficit			Accumulated Other Comprehensive Loss			Non- Controlling Interest in Subsidiaries			Total Equity (Deficit)				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			Additional Paid in Capital			Number			Amount			Accumulated Deficit			Accumulated Other Comprehensive Loss			Non- Controlling Interest in Subsidiaries			Total Equity (Deficit)			Number			Amount			Number							Amount							Accumulated Deficit					Accumulated Other Comprehensive Loss					Non- Controlling Interest in Subsidiaries					Total Equity (Deficit)
Balance as of December 31, 2015		124,476,382		$	311		$	2,715,538			844,908		$	(13,331)		$	(2,881,658)		$	(177,507)		$	33,789		$	(322,858)			124,476,382		$	311		Additional Paid in Capital			$	2,715,538				844,908			$	(13,331)				$	(2,881,658)				$	(177,507)				$	33,789				$	(322,858)
Dividend to shareholders ($0.15 per share)		—			—			(18,996)			—			—			—			—			—			(18,996)
Dividend to shareholders ($0.225 per share)																													—			—				(28,553)					—			—					—					—					—					(28,553)
Purchase of non-controlling interest in a subsidiary		—			—			1,189			—			—			—			—			(9,709)			(8,520)			—			—				1,189					—			—					—					—					(9,709)					(8,520)
Equity-based compensation		260,007			1			17,392			—			—			—			—			—			17,393			308,167			1				23,381					—			—					—					—					—					23,382
Treasury shares purchased in relation to vesting of equity awards		—			—			—			70,362			(1,004)			—			—			—			(1,004)			—			—				—					70,362			(1,004)					—					—					—					(1,004)
Treasury shares issued in relation to vesting of equity awards		—			—			(802)			(50,969)			802			—			—			—			—			—			—				(802)					(50,969)			802					—					—					—					—
Comprehensive income, net of tax		—			—			—			—			—			1,754			7,162			998			9,914			—			—				—					—			—					22,592					12,109					1,564					36,265
Balance as of June 30, 2016		124,736,389		$	312		$	2,714,321			864,301		$	(13,533)		$	(2,879,904)		$	(170,345)		$	25,078		$	(324,071)
Balance as of September 30, 2016																													124,784,549		$	312			$	2,710,753					864,301		$	(13,533)				$	(2,859,066)				$	(165,398)				$	25,644				$	(301,288)

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TRAVELPORT WORLDWIDE LIMITED

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)

1. Basis of Presentation

Basis of Presentation

Travelport Worldwide Limited (the “Company” or “Travelport”) is a travel commerce platform providing distribution, technology, payment, mobile and other solutions for the global travel and tourism industry. With a presence in approximately 180 countries, Travelport business is comprised of:

The Travel Commerce Platform, through which the Company facilitates travel commerce by connecting the world’s leading travel providers, such as airlines and hotel chains, with online and offline travel buyers in the Company’s proprietary business to business (“B2B”) travel commerce platform. As travel industry needs evolve, Travelport is utilizing its Travel Commerce Platform to redefine the electronic distribution and merchandising of airline core and ancillary products, as well as extending its reach into the growing world of travel commerce beyond air, including to hotel, car rental, rail, cruise-line and tour operators. In addition, Travelport has leveraged its domain expertise in the travel industry to design a pioneering B2B payment solution that addresses the need of travel agencies to efficiently and securely make payments to travel providers globally. The Company also provides travel companies with a mobile travel platform and digital product set that allows airlines, hotels, corporate travel management companies and travel agencies to engage with their customers through mobile services including apps, mobile web and mobile messaging. Travelport utilizes the extensive data managed by its platform to provide an array of additional services, such as advertising solutions, subscription services, business intelligence data services, and marketing-oriented analytical tools to travel agencies, travel providers and other travel data users.

Through its Technology Services, Travelport provides critical hosting solutions to airlines, such as pricing, shopping, ticketing, ground handling and other solutions, enabling them to focus on their core business competencies and reduce costs. The Company hosts reservations, inventory management and other related critical systems for Delta Air Lines Inc.

The Company has two operating segments, Travelport and eNett; however, the Company reports them together as one reportable segment as eNett does not meet the thresholds for a separate reportable segment.

These consolidated condensed financial statements and other consolidated condensed financial information included in this Quarterly Report on Form 10-Q are unaudited, with the exception of the December 31, 2015 consolidated balance sheet which was derived from audited consolidated financial statements. These consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. Certain disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.

In presenting the consolidated condensed financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgments and available information. Accordingly, actual results could differ from those estimates. In management’s opinion, the consolidated condensed financial statements contain all normal recurring adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These consolidated condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 18, 2016.

Beginning with the first quarter of 2016, the Company has presented U.S. dollar amounts and certain statistical information in tables rounded to the nearest thousand as compared to the nearest million as presented in previous periods.

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TRAVELPORT WORLDWIDE LIMITED

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)

2. Recently Issued Accounting Pronouncements

Statement of Cash Flows

In August 2016, the Financial Accounting Standards Board (“FASB”) issued guidance on classification of certain cash receipts and cash payments in the statement of cash flows. The amendments provide specific guidance relating to classification of certain items, including cash payments for debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, distributions received from equity method investments, and cash flows classification based on its predominate source or use. The new guidance is applicable to the Company for interim and annual reporting periods beginning after December 15, 2017. Early adoption of the amendments in the guidance is permitted and requires its application using a retrospective transition method. The Company does not anticipate any significant impact on the consolidated condensed financial statements resulting from the adoption of this guidance.

Financial Instruments—Credit Losses

In June 2016, the FASB issued guidance which amends the guidance on accounting for credit losses on financial instruments. The guidance adds an impairment model that is based on expected losses rather than incurred losses. Under this new guidance, an entity will recognize allowance for credit losses based on its estimate of expected credit losses, which will result in more timely recognition of such losses. The guidance requires an entity to consider all available relevant information when estimating expected credit losses, including details about past events, current conditions, and reasonable and supportable forecasts and their implications for expected credit losses. The new guidance is applicable to the Company for interim and annual reporting periods beginning after December 15, 2019 and requires its application using a retrospective transition method. The Company is currently evaluating the impact of the amended guidance on the consolidated condensed financial statements.

Compensation—Stock Compensation

In March 2016, the ~~Financial Accounting Standards Board (the “FASB”)~~FASB issued guidance on several aspects of the accounting for share-based payment transactions which simplifies the current accounting requirements. The update includes accounting for income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The guidance is applicable to the Company for interim and annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of the guidance on the consolidated condensed financial statements.

Leases

In February 2016, the FASB issued guidance on lease accounting which supersedes the current guidance on leases. The new guidance establishes a right-of-use ~~(ROU)~~(“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with the classification affecting the pattern of expense recognition in the income statement. The new guidance is applicable to the Company for interim and annual reporting periods beginning after December 15, 2018. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption of the amendments in the guidance is permitted. The Company is currently evaluating the impact of the guidance on the consolidated condensed financial statements.

Financial Instruments

In January 2016, the FASB issued guidance which amends the current guidance on the classification and measurement of financial instruments. The new guidance significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities of unconsolidated

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TRAVELPORT WORLDWIDE LIMITED

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)

2. Recently Issued Accounting Pronouncements (Continued)

subsidiaries (other than those accounted for using the equity method of accounting) and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The guidance also amends certain disclosure requirements associated with the fair value of financial instruments. The guidance is applicable to the Company for interim and annual reporting periods beginning after December 15, 2017. The Company does not anticipate any significant impact on the consolidated condensed financial statements resulting from the adoption of this guidance.

Income Taxes

In November 2015, the FASB issued guidance in relation to the balance sheet presentation of deferred tax assets and liabilities. This guidance simplifies the current presentation, where deferred tax assets and liabilities are required to be separated into current and non-current amounts in a classified statement of financial position, and requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as non-current on the balance sheet. As a result, each jurisdiction will now only have one net non-current deferred tax asset or liability. The guidance does not change the existing requirement that only permits offsetting within a jurisdiction. The guidance is applicable to the Company for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted and may be applied retrospectively or prospectively. The adoption of this guidance will impact the Company’s consolidated condensed balance sheet presentation of deferred tax assets and liabilities.

Revenue Recognition

In May 2014, the FASB issued guidance on revenue from contracts with customers that will supersede most current revenue recognition guidance, including industry-specific guidance. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount

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~~TRAVELPORT WORLDWIDE LIMITED~~

~~NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS~~
~~(unaudited)~~

~~2. Recently Issued Accounting Pronouncements (Continued)~~

~~that~~ to which the entity expects it to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions of the guidance include capitalization of certain contract costs, consideration of the time value of money in the transaction price and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers.

In August 2015, the FASB delayed the effective date of the new revenue guidance issued in May 2014 by one year but allowed companies a choice to adopt the guidance as of the original effective date that was set out in May 2014. The Company has decided to defer the application date and, consequently, the May 2014 revenue recognition guidance will be applicable to the Company for interim and annual reporting periods beginning after December 15, 2017. The guidance permits the use of either a retrospective or cumulative effect transition method. The Company has not yet selected a transition method and is currently evaluating the impact of the amended guidance on the consolidated condensed financial statements.

Simplifying the Presentation of Debt Issuance Costs

In April 2015, the FASB issued guidance which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The guidance does not affect the recognition and measurement of debt issuance costs which would continue to be calculated using the interest method and be reported as interest expense. In August 2015, the FASB issued further guidance to clarify the SEC’s position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements whereby such costs could be presented as an asset and subsequently amortized ratably over the term of the line-of-credit arrangement. The Company adopted the provision of this guidance effective January 1, 2016. As a result of

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TRAVELPORT WORLDWIDE LIMITED

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)

2. Recently Issued Accounting Pronouncements (Continued)

this guidance, the Company has reclassified its unamortized debt issuance costs of ~~$21~~$19 million and $24 million as of ~~June~~September 30, 2016 and December 31, 2015, respectively, in relation to its term loans and has presented these costs as a deduction from the carrying value of the term loans.

3. Other Current Assets

Other current assets consisted of:

(in $ thousands)	June 30, 2016			December 31, 2015			September 30, 2016			December 31, 2015
Prepaid expenses		$	33,739		$	26,395		$	31,109		$	26,395
Sales and use tax receivables			32,722			27,233			28,133			27,233
Prepaid incentives			21,636			26,496			23,903			26,496
Restricted cash			17,457			11,701			18,371			11,701
Derivative assets			2,096			657			2,602			657
Other			9,243			6,999			11,294			6,999
		$	116,893		$	99,481		$	115,412		$	99,481

During the ~~three and six~~nine months ended ~~June~~September 30, 2016, the Company recorded $11 million as allowance for prepaid incentives.

Restricted cash represents cash held on behalf of clients for a short period of time before being transferred to travel industry partners. A compensating balance is held in accrued expenses and other current liabilities as customer prepayments.

4. Property and Equipment, Net

Property and equipment, net, consisted of:

	September 30, 2016									December 31, 2015
(in $ thousands)	Cost			Accumulated depreciation			Net			Cost			Accumulated depreciation			Net
Capitalized software		$	915,823		$	(710,633)		$	205,190		$	870,868		$	(635,135)		$	235,733
Computer equipment			314,396			(194,969)			119,427			303,902			(168,380)			135,522
Building and leasehold improvements			26,585			(10,635)			15,950			24,102			(8,735)			15,367
Construction in progress			80,498			—			80,498			73,226			—			73,226
		$	1,337,302		$	(916,237)		$	421,065		$	1,272,098		$	(812,250)		$	459,848

The Company recorded depreciation expense (including depreciation on assets under capital leases) of $42 million and $38 million during the three months ended September 30, 2016 and 2015, respectively. The Company recorded depreciation expense of $121 million and $119 million during the nine months ended September 30, 2016 and 2015, respectively. During the three and nine months ended September 30, 2016, the Company also recorded an impairment of $1 million and $5 million, respectively, on its capitalized software.

As of September 30, 2016 and December 31, 2015, the Company had capital lease assets of $179 million and $174 million, respectively, with accumulated depreciation of $84 million and $69 million, respectively, included within computer equipment.

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NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)

~~4. Property and Equipment, Net~~

~~Property and equipment, net, consisted of:~~

June 30, 2016 December 31, 2015
(in $ thousands) Cost
Accumulated
depreciation
Net Cost
Accumulated
depreciation
Net
Capitalized software $ 890,817 $ (681,365) $ 209,452 $ 870,868 $ (635,135) $ 235,733
Computer equipment 308,878 (187,501) 121,377 303,902 (168,380) 135,522
Building and leasehold improvements 25,597 (9,992) 15,605 24,102 (8,735) 15,367
Construction in progress 83,408 — 83,408 73,226 — 73,226
$ 1,308,700 $ (878,858) $ 429,842 $ 1,272,098 $ (812,250) $ 459,848

The Company recorded depreciation expense (including depreciation on assets under capital leases) of $39 million for each of the three months ended June 30, 2016 and 2015. The Company recorded depreciation expense of $80 million and $81 million during the six months ended June 30, 2016 and 2015, respectively. During the three and six months ended June 30, 2016, the Company also recorded an impairment of $4 million on its capitalized software.

As of June 30, 2016 and December 31, 2015, the Company had capital lease assets of $171 million and $174 million, respectively, with accumulated depreciation of $76 million and $69 million, respectively, included within computer equipment.

5. Intangible Assets

The changes in the carrying amount of goodwill and intangible assets for the Company between January 1, 2016 and ~~June~~September 30, 2016 are as follows:

(in $ thousands)	January 1, 2016			Additions			Retirements			Foreign Exchange			June 30, 2016			January 1, 2016			Additions			Retirements			Foreign Exchange			September 30, 2016
Non-Amortizable Assets:
Goodwill		$	1,067,415		$	14,105		$	—		$	2,321		$	1,083,841		$	1,067,415		$	14,105		$	—		$	3,635		$	1,085,155
Trademarks and tradenames			313,961			—			—			54			314,015			313,961			—			—			—			313,961
Other Intangible Assets:
Acquired intangible assets			1,127,360			—			—			(110)			1,127,250			1,127,360			—			—			(146)			1,127,214
Accumulated amortization			(756,489)			(24,855)			—			(348)			(781,692)			(756,489)			(36,693)			—			(538)			(793,720)
Acquired intangible assets, net			370,871			(24,855)			—			(458)			345,558			370,871			(36,693)			—			(684)			333,494
Customer loyalty payments			300,142			50,346			(29,359)			1,844			322,973			300,142			81,349			(32,606)			2,497			351,382
Accumulated amortization			(136,473)			(34,261)			27,479			(596)			(143,851)			(136,473)			(55,193)			32,606			(1,241)			(160,301)
Customer loyalty payments, net			163,669			16,085			(1,880)			1,248			179,122			163,669			26,156			—			1,256			191,081
Other intangible assets, net		$	534,540		$	(8,770)		$	(1,880)		$	790		$	524,680		$	534,540		$	(10,537)		$	—		$	572		$	524,575

The changes in the carrying amount of goodwill and intangible assets for the Company between January 1, 2015 and September 30, 2015 are as follows:

(in $ thousands)	January 1, 2015			Additions			Retirements			Foreign Exchange			September 30, 2015
Non-Amortizable Assets:
Goodwill		$	997,419		$	58,877		$	—		$	(1,760)		$	1,054,536
Trademarks and tradenames			313,961			—			—			—			313,961
Other Intangible Assets:
Acquired intangible assets			1,129,320			—			(2,541)			508			1,127,287
Accumulated amortization			(687,495)			(55,812)			2,541			(516)			(741,282)
Acquired intangible assets, net			441,825			(55,812)			—			(8)			386,005
Customer loyalty payments			334,309			58,001			(75,008)			(5,807)			311,495
Accumulated amortization			(157,319)			(50,797)			75,008			—			(133,108)
Customer loyalty payments, net			176,990			7,204			—			(5,807)			178,387
Other intangible assets, net		$	618,815		$	(48,608)		$	—		$	(5,815)		$	564,392

In April 2016, the Company acquired its distributor in Japan for cash consideration of $15 million, net of cash acquired. The Company completed the process of allocating the purchase consideration to acquired identifiable assets and liabilities in the second quarter of 2016 and recorded a goodwill of $14 million.

The Company paid cash of $57 million and $56 million for customer loyalty payments during the nine months ended September 30, 2016 and 2015, respectively. Further, as of September 30, 2016 and December 31, 2015, the Company had balances payable of $62 million and $42 million, respectively, for customer loyalty payments (see Note 7—Accrued Expenses and Other Current Liabilities).

Amortization expense for acquired intangible assets was $12 million and $18 million for the three months ended September 30, 2016 and 2015, respectively, and $37 million and $56 million for the nine months ended September 30, 2016 and 2015, respectively, and is included as a component of depreciation and amortization in the Company’s consolidated condensed statements of operations.

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NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)

5. Intangible Assets (Continued)

~~The changes in the carrying amount of goodwill and intangible assets for the Company between January 1, 2015 and June 30, 2015 are as follows:~~

(in $ thousands)
January 1,
2015
Additions Retirements
Foreign
Exchange

June 30,
2015

Non-Amortizable Assets:
Goodwill $ 997,419 $ — $ — $ (1,092) $ 996,327
Trademarks and tradenames 313,961 — — — 313,961
Other Intangible Assets:
Acquired intangible assets 1,129,320 — (2,535) 507 1,127,292
Accumulated amortization (687,495) (37,765) 2,535 (513) (723,238)
Acquired intangible assets, net 441,825 (37,765) — (6) 404,054
Customer loyalty payments 334,309 42,840 (43,215) (2,677) 331,257
Accumulated amortization (157,319) (36,267) 43,215 — (150,371)
Customer loyalty payments, net 176,990 6,573 — (2,677) 180,886
Other intangible assets, net $ 618,815 $ (31,192) $ — $ (2,683) $ 584,940

In April 2016, the Company acquired its distributor in Japan for a cash consideration of $15 million, net of cash acquired. The Company completed the process of allocating the purchase consideration to acquired identifiable assets and liabilities and recorded goodwill of $14 million.

The Company paid cash of $44 million and $42 million for customer loyalty payments during the six months ended June 30, 2016 and 2015, respectively. Further, as of June 30, 2016 and December 31, 2015, the Company had balances payable of $41 million and $42 million, respectively, for customer loyalty payments.

Amortization expense for acquired intangible assets was $14 million and $19 million for the three months ended June 30, 2016 and 2015, respectively, and $25 million and $38 million for the six months ended June 30, 2016 and 2015, respectively, and is included as a component of depreciation and amortization on the Company’s consolidated condensed statements of operations.

Amortization expense for customer loyalty payments was ~~$18~~$21 million and $15 million for ~~each of~~ the three months ended ~~June~~September 30, 2016 and 2015, respectively, and ~~$34~~$55 million and ~~$36~~$51 million for the ~~six~~nine months ended ~~June~~September 30, 2016 and 2015, respectively, and is included within cost of revenue or revenue in the Company’s consolidated condensed statements of operations.

6. Other Non-current Assets

Other non-current assets consisted of:

(in $ thousands)	June 30, 2016			December 31, 2015			September 30, 2016			December 31, 2015
Supplier prepayments		$	16,278		$	14,616		$	12,430		$	14,616
Prepaid incentives			9,666			9,282			9,106			9,282
Pension assets			5,752			5,186			7,018			5,186
Deferred financing costs			5,652			6,543			5,203			6,543
Derivative assets			—			8,655			309			8,655
Other			10,758			9,894			10,478			9,894
		$	48,106		$	54,176		$	44,544		$	54,176

7. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of:

(in $ thousands)	September 30, 2016			December 31, 2015
Accrued commissions and incentives		$	293,220		$	241,358
Accrued payroll and related			71,560			77,544
Deferred revenue			40,972			35,836
Income tax payable			21,877			15,516
Customer prepayments			18,371			11,701
Derivative liabilities			17,341			10,341
Accrued interest expense			10,208			18,800
Pension and post-retirement benefit liabilities			1,701			1,528
Other			19,088			18,026
		$	494,338		$	430,650

Included in accrued commissions and incentives are $62 million and $42 million of accrued customer loyalty payments as of September 30, 2016 and December 31, 2015, respectively.

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NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)

~~7. Accrued Expenses and Other Current Liabilities~~

~~Accrued expenses and other current liabilities consisted of:~~

(in $ thousands)
June 30,
2016

December 31,
2015

Accrued commissions and incentives $ 273,927 $ 241,358
Accrued payroll and related 62,352 77,544
Deferred revenue 42,116 35,836
Income tax payable 18,227 15,516
Customer prepayments 17,457 11,701
Derivative liabilities 13,618 10,341
Accrued interest expense 2,997 18,800
Pension and post-retirement benefit liabilities 1,448 1,528
Other 19,140 18,026
$ 451,282 $ 430,650

~~Included in accrued commissions and incentives are $41 million and $42 million of accrued customer loyalty payments as of June 30, 2016 and December 31, 2015, respectively.~~

8. Long-Term Debt

Long-term debt consisted of:

(in $ thousands)	Interest rate		Maturity	June 30, 2016			December 31, 2015			Interest rate		Maturity	September 30, 2016			December 31, 2015
Senior Secured Credit Agreement
Term loans
Dollar denominated(1)(2)(3)		L+4.00%	September 2021		$	2,292,472		$	2,303,315		L+4.00%	September 2021		$	2,239,832		$	2,303,315
Revolver borrowings
Dollar denominated		L+5.00%	September 2019			—			—		L+5.00%	September 2019			—			—
Capital leases and other indebtedness						118,310			133,883						118,557			133,883
Total debt						2,410,782			2,437,198						2,358,389			2,437,198
Less: current portion						64,086			74,163						65,049			74,163
Long-term debt					$	2,346,696		$	2,363,035					$	2,293,340		$	2,363,035

(1)

Minimum LIBOR floor of 1.00%

(2)

Upon the adoption of U.S. GAAP guidance, effective January 1, 2016, unamortized debt finance costs of $24 million have been reclassified and deducted from the term loans balance as of December 31, 2015 (see Note 2—Recently Issued Accounting Pronouncements).

(3)

Interest rate on the term loans as of December 31, 2015, was L+4.75%.

On September 20, 2016, the Company made a voluntary prepayment of $50 million principal amount of its term loans outstanding under its senior secured credit agreement. Pursuant to this prepayment, the Company recognized $1 million as loss on early extinguishment of debt.

As a result of the voluntary prepayment of $50 million, the Company is not contractually required to repay quarterly installments of the term loans until the fourth quarter of 2018. However, the Company has classified a portion of the term loans as “current portion of long-term debt” as the Company has the intent and ability to make additional voluntary prepayments of the term loans from cash flows from operations, which currently are expected to occur within the next twelve months. The amount of any such prepayments may vary based on the Company’s actual cash flow generation and needs, as well as general economic conditions.

On June 23, 2016, the Company entered into an amendment to its senior secured credit agreement which, (i) amended the applicable rates to 3.00% per annum, in the case of base rate loans, and 4.00% per annum, in the case of LIBOR loans and (ii) reset the 1% premium on the repricing of the term loans under the credit agreement for a period of six months. The interest rate per annum applicable to the term loans is based on, at the election of the Company, (i) LIBOR plus 4.00% or base rate (as defined in the senior

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~~NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS~~
~~(unaudited)~~

~~8. Long-Term Debt (Continued)~~

secured credit ~~agreement)~~agreement plus 3.00%. The term loans are subject to a LIBOR floor of 1.00% and a base rate floor of 2.00%. The Company expects to pay interest based on LIBOR plus 4.00% for the term loans. The Company provided a 0.25% discount of $6 million to all the lenders participating in this repricing, which was capitalized.

Certain lenders contributed $143 million towards the term loans, an amount equal to that was paid to the lenders who opted to leave or reduce their participation. On repricing, the Company ~~recorded~~recognized a loss on early extinguishment of debt of $3 million.

During the ~~six~~nine months ended ~~June~~September 30, 2016, the Company (i) repaid ~~$12~~$68 million ~~of its quarterly installments~~ of term loans ~~as required~~(including a voluntary prepayment of $50 million) outstanding under the senior secured credit agreement, (ii) amortized $3$4 million of debt finance costs and $2$4 million of debt discount, and (iii) repaid ~~$24~~$34 million under its capital lease obligations and other indebtedness, ~~and~~ entered into $8$17 million of new capital leases for information technology ~~assets.~~assets and incurred $2 million of other indebtedness.

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TRAVELPORT WORLDWIDE LIMITED

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)

8. Long-Term Debt (Continued)

Under the senior secured credit agreement, the Company has a $125 million revolving credit facility with a consortium of banks, which contains a letter of credit sub-limit up to a maximum of $50 million. During the ~~six~~nine months ended ~~June~~September 30, 2016, the Company borrowed and repaid $10 million under this facility. As of ~~June~~September 30, 2016, the Company had no outstanding borrowings under its revolving credit facility and utilized ~~$24~~$21 million for the issuance of letters of credit, with a balance of ~~$101~~$104 million remaining.

The senior secured credit agreement also permits the issuance of certain cash collateralized letters of credit in addition to those that can be issued under the revolving credit facility, whereby 103% of cash collateral is to be maintained for outstanding letters of credit. As of ~~June~~September 30, 2016, there were no outstanding cash collateralized letters of credit.

As of ~~June~~September 30, 2016, the Company was in compliance with all restrictive and financial covenants related to its long-term debt.

9. Financial Instruments

The Company uses derivative financial instruments as part of its overall strategy to manage its exposure to market risks primarily associated with fluctuations in foreign currency exchange rates and interest rates. The Company does not use derivatives for trading or speculative purposes. During the ~~six~~nine months ended ~~June~~September 30, 2016, there was no material change in the Company’s foreign currency and interest rate risk management policies or in its fair value methodology. As of ~~June~~September 30, 2016, the Company had a net liability position of ~~$26~~$23 million related to derivative financial instruments associated with its interest rate risk and foreign currency exchange rate risk.

The primary interest rate risk exposure as of ~~June~~September 30, 2016 was the impact of LIBOR interest rates on the Company’s dollar denominated variable rate term loans. The term loans have a 1.00% LIBOR floor. During the ~~six~~nine months ended ~~June~~September 30, 2016, LIBOR rates were below 1.00%. The primary foreign currency risk exposure as of ~~June~~September 30, 2016 was to exchange rate fluctuations that arise from certain intercompany transactions and from non-functional currency denominated assets and liabilities and earnings denominated in non-U.S. dollar currencies.

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NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)

9. Financial Instruments (Continued)

Presented below is a summary of the fair value of the Company’s derivative contracts, which have not been designated as hedging instruments, recorded on the consolidated condensed balance sheets at fair value.

(in $ thousands)	Balance Sheet Location	Fair Value Asset						Balance Sheet Location		Fair Value (Liability)						Balance Sheet Location		Fair Value Asset						Balance Sheet Location		Fair Value (Liability)
		June 30, 2016			December 31, 2015				June 30, 2016				December 31, 2015				September 30, 2016				December 31, 2015				September 30, 2016				December 31, 2015
Interest rate swap contracts	Other current assets		$	—		$	—	Accrued Expenses and other current liabilities			$	(2,401)		$	—	Other current assets			$	—		$	—	Accrued Expenses and other current liabilities			$	(3,386)		$	—
Interest rate swap contracts	Other non-current assets			—			8,655	Other non-current liabilities				(10,806)			—	Other non-current assets				—			8,655	Other non-current liabilities				(5,430)			—
Foreign currency contracts	Other current assets			2,096			657	Accrued Expenses and other current liabilities				(11,217)			(10,341)	Other current assets				2,602			657	Accrued Expenses and other current liabilities				(13,955)			(10,341)
Foreign currency contracts	Other non-current assets			—			—	Other non-current liabilities				(4,066)			(1,082)	Other non-current assets				309			—	Other non-current liabilities				(2,846)			(1,082)
Total fair value of derivative assets (liabilities)			$	2,096		$	9,312				$	(28,490)		$	(11,423)				$	2,911		$	9,312				$	(25,617)		$	(11,423)

As of ~~June~~September 30, 2016, the notional amounts of foreign currency forward contracts and interest rate swap contracts were ~~$331~~$304 million and $1,400 million, respectively. These derivative contracts cover transactions for periods that do not exceed three years.

The following table provides a reconciliation of the movement in the net carrying amount of derivative financial instruments during the ~~six~~nine months ended ~~June~~September 30, 2016 and ~~2015.~~2015:

(in $ thousands)	Six Months Ended June 30, 2016			Six Months Ended June 30, 2015			Nine Months Ended September 30, 2016			Nine Months Ended September 30, 2015
Net derivative liability opening balance		$	(2,111)		$	(15,548)		$	(2,111)		$	(15,548)
Total loss for the period included in net income			(34,560)			(5,426)			(33,217)			(14,870)
Payment on settlement of foreign currency derivative contracts			10,277			13,501			12,622			21,571
Net derivative liability closing balance		$	(26,394)		$	(7,473)		$	(22,706)		$	(8,847)

The table below presents the impact of changes in fair values of derivatives not designated as hedges on net ~~(loss)~~ income during the three and ~~six~~nine months ended ~~June~~September 30, 2016 and 2015:

		Amount of Income (Loss) Recorded in Net (Loss) Income													Amount of Income (Loss) Recorded in Net Income
(in $ thousands)	Statement of Operations Location	Three Months Ended June 30,						Six Months Ended June 30,						Statement of Operations Location	Three Months Ended September 30,						Nine Months Ended September 30,
		2016			2015			2016			2015				2016			2015			2016			2015
Interest rate swap contracts	Interest expense, net		$	(5,406)		$	—		$	(21,862)		$	—	Interest expense, net		$	4,391		$	—		$	(17,471)		$	—
Foreign currency contracts	Selling, general and administrative			(14,549)			11,031			(12,698)			(5,426)	Selling, general and administrative			(3,048)			(9,444)			(15,746)			(14,870)
			$	(19,955)		$	11,031		$	(34,560)		$	(5,426)			$	1,343		$	(9,444)		$	(33,217)		$	(14,870)

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TRAVELPORT WORLDWIDE LIMITED

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)

9. Financial Instruments (Continued)

Fair Value Disclosures for All Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses and other current liabilities approximate fair value due to the short-term maturities of these assets and liabilities.

The fair values of the Company’s other financial instruments are as follows:

June 30, 2016 December 31, 2015
(in $ thousands)
Fair Value
Hierarchy

Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value

Asset (liability)
Derivative assets(1)
Level 3 2,096 2,096 9,312 9,312
Derivative liabilities(1)
Level 3 (28,490) (28,490) (11,423) (11,423)
Total debt Level 2 (2,410,782) (2,451,346) (2,437,198) (2,431,242)

~~(1)~~

~~As of December 31, 2015, derivative assets and liabilities were categorized at Level 2 of the fair value hierarchy.~~

		September 30, 2016				December 31, 2015
(in $ thousands)	Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Asset (liability)
Derivative assets	Level 2		2,911		2,911		9,312		9,312
Derivative liabilities	Level 2		(25,617)		(25,617)		(11,423)		(11,423)
Total debt	Level 2		(2,358,389)		(2,408,183)		(2,437,198)		(2,431,242)

The significant unobservable inputs used to fair value the Company’s derivative financial instruments are probability of default of approximately ~~16%~~11% and a recovery rate of 20% which are applied to the Company’s credit default swap adjustments. In accordance with the Company’s policy, as the credit valuation adjustment applied to arrive at the fair value of derivatives has not been greater than 15% of the unadjusted fair value of derivative instruments for two consecutive quarters, the Company has categorized derivative fair valuations at Level 32 of the fair value hierarchy. A 10% change in the significant unobservable inputs will not have a material impact on the fair value of the derivative financial instruments as of ~~June~~September 30, 2016.

The fair value of the Company’s total debt has been determined by calculating the fair value of its term loans based on quoted prices obtained from independent brokers for identical debt instruments when traded as an asset and is categorized within Level 2 of the fair value hierarchy.

10. Commitments and Contingencies

Purchase Commitments

In the ordinary course of business, the Company makes various commitments to purchase goods and services from specific suppliers, including those related to capital expenditures. As of ~~June~~September 30, 2016, the Company had approximately ~~$39~~$35 million of outstanding purchase commitments, primarily relating to service contracts for information technology, of which ~~$22~~$19 million relates to the twelve months ending ~~June~~September 30, 2017. These purchase obligations extend through 2020.

Contingencies

Company Litigation

The Company is involved in various claims, legal proceedings and governmental inquiries related to contract disputes, business practices, intellectual property and other commercial, employment and tax matters. The Company believes it has adequately accrued for such matters as appropriate or, for matters not requiring accrual, believes they will not have a material adverse effect on its results of operations, financial position or cash flows based on information currently available. However, litigation is inherently

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TRAVELPORT WORLDWIDE LIMITED

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)

10. Commitments and Contingencies (Continued)

Standard Guarantees/Indemnification

In the ordinary course of business, the Company enters into numerous agreements that contain standard guarantees and indemnities whereby the Company indemnifies another party for breaches of representations and warranties. In addition, many of these parties are also indemnified against any third-party claim resulting from the transaction that is contemplated in the underlying agreement. Such guarantees or indemnifications are granted under various agreements, including those governing (i) purchases, sales or outsourcing of assets or businesses, (ii) leases of real estate, (iii) licensing of trademarks, (iv) use of derivatives, and (v) issuances or sales of debt or equity securities. The guarantees or indemnifications issued are for the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) licensees of the Company’s trademarks, (iv) financial institutions in derivative contracts, and (v) underwriters in debt or equity security issuances or sales. While some of these guarantees extend only for the duration of the underlying agreement, many survive the expiration of the term of the agreement or extend into perpetuity payments the Company could be required to make under these guarantees, nor is the Company able to develop an estimate of the maximum potential amount of future payments to be made under these guarantees, as the triggering events are not subject to predictability and there is little or no history of claims against the Company under such arrangements. With respect to certain of the aforementioned guarantees, such as indemnifications of landlords against third-party claims for the use of real estate property leased by the Company, the Company maintains insurance coverage that mitigates any potential payments to be made.

11. Equity

Purchase of Non-Controlling Interest in a Subsidiary

In June 2016, the Company acquired an additional 40% of the equity of Locomote Holdings Pty Ltd. (“Locomote”) from the non-controlling shareholders for a total consideration of $9 million. The excess of consideration paid by the Company over the carrying value of the non-controlling interest acquired is recorded within additional paid-in-capital on the Company’s consolidated condensed balance sheet, and the cash payment is presented as a financing activity in the Company’s consolidated condensed statements of cash ~~flow.~~flows. As of ~~June~~September 30, 2016, the Company’s ownership in Locomote was ~~95%~~96%.

Dividends on Common Shares

The Company’s Board of Directors declared the following cash dividends during the ~~six~~nine months ended ~~June~~September 30, 2016:

Declaration Date	Dividend Per Share			Record Date	Payment Date	Amount (in $ thousands)			Dividend Per Share			Record Date	Payment Date	Amount (in $ thousands)
February 17, 2016		$	0.075	March 3, 2016	March 17, 2016		$	9,279		$	0.075	March 3, 2016	March 17, 2016		$	9,279
May 3, 2016		$	0.075	June 2, 2016	June 16, 2016		$	9,286		$	0.075	June 2, 2016	June 16, 2016		$	9,286
August 3, 2016										$	0.075	September 1, 2016	September 15, 2016		$	9,294

On ~~August 3,~~November 1, 2016, the Company’s Board of Directors declared a cash dividend of $0.075 per common share (see Note 14—Subsequent Events).

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TRAVELPORT WORLDWIDE LIMITED

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)

12. Equity-Based Compensation

The table below presents the activity of the Company’s restricted share units (“RSUs”), performance share units (“PSUs” and, together with RSUs, “Restricted Units”) and stock options for the ~~six~~nine months ended ~~June~~September 30, 2016:

	Restricted Units					Restricted Units
(in dollars, except number of Restricted Units)	Number		Weighted Average Grant Date Fair Value			Number		Weighted Average Grant Date Fair Value
Balance as of January 1, 2016		2,172,529		$	15.73		2,172,529		$	15.73
Granted at fair market value		1,746,421		$	13.23		1,815,173		$	13.26
Vested(1)		(206,216)		$	15.62		(207,756)		$	15.61
Forfeited		(218,025)		$	16.33		(295,484)		$	15.82
Balance as of June 30, 2016		3,494,709		$	14.45
Balance as of September 30, 2016							3,484,462		$	14.44

(1)

During the ~~six~~nine months ended ~~June~~September 30, 2016, the Company completed net share settlement of 70,362 common shares in connection with employee taxable income created upon the vesting of Restricted Units. The Company agreed to pay these taxes on behalf of the employees in return for the employees returning an equivalent value of common shares.

	Stock Options					Stock Options
(in dollars, except number of stock options)	Number		Weighted Average Grant Date Fair Value			Number		Weighted Average Grant Date Fair Value
Balance as of January 1, 2016		1,454,638		$	6.49		1,454,638		$	6.49
Granted at fair market value		1,347,066		$	4.04		1,393,511		$	4.04
Forfeited		(127,611)		$	6.35		(164,498)		$	6.05
Expired		(73,010)		$	6.43		(74,963)		$	6.43
Balance as of June 30, 2016		2,601,083		$	5.23
Balance as of September 30, 2016							2,608,688		$	5.21

In March 2016, the Company granted 0.6 million RSUs, 0.7 million PSUs and 1.2 million stock options under the Travelport Worldwide Limited 2014 Omnibus Incentive Plan (“2014 Equity Plan”). The RSUs and stock options vest annually in quarterly installments on April 15 each year, over a period of four years, if the employee continues to remain in employment during the vesting period. The number of PSUs that will vest on April 15, 2019 is based on the satisfaction of certain performance conditions and continued employment of the employee during the vesting period.

On June 8, 2016, the shareholders of the Company approved an amendment and restatement of the 2014 Equity Plan (the “Amended 2014 Equity Plan”), which provides for an additional 8.9 million common shares available for issuances of equity awards thereunder.

As of ~~June~~September 30, 2016, 0.5 million stock options have vested and become exercisable. The weighted-average exercise price of stock options granted during the ~~six~~nine months ended ~~June~~September 30, 2016 was ~~$13.23~~$13.26 per option, with the remaining weighted average contractual term as of ~~June~~September 30, 2016 of ~~9.71~~9.47 years.

Compensation expense for the ~~six~~nine months ended ~~June~~September 30, 2016 and 2015 resulted in a credit to equity on the Company’s consolidated condensed balance sheets of ~~$17~~$23 million and ~~$19~~$20 million, respectively.

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~~TRAVELPORT WORLDWIDE LIMITED~~

~~NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS~~
~~(unaudited)~~

13. ~~(Loss)~~ Income Per Share

The following table reconciles the numerators and denominators used in the computation of basic and diluted ~~(loss)~~ income per share:

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
(in $ thousand, except share data)	2016			2015			2016			2015			2016			2015			2016			2015
Numerator – Basic and Diluted (Loss) Income per Share:
Net (loss) income attributable to the Company		$	(14,831)		$	15,328		$	1,754		$	7,187
Denominator – Basic (Loss) Income per Share:
Numerator – Basic and Diluted Income per Share:
Net income attributable to the Company														$	20,838		$	3,680		$	22,592		$	10,867
Denominator – Basic Income per Share:
Weighted average common shares outstanding			123,825,030			122,269,482			123,771,642			121,842,792			123,920,699			122,495,392			123,821,339			122,062,715
(Loss) income per share – Basic		$	(0.12)		$	0.13		$	0.01		$	0.06
Denominator – Diluted (Loss) Income per Share:
Number of common shares used for basic (loss) income per share			123,825,030			122,269,482			123,771,642			121,842,792
Income per share – Basic														$	0.17		$	0.03		$	0.18		$	0.09
Denominator – Diluted Income per Share:
Number of common shares used for basic income per share															123,920,699			122,495,392			123,821,339			122,062,715
Weighted average effect of dilutive securities
RSUs			70,030			365,951			64,467			770,326			269,311			161,744			304,870			447,081
Stock Options			95,117			82,464			76,572			59,645			101,677			67,005			82,843			53,563
Weighted average common shares outstanding			123,990,177			122,717,897			123,912,681			122,672,763			124,291,687			122,724,141			124,209,052			122,563,359
(Loss) income per share – Diluted		$	(0.12)		$	0.12		$	0.01		$	0.06
Income per share – Diluted														$	0.17		$	0.03		$	0.18		$	0.09

Basic ~~(loss)~~ income per share is based on the weighted average number of common shares outstanding during each period. Diluted ~~(loss)~~ income per share is based on the weighted average number of common shares outstanding and the effect of all dilutive common shares equivalents during each period.

For the three and ~~six~~nine months ended ~~June~~September 30, 2016, the Company had 2.3 million and ~~1.8~~2.0 million, respectively, of ~~weighted-average~~weighted average common share equivalents, primarily associated with the Company’s stock options, that were excluded from the calculation of diluted ~~(loss)~~ income per share as their inclusion would have been antidilutive as the common shares repurchased from the total assumed proceeds applying the treasury stock method exceed the common shares that would have been issued.

14. Subsequent Events

On ~~August 3,~~November 1, 2016, the Company’s Board of Directors declared a cash dividend of $0.075 per common share for the ~~second~~third quarter of 2016, which is payable on ~~September~~December 15, 2016 to shareholders of record on ~~September~~December 1, 2016.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our results of operations and financial condition for the three and ~~six~~nine months ended ~~June~~September 30, 2016 should be read in conjunction with our consolidated condensed financial statements and accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis includes forward-looking statements that reflect the current view of management and involve risks and uncertainties. Our actual results may differ materially from those contained in any forward-looking statements as a result of factors discussed below and elsewhere in this Quarterly Report, particularly under the headings “Risk Factors” and “Forward-Looking Statements.”

Overview

We are a leading travel commerce platform providing distribution, technology, payment, mobile and other solutions for the $7 trillion global travel and tourism industry. We facilitate travel commerce by connecting the world’s leading travel providers, such as airlines and hotel chains, with online and offline travel agencies and other travel buyers in our proprietary business-to-business (“B2B”) travel commerce platform (our Travel Commerce Platform). In 2015, we processed approximately $82 billion of travel spending. Since 2012, we have strategically invested in products with a focus on redefining our Travel Commerce Platform to address the trends, inefficiencies and unmet needs of all components of the travel value chain.

We have one reporting segment, and we further classify revenue according to its source as either Travel Commerce Platform revenue (comprised of Air and Beyond Air) or Technology Services revenue. For the ~~six~~nine months ended ~~June~~September 30, 2016, Air, Beyond Air and Technology Services represented ~~72%~~71%, ~~23%~~24% and 5%, respectively, of our net revenue.

Travel Commerce Platform

Our Travel Commerce Platform combines state-of-the-art technology with features, functionality and innovative solutions to address the high-volume and growing transaction processing requirements for the evolving needs of the travel industry.

Air

We provide comprehensive real-time search, pricing, booking, change, payment and integrated itinerary creation for travelers who use the services of online and offline travel agencies for both leisure and business travel. We provide such services to approximately 400 airlines globally, including approximately 120 low cost carriers (“LCCs”). Our access to business travelers, merchandising capabilities and ability to process complex itineraries have attracted and allowed for the full integration of several fast-growing LCCs such as Air Asia, EasyJet and Ryanair into our Travel Commerce Platform.

Beyond Air

We have expanded our Travel Commerce Platform with a fast growing portfolio of Beyond Air initiatives. Our Beyond Air portfolio includes hospitality, payment solutions, mobile commerce, advertising and other platform services.

For the hospitality sector of the travel industry, we provide innovative distribution and merchandising solutions for hotel, car rental, rail, cruise-line and tour operators. Based on our estimates, we offer the largest inventory of hotel properties on any travel platform in the world via our innovative distribution and merchandising solutions for both chain and independent hotels.

For payment solutions, eNett International (Jersey) Limited’s (“eNett”) core offering is a Virtual Account Number (“VAN”) that automatically generates unique ~~MasterCard~~Mastercard numbers used to process payments globally. eNett’s operations currently focus on Asia Pacific and Europe, and we believe the model is highly scalable. During the three and ~~six~~nine months ended ~~June~~September 30, 2016, eNett generated net revenue of ~~$38~~$42 million and ~~$71~~$113 million, respectively, representing an approximately ~~85%~~60% and ~~81%~~72% increase compared to the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively.

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Following our acquisition of Mobile Travel Technologies Ltd. (“MTT”) in ~~July~~ July��2015, we also provide a mobile travel platform and digital product set that allows airlines, hotels, corporate travel management companies and travel agencies to engage with their customers through mobile services, including apps, mobile web and mobile messaging.

In addition to hospitality, payment solutions and mobile commerce, we utilize the broad connections and extensive data managed by our Travel Commerce Platform to provide advertising solutions that allow our travel providers to easily and cost-effectively promote upgrades, ancillary products or services, package deals and other offers. We also offer other platform services, including subscription services, processing services, business intelligence data services and marketing-oriented analytical tools, to travel agencies, travel providers and other travel data users.

Technology Services

We provide critical hosting solutions to airlines, such as pricing, shopping, ticketing, ground handling and other services, enabling them to focus on their core business competencies and reduce costs. We also host reservations, inventory management and other related critical systems for Delta Air Lines Inc. In addition, we own 51% of IGT Solutions Private Ltd., an application development services provider based in Gurgaon, India that is used for both internal and external software development.

Management Performance Metrics

Our management team monitors the performance of our operations against our strategic objectives. We assess our performance using both financial and non-financial measures. As a Travel Commerce Platform, we measure performance primarily on the basis of changes in both Reported Segments and RevPas. Travel Commerce Platform RevPas is computed by dividing Travel Commerce Platform revenue by the total number of Reported Segments. Travel Commerce Platform revenue is generated from a wide portfolio of products and services, including traditional air bookings, ancillaries, hospitality, payment solutions, mobile commerce, advertising and other platform services. Reported Segments is defined as travel provider revenue generating units (net of cancellations) sold by our travel agency network, geographically presented by region based upon the point of sale location. We also use other GAAP and non-GAAP measures as performance metrics.

The table below sets out our performance metrics:

(in $ thousands, except per share data, Reported Segments and RevPas)	Three Months Ended June 30,						Change					Six Months Ended June 30,						Change					Three Months Ended September 30,						Change					Nine Months Ended September 30,						Change
	2016			2015						%		2016			2015						%		2016			2015						%		2016			2015						%
Net revenue		$	605,905		$	554,202		$	51,703		9		$	1,215,168		$	1,126,330		$	88,838		8		$	590,756		$	559,837		$	30,919		6		$	1,805,924		$	1,686,167		$	119,757		7
Operating income			37,760			63,146			(25,386)		(40)			117,628			96,895			20,733		21			62,235			54,091			8,144		15			179,863			150,986			28,877		19
Net (loss) income			(14,429)			16,409			(30,838)		(188)			2,752			9,301			(6,549)		(70)
(Loss) income per share – diluted (in $)			(0.12)			0.12			(0.24)		(200)			0.01			0.06			(0.05)		(83)
Net income																									21,404			4,950			16,454		*			24,156			14,251			9,905		70
Income per share – diluted (in $)																									0.17			0.03			0.14		*			0.18			0.09			0.09		100
Adjusted EBITDA(1)			139,013			136,986			2,027		1			293,153			274,444			18,709		7			150,432			130,977			19,455		15			443,585			405,421			38,164		9
Adjusted Operating Income(2)			82,796			80,343			2,453		3			179,260			157,067			22,193		14			87,757			78,224			9,533		12			267,017			235,291			31,726		13
Adjusted Net Income(3)			34,287			35,487			(1,200)		(3)			85,242			65,064			20,178		31			40,995			30,087			10,908		36			126,237			95,151			31,086		33
Adjusted Income per Share – diluted(4) (in $)			0.28			0.29			(0.01)		(3)			0.69			0.53			0.16		30			0.33			0.25			0.08		32			1.02			0.78			0.24		31
Net cash provided by operating activities			76,728			81,147			(4,419)		(5)			102,932			92,166			10,766		12			110,926			61,569			49,357		80			213,858			153,735			60,123		39
Adjusted Free Cash Flow(5)			52,343			53,701			(1,358)		(3)			47,273			32,683			14,590		45			83,170			31,113			52,057		167			130,443			63,796			66,647		104
Reported Segments (in thousands)			86,807			87,150			(343)		—			176,780			181,670			(4,890)		(3)			83,945			83,979			(34)		—			260,725			265,649			(4,924)		(2)
Travel Commerce Platform RevPas (in $)		$	6.61		$	6.00		$	0.61		10		$	6.52		$	5.86		$	0.66		11		$	6.67		$	6.29		$	0.38		6		$	6.57		$	5.99		$	0.58		10

Percentage calculated not meaningful

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(1)

Adjusted EBITDA is defined as Adjusted Net Income (Loss) excluding depreciation and amortization of property and equipment, amortization of customer loyalty payments, interest expense, net (excluding unrealized gains (losses) on interest rate derivative instruments) and related income taxes.

(2)

Adjusted Operating Income (Loss) is defined as Adjusted EBITDA less depreciation and amortization of property and equipment and amortization of customer loyalty payments.

(3)

Adjusted Net Income (Loss) is defined as net income (loss) from continuing operations excluding amortization of acquired intangible assets, gain (loss) on early extinguishment of debt, share of earnings (losses) in equity method investments and items that are excluded under our debt covenants, such as gain on the sale of shares of Orbitz Worldwide Inc. (“Orbitz Worldwide”), non-cash equity-based compensation, certain corporate and restructuring costs, certain litigation and related costs and other non-cash items, such as unrealized foreign currency gains (losses) on earnings hedges, and unrealized gains (losses) on interest rate derivate instruments, along with any income tax related to these exclusions.

(4)

Adjusted Income (Loss) per Share—diluted is defined as Adjusted Net Income (Loss) for the period divided by the weighted average number of dilutive common shares.

(5)

Adjusted Free Cash Flow is defined as net cash provided by (used in) operating activities of continuing operations, adjusted to remove the impact of cash paid for other adjusting items which we believe are unrelated to our ongoing operations and to deduct capital expenditures on property and equipment additions, capital lease and other indebtedness repayments (“Capital Expenditure”).

