<PAGE> 1
Filed by Travelocity.com Inc. Pursuant to Rule 425 under the Securities Act of
1933 and deemed filed pursuant to Rule 14a-12 of the Securities Act of 1934
Subject Company: Travelocity.com, Inc.
SEC File No. 333-95757
Travelocity.com, the online travel expert, today reported pro-forma financial
results for the fourth quarter and year ended December 31, 1999.
TRAVELOCITY.COM PRO-FORMA FINANCIAL RESULTS (NOT INCLUDING PREVIEW TRAVEL)
Total revenues for the fourth quarter, including pro-forma adjustments for
agreements to be entered into with Sabre, were $19.9 million, up 215 percent, as
compared to total revenues of $6.3 million in fourth quarter 1998. Total
pro-forma revenues for 1999 were $55.8 million, up 201 percent, as compared to
total revenues of $18.5 million in 1998.
Online gross travel bookings for the quarter were $280.7 million, up 205
percent, as compared to online gross travel bookings of $92.0 million in the
fourth quarter of 1998. Online gross travel bookings for 1999 were $808.5
million, up 184 percent as compared to online gross travel bookings for 1998 of
$284.6 million.
"1999 saw continued growth for Travelocity.com. Revenues for fourth quarter 1999
alone exceeded total revenues for the entire year of 1998," said Terrell B.
Jones, chief executive officer of Travelocity.com. "Our merger with Preview
Travel is slated for completion on or about March 7 of this year. The combined
company will be the clear leader in the online travel category."
<PAGE> 2
Travelocity.com registered membership at December 31, 1999 was 10.3 million, up
119 percent as compared to membership at December 31, 1998 of 4.7 million.
Revenues from advertising and royalties were $3.6 million for the quarter. This
represents an increase of 196 percent as compared to revenues of $1.2 million in
the fourth quarter of 1998. Revenues from advertising and royalties were $9.6
million for 1999, up 235 percent, as compared to revenues of $2.9 million in
1998.
Gross margin on a pro-forma basis for the fourth quarter of 1999 was 51.9
percent, compared to 9.3 percent in the fourth quarter of 1998. Gross margin for
1999 was 51.1 percent, compared to 5.3 percent in 1998.
Net loss for the fourth quarter of 1999 was $4.6 million as compared to a net
loss of $5.4 million for the fourth quarter of 1998. Net loss for 1999 was $13.6
million as compared to a net loss of $20.8 million in 1998.
COMBINED TRAVELOCITY.COM AND PREVIEW TRAVEL (NASDAQ: PTVL-NEWS) PRO-FORMA
FINANCIAL RESULTS
The merger of Travelocity.com with Preview Travel is expected to close in the
first quarter of 2000, subject to the approval of the Preview Travel
stockholders. The following describes the pro forma results of the combined
businesses.
Total pro-forma revenue for the combined company for fourth quarter 1999 was
$30.2 million, an increase of 158 percent, as compared to total pro-forma
revenue of $11.7 million in the fourth quarter of 1998. Total combined pro-forma
revenue for 1999 was $90.9 million, or an increase of 156 percent, as compared
to total pro-forma revenue for 1998 of $35.5 million.
Combined online gross travel bookings for the quarter were $389.7 million, up
162 percent, as compared to online gross travel bookings of $149.0 million in
the fourth quarter of 1998. Online gross travel bookings for 1999 were $1,190.4
billion, up 146 percent as compared to online gross travel bookings for 1998 of
$484.6 million.
Revenues from advertising and royalties on a combined pro-forma basis were $6.8
million for the quarter. This represents an increase of 149 percent as compared
to revenues of $2.7 million in the fourth quarter of 1998. Revenues from
advertising and royalties were $20.7 million for 1999, up 233 percent, as
compared to revenues of $6.2 million in 1998.
Gross margin of the combined entity on a pro-forma basis for the fourth quarter
of 1999 was 54.9 percent, compared to 32.4 percent in the fourth quarter of
1998. Combined pro-forma gross margin for 1999 was 55.2 percent, compared to
29.9 percent in 1998.
Net loss of the combined entity on a pro-forma basis for the fourth quarter of
1999 was $11.4 million, or $0.81 per share, as compared to a net loss of $11.3
million, or $0.83 per share, in the fourth quarter of 1998. Net loss of the
combined entity on a pro-forma basis for 1999 was $42.7 million, or a loss of
$3.08 per share, as compared to a net loss of $41.1 million, or $3.21 per share
in 1998.
