Earnings Releases

The SABRE Group Reports Third Quarter Results

FORT WORTH, Texas - The SABRE Group (NYSE: TSG) today reported record revenues and earnings for the third quarter ended September 30. The company generated revenues of $604 million in the quarter, an increase of 32 percent over third quarter 1997 revenues.

The company's net earnings, including a one-time special item described below, grew 27 percent to $71 million, or $0.55 per share on a diluted basis, compared to net earnings of $56 million, or $0.43 per share on a diluted basis, in the same period last year. Excluding the special item, net earnings grew 11 percent to $62 million, or $0.48 per share on a diluted basis.

Operating income grew 10 percent to $98 million for the quarter, compared to $89 million for the same period in 1997. "The third quarter was another period of record revenue growth for the company," said Michael J. Durham, president and chief executive officer of The SABRE Group. "This is especially gratifying since it's a result of strong performance from each of our businesses.

"Our information technology solutions business realized 77 percent revenue growth this quarter due largely to the US Airways IT outsourcing contract. Our electronic travel distribution business grew a solid 10 percent because of our expanding presence in international markets, a booking fee price increase implemented earlier this year, and growth in non-booking fee revenues," Durham added.

Net earnings for the third quarter include a one-time extraordinary gain of $9 million, net of tax, or $0.07 per share on a diluted basis, relating to proceeds from a favorable court judgment involving an inactive subsidiary of the company.

Total worldwide bookings processed through the SABRE computer reservations system, which includes direct bookings and joint venture bookings, were 105.2 million for the quarter, an increase of 11.6 percent over the same period last year.

Direct worldwide reservations booked through the SABRE system were 90.4 million during the third quarter, a decline of 1 percent over the same period in 1997. However, direct bookings grew 3.4 percent, excluding Asia/Pacific bookings, which have been transferred to Abacus International, the company's joint venture in that region.

Direct bookings within the United States showed a slight decline of 0.4 percent for the quarter, primarily as a result of the introduction of a non-billable booking code for certain non-ticketed airline bookings. Direct international bookings, excluding Asia/Pacific bookings, were strong, and grew 13.8 percent for the quarter.

Revenue for the first nine months of 1998 was $1.7 billion, an increase of 29 percent over the same period last year. Net earnings for that period, including the one-time special item, rose 17 percent to $212 million, or $1.62 per share on a diluted basis, compared to net earnings of $181 million, or $1.39 per share on a diluted basis, in the same period last year. Excluding the special item, net earnings rose 12 percent to $203 million, or $1.55 per share on a diluted basis.

Operating income grew 10 percent to $322 million for the nine months ended September 30, compared to $293 million for the same period in 1997.

"Year-to-date net earnings results are very encouraging, particularly with the significant year 2000 costs incurred in 1998," said Durham. "We will continue to invest in the emerging travel distribution markets and in our growing IT outsourcing business. We expect to see improved operating margins in 1999 as many of the Year 2000 project costs are eliminated, and as the US Airways contract moves into steady state operations."

The SABRE Group is a world leader in the electronic distribution of travel and travel-related services around the globe, and is a leading provider of information technology solutions for the travel and transportation industry, including customized software development and software products, transaction processing, consulting and total IT outsourcing.

Statements in this news release about anticipated or expected future revenue and earnings growth are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements in this release are based upon information available to The SABRE Group on the date of this release. Any forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including risks of changes in relationships with American and its affiliates; competition and technological innovation by competitors; risks related to the Company's technology, such as a failure to timely achieve Year 2000 or Euro currency compliance; seasonality of the travel industry and booking revenues; sensitivity to general economic conditions and events that affect airline travel; risks associated with the Company's international operations; and legal and regulatory issues. The SABRE Group undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.

The SABRE Group - Statement of Income Before Special Items- Three Months Ended September 30, 1998

The SABRE Group - Condensed Statements of Income - Three Months Ended September 30, 1998

The SABRE Group - Statement of Income Before Special Items - Nine Months Ended September 30, 1998

The SABRE Group - Condensed Statements of Income - Nine Months Ended September 30, 1998

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