We utilize non-GAAP (or adjusted) financial measures, including Adjusted EBITDA, Adjusted Operating Income (Loss), Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Share—diluted, to provide useful supplemental information to assist investors in understanding and assessing our performance and financial results on the same basis that management uses internally. These adjusted financial measures provide investors greater transparency with respect to key metrics used by management to evaluate our core operations, forecast future results, determine future capital investment allocations and understand business trends within the industry. These metrics are also used by our Board of Directors to determine incentive compensation for future periods. Management believes the adjusted financial measures assist investors in the comparison of financial results between periods as such measures exclude certain items that management believes are not reflective of our core operating performance consistent with how management reviews the business.

Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Share—diluted, Adjusted Operating Income and Adjusted EBITDA are supplemental measures of operating performance that do not represent, and should not be considered as, alternatives to net income (loss), or net income (loss) per share—diluted, as determined under U.S. GAAP. In addition, these measures may not be comparable to similarly named measures used by other companies. The presentation of these measures ~~have~~has limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.

We have included Adjusted Net Income (Loss), Adjusted Operating Income and Adjusted EBITDA as they are primary metrics used by management to evaluate and understand the underlying operations and business trends, forecast future results and determine future capital investment allocations. These metrics are also used by our Board of Directors to determine incentive compensation for future periods.

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The following table provides a reconciliation of net ~~(loss)~~ income to Adjusted Net Income, to Adjusted Operating Income and to Adjusted EBITDA:

	Three Months Ended June 30,							Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
(in $ thousands)	2016			2015				2016			2015			2016			2015			2016			2015
Net (loss) income		$	(14,429)		$	16,409			$	2,752		$	9,301
Net income															$	21,404		$	4,950		$	24,156		$	14,251
Adjustments:
Amortization of intangible assets(1)			13,716			19,142				24,855			37,765			11,838			18,047			36,693			55,812
Loss on early extinguishment of debt			2,671			—				2,671			—			955			—			3,626			—
Share of losses in equity method investment			—			194				—			175			—			342			—			517
Gain on sale of shares of Orbitz Worldwide			—			—				—			(6,271)			—			—			—			(6,271)
Equity-based compensation and related taxes			6,823			8,621				15,924			21,023			5,383			3,828			21,307			24,851
Corporate and restructuring costs(2)			6,870			6,454				14,279			8,068			7,152			3,092			21,431			11,160
Other – non cash(3)			23,033			(17,020)				28,436			(6,684)			(3,242)			(834)			25,194			(7,518)
Tax impact of adjustments(4)			(4,397)			1,687				(3,675)			1,687			(2,495)			662			(6,170)			2,349
Adjusted Net Income			34,287			35,487				85,242			65,064			40,995			30,087			126,237			95,151
Adjustments:
Interest expense, net(5)			39,707			38,751				78,146			78,140			34,204			40,346			112,350			118,486
Remaining provision for income taxes			8,802			6,105	��			15,872			13,863			12,558			7,791			28,430			21,654
Adjusted Operating Income			82,796			80,343				179,260			157,067			87,757			78,224			267,017			235,291
Adjustments:
Depreciation and amortization of property and equipment			38,530			38,705				79,632			81,110			41,743			38,223			121,375			119,333
Amortization of customer loyalty payments			17,687			17,938				34,261			36,267			20,932			14,530			55,193			50,797
Adjusted EBITDA		$	139,013		$	136,986			$	293,153		$	274,444		$	150,432		$	130,977		$	443,585		$	405,421

(1)

Relates primarily to intangible assets acquired in the sale of Travelport to The Blackstone Group (“Blackstone”) in 2006 and from the acquisition of Worldspan in 2007.

(2)

Relates to costs associated with corporate development transactions and costs incurred to enhance our organization’s efficiency.

(3)

Other—non cash includes (i) unrealized losses (gains) on foreign currency derivative contracts of ~~$14~~$0 million and ~~$(16)~~$1 million for the three months ended ~~June~~September 30, 2016 and 2015, respectively, and $3 million and ~~$(6)~~$(5) million for the ~~six~~nine months ended ~~June~~September 30, 2016 and 2015, respectively, (ii) unrealized (gain) loss on interest rate derivative contracts of $6$(5) million and ~~$22~~$17 million for the three and ~~six~~nine months ended ~~June~~September 30, 2016, respectively, (iii) impairment of $4$1 million and $5 million for ~~each of~~ the three and ~~six~~nine months ended ~~June~~September 30, 2016, respectively, primarily related to property and equipment and (iv) other ~~gains~~losses (gains) of $1 million and $(2) million for ~~each of~~ the three ~~and six~~ months ended ~~June~~September 30, 2016 and ~~2015.~~2015, respectively, and $0 million and $(3) million for the nine months ended September 30, 2016 and 2015, respectively.

(4)

Tax impact of adjustments primarily relates to equity-based compensation, corporate and restructuring costs, and unrealized gains and losses on foreign currency derivative contracts and is calculated at the rate applicable for the jurisdiction in which the adjusting item arose.

(5)

Interest expense, net, excludes the impact of unrealized (gain) loss of $6$(5) million and ~~$22~~$17 million on interest rate derivative contracts for the three and ~~six~~nine months ended ~~June~~September 30, 2016, respectively, which is included within “Other—non ~~cash”.~~cash.”

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The following table provides a reconciliation of ~~(loss)~~ income per share – diluted to Adjusted Income per Share – diluted:

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
(Loss) income per share – diluted		$	(0.12)		$	0.12		$	0.01		$	0.06
Per share adjustments to net (loss) income to determine Adjusted Income per Share – diluted			0.40			0.17			0.68			0.47
(in $)													2016			2015			2016			2015
Income per share – diluted														$	0.17		$	0.03		$	0.18		$	0.09
Per share adjustments to net income to determine Adjusted Income per Share – diluted															0.16			0.22			0.84			0.69
Adjusted Income per Share – diluted		$	0.28		$	0.29		$	0.69		$	0.53		$	0.33		$	0.25		$	1.02		$	0.78

We have included Adjusted Income (Loss) per Share – diluted as we believe it is a useful measure for our investors as it represents, on a per share basis, our consolidated results, taking into account depreciation and amortization on property and equipment and amortization of customer loyalty payments, as well as other items which are not allocated to the operating businesses, such as interest expense (excluding unrealized gains (losses) on interest rate derivative instruments) and related income taxes but excluding the effects of certain expenses not directly tied to the core operations of our businesses. Adjusted Income (Loss) per Share – diluted has similar limitations as Adjusted Net Income (Loss), Adjusted Operating Income (Loss) and Adjusted EBITDA and may not be comparable to similarly named measures used by other companies. In addition, Adjusted Net Income (Loss) does not include all items that affect our net income (loss) and net income (loss) per share for the period. Therefore, it is important to evaluate these measures along with our consolidated condensed statements of operations.

For a discussion of Adjusted Free Cash Flow, please see “Liquidity and Capital Resources—Cash Flows.”

Factors Affecting Results of Operations

Geographic Mix: Our geographically dispersed footprint helps insulate us from particular country or regional instability, allows for optimal information technology efficiency and enhances our value proposition to travel providers. We are well positioned to capture higher value business from travel providers operating in away markets, which results in higher per transaction revenue for both us and the travel providers we serve. The table below sets forth revenue by region percentages for our Travel Commerce Platform for the ~~six~~nine months ended ~~June~~September 30, 2016 and 2015:

	Six Months Ended June 30,				Nine Months Ended September 30,
(in percentages)	2016		2015		2016		2015
Asia Pacific		22		22		23		22
Europe		33		30		32		29
Latin America and Canada		5		4		5		5
Middle East and Africa		13		14		13		14
International		73		70		73		70
United States		27		30		27		30
Travel Commerce Platform		100		100		100		100

We expect some of the regions in which we currently operate, such as Asia Pacific, the Middle East and Africa, to experience growth in travel that is greater than the global average due to factors such as economic growth and a growing middle class, while more mature regions, such as the United States, remain stable. As these emerging travel regions may grow at a higher rate than mature regions, the geographic distribution of our revenue may similarly shift.

Customer Mix: We believe our customer mix is broadly diversified, supporting our stable and recurring business model with high revenue visibility. We provide air distribution services to approximately 400 airlines globally, including approximately 120 LCCs. In addition, we serve numerous Beyond Air travel

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providers, including approximately 650,000 hotel properties (of which over 550,000 are independent hotel properties), ~~approximately~~over 36,000 car rental locations, ~~and~~ approximately 60 cruise-line and tour operators and 13 major rail networks worldwide. We aggregate travel content across ~~over 68,000~~approximately 67,000 travel agency locations representing over 235,000 online and offline travel agency terminals worldwide, which in turn serves millions of end customers globally. None of our travel buyers or travel providers accounted for more than 10% of our revenue for the ~~six~~nine months ended ~~June~~September 30, 2016.

Renegotiated Legacy Contract: In February 2014, we entered into a renegotiated long-term agreement under which Orbitz Worldwide uses our services in the United States and other countries. Under the agreement, we paid incremental benefits in 2014, and since then, we have paid and will continue to pay further increased fees in later years for each air, car and hotel segment. Since 2015, Orbitz Worldwide has wider flexibility to use traditional GDS providers for services. In exchange for the enhanced payments, Orbitz Worldwide agreed to generate a minimum specified book of business through our Travel Commerce Platform and pay a shortfall payment if the minimum volume is not met.

Seasonality: Our revenue can experience seasonal fluctuations, reflecting seasonal demand trends for the products and services we offer. These trends generally cause our revenue to be higher in the first and second quarters as compared to the third and fourth quarters of the calendar year. Revenue typically peaks during ~~these times~~first two quarters as travelers plan and purchase their upcoming spring and summer travel.

Foreign Exchange Fluctuations: We are exposed to movements in currency exchange rates that impact our operating results. While substantially all of our revenue is denominated in U.S. dollars, a portion of our cost base is transacted in non-U.S. dollar currencies (principally, the British pound, Euro and Australian dollar).

Litigation and Related Costs: We are involved in various claims, legal proceedings and governmental inquiries related to contract disputes, business practices, intellectual property and other commercial, employment and tax matters. We believe we have adequately accrued for such matters, and for costs of defending against such matters. However, litigation is inherently unpredictable and although we believe that our accruals are adequate and we have valid defenses in these matters, unfavorable resolutions could occur, which could have a material adverse effect on our results of operations or cash flows in a particular reporting period.

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Results of Operations

Three Months Ended ~~June~~September 30, 2016 compared to Three Months Ended ~~June~~September 30, 2015

	Three Months Ended June 30,						Change					Three Months Ended September 30,						Change
(in $ thousands)	2016			2015			$			%		2016			2015			$			%
Net revenue		$	605,905		$	554,202		$	51,703		9		$	590,756		$	559,837		$	30,919		6
Costs and expenses
Cost of revenue			376,605			335,050			41,555		12			351,534			335,724			15,810		5
Selling, general and administrative			139,294			98,159			41,135		42			123,406			113,752			9,654		8
Depreciation and amortization			52,246			57,847			(5,601)		(10)			53,581			56,270			(2,689)		(5)
Total costs and expenses			568,145			491,056			77,089		16			528,521			505,746			22,775		5
Operating income			37,760			63,146			(25,386)		(40)			62,235			54,091			8,144		15
Interest expense, net			(45,113)			(38,751)			(6,362)		(16)			(29,813)			(40,346)			10,533		26
Loss on early extinguishment of debt			(2,671)			—			(2,671)		*			(955)			—			(955)		*
(Loss) income before income taxes and share of losses in equity method investment			(10,024)			24,395			(34,419)		(141)
Income before income taxes and share of losses in equity method investment														31,467			13,745			17,722		129
Provision for income taxes			(4,405)			(7,792)			3,387		43			(10,063)			(8,453)			(1,610)		(19)
Share of losses in equity method investment			—			(194)			194		100			—			(342)			342		100
Net (loss) income		$	(14,429)		$	16,409		$	(30,838)		(188)
Net income													$	21,404		$	4,950		$	16,454		*

Percentage calculated not meaningful

Net Revenue

Net revenue is comprised of:

	Three Months Ended June 30,						Change					Three Months Ended September 30,						Change
(in $ thousands)	2016			2015			$			%
(in $ thousands)												2016			2015			$			%
Air		$	425,861		$	400,974		$	24,887		6		$	407,926		$	398,781		$	9,145		2
Beyond Air			148,197			121,700			26,497		22			151,857			129,183			22,674		18
Travel Commerce Platform			574,058			522,674			51,384		10			559,783			527,964			31,819		6
Technology Services			31,847			31,528			319		1			30,973			31,873			(900)		(3)
Net revenue		$	605,905		$	554,202		$	51,703		9		$	590,756		$	559,837		$	30,919		6

During the three months ended ~~June~~September 30, 2016, Net revenue increased by ~~$52~~$31 million, or 9%6%, compared to the three months ended ~~June~~September 30, 2015. This increase was primarily driven by an increase in Travel Commerce Platform revenue of ~~$51~~$32 million, or ~~10%~~6%.

Travel Commerce Platform

The table below sets forth Travel Commerce Platform RevPas and Reported Segments:

	Three Months Ended June 30,						Change					Three Months Ended September 30,						Change
	2016			2015						%		2016			2015						%
Travel Commerce Platform RevPas (in $)		$	6.61		$	6.00		$	0.61		10		$	6.67		$	6.29		$	0.38		6
Reported Segments (in thousands)			86,807			87,150			(343)		—			83,945			83,979			(34)		—

The increase in Travel Commerce Platform revenue of ~~$51~~$32 million, or ~~10%~~6%, was due to a ~~$25~~$9 million, or 6%2%, increase in Air revenue and ~~$26~~a $23 million, or ~~22%~~18%, increase in Beyond Air revenue. Overall, there was a ~~10%~~6% increase in Travel Commerce Platform RevPas, with Reported Segments remaining stable.

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Our Travel Commerce Platform continues to benefit from growth in Air and Beyond Air revenue. The value of transactions processed on the Travel Commerce Platform decreased to ~~$20.8~~$19.9 billion for the three months ended ~~June~~September 30, 2016 from ~~$ 21.6~~$20.7 billion for the three months ended ~~June~~September 30, 2015 as a result of a decrease in segments in the U.S. and a reduction in average ticket prices in line with global trends. Our percentage of Air segment revenue from away bookings increased to 66% from 65%. ~~Our~~We increased our car rental days sold to 26 million from 25 million and our hotel room nights sold to 17 million from 16 million, with hospitality segments per 100 airline tickets issued ~~our car rental days sold, and our hotel room nights sold remained~~remaining stable at ~~48, 24 million and 17 million, respectively.~~49.

The table below sets forth Travel Commerce Platform revenue by region:

	Three Months Ended June 30,						Change					Three Months Ended September 30,						Change
(in $ thousands)	2016			2015			$			%		2016			2015			$			%
Asia Pacific		$	130,526		$	115,397		$	15,129		13		$	129,309		$	117,145		$	12,164		10
Europe			182,710			149,913			32,797		22			180,746			159,193			21,553		14
Latin America and Canada			28,245			24,299			3,946		16			26,336			27,022			(686)		(3)
Middle East and Africa			77,346			74,625			2,721		4			72,833			71,581			1,252		2
International			418,827			364,234			54,593		15			409,224			374,941			34,283		9
United States			155,231			158,440			(3,209)		(2)			150,559			153,023			(2,464)		(2)
Travel Commerce Platform		$	574,058		$	522,674		$	51,384		10		$	559,783		$	527,964		$	31,819		6

The table below sets forth Reported Segments and RevPas by region:

	Segments (in thousands)								RevPas (in $)											Segments (in thousands)								RevPas (in $)
	Three Months Ended June 30,				Change				Three Months Ended June 30,						Change					Three Months Ended September 30,				Change				Three Months Ended September 30,						Change
	2016		2015				%		2016			2015			$			%		2016		2015				%		2016			2015			$			%
Asia Pacific		17,009		16,042		967		6		$	7.67		$	7.19		$	0.48		7		16,735		16,002		733		5		$	7.73		$	7.32		$	0.41		6
Europe		20,561		20,080		481		2		$	8.89		$	7.47		$	1.42		19		19,588		19,407		181		1		$	9.23		$	8.20		$	1.03		13
Latin America and Canada		4,524		4,210		314		7		$	6.24		$	5.77		$	0.47		8		4,279		4,269		10		—		$	6.16		$	6.33		$	(0.17)		(3)
Middle East and Africa		9,912		9,921		(9)		—		$	7.80		$	7.51		$	0.29		4		9,243		9,601		(358)		(4)		$	7.88		$	7.47		$	0.41		5
International		52,006		50,253		1,753		3		$	8.05		$	7.25		$	0.80		11		49,845		49,279		566		1		$	8.21		$	7.61		$	0.60		8
United States		34,801		36,897		(2,096)		(6)		$	4.46		$	4.30		$	0.16		4		34,100		34,700		(600)		(2)		$	4.41		$	4.41		$	—		—
Travel Commerce Platform		86,807		87,150		(343)		—		$	6.61		$	6.00		$	0.61		10		83,945		83,979		(34)		—		$	6.67		$	6.29		$	0.38		6

International

Our International Travel Commerce Platform revenue increased ~~$55~~$34 million, or ~~15%~~9%, due to an ~~11%~~8% increase in RevPas and a 3%1% increase in Reported Segments. The increase in RevPas was a result of growth in our Air and Beyond Air offerings. The increase in Air was mainly due to improved pricing ~~mix~~ and merchandising, and the increase in Beyond Air was primarily driven by growth in payment ~~solutions and expansion into mobile commerce.~~solutions. Our International Travel Commerce Platform revenue as a percentage of Travel Commerce Platform revenue was 73% for the three months ended ~~June~~September 30, 2016 compared to ~~70%~~71% for the three months ended ~~June~~September 30, 2015.