HIGHLIGHTS OF TRAVELOCITY.COM
o Sabre announced the merger of Travelocity.com and Preview Travel
in October of 1999. The transaction is slated to close on or
about March 7, subject to the approval of the Preview Travel
stockholders.
o Travelocity.com was the top travel channel according to a January
2000
<PAGE> 3
Media Metrix survey with a 6.5 percent reach. The reach of
Travelocity.com, including Preview Travel (not including traffic
from AOL Travel channel, Excite or Lycos) was 9.3 percent, making
the combined companies the third largest e-commerce site by reach
after Amazon.com and e-Bay.
o Travelocity.co.uk, Travelocity's British version, celebrated its
one year anniversary in November of 1999.
o Travelocity.ca, Travelocity's Canadian version, launched in April
of 1999.
o Best Fare Finder was launched in March of 1999, introducing an
industry-first feature that searches for the lowest available
fares and displays them in an interactive calendar that
highlights the days the fares are offered. Members can then
select their preferred travel dates by clicking on the calendar.
o Alternate Airport feature was added in November 1999 as a
companion feature to Best Fare Finder - allowing customers to
automatically search nearby airports for lower airfares and
displays options via an interactive window. When selecting from
the Alternate Airport feature, airfare savings and driving
distance are also provided.
o Hotel Mapping was added in November 1999. It allows
Travelocity.com members to have a quick-and-easy way to compare
hotel options. Once the city, date, and amenity requirements have
been entered, Travelocity.com will display an interactive map of
all the available hotels that meet the designated criteria.
Members can view each hotel's location in proximity to areas of
interest while also viewing other comparison information such as
the price, name of the hotel and the hotel chain.
o Travelocity.com was named "World's Leading Travel Internet Site"
for the third consecutive year at the 1999 World Travel Awards.
ABOUT TRAVELOCITY.COM
Travelocity.com is owned and operated by Sabre Inc. Travelocity.com provides
reservations capabilities for 95 percent of all airline seats sold, more than
45,000 hotels, more than 50 car rental companies and more than 70,000 vacation
packages. This reservations capability is paired with access to a vast database
of destination and interest information. Since its launch in March of 1996,
Travelocity.com has registered more than 10 million members and logs more than
150 million page views per month.
Sabre is the global leader in applying information technology to meet the needs
of the travel and transportation industries with advanced and innovative
technology skills to deliver progressive solutions. Headquartered in Dallas/Fort
Worth, Texas, the company has more than 10,000 employees worldwide who span 45
countries. More information on Sabre is available on the World Wide Web at
http://www.sabre.com. Sabre and the Sabre logo are registered trademarks of an
affiliate of Sabre Inc.
In October 1999, the company announced plans to merge its Travelocity.com
business with Preview Travel to form a new company, Travelocity.com. The
transaction is expected to close in the first quarter 2000. The proposed merger,
which has received regulatory approval, is subject to customary closing
conditions and requires the approval of Preview Travel's stockholders. Sabre
will have a 70 percent ownership in the new Travelocity.com.
<PAGE> 4
ABOUT PREVIEW TRAVEL
Preview Travel, Inc. (NASDAQ: PTVL) is a leading provider of online travel
services for leisure and small-business travelers. It offers one-stop shopping
for airline tickets, vacation packages, car rentals, hotels and cruises, as well
as integrated access to travel information, merchandise, news and world-class
customer service. Preview Travel's trained travel agents provide customer
service 24 hours a day, seven days a week via a toll-free number and email.
Preview Travel has a growing community of more than 10 million registered
members and over 1 million customers since its launch in May of 1996.
The company operates its own award-winning Web site at www.previewtravel.com and
is the primary travel service on America Online at AOL keyword: previewtravel.
In addition, Preview Travel provides the primary travel services on AOL.com,
Excite, Lycos, Snap and USA Today.
INVESTOR NOTICE
Investors are urged to read the proxy statement/prospectus included in the
Registration Statement on Form S-4, filed with the Securities and Exchange
Commission (SEC) in connection with the proposed merger because it contains
important information. The proxy tatement/prospectus is available free of charge
on the SEC's Web site (www.sec.gov), from Travelocity.com's Corporate Secretary,
and from Preview Travel's Office of Investor Relations. In addition, the
identity of the people who, under SEC rules, may be considered participants in
the solicitation of Preview Travel, Inc. stockholders in connection with the
proposed merger, and a description of their interests, is available in the proxy
statement/prospectus.
Statements in this news release which are not purely historical facts, including
statements about anticipated or expected future revenue and earnings growth, are
forward looking statements. 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 related to: the failure to complete the merger with Preview
Travel or successfully integrate its operations with those of Travelocity.com;
Travelocity.com's relationship with Sabre; the limited operating history of
Travelocity.com and Preview Travel; the expectation of continued net losses for
the foreseeable future; a decline in or elimination of commissions; expenses
associated with financial commitments to Internet portals; adverse changes or
interruptions in relationships with travel suppliers, distribution partners and
other service providers; security breaches and other systems-related failures;
and legal and regulatory constraints. Further information regarding factors that
could affect Travelocity.com's financial and other results is included in
Travelocity.com's filings with the Securities and Exchange Commission.
Travelocity.com undertakes no obligation to update any forward looking
statements.
<PAGE> 5
TRAVELOCITY.COM PRO FORMA FINANCIAL RESULTS (EXCLUDING PREVIEW TRAVEL)
PRO FORMA CONDENSED QUARTERLY STATEMENTS OF OPERATIONS (A)
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
----------------------------------------------- -------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1999 1999 1999 1999 1999
---------- ---------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Transaction revenue $ 7,815 $ 9,246 $ 12,833 $ 16,308 $ 46,202
Advertising revenue 1,470 1,897 2,418 2,806 8,591
Licensing and royalty fees 77 181 -- 771 1,029
---------- ---------- ------------- ------------ ------------
Total operating revenue 9,362 11,324 15,251 19,885 55,822
Cost of revenues 5,814 6,493 5,425 9,569 27,301
---------- ---------- ------------- ------------ ------------
Gross profit 3,548 4,831 9,826 10,316 28,521
Operating expenses:
Selling and marketing 5,156 5,890 7,519 10,952 29,517
Technology and development 1,820 1,660 1,686 1,766 6,932
General and administrative 1,097 1,068 1,324 2,211 5,700
---------- ---------- ------------- ------------ ------------
Total operating
expenses 8,073 8,618 10,529 14,929 42,149
---------- ---------- ------------- ------------ ------------
Operating loss $ (4,525) $ (3,787) $ (703) $ (4,613) $ (13,628)
========== ========== ============= ============ ============
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
----------------------------------------------- -------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1998 1998 1998 1998 1998
---------- ---------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Transaction revenue $ 3,095 $ 3,314 $ 4,138 $ 5,109 $ 15,656
Advertising revenue 261 572 753 1,235 2,821
Licensing and royalty fees 28 32 12 (25) 47
---------- ---------- ------------- ------------ ------------
Total operating revenue 3,384 3,918 4,903 6,319 18,524
Cost of revenues 3,353 3,623 4,835 5,729 17,540
---------- ---------- ------------- ------------ ------------
Gross profit 31 295 68 590 984
Operating expenses:
Selling and marketing 2,519 2,643 2,439 3,042 10,643
Technology and development 1,485 1,596 1,643 1,746 6,470
General and administrative 1,314 1,054 1,091 1,203 4,662
---------- ---------- ------------- ------------ ------------
Total operating
expenses 5,318 5,293 5,173 5,991 21,775
---------- ---------- ------------- ------------ ------------
Operating loss $ (5,287) $ (4,998) $ (5,105) $ (5,401) $ (20,791)
========== ========== ============= ============ ============
</TABLE>
- ----------------------------------
(A) Represents the results of Travelocity.com adjusted for the estimated
impacts of certain agreements to be entered into with Sabre at the closing
of the proposed merger with Preview Travel, Inc. These agreements are an
access agreement, a technology services agreement, a facility agreement and
an administrative services agreement.
<PAGE> 6
COMBINED TRAVELOCITY.COM AND PREVIEW TRAVEL PRO FORMA FINANCIAL RESULTS
PRO FORMA CONDENSED COMBINED QUARTERLY STATEMENTS OF OPERATIONS (A)
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
----------------------------------------------- -------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1999 1999 1999 1999 1999
---------- ---------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Transaction revenue $ 12,795 $ 14,714 $ 19,376 $ 23,395 $ 70,280
Advertising revenue 3,241 4,305 6,034 6,052 19,632
Licensing and royalty fees 77 181 -- 771 1,029
---------- ---------- ------------- ------------ ------------
Total operating revenue 16,113 19,200 25,410 30,218 90,941
Cost of revenues 8,333 9,534 9,228 13,635 40,730
---------- ---------- ------------- ------------ ------------
Gross profit 7,780 9,666 16,182 16,583 50,211
Operating expenses:
Selling and marketing 12,035 15,125 20,823 20,204 68,187
Technology and development 2,929 2,934 3,042 3,210 12,115
General and administrative 2,601 2,972 3,658 4,951 14,182
Stock compensation 451 762 640 1,689 3,542
Merger expense -- -- 476 533 1,009
Amortization of goodwill
and other intangibles (B) 17,967 17,968 17,968 17,967 71,870
---------- ---------- ------------- ------------ ------------
Total operating
expenses 35,983 39,761 46,607 48,554 170,905
Operating loss (28,203) (30,095) (30,425) (31,971) (120,694)
Interest income 708 639 550 370 2,267
---------- ---------- ------------- ------------ ------------
Loss before Sabre interest in
partnership and income taxes (27,495) (29,456) (29,875) (31,601) (118,427)
Sabre's interest in partnership (C) 17,617 18,862 19,135 20,218 75,832
---------- ---------- ------------- ------------ ------------
Loss before income taxes (9,878) (10,594) (10,740) (11,383) (42,595)
Provision for income taxes (32) (16) (23) 10 (61)
---------- ---------- ------------- ------------ ------------
Net loss $ (9,910) $ (10,610) $ (10,763) $ (11,373) $ (42,656)
========== ========== ============= ============ ============
Basic Earnings Per Share $ (0.72) $ (0.77) $ (0.78) $ (0.81) $ (3.08)
========== ========== ============= ============ ============
Weighted Average Shares 13,743 13,818 13,857 13,982 13,850
========== ========== ============= ============ ============
</TABLE>
- ----------------------------------
(A) Represents the results of Travelocity.com and Preview Travel adjusted for
the estimated impacts of the merger transaction and certain agreements to
be entered into with Sabre at closing of the merger. These agreements are
an access agreement, a technology services agreement, a facility agreement,
and an administrative services agreement.
(B) Represents the amortization of goodwill and other intangibles resulting
from the purchase price allocation in the merger transaction. The
calculation of the purchase price is preliminary and will be adjusted upon
the consummation of the transaction. Goodwill recorded as a result of the
merger will be amortized over three years.
(C) Represents Sabre's direct interest in Travelocity.com LP, which
consolidates with Travelocity.com Inc. for financial reporting purposes.
<PAGE> 7
COMBINED TRAVELOCITY.COM AND PREVIEW TRAVEL PRO FORMA FINANCIAL RESULTS
PRO FORMA CONDENSED COMBINED QUARTERLY STATEMENTS OF OPERATIONS (A)
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
----------------------------------------------- -------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1998 1998 1998 1998 1998
---------- ---------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Transaction revenue $ 5,645 $ 6,654 $ 8,038 $ 8,989 $ 29,326
Advertising revenue 547 1,124 1,721 2,770 6,162
Licensing and royalty fees 28 32 12 (25) 47
---------- ---------- ------------- ------------ ------------
Total operating revenue 6,220 7,810 9,771 11,734 35,535
Cost of revenues 4,734 5,352 6,877 7,937 24,900
---------- ---------- ------------- ------------ ------------
Gross profit 1,486 2,458 2,894 3,797 10,635
Operating expenses:
Selling and marketing 6,499 7,344 7,774 11,740 33,357
Technology and development 2,223 2,440 2,680 2,833 10,176
General and administrative 2,496 2,391 2,548 3,242 10,677
Stock Compensation 297 297 297 296 1,187
Amortization of goodwill
and other intangibles (B) 17,967 17,968 17,968 17,967 71,870
---------- ---------- ------------- ------------ ------------
Total operating
expenses 29,482 30,440 31,267 36,078 127,267
Operating loss (27,996) (27,982) (28,373) (32,281) (116,632)
Interest income 278 647 897 814 2,636
---------- ---------- ------------- ------------ ------------
Loss before Sabre interest
in partnership and
income taxes (27,718) (27,335) (27,476) (31,467) (113,996)
Sabre's interest in partnership (C) 17,743 17,502 17,597 20,148 72,990
---------- ---------- ------------- ------------ ------------
Loss before income taxes (9,975) (9,833) (9,879) (11,319) (41,006)
Provision for income taxes (7) (14) (15) (15) (51)
---------- ---------- ------------- ------------ ------------
Net loss $ (9,982) $ (9,847) $ (9,894) $ (11,334) $ (41,057)
========== ========== ============= ============ ============
Basic Earnings Per Share $ (0.88) $ (0.77) $ (0.73) $ (0.83) $ (3.21)
========== ========== ============= ============ ============
Weighted Average Shares 11,353 12,742 13,488 13,593 12,796
========== ========== ============= ============ ============
</TABLE>
- ----------------------------------
(A) Represents the results of Travelocity.com and Preview Travel adjusted for
the estimated impacts of the merger transaction and certain agreements to
be entered into with Sabre at closing of the merger. These agreements are
an access agreement, a technology services agreement, a facility agreement,
and an administrative services agreement.
(B) Represents the amortization of goodwill and other intangibles resulting
from the purchase price allocation in the merger transaction. The
calculation of the purchase price is preliminary and will be adjusted upon
the consummation of the transaction. Goodwill recorded as a result of the
merger will be amortized over three years.
(C) Represents Sabre's direct interest in Travelocity.com LP, which
consolidates with Travelocity.com Inc. for financial reporting purposes.
