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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
DECEMBER 15, 2000
Date of Report (Date of earliest event reported)
SABRE HOLDINGS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-12175 75-2662240
(State or other (Commission File No.) (IRS Employer
jurisdiction of incorporation) Identification No.)
4255 AMON CARTER BLVD.
FORT WORTH, TEXAS 76155
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (817) 963-6400
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ITEM 5. OTHER EVENTS.
NEW BOOKING FEE STRUCTURE
Sabre has announced new booking fee pricing for airline customers that
use the Sabre Computer Reservation System (CRS). As part of the new pricing
structure, effective February 1, 2001, Sabre is giving a 1% credit to be used
in the new Traveller Fund, which grants airlines access to many of Sabre's
leading tools. For airlines utilizing the Traveller Fund, the effective
average booking fee increase will be approximately 7.7% per booking. The
booking fee increase is in response to growing costs and the need to remain
price competitive, with rates varying by participation level and regions.
Unless otherwise indicated, references in this report to "the Company" or
"Sabre" include Sabre Holdings Corporation and its consolidated subsidiaries.
As a part of the 2001 pricing initiative, the Company is introducing the
Traveller Fund which allows airlines to apply approximately 1% of the booking
fee towards the use of many of the Company's new product offerings, including
Sabre Virtually There, other one-to-one marketing tools, content, and web
related products and services. The Traveller Fund offers a broad suite of
capabilities to help leading edge airlines communicate directly with their
premium customers.
The price change for 2001 is in response to growing costs of supporting
the travel agency channel and on-line travel distribution outlets and
continued investments in new products and services that benefit the consumer
and allow airlines to better market their products through the travel agent.
Sabre's CRS competitors have led the market with increases higher than
historical averages. Sabre's price is intended to keep Sabre's booking fee
price points competitive in each regional marketplace.
With over 40,000 points of sale and 144,000 CRTs in 112 countries, Sabre
is confident that this extensive sales reach, coupled with its innovative
products and services, can continue to help distribute airline inventory
through the Sabre CRS more efficiently and effectively than ever before.
** Over $50 billion of air travel is booked through the Sabre CRS annually
** Booking fees still represent just a small percentage, approximately
2.5%, of the total ticket value
Sabre continues to be the leader in offering strategic new products and
services through its global distribution system. The Company plans to use a
portion of the revenue from booking fees to continue to develop and improve
products and services for our airline customers, travel agencies, and
consumers.
OUTLOOK FOR FOURTH QUARTER
Sabre's outlook for the fourth quarter remains in line with the
Company's most recent forecasts.
Sabre anticipates fourth quarter 2000 revenue in the Travel Marketing
and Distribution business to be up year over year in the 18 to 21% range,
driven by continued bookings growth, growth within our emerging businesses
and revenue growth for the Travelocity.com and GetThere businesses. For the
Outsourcing and Software Solutions business, the Company anticipates fourth
quarter 2000 revenue
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growth in the low single digits. Thus, revenue growth for Sabre overall is
expected to be in the 12 to 15% range for the fourth quarter.
Sabre estimates that EPS for the fourth quarter - including the impact
of the GetThere acquisition - will be in the $0.21 to $0.25 range.
OUTLOOK FOR 2001
Sabre's outlook for 2001 remains in line with the Company's most recent
revenue and earnings forecasts.
Revenue growth for the Travel Marketing and Distribution side of the
business is anticipated to be in the 15 to 17% range for 2001. The price
increase, which is somewhat higher than the Company's earlier projections,
provides additional support for these strong growth rate projections.
Sabre is reiterating its revenue forecasts on the Outsourcing and
Software Solutions side of the business and is projecting 2001 OSS revenues
to be flat or only slightly higher than 2000 revenues.
On the cost side, the Company anticipates continued pressure in customer
incentives and other costs.
Given the above, the Company does not anticipate a change from its most
recent 2001 EPS forecast - which we expect to show year over year growth in
the mid to upper teens - from 2000's base earnings.
Please note that the above 2001 EPS forecast excludes certain special
items anticipated in 2001, including US Airways options amortization and
goodwill associated with the acquisitions in 2000 of Preview Travel, Gradient
Solutions, Dillon Communications and GetThere.com.
CAUTIONARY STATEMENT
Statements in this report which are not purely historical facts,
including statements regarding the Company's anticipations, beliefs,
expectations, hopes, intentions or strategies for the future, may be
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended. All forward-looking statements
in this report are based upon information available to the Company on the
date of this report. The Company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. 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. Readers are cautioned not to place undue reliance on these
forward-looking statements.
Risks associated with the Company's forward-looking statements in this
report include, but are not limited to: risks related to the Company's
relationships with American and US Airways and their
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affiliates, including risks that they may terminate any of the agreements
with the Company, or fail or otherwise become unable to fulfill their
principal obligations thereunder, or determine not to renew certain of the
agreements; risks associated with the spin-off by AMR of its equity interest
in the Company including potential liability for income taxes; risks related
to the $675 million dividend paid in February 2000, including the increased
debt service for indebtedness incurred to effect that dividend; risks
associated with competition, and technological innovation by competitors,
which could require the Company to reduce prices, to change billing
practices, to increase spending or marketing or product development or
otherwise to take actions that might adversely affect its operations or
earnings; risks related to the Company's technology; risks associated with
online commerce and doing business through an Internet Web site, such as
security issues, liability for site content, and uncertain protection of
intellectual property; risks relating to the Company's investment in
technology, including the ability of the Company to timely develop and
achieve market acceptance of new products; risks associated with industry
consolidation, including strategic alliances, in the computer reservations
system industry; risks related to seasonality of the travel industry and
booking revenues; risks of the Company's sensitivity to general economic
conditions and events that affect airline travel and the airlines, hotel
operators and car rental companies that participate in the Sabre system,
including the increased price of fuel; risks of a natural disaster, computer
terrorism or other calamity that may cause significant damage to the
Company's data center facilities and enterprise information systems; risks of
interruption or deterioration of third party services on which the Company
relies to provide its services; risks of deterioration or obsolescence of the
Company's current systems and infrastructures; risks associated with the
Company's international operations, such as currency fluctuations,
governmental approvals, tariffs and trade barriers, and political
instability; risks of new or different legal and regulatory requirements; and
risks associated with the Company's growth strategy, including investments in
emerging markets and the ability to successfully conclude and execute
alliances.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SABRE HOLDINGS CORPORATION
By: /s/ James F. Brashear
Name: James F. Brashear
Title: Corporate Secretary
Date: December 15, 2000