Asia Pacific

Revenue in Asia Pacific increased ~~$15~~$12 million, or ~~13%~~10%, due to a 7%6% increase in RevPas and a 6% increase in Reported Segments. RevPas increased due to growth in Air revenue and Beyond Air revenue, including payment solutions and expansion into mobile commerce. Reported Segments increased due to strong growth in India, South Korea and Australia.

~~Europe~~

~~Revenue in Europe increased $33 million, or 22%, primarily due to a 19% increase in RevPas and a 2%~~5% increase in Reported Segments. RevPas increased due to revenue growth in Air and payment solutions in Beyond Air. Reported Segments increased due to growth in South Korea, Hong Kong and ~~mobile commerce~~India.

Europe

Revenue in Europe increased $22 million, or 14%, primarily due to a 13% increase in RevPas and a 1% increase in Reported Segments. RevPas increased due to revenue growth in Air and payment solutions in Beyond Air.

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Latin America and Canada

Revenue in Latin America and Canada ~~increased $4~~decreased $1 million, or ~~16%~~3%, due to ~~an 8% increase~~a 3% decrease in RevPas ~~and a 7% increase in~~with Reported ~~Segments.~~Segments remaining stable. The ~~increase~~decrease in RevPas was ~~due to revenue growth~~primarily driven by a decline in Air ~~and mobile commerce in Beyond Air. Reported Segments growth was due to strong growth in Argentina and Colombia.~~revenue.

Middle East and Africa

Revenue in the Middle East and Africa increased $3$1 million, or 4%2%, due to a 4%5% increase in RevPas ~~while~~offset by a 4% decrease in Reported ~~Segments remained stable.~~Segments. The increase in RevPas was primarily due to revenue growth in Beyond Air.

United States

Revenue in the United States decreased $3$2 million, or 2%, ~~primarily~~ due to a 6% decrease in Reported Segments, ~~offset by a 4% increase in RevPas. The decrease in Reported Segments~~which was primarily driven by the impact of the renegotiated contract with Orbitz Worldwide in 2014. ~~The increase in RevPas was primarily due to Beyond Air revenue.~~

Technology Services

Technology Services revenue ~~remained stable at $32 million.~~decreased marginally by $1 million, or 3%.

Cost of Revenue

Cost of revenue is comprised of:

	Three Months Ended June 30,						Change					Three Months Ended September 30,						Change
(in $ thousands)	2016			2015			$			%		2016			2015			$			%
Commissions		$	292,714		$	258,830		$	33,884		13		$	273,702		$	260,806		$	12,896		5
Technology costs			83,891			76,220			7,671		10			77,832			74,918			2,914		4
Cost of revenue		$	376,605		$	335,050		$	41,555		12		$	351,534		$	335,724		$	15,810		5

Cost of revenue increased by ~~$42~~$16 million, or ~~12%~~5%, as a result of a ~~$34~~$13 million, or ~~13%~~5%, increase in commission costs and $8a $3 million, or ~~10%~~4%, increase in technology costs. Commissions increased due to a 9%1% increase in travel distribution costs per segment, primarily driven by ~~mix and an $11 million allowance for prepaid incentive related to a long-term contract with a travel agent,~~pricing, and incremental commission costs from our payment ~~processing~~solutions business. Commissions included amortization of customer loyalty payments of ~~$18~~$21 million and $15 million for ~~each of~~ the three months ended ~~June~~September 30, 2016 and ~~2015.~~2015, respectively. Technology costs across the shared infrastructure that runs our Travel Commerce Platform and Technology Services increased due to continued expansion of our operations through acquisitions and further investments in technology.

Selling, General and Administrative (SG&A)

SG&A is comprised of:

Three Months Ended
June 30, Change
(in $ thousands) 2016 2015 $ %
Workforce $ 88,536 $ 71,655 $ 16,881 24
Non-workforce 19,438 28,449 (9,011) (32)
Sub-total 107,974 100,104 7,870 8
Non-core corporate costs 31,320 (1,945) 33,265 *
SG&A $ 139,294 $ 98,159 $ 41,135 42

~~Percentage calculated not meaningful~~

	Three Months Ended September 30,						Change
(in $ thousands)	2016			2015			$			%
Workforce		$	88,276		$	77,878		$	10,398		13
Non-workforce			21,446			29,788			(8,342)		(28)
Sub-total			109,722			107,666			2,056		2
Non-core corporate costs			13,684			6,086			7,598		125
SG&A		$	123,406		$	113,752		$	9,654		8

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SG&A expenses increased by ~~$41~~$10 million, or ~~42%~~8%, during the three months ended ~~June~~September 30, 2016 compared to ~~June~~September 30, 2015. SG&A expenses ~~include $31~~included $14 million and ~~$(2)~~$6 million of charges ~~(credits)~~ for the three months ended ~~June~~September 30, 2016 and 2015, respectively, for non-core corporate costs that are removed from Adjusted EBITDA. Excluding these items, our SG&A expenses for the three months ended ~~June~~September 30, 2016 compared to the three months ended ~~June~~September 30, 2015 increased by $8$2 million, or 8%2%. Workforce expenses, which include the wages and benefits of our selling, marketing, advertising, finance and legal personnel, increased by ~~$17~~$10 million, or ~~24%~~13%, primarily as a result of increased wages and benefits due to headcount increases related to the expansion of our Travel Commerce Platform through acquisitions and go-to-market capabilities ~~pension costs~~ and merit ~~increases.~~increases, partially offset by favorable foreign currency exchange movement. Non-workforce expenses, which include costs of finance and legal professional fees, communications and marketing and foreign exchange related costs, decreased $9$8 million, or ~~32%~~28%, primarily due to reduced administrative expenses and lower realized foreign exchange losses.

Non-core corporate costs ~~(credits)~~ of ~~$31~~$14 million and ~~$(2)~~$6 million for the three months ended ~~June~~September 30, 2016 and 2015, respectively, represent costs related to strategic transactions and restructurings, equity-based compensation, certain legal and related costs and unrealized foreign currency gains and losses related to derivatives. The increase of ~~$33~~$8 million is primarily due to a ~~$30~~$4 million ~~fluctuation~~increase in ~~unrealized foreign exchange gains~~corporate and ~~losses on foreign currency derivative contracts~~restructuring costs and a $4$2 million ~~of impairment on property~~increase in equity-based compensation and ~~equipment.~~related taxes.

Depreciation and Amortization

Depreciation and amortization is comprised of:

	Three Months Ended June 30,						Change					Three Months Ended September 30,						Change
(in $ thousands)	2016			2015			$			%		2016			2015			$			%
Depreciation on property and equipment		$	38,530		$	38,705		$	(175)		—		$	41,743		$	38,223		$	3,520		9
Amortization of acquired intangible assets			13,716			19,142			(5,426)		(28)			11,838			18,047			(6,209)		(34)
Total depreciation and amortization		$	52,246		$	57,847		$	(5,601)		(10)		$	53,581		$	56,270		$	(2,689)		(5)

Total depreciation and amortization decreased by $6$3 million, or ~~10%~~5%, primarily due to a decrease in the amortization of acquired intangible assets as the useful lives expired on a portion of the assets acquired on the sale of Travelport to Blackstone in 2006 and the acquisition of Worldspan in 2007.

Interest Expense, Net

Interest expense, net, ~~increased~~decreased by $6$11 million, or ~~16%~~26%, due to ~~the adverse~~a favorable impact of fair value changes of our interest rate ~~swaps.~~swaps, a decrease in outstanding balance of term loans under our senior secured credit agreement and a decrease in the interest rate on the such term loans from 5.75% during three months ended September 30, 2015 to 5.00% during the three months ended September 30, 2016.

Loss on Early Extinguishment of Debt

In ~~June~~September 2016, we ~~amended~~voluntarily prepaid $50 million principal amount of the term loans outstanding under our senior secured credit agreement, ~~under which we reduced the interest rates on our term loans by 75 basis points. In connection with this amendment, certain lenders under the credit agreement were repaid partially or in full,~~ resulting in a $3$1 million loss on early extinguishment of debt.

Provision for Income Taxes

Our tax provision for the three months ended ~~June~~September 30, 2016 differs significantly from the U.S. Federal statutory rate primarily as a result of a number of offsetting items such as (i) being subject to income tax in numerous non-U.S. jurisdictions with varying income tax rates, (ii) a valuation allowance continued to be maintained in various jurisdictions including the U.S. due to the historical losses in those jurisdictions and (iii) certain expenses that aredoes not ~~deductible for tax or do not secure an effective tax deduction under the relevant jurisdictions.~~

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~~Six Months Ended June 30, 2016 compared to Six Months Ended June 30, 2015~~

Six Months Ended June 30, Change
(in $ thousands) 2016 2015 $ %
Net revenue $ 1,215,168 $ 1,126,330 $ 88,838 8
Costs and expenses
Cost of revenue 739,282 684,281 55,001 8
Selling, general and administrative 253,771 226,279 27,492 12
Depreciation and amortization 104,487 118,875 (14,388) (12)
Total costs and expenses 1,097,540 1,029,435 68,105 7
Operating income 117,628 96,895 20,733 21
Interest expense, net (100,008) (78,140) (21,868) (28)
Loss on early extinguishment of debt (2,671) — (2,671) *
Gain on sale of shares of Orbitz Worldwide — 6,271 (6,271) (100)
Income before income taxes and share of losses in equity method investment 14,949 25,026 (10,077) (40)
Provision for income taxes (12,197) (15,550) 3,353 22
Share of losses in equity method investment — (175) 175 100
Net income $ 2,752 $ 9,301 $ (6,549) (70)

~~Percentage calculated not meaningful~~

~~Net Revenue~~

~~Net revenue is comprised of:~~

Six Months Ended
June 30, Change
(in $ thousands) 2016 2015 $ %
Air $ 869,745 $ 832,495 $ 37,250 4
Beyond Air 283,199 231,820 51,379 22
Travel Commerce Platform 1,152,944 1,064,315 88,629 8
Technology Services 62,224 62,015 209 —
Net revenue $ 1,215,168 $ 1,126,330 $ 88,838 8

During the six months ended June 30, 2016, Net revenue increased by $89 million, or 8%, compared to the six months ended June 30, 2015 which was primarily driven by an increase in Travel Commerce Platform revenue.

~~Travel Commerce Platform~~

~~The table below sets forth Travel Commerce Platform RevPas and Reported Segments:~~

Six Months Ended
June 30, Change
2016 2015 $ %
Travel Commerce Platform RevPas (in $)
$ 6.52 $ 5.86 $ 0.66 11
Reported Segments (in thousands)
176,780 181,670 (4,890) (3)

The increase in Travel Commerce Platform revenue of $89 million, or 8%, was due to a $37 million, or 4%, increase in Air revenue and a $51 million, or 22%, increase in Beyond Air revenue. Overall, there was an 11% increase in Travel Commerce Platform RevPas, partially offset by a 3% decrease in Reported Segments.

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Our Travel Commerce Platform continues to benefit from growth in Air revenue and Beyond Air revenue. The value of transactions processed on the Travel Commerce Platform decreased to $40.9 billion for the six months ended June 30, 2016 from $43.5 billion for the six months ended June 30, 2015 as a result of a decrease in segments in the U.S. and a reduction in ticket prices in line with global trends. Our percentage of Air segment revenue from away bookings increased to 67% from 65%. We increased our hospitality segments per 100 airline tickets issued to 46 from 45, our car rental days sold to 46 million from 45 million, and our hotel room nights sold remained stable at 33 million.

~~The table below sets forth Travel Commerce Platform revenue by region:~~

Six Months Ended
June 30, Change
(in $ thousands) 2016 2015 $ %
Asia Pacific $ 259,021 $ 233,170 $ 25,851 11
Europe 377,557 315,640 61,917 20
Latin America and Canada 56,281 48,060 8,221 17
Middle East and Africa 150,796 147,948 2,848 2
International 843,655 744,818 98,837 13
United States 309,289 319,497 (10,208) (3)
Travel Commerce Platform $ 1,152,944 $ 1,064,315 $ 88,629 8

~~The table below sets forth Reported Segments and RevPas by region:~~

Segments (in thousands)

RevPas (in $)

Six Months Ended
June 30, Change Six Months Ended
June 30, Change
2016 2015 % 2016 2015 $ %
Asia Pacific 33,998 32,761 1,237 4 $ 7.62 $ 7.12 $ 0.50 7
Europe 43,694 43,069 625 1 $ 8.64 $ 7.33 $ 1.31 18
Latin America and Canada 9,074 8,481 593 7 $ 6.20 $ 5.67 $ 0.53 9
Middle East and Africa 19,633 19,850 (217) (1) $ 7.68 $ 7.45 $ 0.23 3
International 106,399 104,161 2,238 2 $ 7.93 $ 7.15 $ 0.78 11
United States 70,381 77,509 (7,128) (9) $ 4.39 $ 4.12 $ 0.27 7
Travel Commerce Platform 176,780 181,670 (4,890) (3) $ 6.52 $ 5.86 $ 0.66 11

~~International~~

Our International Travel Commerce Platform revenue increased $99 million, or 13%, due to an 11% increase in RevPas and a 2% increase in Reported Segments. The increase in RevPas was a result of growth in our Air and Beyond Air offerings. The increase in Air was mainly due to improved pricing, mix and merchandising, and the increase in Beyond Air was primarily driven by growth in payment solutions and expansion into mobile commerce. Our International Travel Commerce Platform revenue as a percentage of Travel Commerce Platform revenue was 73% for the six months ended June 30, 2016 compared to 70% for the six months ended June 30, 2015.

~~Asia Pacific~~

Revenue in Asia Pacific increased $26 million, or 11%, due to a 7% increase in RevPas and a 4% increase in Reported Segments. RevPas increased due to growth in Air revenue and Beyond Air revenue, including payment solutions and expansion into mobile commerce. Reported Segments increased due to strong growth in India, South Korea and Hong Kong.

~~Europe~~

Revenue in Europe increased $62 million, or 20%, primarily due to an 18% increase in RevPas and a 1% increase in Reported Segments. RevPas increased due to revenue growth in Air and payment solutions and mobile commerce in Beyond Air.

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~~Latin America and Canada~~

Revenue in Latin America and Canada increased $8 million, or 17%, due to a 9% increase in RevPas and a 7% increase in Reported Segments. The increase in RevPas was mainly due to revenue growth in Beyond Air powered by expansion into mobile commerce. Reported Segments experienced strong growth in Argentina and Colombia.

~~Middle East and Africa~~

Revenue in Middle East and Africa increased $3 million, or 2%, due to a 3% increase in RevPas offset by a 1% decrease in Reported Segments. The increase in RevPas was driven by revenue growth in both Air and Beyond Air.

~~United States~~

Revenue in the United States decreased $10 million, or 3%, primarily due to a 9% decrease in Reported Segments, partially offset by a 7% increase in RevPas. The decrease in Reported Segments was primarily driven by the impact of the renegotiated contract with Orbitz Worldwide in 2014, partially offset by growth in other parts of our platform. The increase in RevPas was primarily due to Beyond Air revenue.

~~Technology Services~~

~~Technology Services revenue remained stable at $62 million.~~

~~Cost of Revenue~~

~~Cost of revenue is comprised of:~~

Six Months Ended
June 30, Change
(in $ thousands) 2016 2015 $ %
Commissions $ 574,756 $ 528,899 $ 45,857 9
Technology costs 164,526 155,382 9,144 6
Cost of revenue $ 739,282 $ 684,281 $ 55,001 8

Cost of revenue increased by $55 million, or 8%, primarily as a result of a $46 million, or 9%, increase in commission costs. Commissions increased due to a 7% increase in travel distribution costs per segment, primarily driven by mix and an $11 million allowance for prepaid incentive allowance related to a long-term contract with a travel agent, and incremental commission costs from our payment processing business, partially offset by a 3% reduction in Reported Segments. Commissions included amortization of customer loyalty payments of $34 million and $36 million for the six months ended June 30, 2016 and 2015, respectively. Technology costs across the shared infrastructure that runs our Travel Commerce Platform and Technology Services increased by $9 million, or 6%, due to continued expansion of our operations through acquisitions and further investments in technology.

