XML 39 R26.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Segment Information (Tables) | 3 Months Ended
--- | ---
Mar. 31, 2017
Segment Reporting [Abstract] |
Summary of Segment Information | Segment information for the three months ended March 31, 2017 and 2016 is as follows (in thousands):
| Three Months Ended March 31,
| 2017 |  | 2016
Revenue |  |  |  |  |
Travel Network | $ | 663,477 |  |  | $ | 625,476 |
Airline and Hospitality Solutions | 257,976 |  |  | 238,380 |
Eliminations | (6,100 | ) |  | (4,313 | )
Total revenue | $ | 915,353 |  |  | $ | 859,543 |
Adjusted Gross Profit (a) |  |  |  |  |
Travel Network | $ | 319,018 |  |  | $ | 304,914 |
Airline and Hospitality Solutions | 105,348 |  |  | 100,876 |
Corporate | (23,589 | ) |  | (17,594 | )
Total | $ | 400,777 |  |  | $ | 388,196 |
Adjusted EBITDA (b) |  |  |  |  |
Travel Network | $ | 290,222 |  |  | $ | 273,174 |
Airline and Hospitality Solutions | 85,517 |  |  | 82,938 |
Total segments | 375,739 |  |  | 356,112 |
Corporate | (78,178 | ) |  | (68,632 | )
Total | $ | 297,561 |  |  | $ | 287,480 |
Depreciation and amortization |  |  |  |  |
Travel Network | $ | 20,468 |  |  | $ | 18,530 |
Airline and Hospitality Solutions | 38,777 |  |  | 35,793 |
Total segments | 59,245 |  |  | 54,323 |
Corporate | 46,425 |  |  | 41,960 |
Total | $ | 105,670 |  |  | $ | 96,283 |
Adjusted Capital Expenditures (c) |  |  |  |  |
Travel Network | $ | 26,273 |  |  | $ | 22,970 |
Airline and Hospitality Solutions | 62,162 |  |  | 60,420 |
Total segments | 88,435 |  |  | 83,390 |
Corporate | 16,979 |  |  | 12,039 |
Total | $ | 105,414 |  |  | $ | 95,429 |
______________________________
(a) | The following table sets forth the reconciliation of Adjusted Gross Profit to operating income in our statement of operations (in thousands):
| Three Months Ended March 31,
| 2017 |  | 2016
Adjusted Gross Profit | $ | 400,777 |  |  | $ | 388,196 |
Less adjustments: |  |  |  |  |
Selling, general and administrative | 144,441 |  |  | 133,856 |
Cost of revenue adjustments: |  |  |  |  |
Depreciation and amortization (1) | 73,697 |  |  | 66,507 |
Amortization of upfront incentive consideration (2) | 16,132 |  |  | 12,337 |
Stock-based compensation | 3,181 |  |  | 4,074 |
Operating income | $ | 163,326 |  |  | $ | 171,422 |
(b) | The following table sets forth the reconciliation of Adjusted EBITDA to income from continuing operations in our statement of operations (in thousands):
| Three Months Ended March 31,
| 2017 |  | 2016
Adjusted EBITDA | $ | 297,561 |  |  | $ | 287,480 |
Less adjustments: |  |  |
Depreciation and amortization of property and equipment (1a) | 61,300 |  |  | 53,665 |
Amortization of capitalized implementation costs (1b) | 9,189 |  |  | 8,488 |
Acquisition-related amortization (1c) | 35,181 |  |  | 34,130 |
Amortization of upfront incentive consideration (2) | 16,132 |  |  | 12,337 |
Interest expense, net | 39,561 |  |  | 41,202 |
Other, net (3) | 15,234 |  |  | (3,360 | )
Restructuring and other costs (4) | — |  |  | 124 |
Acquisition-related costs (5) | — |  |  | 108 |
Litigation costs, net (6) | 3,501 |  |  | (3,846 | )
Stock-based compensation | 8,034 |  |  | 10,289 |
Provision for income taxes | 31,707 |  |  | 41,424 |
Income from continuing operations | $ | 77,722 |  |  | $ | 92,919 |
______________________________________________________
(1) | Depreciation and amortization expenses:
a. | Depreciation and amortization of property and equipment includes software developed for internal use.
b. | Amortization of capitalized implementation costs represents amortization of upfront costs to implement new customer contracts under our SaaS and hosted revenue model.
c. | Acquisition-related amortization represents amortization of intangible assets from the take-private transaction in 2007 as well as intangibles associated with acquisitions since that date and amortization of the excess basis in our underlying equity in joint ventures.
(2) | Our Travel Network business at times makes upfront cash payments or other consideration to travel agency subscribers at the inception or modification of a service contract, which are capitalized and amortized over an average expected life of the service contract, generally over three years to five years. Such consideration is made with the objective of increasing the number of clients or to ensure or improve customer loyalty. Such service contract terms are established such that the supplier and other fees generated over the life of the contract will exceed the cost of the incentive consideration provided up front. Such service contracts with travel agency subscribers require that the customer commit to achieving certain economic objectives and generally have terms requiring repayment of the upfront incentive consideration if those objectives are not met.
(3) | In the first quarter of 2017, we recognized a $12 million loss related to debt modification costs associated with our debt refinancing. In the first quarter of 2016, we recognized a gain of $6 million associated with the receipt of an earn-out payment from the sale of a business in 2013. In addition, other, net includes foreign exchange gains and losses related to the remeasurement of foreign currency denominated balances included in our consolidated balance sheets into the relevant functional currency.
(4) | Restructuring and other costs represent charges associated with business restructuring and associated changes implemented which resulted in severance benefits related to employee terminations, integration and facility opening or closing costs and other business reorganization costs.
(5) | Acquisition-related costs represent fees and expenses incurred associated with the acquisition of the Trust Group and Airpas Aviation (see Note 2, Acquisitions).
(6) | Litigation costs, net represent charges and legal fee reimbursements associated with antitrust litigation (see Note 10, Contingencies).
(c) | Includes capital expenditures and capitalized implementation costs as summarized below (in thousands):
| Three Months Ended March 31,
| 2017 |  | 2016
Additions to property and equipment | $ | 88,318 |  |  | $ | 75,472 |
Capitalized implementation costs | 17,096 |  |  | 19,957 |
Adjusted Capital Expenditures | $ | 105,414 |  |  | $ | 95,429 |

X
- Definition Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 25 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8813-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13816-109267 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8736-108599 + Details
Name: | us-gaap_ScheduleOfSegmentReportingInformationBySegmentTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration