Travelport Worldwide Limited (NYSE: TVPT) today reaffirmed its financial guidance for the full year 2016 and announced that it successfully repriced its $2.34 billion term loans on Thursday, June 23, 2016.
Under the amended terms of Travelport’s credit agreement, the interest rate on its terms loans has been reduced by 75 basis points to LIBOR plus 4.00% (LIBOR floor of 1.00% remains unchanged) from LIBOR plus 4.75%. The repricing is expected to generate annualized cash interest savings of approximately $18 million based on the current principal balance of $2.34 billionoutstanding. The term loans hold no significant maturities before September 2021.
Gordon Wilson, President and CEO of Travelport, commented: “The successful repricing of our term loans underscore Travelport’s commitment to financial health and flexibility, and this action will further strengthen our free cash flow generation.”
Travelport also notes the outcome of the United Kingdom referendum on EU membership and highlights the following key points about its business:
- Travelport’s business model is transaction-based and the company’s primary currency of revenue is the U.S. dollar. Travelport has negligible revenue denominated in British pounds (less than 1%).(1)
- While Travelport’s business operations are headquartered in the UK, its main technology and data center (processing the majority of transactions) is located in the United States.
- Travelport operates in approximately 180 countries and has a balanced geographical footprint across the leading travel economies in the Americas, Asia Pacific, Europe, the Middle East and Africa.
- While the UK is an important market, it only represents approximately 8% of Travelport’s net revenue.(1)
- Travelport has around 10% of its costs and expenses denominated in British pounds that are translated into U.S. dollars for its reporting and for which, alongside certain other major currencies of expense, Travelport operates a rolling hedge program.(1)(2)
Mr. Wilson continued, “Our business operations are based on a highly resilient transactional model. We benefit from a diverse and balanced global footprint in addition to significant growth engines, especially around mobile commerce and B2B payments. We reaffirm the financial guidance that we issued in February, 2016 and look forward to announcing our second quarter earnings results and discussing more detail on our performance on August 4, 2016.”
Outlook and Financial Guidance
Travelport reaffirms the following outlook for the full year 2016:
|(in $ millions, except per share amounts)||FY 2016 Guidance||Growth Rate|
|Net revenue||$2,350 – $2,400||6% – 8%|
|Adjusted EBITDA||$565 – $580||6% – 8%|
|Adjusted Net Income||$140 – $150||15% – 23%|
|Adjusted Income per Share – diluted||$1.12 – $1.20||12% – 20%|
|Adjusted Free Cash Flow||$145 – $165||8% – 23%|
This guidance assumes spot foreign exchange rates as of June 24, 2016, together with the impact of foreign exchange rate hedges undertaken during 2015 as part of our rolling hedging program. For future periods, we are unable to provide a reconciliation of non-GAAP financial measures to relevant GAAP measures guidance because we do not provide guidance for equity-based compensation expense, provision for income taxes, interest income, interest expense, litigation and related costs, and other items, as certain of these items are out of our control that may be incurred in the future and/or cannot be reasonably predicted. Our quarterly and annual results as reported in these non-GAAP financial measures will be reconciled to the most directly comparable GAAP financial measures when we report such actual results.
The forward-looking statements made within this press release reflect expectations as of June 27, 2016. We assume no obligation to update these statements. Results may be materially different and are affected by many factors detailed in this release and in Travelport’s quarterly and annual Securities and Exchange Commission (SEC) filings and/or furnishings, which are available on the SEC’s website at www.sec.gov.
(1) The percentages represent amounts for the year ended December 31, 2015.
(2) ‘Costs and expenses’ excluding depreciation on property and equipment, amortization of customer loyalty payments, amortization of acquired intangible assets and non-core corporate costs.