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Script of Sabre Internal Audio - Visual Webcast for Employees
with Bill Hannigan (CEO)
August 28
- Good afternoon.
- This morning we made two important announcements - a major acquisition in the
Travel Marketing & Distribution area, and a company-wide cost cutting
initiative. Both announcements strongly support Sabre's goals for long-term
growth and profitability.
- By the way, these are what Security and Exchange Commission folks refer to as
Material events - so we had to make these public to the financial community
before we could talk about it here.
- I'd like to talk a little about both announcements and what they mean to all
of us here at Sabre:
- First, let's talk about Get There
- We have signed an agreement to acquire Get-There and merge them with our BTS
unit. [pause]
- This is a strategic move - some will say a bold strategic move - that sends a
very clear signal that we are serious about being the premier electronic
travel marketing and distribution company.
- I've made comments in the past about our strategy to double down on our
strengths in this business - and this action certainly is in keeping with
that strategy.
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- The corporate online space was a very crowded field just a year ago. Today,
two leaders have emerged our BTS team, and the Get-There team.
- There will no longer be any argument about who leads in the online space --
because this acquisition will CLEARLY establish Sabre as the industry leader
in both the online B2B corporate travel channel, and the B2C e-Commerce
channel for airlines, suppliers, and agencies.
- By combining the strengths of both companies -- I believe we will provide the
most powerful and flexible online platform for managing corporate travel in
our industry -- and deliver the best-in-class web development services for
travel suppliers.
- We also will benefit from an unparalleled list of blue-chip customers:
Corporate customers like Cisco, Citicorp, Dell, GE, Lucent, Nike and Nortel.
And airline customers like United, America West, US Airways and SwissAir. No
other company in the travel industry can boast such a long list of premier
customers.
- We're a company that likes to win and be a leader. With this move, Sabre will
now be the undisputed leader in all channels of travel distribution:
- travel agency,
- B2C with Travelocity,
- B2B with BTS and Get-There,
- and Supplier Direct.
- That's quite a position.
- Acquisitions and mergers aren't easy. But we have shown that we can do it,
and do it well. The Travelocity/Preview Travel merger gave us the confidence
that we can unlock the promise
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of a merger - and deliver the benefits that customers in the marketplace are
waiting for.
- And I believe that we will be as successful this time around.
- The work will be worth it. The growth potential in this market is tremendous.
- As I expect all of you know -- Travel ranks as the number 1 product consumers
want to buy on the Internet - beating out number 2 software by a factor of
more than two-to-one.
- Total on-line travel sales are expected to reach $29 billion by 2003 - almost
ten-fold the 1998 level. And that's with online still being in its infancy.
Today online travel just represents a few percent of total travel sales, but
by 2003 it should be AT LEAST 10 percent.
- We have a lot of room there to grow our business.
[discussion concerning downsizing redacted]
- And we have some great market opportunities ahead of us.
[PAUSE]
- As you have seen from today's and other recent acquisitions, we are putting
in place strategies -- and taking the actions -- to extend our business in
distribution, and to extend into travel marketing delivering the tools to our
customers to enable one-to-one marketing and stimulate demand.
- We have an aggressive goal to be the world's leading electronic travel
distributor, and, a world-class travel marketer - touching and enhancing the
experience of every traveler.
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- We also see high growth opportunity in the areas of SOFTWARE, RESERVATIONS
HOSTING and WEB HOSTING. This draws on our competencies in airline software
solutions and our understanding of airline IT. And it allows us to leverage
our strengths in high-value, high-margin areas.
- In support of this shifting market focus, we are changing the way we will bid
for large outsourcing contracts. We will no longer go it alone or be the
PRIMARY contractor for FACILITY MANAGEMENT OPPORTUNITIES. These pursuits
require considerable time and resources, and by their nature, do not create
the shareholder value of our other businesses.
- Instead, we will partner with complementary IT firms to bid for those types
of contracts - with Sabre focusing on the areas that rely on our consulting,
software, multihost and web hosting capabilities.
- A good example of this is with the Air Canada RFP. We are partnering with CGI
to go after that deal. We believe that this type of partnering will focus on
our core competencies, and allow us to produce a more predictable revenue and
earnings stream.
- Our software business is more important to us than ever before.
- We have a long history of airline solutions innovation. We're the market
leader for airline software. But we won't stay a leader if we don't take
actions.
- We need to ASP our software suite. WE WILL DO THIS -- AND WE WILL DO IT FAST.
We will make the financial commitment.
- Let's talk about "Reservations Hosting" - what we often call Multi-Host. This
area is a key growth area for us as well.
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- We need to make investments here also. We have the opportunities to draw on
our skills and grow this business - and we need to make this happen.
- And then there's WEB HOSTING: It's not new to us - we have been quietly
growing our customer base in this area for more than three years. We're
expanding outside of travel and transportation - and we're going to be less
quiet about it.
- I haven't even mentioned a number of other key initiatives that require
investments: such as Sabre Virtually There and Sabre Marketplace, as
examples.
- All of this work is being done to make this company even stronger. To put us
on a more aggressive growth curve.
- On the acquisition, it will be 2-3 months before this transaction closes, so
until that time, we need to continue to aggressively go after new business,
and keep a healthy competitive spirit going between Sabre BTS and Get-There.
- I know you all have a lot of questions about today's news. Not all the
answers are available today. But I can tell you that we will be getting more
details to you as quickly as possible.
- I also know we have some challenges ahead of us - but I'm counting on your to
stay as focused as possible on our customer.
Thank you for your time.
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