~~Selling, General and Administrative (SG&A)~~

~~SG&A is comprised of:~~

Six Months Ended
June 30, Change
(in $ thousands) 2016 2015 $ %
Workforce $ 173,095 $ 151,894 $ 21,201 14
Non-workforce 43,899 51,978 (8,079) (16)
Sub-total 216,994 203,872 13,122 6
Non-core corporate costs 36,777 22,407 14,370 64
SG&A $ 253,771 $ 226,279 $ 27,492 12

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SG&A expenses increased by $27 million, or 12%, during the six months ended June 30, 2016 compared to June 30, 2015. SG&A expenses include $37 million and $22 million of charges for the six months ended June 30, 2016 and 2015, respectively, for non-core corporate costs that are removed from Adjusted EBITDA. Excluding these items, our SG&A expenses for the six months ended June 30, 2016 compared to the six months ended June 30, 2015 increased by $13 million, or 6%. Workforce expenses, which include the wages and benefits of our selling, marketing, advertising, finance and legal personnel, increased by $21 million, or 14%, primarily as a result of increased wages and benefits on account of headcount increases related to the expansion of the Travel Commerce Platform through acquisitions and go-to-market capabilities, pension costs and merit increases. Non-workforce expenses, which include costs of finance and legal professional fees, communications and marketing and foreign exchange related costs, decreased $8 million, or 16%, primarily due to lower realized foreign exchange losses.

Non-core corporate costs of $37 million and $22 million for the six months ended June 30, 2016 and 2015, respectively, represent costs related to strategic transactions and restructurings, equity-based compensation, certain legal and related costs and unrealized foreign currency gains and losses related to derivatives. The increase of $14 million is primarily due to a $9 million fluctuation in unrealized foreign exchange gains and losses on foreign currency derivative contracts and a $4 million of impairment on property and equipment.

~~Depreciation and Amortization~~

~~Depreciation and amortization is comprised of:~~

Six Months Ended
June 30, Change
(in $ thousands) 2016 2015 $ %
Depreciation on property and equipment $ 79,632 $ 81,110 $ (1,478) (2)
Amortization of acquired intangible assets 24,855 37,765 (12,910) (34)
Total depreciation and amortization $ 104,487 $ 118,875 $ (14,388) (12)

Total depreciation and amortization decreased by $14 million, or 12%, primarily due to a decrease in the amortization of acquired intangible assets as the useful lives expired on a portion of the assets acquired on the sale of Travelport to Blackstone in 2006 and the acquisition of Worldspan in 2007.

~~Interest Expense, Net~~

~~Interest expense, net, increased by $22 million, or 28%, due to the adverse impact of fair value changes of our interest rate swaps.~~

~~Loss on Early Extinguishment of Debt~~

In June 2016, we amended our senior secured credit agreement under which we reduced the interest rates on our term loans by 75 basis points. In connection with this amendment, certain lenders under the credit agreement were repaid partially or in full, resulting in a $3 million loss on early extinguishment of debt.

~~Gain on Sale of Shares in Orbitz Worldwide~~

~~In February 2015, we sold all of our remaining shares of common stock of Orbitz Worldwide, which were classified as available-for-sale securities, and realized a gain of $6 million for 2015.~~

~~Provision for Income Taxes~~

~~Our tax provision for the six months ended June 30, 2016 differs~~differ significantly from the U.S. Federal statutory rate primarily as a result of a number of offsetting items such as (i) being subject to income tax in numerous non-U.S. jurisdictions with varying income tax rates, (ii) a valuation allowance continued to be maintained in various jurisdictions including the U.S. due to the historical losses in those jurisdictions and (iii) certain expenses that are not deductible for tax or do not secure an effective tax deduction under the relevant jurisdictions.

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Nine Months Ended September 30, 2016 compared to Nine Months Ended September 30, 2015

	Nine Months Ended September 30,						Change
(in $ thousands)	2016			2015			$			%
Net revenue		$	1,805,924		$	1,686,167		$	119,757		7
Costs and expenses
Cost of revenue			1,090,816			1,020,005			70,811		7
Selling, general and administrative			377,177			340,031			37,146		11
Depreciation and amortization			158,068			175,145			(17,077)		(10)
Total costs and expenses			1,626,061			1,535,181			90,880		6
Operating income			179,863			150,986			28,877		19
Interest expense, net			(129,821)			(118,486)			(11,335)		(10)
Loss on early extinguishment of debt			(3,626)			—			(3,626)		*
Gain on sale of shares of Orbitz Worldwide			—			6,271			(6,271)		(100)
Income before income taxes and share of losses in equity method investment			46,416			38,771			7,645		20
Provision for income taxes			(22,260)			(24,003)			1,743		7
Share of losses in equity method investment			—			(517)			517		100
Net income		$	24,156		$	14,251		$	9,905		70

Percentage calculated not meaningful

Net Revenue

Net revenue is comprised of:

	Nine Months Ended September 30,						Change
(in $ thousands)	2016			2015			$			%
Air		$	1,277,671		$	1,231,276		$	46,395		4
Beyond Air			435,056			361,003			74,053		21
Travel Commerce Platform			1,712,727			1,592,279			120,448		8
Technology Services			93,197			93,888			(691)		(1)
Net revenue		$	1,805,924		$	1,686,167		$	119,757		7

During the nine months ended September 30, 2016, Net revenue increased by $120 million, or 7%, compared to the nine months ended September 30, 2015 which was primarily driven by an increase in Travel Commerce Platform revenue.

Travel Commerce Platform

The table below sets forth Travel Commerce Platform RevPas and Reported Segments:

	Nine Months Ended September 30,						Change
	2016			2015			$			%
Travel Commerce Platform RevPas (in $)		$	6.57		$	5.99		$	0.58		10
Reported Segments (in thousands)			260,725			265,649			(4,924)		(2)

The increase in Travel Commerce Platform revenue of $120 million, or 8%, was due to a $46 million, or 4%, increase in Air revenue and a $74 million, or 21%, increase in Beyond Air revenue. Overall, there was a 10% increase in Travel Commerce Platform RevPas, partially offset by a 2% decrease in Reported Segments.

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Our Travel Commerce Platform continues to benefit from growth in Air revenue and Beyond Air revenue. The value of transactions processed on the Travel Commerce Platform decreased to $60.8 billion for the nine months ended September 30, 2016 from $64.2 billion for the nine months ended September 30, 2015 as a result of a decrease in segments in the U.S. and a reduction in average ticket prices in line with global trends. Our percentage of Air segment revenue from away bookings increased to 67% from 65%. We increased our hospitality segments per 100 airline tickets issued to 47 from 46, our car rental days sold to 72 million from 70 million, and our hotel room nights sold to 50 million from 49 million.

The table below sets forth Travel Commerce Platform revenue by region:

	Nine Months Ended September 30,						Change
(in $ thousands)	2016			2015			$			%
Asia Pacific		$	388,330		$	350,315		$	38,015		11
Europe			558,303			474,833			83,470		18
Latin America and Canada			82,617			75,082			7,535		10
Middle East and Africa			223,629			219,529			4,100		2
International			1,252,879			1,119,759			133,120		12
United States			459,848			472,520			(12,672)		(3)
Travel Commerce Platform		$	1,712,727		$	1,592,279		$	120,448		8

The table below sets forth Reported Segments and RevPas by region:

	Segments (in thousands)								RevPas (in $)
	Nine Months Ended September 30,				Change				Nine Months Ended September 30,						Change
	2016		2015				%		2016			2015			$			%
Asia Pacific		50,733		48,763		1,970		4		$	7.65		$	7.18		$	0.47		7
Europe		63,282		62,476		806		1		$	8.82		$	7.60		$	1.22		16
Latin America and Canada		13,353		12,750		603		5		$	6.19		$	5.89		$	0.30		5
Middle East and Africa		28,876		29,451		(575)		(2)		$	7.74		$	7.45		$	0.29		4
International		156,244		153,440		2,804		2		$	8.02		$	7.30		$	0.72		10
United States		104,481		112,209		(7,728)		(7)		$	4.40		$	4.21		$	0.19		5
Travel Commerce Platform		260,725		265,649		(4,924)		(2)		$	6.57		$	5.99		$	0.58		10

International

Our International Travel Commerce Platform revenue increased $133 million, or 12%, due to a 10% increase in RevPas and a 2% increase in Reported Segments. The increase in RevPas was a result of growth in our Air and Beyond Air offerings. The increase in Air was mainly due to improved pricing and merchandising, and the increase in Beyond Air was primarily driven by growth in payment solutions and expansion into mobile commerce. Our International Travel Commerce Platform revenue as a percentage of Travel Commerce Platform revenue was 73% for the nine months ended September 30, 2016 compared to 70% for the nine months ended September 30, 2015.

Asia Pacific

Revenue in Asia Pacific increased $38 million, or 11%, due to a 7% increase in RevPas and a 4% increase in Reported Segments. RevPas increased due to revenue growth in Air, and payment solutions growth and expansion into mobile commerce in Beyond Air. Reported Segments increased due to growth in India, South Korea and Hong Kong.

Europe

Revenue in Europe increased $83 million, or 18%, primarily due to a 16% increase in RevPas and a 1% increase in Reported Segments. RevPas increased due to revenue growth in Air and payment solutions in Beyond Air.

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Latin America and Canada

Revenue in Latin America and Canada increased $8 million, or 10%, due to a 5% increase in both RevPas and Reported Segments. The increase in RevPas was due to revenue growth in both Air and Beyond Air, primarily driven by expansion into mobile commerce. Reported Segments experienced growth in Colombia and Argentina.

Middle East and Africa

Revenue in the Middle East and Africa increased $4 million, or 2%, due to a 4% increase in RevPas, partially offset by a 2% decrease in Reported Segments. The increase in RevPas was mainly driven by revenue growth in Beyond Air.

United States

Revenue in the United States decreased $13 million, or 3%, primarily due to a 7% decrease in Reported Segments, partially offset by a 5% increase in RevPas. The decrease in Reported Segments was primarily driven by the impact of the renegotiated contract with Orbitz Worldwide in 2014, partially offset by growth in other parts of our travel commerce platform. The increase in RevPas was primarily due to Beyond Air revenue.

Technology Services

Technology Services revenue decreased marginally by $1 million, or 1%.

Cost of Revenue

Cost of revenue is comprised of:

	Nine Months Ended September 30,						Change
(in $ thousands)	2016			2015			$			%
Commissions		$	848,458		$	789,705		$	58,753		7
Technology costs			242,358			230,300			12,058		5
Cost of revenue		$	1,090,816		$	1,020,005		$	70,811		7

Cost of revenue increased by $71 million, or 7%, primarily as a result of a $59 million, or 7%, increase in commission costs and a $12 million, or 5%, increase in technology costs. Commissions increased due to a 5% increase in travel distribution costs per segment, primarily driven by mix and an $11 million allowance for a prepaid incentive related to a long-term contract with a travel agent, and incremental commission costs from our payment solutions business, partially offset by a 2% reduction in Reported Segments and favorable foreign currency exchange movement. Commissions included amortization of customer loyalty payments of $55 million and $51 million for the nine months ended September 30, 2016 and 2015, respectively. Technology costs across the shared infrastructure that runs our Travel Commerce Platform and Technology Services increased due to continued expansion of our operations through acquisitions and further investments in technology.

Selling, General and Administrative (SG&A)

SG&A is comprised of:

	Nine Months Ended September 30,						Change
(in $ thousands)	2016			2015			$			%
Workforce		$	261,371		$	229,772		$	31,599		14
Non-workforce			65,345			81,766			(16,421)		(20)
Sub-total			326,716			311,538			15,178		5
Non-core corporate costs			50,461			28,493			21,968		77
SG&A		$	377,177		$	340,031		$	37,146		11

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SG&A expenses increased by $37 million, or 11%, during the nine months ended September 30, 2016 compared to September 30, 2015. SG&A expenses included $50 million and $28 million of charges for the nine months ended September 30, 2016 and 2015, respectively, for non-core corporate costs that are removed from Adjusted EBITDA. Excluding these items, our SG&A expenses for the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015 increased by $15 million, or 5%. Workforce expenses, which include the wages and benefits of our selling, marketing, advertising, finance and legal personnel, increased by $32 million, or 14%, primarily as a result of increased wages and benefits on account of headcount increases related to the expansion of the Travel Commerce Platform through acquisitions and go-to-market capabilities and merit increases, partially offset by favorable foreign currency exchange movement. Non-workforce expenses, which include costs of finance and legal professional fees, communications and marketing and foreign exchange related costs, decreased $16 million, or 20%, primarily due to lower realized foreign exchange losses and reduced administrative expenses.

Non-core corporate costs of $50 million and $28 million for the nine months ended September 30, 2016 and 2015, respectively, represent costs related to strategic transactions and restructurings, equity-based compensation, certain legal and related costs and unrealized foreign currency gains and losses related to derivatives. The increase of $22 million is primarily due to a $10 million increase in corporate and restructuring costs, an $8 million fluctuation in unrealized foreign exchange gains and losses on foreign currency derivative contracts and a $5 million impairment of capitalized software recognized in 2016.

Depreciation and Amortization

Depreciation and amortization is comprised of:

	Nine Months Ended September 30,						Change
(in $ thousands)	2016			2015			$			%
Depreciation on property and equipment		$	121,375		$	119,333		$	2,042		2
Amortization of acquired intangible assets			36,693			55,812			(19,119)		(34)
Total depreciation and amortization		$	158,068		$	175,145		$	(17,077)		(10)

Total depreciation and amortization decreased by $17 million, or 10%, primarily due to a decrease in the amortization of acquired intangible assets as the useful lives expired on a portion of the assets acquired on the sale of Travelport to Blackstone in 2006 and the acquisition of Worldspan in 2007.

Interest Expense, Net

Interest expense, net, increased by $11 million, or 10%, due to the adverse impact of fair value changes of our interest rate swaps, offset by a decrease in outstanding balance of term loans under our senior secured credit agreement and a decrease in the interest rate on such term loans from 5.75% to 5.00% in June 2016.

Loss on Early Extinguishment of Debt

In June 2016, we amended our senior secured credit agreement under which we reduced the interest rate on our term loans by 75 basis points. In connection with this amendment, certain lenders under the credit agreement were repaid partially or in full. Further, in September 2016, we voluntarily prepaid $50 million principal amount of the term loans outstanding under our senior secured credit agreement. These transactions resulted in a $4 million loss on early extinguishment of debt.

Gain on Sale of Shares in Orbitz Worldwide

In February 2015, we sold all of our remaining shares of common stock of Orbitz Worldwide, which were classified as available-for-sale securities, and realized a gain of $6 million for 2015.

Provision for Income Taxes

Our tax provision for the nine months ended September 30, 2016 differs significantly from the U.S. Federal statutory rate primarily as a result of a number of items such as (i) being subject to income tax in

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numerous non-U.S. jurisdictions with varying income tax rates, (ii) a valuation allowance continued to be maintained in various jurisdictions including the U.S. due to the historical losses in those jurisdictions and (iii) certain expenses that are not deductible for tax or do not secure an effective tax deduction under the relevant jurisdictions.

Liquidity and Capital Resources

Our principal sources of liquidity are (i) cash and cash equivalents, (ii) cash flows generated from operations and (iii) borrowings under our revolving credit facility. As of ~~June~~September 30, 2016, our cash and cash equivalents and revolving credit facility availability were as follows:

(in $ thousands)	June 30, 2016			September 30, 2016
Cash and cash equivalents		$	126,937		$	138,400
Revolving credit facility availability			101,194			103,741

With the cash and cash equivalents on our consolidated condensed balance sheet, our ability to generate cash from operations and access to our revolving credit facility and other lending sources, we believe we have sufficient liquidity to meet our ongoing needs for at least the next 12 months.

Working Capital

Our cash flows from operations are significantly impacted by revenue derived from, and commissions paid to, travel providers and travel agencies and consist of accounts receivables and deferred revenue from travel providers and travel agencies, current prepaid travel agency incentive payments and accrued liabilities for commissions. The movement within these account balances are included within working capital.

