Earnings Releases

The SABRE Group Reports First Quarter 1999 Results

FORT WORTH, Texas - Sabre today reported record revenues of $638 million for the first quarter ended March 31, an increase of 15 percent over revenues for the first quarter of 1998.

The company’s net earnings, including a one-time special item described below, grew 29 percent to $93 million, or $0.71 per share on a diluted basis, compared to net earnings of $72 million, or $0.55 per share on a diluted basis, in the same period last year. Excluding the special item, net earnings were $72 million, or $0.55 per share – flat compared to the first quarter 1998. Operating income was $112 million for the quarter, a decline of 2 percent, compared to $114 million for the same period in 1998.

Net earnings for the first quarter of 1999 included a one-time gain of $21 million, net of tax, or $0.16 per share on a diluted basis, arising from the sale in a secondary offering of 490,000 shares of Equant, N.V., a telecommunications company. These shares represented approximately 30 percent of the company’s indirect beneficial interest in Equant on December 31, 1998. The company anticipates that its indirect beneficial interest in Equant will significantly increase due to equity reallocations among certain owners in 1999.

"We saw strong revenue growth in both of our primary business activities for the quarter and are pleased with the prospects for the rest of the year," said Michael J. Durham, president and chief executive officer of Sabre. "Travel distribution revenue increased more than 10 percent for the quarter, while information technology services revenue increased almost 23 percent."

"As we anticipated, we experienced certain expense pressures associated with our growing outsourcing business, efforts to finalize our preparations for the Year 2000, and growing customer incentive expenses," Durham added. "We expect improving operating income and margins through the balance of 1999 as we wind down both the migration/conversion work on the US Airways contract and also the effort to make our systems Year 2000 compliant."

Revenue growth and financial results for Travelocity.com, the company’s leading travel Web site, were better than expected for the quarter. "Travelocity.com is an important piece of the overall travel distribution strategy at Sabre," Durham said. "In light of the need to fund the dramatic growth in this business and the desire to partner with other e-commerce companies, we continue to evaluate the attractiveness of various capital structures for this division."

Total worldwide bookings processed through the Sabre® computer reservations system, which includes direct bookings and joint venture bookings, were 115 million for the quarter, an increase of 10 percent over the same period last year.

Direct worldwide reservations booked through the Sabre® computer reservations system were 99 million during the first quarter – an increase of 5 percent over the same period in 1998 – excluding Asia/Pacific bookings, which were transferred to Abacus International Inc., the company’s joint venture in that region.

Direct bookings within the United States grew 3 percent for the quarter, driven by travel growth, market share gains and rapid growth in Travelocity.com. Direct international bookings, excluding Asia/Pacific bookings, were strong and grew 10 percent for the quarter.

"Travel bookings through the Sabre® computer reservations system were strong for the quarter and we are particularly pleased with growth we have seen in the United States," said Durham. "We have continued to gain market share both domestically and internationally and believe that we can continue this growth."

Sabre (NYSE: TSG) is a world leader in the electronic distribution of travel and is a leading provider of information technology solutions for the travel and transportation industries, including customized software development and software products, transaction processing, consulting and total information technology 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 Sabre 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 Airlines, US Airways or their 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. Sabre 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.

Sabre and the Sabre logo are registered trademarks of Sabre Holdings.

The SABRE Group - Statement of Income Before Special Items- Three Months Ended March 31, 1999

The SABRE Group - Condensed Statements of Income - Three Months Ended March 31, 1999

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