The table below sets out our working capital as of ~~June~~September 30, 2016 and December 31, 2015, as monitored by management, which is then reconciled to our working capital as presented in our consolidated condensed balance sheets:

	Asset (Liability)									Asset (Liability)
(in $ thousands)	June 30, 2016			December 31, 2015			Change
(in $ thousands)										September 30, 2016			December 31, 2015			Change
Accounts Receivable, net		$	241,526		$	205,686		$	35,840		$	245,257		$	205,686		$	39,571
Accrued commissions and incentives			(273,927)			(241,358)			(32,569)			(293,220)			(241,358)			(51,862)
Deferred revenue and prepaid incentives, net			(20,480)			(9,340)			(11,140)			(17,069)			(9,340)			(7,729)
Cash and cash equivalents			126,937			154,841			(27,904)			138,400			154,841			(16,441)
Accounts payable and employee related			(131,833)			(153,349)			21,516			(139,310)			(153,349)			14,039
Accrued interest			(2,997)			(18,800)			15,803			(10,208)			(18,800)			8,592
Current portion of long-term debt			(64,086)			(74,163)			10,077			(65,049)			(74,163)			9,114
Taxes			19,613			16,850			2,763			11,391			16,850			(5,459)
Other assets (liabilities), net			12,320			5,684			6,636			8,576			5,684			2,892
Working Capital		$	(92,927)		$	(113,949)		$	21,022		$	(121,232)		$	(113,949)		$	(7,283)
Consolidated Condensed Balance Sheets:
Total current assets		$	490,474		$	465,141		$	25,333		$	504,204		$	465,141		$	39,063
Total current liabilities			(583,401)			(579,090)			(4,311)			(625,436)			(579,090)			(46,346)
Working Capital		$	(92,927)		$	(113,949)		$	21,022		$	(121,232)		$	(113,949)		$	(7,283)

As of ~~June~~September 30, 2016, we had a working capital net liability of ~~$93~~$121 million compared to $114 million as of December 31, 2015, an ~~improvement~~increase of ~~$21~~$7 million, which is primarily due to a ~~$22~~$52 million ~~decrease in accounts payable and employee related, a $10 million decrease in current portion of long term debt and a $16 million decrease~~increase in accrued ~~interest,~~commissions and incentives, partially offset by a ~~$28~~$40 million ~~decrease~~increase in ~~cash and cash equivalents as discussed in “—Cash Flows” below.~~account receivable, net.

As our business grows and our revenue and corresponding commissions and incentive expenses increase, our receivables and accruals increase.

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The table below sets out information on our accounts receivable:

	June 30, 2016			December 31, 2015			Change			September 30, 2016			December 31, 2015			Change
Accounts receivable, net (in $ thousands)		$	241,526		$	205,686		$	35,840		$	245,257		$	205,686		$	39,571
Accounts receivable, net – Days Sales Outstanding (“DSO”)			36			38			(2)			38			38			—

Substantially all of our Air revenue within our Travel Commerce Platform is collected through the Airline Clearing House (“ACH”) and other similar clearing houses. ACH requires participants to deposit certain balances into its demand deposit accounts by certain deadlines, which facilitates a timely settlement process. For the ~~six~~nine months ended ~~June~~September 30, 2016, Air revenue accounted for approximately ~~72%~~71% of our net revenue; however, only ~~49%~~48% of our outstanding receivables related to customers using ACH as of ~~June~~September 30, 2016. The ACH receivables are collected on average in 31 days. Beyond Air revenue is generally not collected through the ACH process and takes longer to collect. ~~As of June 30, 2016, our~~Our average net collection period ~~was 36 DSO~~ for total accounts receivable ~~as compared to~~was 38 DSO as of both September 30, 2016 and December 31, 2015. Growth in Air revenue in the month of ~~June~~September 2016 compared to December 2015, primarily contributed to the increase in our accounts receivable, net, balance.

Our revenue can experience seasonal fluctuations, reflecting seasonal trends for the products and services we offer. Our accounts receivable balance increased by ~~$36~~$40 million from December 31, 2015 to ~~June~~September 30, 2016, and our accrued commissions and incentives increased by ~~$33~~$52 million from December 31, 2015 to ~~June~~September 30, 2016, reflecting the seasonality in our business. Seasonality trends generally cause our revenue to be higher in the first and second quarters as compared to the third and fourth quarters of the calendar year. Revenue and related cost of revenue typically peaks during the first half of the year as travelers plan and book their upcoming spring and summer travel.

Cash Flows

The following table summarizes the changes to our cash flows provided by (used in) operating, investing and financing activities for the ~~six~~nine months ended ~~June~~September 30, 2016 and 2015:

	Six Months Ended June 30,						Change			Nine Months Ended September 30,						Change
(in $ thousands)	2016			2015			$			2016			2015			$
Cash provided by (used in):
Operating activities		$	102,932		$	92,166		$	10,766		$	213,858		$	153,735		$	60,123
Investing activities			(59,994)			(46,223)			(13,771)			(85,139)			(130,647)			45,508
Financing activities			(70,597)			(56,641)			(13,956)			(144,912)			(59,738)			(85,174)
Effect of exchange rate changes			(245)			(1,252)			1,007			(248)			(1,010)			762
Net decrease in cash and cash equivalents		$	(27,904)		$	(11,950)		$	(15,954)		$	(16,441)		$	(37,660)		$	21,219

We believe our important measure of liquidity is Adjusted Free Cash Flow. This measure is a useful indicator of our ability to generate cash to meet our liquidity demands. We believe this measure provides investors with an understanding of how assets are performing and measures management’s effectiveness in managing cash. We believe this measure gives management and investors a better understanding of the cash flows generated by our underlying business, as cash paid for other adjusting items ~~are~~is unrelated to the underlying business, and our Capital Expenditures are primarily related to the development of our operating ~~platforms.~~platform.

Adjusted Free Cash Flow is a non-GAAP measure and may not be comparable to similarly named measures used by other companies. Adjusted Free Cash Flow has limitations in that it does not represent the total increase or decrease in the cash balance for the period, nor does it represent residual cash flow for discretionary expenditures. This measure should not be considered as measure of liquidity or cash flows from operations as determined under U.S. GAAP. This measure is not a measurement of our financial performance under U.S. GAAP and should not be considered in isolation or as an alternative to net income (loss) or any other performance measures derived in accordance with U.S. GAAP or as alternative to cash flows from operating activities as a measure of liquidity.

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The following table provides a reconciliation of net cash provided by operating activities to Adjusted Free Cash Flow. We have also supplementally provided as part of this reconciliation, a reconciliation of Adjusted EBITDA, our primary key performance measure, to net cash provided by operating activities:

	Six Months Ended, June 30,						Nine Months Ended, September 30,
(in $ thousands)	2016			2015
(in $ thousands)							2016			2015
Adjusted EBITDA		$	293,153		$	274,444		$	443,585		$	405,421
Interest payments			(86,854)			(72,732)			(110,988)			(109,168)
Tax payments			(8,573)			(13,272)			(15,069)			(18,045)
Customer loyalty payments			(43,922)			(42,211)			(56,533)			(55,679)
Changes in working capital			(30,525)			(53,392)			(19,350)			(61,285)
Pensions liability contribution			(1,837)			(1,550)			(2,440)			(2,276)
Changes in other assets and liabilities			(5,642)			9,957			(4,426)			6,802
Other adjusting items(1)			(12,868)			(9,078)			(20,921)			(12,035)
Net cash provided by operating activities			102,932			92,166			213,858			153,735
Add: other adjusting items(1)			12,868			9,078			20,921			12,035
Less: capital expenditures on property and equipment additions			(44,985)			(52,494)			(70,130)			(76,385)
Less: repayment of capital lease obligations and other indebtedness			(23,542)			(16,067)			(34,206)			(25,589)
Adjusted Free Cash Flow		$	47,273		$	32,683		$	130,443		$	63,796

(1)

Other adjusting items relate to payments for costs included within operating income but excluded from Adjusted EBITDA, and during the ~~six~~nine months ended ~~June~~September 30, 2016 and 2015, relate to payments for (i) corporate and restructuring costs and (ii) litigation and related costs accrued in 2012.

As of ~~June~~September 30, 2016, we had ~~$127~~$138 million of cash and cash equivalents, a decrease of ~~$28~~$16 million compared to December 31, 2015. The following discussion summarizes changes to our cash flows from operating, investing and financing activities for the ~~six~~nine months ended ~~June~~September 30, 2016 compared to the ~~six~~nine months ended ~~June~~September 30, 2015.

Operating activities: For the ~~six~~nine months ended ~~June~~September 30, 2016, cash provided by operating activities was ~~$103~~$214 million compared to cash provided by operating activities of ~~$92~~$154 million for the ~~six~~nine months ended ~~June~~September 30, 2015. The increase of ~~$11~~$60 million is primarily a result of the increase in operating income and positive impact from fluctuations in working ~~capital, partially offset by higher interest payments due to a change in the timing of payments in conjunction with our debt repricing in June 2016.~~capital.

Investing activities: During the ~~six~~nine months ended ~~June~~September 30, 2016, cash used in investing activities of ~~$60~~$85 million was primarily due to ~~$45~~$70 million cash used in the purchase of property and equipment and $15 million net cash consideration paid for acquisition of a ~~business acquisition.~~distributor in Japan. During the ~~six~~nine months ended ~~June~~September 30, 2015, cash used in investing activities of ~~$46~~$131 million was primarily due to ~~$52~~$76 million of cash used in the purchase of property and equipment and $61 million net cash consideration paid for acquisition of MTT, offset by $6 million of cash received on the sale of ~~available-for-sale- securities.~~available-for-sale-securities.

Our investing activities for the ~~six~~nine months ended ~~June~~September 30, 2016 and 2015 include:

	Six Months Ended June 30,						Nine Months Ended September 30,
(in $ thousands)	2016			2015			2016			2015
Cash additions to software developed for internal use		$	36,452		$	37,452		$	56,297		$	57,111
Cash additions to computer equipment			8,533			15,042			13,833			19,274
Total		$	44,985		$	52,494		$	70,130		$	76,385

Cash additions to software developed for internal use represent the continuing development of our systems to enhance our Travel Commerce Platform. Our expenditures have been focused on key areas, including investing in our data center by implementing zTPF software on our mainframes, the development

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of our Travelport Universal API that underpins our new and existing applications, the development of Smartpoint, our innovative booking solution delivering multisource content and pricing, and the development of our Travelport Merchandising Suite to allow airlines to showcase their content in travel agency workflows.

Cash additions to computer equipment are primarily for our continuing investment in our data center.

We view our Capital Expenditure for the period to include cash additions to our property and equipment and repayment of capital lease and other indebtedness, and was ~~$69~~$104 million and ~~$68~~$102 million for the ~~six~~nine months ended ~~June~~September 30, 2016 and 2015, respectively.

Financing activities: Cash used in financing activities for the ~~six~~nine months ended ~~June~~September 30, 2016 was ~~$71~~$145 million. This was primarily comprised of (i) ~~$12~~$68 million of term loans net repayment, (ii) ~~$24~~$34 million of capital lease and other indebtedness repayments, (iii) ~~$19~~$28 million in dividend payments, (iv) an $8 million purchase of non-controlling interest in Locomote and (v) an $8 million payment ~~to lenders on repricing~~for lender fees and debt finance ~~costs.~~costs on repricing of our term loans. The cash used in financing activities for the ~~six~~nine months ended ~~June~~September 30, 2015 was ~~$57~~$60 million. This was primarily comprised of (i) ~~$12~~$28 million in dividend payments, (ii) $26 million of capital lease and other indebtedness repayments, (iii) $18 million of term loans repayment, ~~(ii) $16~~(iv) a $13 million ~~of capital lease repayments, (iii) $19 million in dividend payments and (iv) $14 million of~~ payment ~~for~~related to the purchase of treasury shares on vesting of equity ~~awards.~~awards, offset by (v) $26 million release of cash provided as collateral.

Financing Arrangements

As of ~~June~~September 30, 2016, our financing arrangements include our senior secured credit facilities, obligations under our capital leases and other indebtedness. The following table summarizes our Net Debt position as of ~~June~~September 30, 2016 and December 31, 2015:

(in $ thousands)	Interest rate	Maturity	June 30, 2016			December 31, 2015			Interest rate	Maturity	September 30, 2016			December 31, 2015
Senior Secured Credit Agreement
Term loans
Dollar denominated(1)(2)(3)	L+4.00%	September 2021		$	2,292,472		$	2,303,315	L+4.00%	September 2021		$	2,239,832		$	2,303,315
Revolver borrowings
Dollar denominated	L+5.00%	September 2019			—			—	L+5.00%	September 2019			—			—
Capital leases and other indebtedness					118,310			133,883					118,557			133,883
Total debt					2,410,782			2,437,198					2,358,389			2,437,198
Less: cash and cash equivalents					(126,937)			(154,841)					(138,400)			(154,841)
Net Debt~~(3)~~(4)				$	2,283,845		$	2,282,357				$	2,219,989		$	2,282,357

(1)

Minimum LIBOR floor of 1.00%

(2)

Upon the adoption of the U.S. GAAP guidance, effective January 1, 2016, unamortized debt finance costs of $24 million have been reclassified and deducted from the term loans balance as of December 31, 2015.

(3)

Interest rate on the term loans as of December 31, 2015, was L+4.75%.

(4)

Net Debt is defined as total debt comprised of current and non-current portion of long-term debt minus cash and cash equivalents. Net Debt is not a measurement of our indebtedness under U.S. GAAP and should not be considered in isolation or as an alternative to assess our total debt or any other measures derived in accordance with U.S. GAAP. Management uses Net Debt to review our overall liquidity, financial flexibility, capital structure and leverage. Further, we believe certain debt rating agencies, creditors and credit analysts monitor our Net Debt as part of their assessment of our business.

On September 20, 2016, we made a voluntary prepayment of $50 million principal amount of our term loans outstanding under our senior secured credit agreement. Pursuant to this prepayment, we recognized $1 million as loss on early extinguishment of debt.

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credit agreement for a period of six months. The interest rate per annum applicable to the term loans is based on, at our election, (i) LIBOR plus 4.00% or base rate (as defined in the senior secured credit agreement) plus 3.00%. The term loans are subject to a LIBOR floor of 1.00% and a base rate floor of 2.00%. We expect to pay interest based on LIBOR plus 4.00% for the term loans. We provided a 0.25% discount of $6 million to all the lenders participating in this repricing, which was capitalized.

Certain lenders contributed $143 million towards the term loans, an amount equal to that was paid to the lenders who opted to leave or reduce their participation. On repricing, we ~~recorded~~recognized a loss on early extinguishment of debt of $3 million.

During the ~~six~~nine months ended ~~June~~September 30, 2016, we (i) repaid ~~$12~~$68 million ~~of our quarterly installments~~ of term loans ~~as required~~(including a voluntary prepayment of $50 million) outstanding under the senior secured credit agreement, (ii) amortized $3$4 million of debt finance costs and $2$4 million of debt discount, and (iii) repaid ~~$24~~$34 million under our capital lease obligations and other indebtedness, ~~and~~ entered into $8$17 million of new capital leases for information technology ~~assets.~~assets and incurred $2 million of other indebtedness.

Under the senior secured credit agreement, we have a $125 million revolving credit facility with a consortium of banks, which contains a letter of credit sub-limit up to a maximum of $50 million. During the ~~six~~nine months ended ~~June~~September 30, 2016, we borrowed and repaid $10 million under this facility. As of ~~June~~September 30, 2016, we had no outstanding borrowings under our revolving credit facility and had utilized ~~$24~~$21 million for the issuance of letters of credit, with a balance of ~~$101~~$104 million remaining.

The senior secured credit agreement also permits the issuance of certain cash collateralized letters of credit in addition to those that can be issued under the revolving credit facility, whereby 103% of cash collateral has to be maintained for outstanding letters of credit. As of ~~June~~September 30, 2016, there were no outstanding cash collateralized letters of credit.

Substantially all of our debt is scheduled for repayment in September 2021.

Travelport Finance (Luxembourg) S.a.r.l., our indirect 100% owned subsidiary, is the obligor (the “Obligor”) under our senior secured credit agreement. All obligations under our senior secured credit agreement are unconditionally guaranteed by certain of our wholly owned foreign subsidiaries, and, subject to certain exceptions, each of our existing and future domestic wholly owned subsidiaries. All obligations under our secured debt, and the guarantees of those obligations, are secured by substantially all the following assets of the Obligor and each guarantor, subject to certain exceptions: (i) a pledge of 100% of the capital stock and intercompany indebtedness of the Obligor and each guarantor; (ii) a pledge of 100% of the capital stock and intercompany indebtedness of certain other subsidiaries directly owned by the Obligor or any other guarantor subject to certain exceptions and limitations; and (iii) a security interest in, and mortgages on, substantially all tangible and intangible assets of the Obligor and each U.S. guarantor subject to additional collateral and guarantee obligations.

Borrowings under our senior secured credit agreement are subject to amortization and prepayment requirements, and our senior secured credit agreement contains various covenants, including leverage ratio, events of default and other provisions.

Our senior secured credit agreement limits certain of our subsidiaries’ ability to:

•

incur additional indebtedness;

•

pay dividends on, repurchase or make distributions in respect of equity interests or make other restricted payments;

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As of ~~June~~September 30, 2016, our consolidated first lien net leverage ratio, as determined under our senior secured credit agreement, was ~~4.27~~4.02 compared to the maximum allowable of 6.00, and we were in compliance with such other covenants under our senior secured credit agreement.

We re-evaluate our capital structure from time to time, including, but not limited to, refinancing our current indebtedness with other indebtedness which may have different interest rates, maturities and covenants.

Interest Rate Risk

We are exposed to interest rate risk relating to our floating rate debt. We use derivative financial instruments as part of our overall strategy to manage our exposure to interest rate risk. We do not use derivatives for trading or speculative purposes.

The primary interest rate exposure as of ~~June~~September 30, 2016 was to interest rate fluctuations in the United States, specifically the impact of LIBOR interest rates on our dollar denominated floating rate debt. Interest on our ~~$2,292~~$2,240 million term ~~loan~~loans is currently charged at LIBOR plus 4.00%, subject to a LIBOR floor of 1.00%. During the ~~six~~nine months ended ~~June~~September 30, 2016, LIBOR rates were below 1.00%. In order to protect against ~~potential~~potentially higher interest costs resulting from increases in LIBOR, in 2015, we transacted $1,400 million notional amount of interest rate swap contracts commencing February 2017 until February 2019. These swaps fix the LIBOR rate payable on approximately 60% of our floating rate debt during the future period at 1.4010%.

During the ~~six~~nine months ended ~~June~~September 30, 2016, none of the derivative financial instruments used to manage our interest rate exposure were designated as accounting hedges. The fluctuations in the fair value of interest rate derivative financial instruments not designated as hedges for accounting purposes are recorded as a component of interest expense, net, in our consolidated condensed statements of operations. Losses on these interest rate derivative financial instruments amounted to ~~$22~~$17 million for the ~~six~~nine months ended ~~June~~September 30, 2016.

Foreign Currency Risk

We are exposed to foreign currency exchange rate risk that arises from certain intercompany transactions and from non-functional currency denominated assets and liabilities and earnings denominated in non-U.S. dollar currencies.

We use derivative financial instruments as part of our overall strategy to manage our exposure to foreign currency exchange rate risk. We do not use derivatives for trading or speculative purposes.

During 2016, we used foreign currency derivative contracts (i.e. forward contracts) to manage our exposure to foreign currency exchange rate risk. As of ~~June~~September 30, 2016, we had ~~$331~~$304 million notional amount of foreign currency forward contracts.

During the ~~six~~nine months ended ~~June~~September 30, 2016 and 2015, none of the derivative financial instruments used to manage our foreign currency exposures were designated as accounting hedges. The fluctuations in the fair value of foreign currency derivative financial instruments not designated as hedges for accounting purposes are recorded as a component of selling, general and administrative expenses in our consolidated condensed statements of operations. Losses on these foreign currency derivative financial

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instruments amounted to ~~$13~~$16 million and $5$15 million for the ~~six~~nine months ended ~~June~~September 30, 2016 and 2015, respectively. The fluctuations in the fair values of our foreign currency derivative financial instruments partially offset the impact of the changes in the value of the underlying risks they are intended to economically hedge.

As of ~~June~~September 30, 2016, our derivative contracts which hedge our interest rate and foreign currency exposure had a net liability position of ~~$26~~$23 million and cover transactions for periods that do not exceed three years.

Contractual Obligations

In June 2016, we amended our senior secured credit agreement under which we reduced the interest ~~rates~~rate on our term loans by 75 basis points. ~~This repricing is~~Further, in September 2016, we voluntarily prepaid $50 million principal amount of our term loans. These transactions are expected to lower our annualized interest expense by approximately ~~$18~~$20 million based on the principal balance outstanding as of ~~June~~September 30, 2016.

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Other than as set forth above, as of ~~June~~September 30, 2016, our future contractual obligations have not changed significantly from the amounts included within our Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 18, 2016.

Other Off-Balance Sheet Arrangements

We had no other off-balance sheet arrangements during the ~~six~~nine months ended ~~June~~September 30, 2016.

~~Item~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We assess our market risk based on changes in interest rates and foreign currency exchange rates utilizing a sensitivity analysis that measures the potential impact on earnings, fair values, and cash flows based on a hypothetical 100 basis point change (increase and decrease) in interest rates and a 10% change (increase and decrease) in the exchange rates against the U.S. dollar as of ~~June~~September 30, 2016. There are certain limitations inherent in these sensitivity analyses as our overall market risk is influenced by a wide variety of factors, including the volatility present within markets and the liquidity of markets. These “shock tests” are constrained by several factors, including the necessity to conduct analysis based on a single point in time and the inability to include complex market reactions normally arising from the market shifts modeled.

Interest Rate Risk

We assess our interest rate market risk utilizing a sensitivity analysis based on a hypothetical 100 basis point change (increase or decrease) in interest rates. We have determined, through such analysis, that a 100 basis point increase in interest rates as of ~~June~~September 30, 2016, based on the outstanding floating rate debt balance would increase our annualized interest charge by ~~$15~~$19 million, excluding the effect of fair value changes on our interest rate swaps. Due to the 1.00% LIBOR floor on our term loans, a 100 basis point decrease in interest rates as of ~~June~~September 30, 2016 would not change our annualized interest charge.

In 2015, in order to protect against potential higher interest costs resulting from increases in LIBOR interest rates, we transacted $1,400 million notional amount of interest rate swap contracts commencing February 2017 until February 2019. These swaps fix the LIBOR rate payable on approximately 60% of our floating rate debt during this future period at 1.4010%. We have not hedge accounted for these swaps. Mark to market fair value changes on these swaps, which represent the net present value of future cash flows on the swaps, are accounted for within interest expense, net, in our consolidated condensed statement of operations. As of ~~June~~September 30, 2016, a 100 basis point ~~increase/~~increase or decrease in interest rates would result in a ~~debit/(credit)~~credit or debit, respectively, to interest expense of $28 million, due to changes in the fair value of these swaps.

Foreign Currency Risk

We have foreign currency exposure to exchange rate fluctuations, particularly with respect to the British pound, Euro and Australian dollar. We anticipate such foreign currency exchange rate risk will remain a market risk exposure for the foreseeable future. We assess our foreign currency market risk

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utilizing a sensitivity analysis based upon a hypothetical 10% change (increase or decrease) in exchange rate against the U.S. dollar on the value of our foreign currency derivative instruments as of ~~June~~September 30, 2016. We have determined, through the sensitivity analysis, the impact of a 10% strengthening in the U.S. dollar exchange rate with respect to the British pound, Euro and Australian dollar would result in a charge of approximately ~~$31~~$27 million on our consolidated condensed statements of operations, while a 10% weakening in the U.S. dollar exchange rate with respect to the same currencies would result in a credit of ~~$33~~$29 million on our consolidated condensed statements of operations.

There were no material changes to our market risks as previously disclosed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosure About Market Risks” included within our Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 18, 2016, ~~except as discussed in Item 1A, “Risk Factors”.~~and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 filed with the SEC on August 4, 2016.

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~~Item~~ITEM 4. CONTROLS AND PROCEDURES

(a)

Disclosure Controls and Procedures. The Company maintains disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the “Act”) is recorded, processed, summarized and reported within the specified time periods and accumulated and communicated to management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Act) as of ~~June~~September 30, 2016. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective.

(b)

Changes in Internal Control Over Financial Reporting. There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Act) during the Company’s fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

(c)

Limitations on Controls. Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

~~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. and Kolman et al. v. Amadeus IT Group, S.A., Amadeus North America, Inc., Amadeus Americas, Inc., Sabre Corporation f/k/a Sabre Holdings Corporation, Sabre Holdings Corporation, Sabre GLBL Inc., Sabre Travel International Limited, Travelport Worldwide Limited, and Travelport LP d/b/a Travelport.) A consolidated, amended complaint was filed on October 2, 2015 (the “Amended Complaint”). The Amended Complaint alleges violations of the Sherman Act, state antitrust laws and state consumer protection laws by defendants beginning in 2006. In particular, the plaintiffs claim there was a conspiracy among us and the other defendants to maintain higher fees and restrict competition for airfare bookings that prevents airline discounting. On January 15, 2016, the defendants moved to dismiss the Amended Complaint. On July 6, 2016, the court granted in part and denied in part defendants’ motion thereby dismissing the plaintiffs’ state law claims for damages in full, but declined to dismiss plaintiffs’ Sherman Act claim, which seeks injunctive relief. At this time, the outcome of this lawsuit cannot be determined, but we believe the plaintiffs’ claims are without merit, and we will continue to defend the claims vigorously.

~~Other than as set forth above, there~~There are no material changes from the description of our legal proceedings disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 18, 2016 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, filed with the SEC on August 4, 2016.

ITEM 1A. RISK FACTORS.

~~The results of the United Kingdom’s referendum on withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and our business.~~

In June 2016, a majority of voters in the U.K. elected to withdraw from the European Union (“E.U.”) in a national referendum. The referendum was advisory, and the terms of any withdrawal are subject to a negotiation period that could last at least two years after the U.K. government formally initiates a withdrawal process. Nevertheless, the referendum has created significant uncertainties and instability in financial and trade markets. As an E.U. member state, the U.K. and U.K.-based businesses have access to strong financial and trade relationships, including the E.U. Single Market. Given the lack of precedent, it is unclear how a potential withdrawal of the U.K. from the E.U. would affect the U.K.’s access to the E.U. Single Market and other important financial and trade relationships and how it would affect us. A withdrawal could, among other outcomes, disrupt the free movement of goods, services and people between the U.K. and the E.U., undermine bilateral cooperation in key policy areas and significantly disrupt trade between the U.K. and the E.U. Under current E.U. rules, following a withdrawal, the U.K. would not be able to negotiate bilateral trade agreements with member countries of the E.U. In addition, a withdrawal of the U.K. from the E.U. could significantly affect the fiscal, monetary and regulatory landscape, including with respect to data protection and privacy, within the U.K. and could have a material impact on its economy and the future growth of its various industries. Although it is not possible to predict fully the effects of a withdrawal of the U.K. from the E.U., if it were to occur it could have a material adverse effect on our business.

~~Other than as set forth above, there~~There have been no material changes in the risks factors previously disclosed in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 18, 2016 and Part II, Item IA, “Risk Factors,” of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, filed with the SEC on August 4, 2016.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Not Applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not Applicable.

~~TABLE OF CONTENTS~~

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5. OTHER INFORMATION.

Trade Sanctions Disclosure

The following activities are disclosed as required by Section 13(r)(1)(D)(iii) of the Exchange Act.

As part of our global business in the travel industry, we provide certain passenger travel related Travel Commerce Platform and Technology Services to Iran Air. We also provide certain Technology Services to Iran Air Tours. All of these services are either exempt from applicable sanctions prohibitions pursuant to a statutory exemption permitting transactions ordinarily incident to travel or, to the extent not otherwise exempt, specifically licensed by the U.S. Office of Foreign Assets Control. Subject to any changes in the exempt/licensed status of such activities, we intend to continue these business activities, which are directly related to and promote the arrangement of travel for individuals.

The gross revenue and net profit attributable to these activities in the quarter ended ~~June~~September 30, 2016 were approximately ~~$171,000~~$134,000 and ~~$126,000,~~$95,000, respectively.

ITEM 6. EXHIBITS.

See Exhibit Index.

TABLE OF CONTENTS

EXHIBIT INDEX

	Exhibit No.			Description
	3.1			Amended and Restated Memorandum of Association of Travelport Worldwide Limited (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by Travelport Worldwide Limited on September 30, 2014).
	3.2			Amended and Restated Bye-laws of Travelport Worldwide Limited (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed by Travelport Worldwide Limited on September 30, 2014).
	~~10.1~~			~~Travelport Worldwide Limited Amended and Restated 2014 Omnibus Incentive Plan.~~
	~~10.2~~			Amendment No. 2 to Credit Agreement, dated as of June 23, 2016, among Travelport Finance (Luxembourg) S.a.r.l., as borrower, Travelport Limited, the Term B Lenders and Deutsche Bank AG New York Branch (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Travelport Worldwide Limited filed on June 27, 2016 (dated June 23, 2016).
	~~10.3~~			~~Consulting Agreement between Travelport Worldwide Limited and Philip Emery, dated May 5, 2016.~~
	~~10.4~~			~~Form of Director Award Agreement.~~
	31.1			Certification of Chief Executive Officer Pursuant to Rules 13(a)-14(a) and 15(d)-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2			Certification of Chief Financial Officer Pursuant to Rules 13(a)-14(a) and 15(d)-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32			Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	101.INS			XBRL Instance Document
	101.SCH			XBRL Taxonomy Extension Schema Document
	101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document
	101.LAB			XBRL Taxonomy Extension Labels Linkbase Document
	101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document
	101.DEF			XBRL Taxonomy Extension Definition Linkbase Document

				Page
PART I. FINANCIAL INFORMATION

	Forward-Looking Statements				1
Item 1		Financial Statements (unaudited)				3
		Consolidated Condensed Statements of Operations for the Three and ~~Six~~Nine Months Ended ~~June~~ September 30, 2016 and 2015 (unaudited)				3
		Consolidated Condensed Statements of Comprehensive Income (Loss) ~~Income~~ for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2016 and 2015 (unaudited)				4
		Consolidated Condensed Balance Sheets as of ~~June~~September 30, 2016 (unaudited) and December 31, 2015				5
		Consolidated Condensed Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~June~~September 30, 2016 and 2015 (unaudited)				6
		Consolidated Condensed Statement of Changes in Total Equity (Deficit) for the ~~Six~~Nine Months Ended ~~June~~September 30, 2016 (unaudited)				8
		Notes to the Consolidated Condensed Financial Statements (unaudited)				9
Item 2		Management’s Discussion and Analysis of Financial Condition and Results of Operations				2122
Item 3		Quantitative and Qualitative Disclosures About Market Risk				41
~~Item 4~~ ~~Controls and Procedures~~			42
~~PART II. OTHER INFORMATION~~Item 4
~~Item 1~~ ~~Legal Proceedings~~ Controls and Procedures			43
PART II. OTHER INFORMATION
Item 1A 1 ~~Risk Factors~~			43
~~Item 2~~ ~~Unregistered Sales of Equity Securities and Use of Proceeds~~			43
~~Item 3~~ ~~Defaults upon Senior Securities~~			43
~~Item 4~~ ~~Mine Safety Disclosures~~ Legal Proceedings			44
Item 5 1A		~~Other Information~~ Risk Factors				44
Item 6 2		~~Exhibits~~ Unregistered Sales of Equity Securities and Use of Proceeds				44
Item 3		Defaults upon Senior Securities				44
Item 4		Mine Safety Disclosures				44
Item 5		Other Information				44
Item 6		Exhibits				44
		Signatures				45

	June 30, 2016									December 31, 2015
(in $ thousands)	Cost			Accumulated depreciation			Net			Cost			Accumulated depreciation			Net
Capitalized software		$	890,817		$	(681,365)		$	209,452		$	870,868		$	(635,135)		$	235,733
Computer equipment			308,878			(187,501)			121,377			303,902			(168,380)			135,522
Building and leasehold improvements			25,597			(9,992)			15,605			24,102			(8,735)			15,367
Construction in progress			83,408			—			83,408			73,226			—			73,226
		$	1,308,700		$	(878,858)		$	429,842		$	1,272,098		$	(812,250)		$	459,848

	Six Months Ended June 30,						Change
(in $ thousands)	2016			2015			$			%
Net revenue		$	1,215,168		$	1,126,330		$	88,838		8
Costs and expenses
Cost of revenue			739,282			684,281			55,001		8
Selling, general and administrative			253,771			226,279			27,492		12
Depreciation and amortization			104,487			118,875			(14,388)		(12)
Total costs and expenses			1,097,540			1,029,435			68,105		7
Operating income			117,628			96,895			20,733		21
Interest expense, net			(100,008)			(78,140)			(21,868)		(28)
Loss on early extinguishment of debt			(2,671)			—			(2,671)		*
Gain on sale of shares of Orbitz Worldwide			—			6,271			(6,271)		(100)
Income before income taxes and share of losses in equity method investment			14,949			25,026			(10,077)		(40)
Provision for income taxes			(12,197)			(15,550)			3,353		22
Share of losses in equity method investment			—			(175)			175		100
Net income		$	2,752		$	9,301		$	(6,549)		(70)

				TRAVELPORT WORLDWIDE LIMITED
	Date: ~~August 4,~~November 3, 2016			By: /s/ Bernard Bot Bernard Bot Executive Vice President and Chief Financial Officer
	Date: ~~August 4,~~November 3, 2016			By: /s/ Antonios Basoukeas Antonios Basoukeas Chief Accounting Officer