SELECTED CONSOLIDATED FINANCIAL DATA FOR TUI
The table below presents our consolidated summary financial and operating data for the years ended and as at December 31, 2002, 2003 and 2004, and for each of the nine-month periods ended and as at
September 30, 2004 and September 30, 2005. The summary consolidated financial and operating data presented below was derived from our consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS) as well as from other unaudited historical sources. Operating data are marked in the table as such.
PricewaterhouseCoopers Aktiengesellschaft Wirtschaftspr¨ufungsgesellschaft (previously PwC Deutsche Revision Aktiengesellschaft Wirtschaftspr¨ufungsgesellschaft) have audited our consolidated financial state- ments prepared in accordance with IFRS for the years ended and as at December 31, 2002, 2003 and 2004.
The interim consolidated financial statements prepared in accordance with IFRS for each of the nine- month periods ended and as at September 30, 2004 and 2005, the summary financial data derived from these interim financial statements and the operating data shown below are unaudited. The interim consolidated financial statements prepared in accordance with IFRS for each of the nine-month periods ended and as at September 30, 2004 and 2005 have not been, according to such published interim financial statements, subject to an audit review (pr¨uferische Durchsicht). The data for the nine-month periods should not be used as a basis for a prediction of our annualized results for 2005 or any other period given the seasonal and cyclical nature of our tourism division.
For reporting periods beginning on or after January 1, 2005, income and expenses from operations that qualify as discontinuing operations pursuant to IFRS 5, ‘‘Non-Current Assets Held for Sale and Discontinued Operations,’’ are shown in the line item ‘‘Result from discontinuing operations.’’ This line item also includes gains and losses recognized on disposal or on the measurement to fair value less costs to sell. The conversion right relating to the convertible bond issued by TUI AG in October 2003 no longer qualifies as an equity component pursuant to amended IAS 32, ‘‘Financial Instruments: Disclosure and Presentation,’’ and IAS 39, ‘‘Financial Instruments: Recognition and Measurement.’’ Instead, this conversion right is, for reporting periods beginning on or after January 1, 2005, shown as a derivative liability and is fair-valued at each balance sheet date, thereby affecting earnings. In addition, for reporting periods beginning on or after January 1, 2005, the airlines Hapag-Lloyd Express and Thomsonfly, which were formerly part of our other/consolidation division, are shown in our tourism division: Hapag-Lloyd Express as part of the Central Europe sector and Thomsonfly as part of the Northern Europe sector. The figures for the nine-month period ended and as at September 30, 2004 shown below have been restated accordingly. The figures for the financial years 2002, 2003 and 2004 shown below have not been restated accordingly and are therefore not directly comparable with the figures for the nine-month periods ended and as at September 30, 2004 and 2005.
The information below should be read together with our consolidated financial statements and the related notes to those statements beginning on page F-2, ‘‘Presentation of Financial Information of TUI’’ and
‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations of TUI.’’
Year ended and as at Nine months ended and as at
December 31, September 30,
2002 2003 2004 2004 2004 2005
(original) (restated)(1) (unaudited) (millions of 5)
Profit and loss statement:
Turnover
Tourism************************************* 12,416.2 12,671.3 13,122.5 10,509.0 10,650.7 11,294.3
Logistics (after December 31, 2004: Shipping)****** 2,225.3 2,381.2 2,686.7 1,972.1 1,972.1 2,307.3
Other/consolidation**************************** 307.6 396.1 480.0 356.9 215.2 191.5
Discontinuing operations(2)********************** 5,353.3 3,766.8 1,757.0 1,412.9 — —
Turnover*************************************** 20,302.4 19,215.4 18,046.2 14,250.9 12,838.0 13,793.1
Other income*********************************** 1,162.6 868.6 682.4 504.7 481.3 584.2
Change in inventories and other own work capitalized 57.5 30.6 49.9 37.6 6.0 (3.8)
21,522.5 20,114.6 18,778.5 14,793.2 13,325.3 14,373.5
Cost of materials and purchased services ************ 14,433.5 13,441.5 12,409.3 9,930.6 8,991.1 9,725.8
Personnel costs ********************************* 2,550.6 2,568.8 2,468.4 1,815.6 1,646.5 1,685.2
Depreciation and amortization********************* 904.9 877.9 520.0 399.1 327.0 347.9
(of which amortization of goodwill)************** (278.3) (278.9) — — — —
Impairment of fixed assets************************ 55.4 387.8 13.0 9.1 — 4.6
(of which impairment of goodwill)*************** (55.0) (368.6) — — — —
Other expenses ********************************* 3,193.1 3,045.5 2,711.6 1,996.0 1,837.2 2,021.8
Result from the discontinuance of operations(2) ******* 89.1 557.7 132.3 175.4 — —
Financial result ********************************* (293.3) (147.3) (208.5) (171.3) (130.7) (89.8)
Earnings from companies measured at equity********* 46.1 42.5 41.8 33.4 30.6 30.1
Earnings before taxes on income******************* 226.9 246.0 621.8 680.3 423.4 528.5
Income taxes*********************************** 185.8 (68.9) 89.7 108.4 64.9 86.5
Result from continuing operations****************** — — — — 358.5 442.0
Result from discontinuing operations**************** — — — — 231.3 95.3
Group profit for the period************************ 41.1 314.9 532.1 571.9 589.8 537.3
Group profit for the period attributable to minority
interests************************************* 9.1 39.9 43.8 46.5 46.5 37.0
Group profit for the period attributable to shareholders
in TUI AG*********************************** 32.0 275.0 488.3 525.4 543.3 500.3
Balance sheet data:
Cash and cash equivalents ************************ 366.5 348.5 481.1 1,249.8 1,249.8 1,729.1
Total assets ************************************ 15,517.4 12,989.2 12,319.3 13,429.0 13,429.0 14,618.7
Net debt(3) ************************************* 5,444.8 3,828.8 3,250.6 2,656.6 2,656.6 1,735.9
Adjusted net debt(4)****************************** 8,508.0 6,776.0 6,458.6 — — 5,052.0
Shareholders’ equity and minority interest *********** 3,180.5 2,766.9 2,990.9(9) 3,234.9 3,228.2 4,651.4
Other financial data(5):
EBITDA(6)************************************* 1,501.1 1,713.2 1,382.2 1,261.2 1,273.2 1,151.1
Adjusted EBITDA(7)***************************** 1,148.5 1,059.3 1,268.9 1,085.8 1,069.7 1,074.4
Capital expenditure****************************** 744.7 636.5 665.8 450.8 450.8 596.2
Operating data:
Guests (in millions)****************************** 18.4 18.2 18.4 15.9 — 17.3
Airline kilometers flown (km in millions)(8)********** 55.2 58.3 63.1 52.2 — 57.8
Airline passengers flown (in millions)(8)************* 17.7 18.3 22.6 17.9 — 20.0
Total Group hotel beds (in thousands)*************** 148 152 154 154 — 163
Overnight stays in own hotel (in millions)*********** 28.2 30.8 31.3 24.7 — 26.7
(1) For information about this restatement, see paragraph four of the discussion above this table.
(2) ‘‘Discontinuing operations’’ represents our former industry division and special logistics sector for financial periods ending on or before December 31, 2004 and our former special logistics and trading sectors for financial periods beginning on or after January 1, 2005.
(3) ‘‘Net debt’’ is defined as the sum of current and non-current financial liabilities less cash and cash equivalents. We believe the most comparable IFRS measure is total current and non-current financial liabilities. We include net debt because we believe that some investors use this measure to assess the net financial position of a company. Nevertheless, it should be noted that net debt is not a measure of financial obligation as determined in accordance with IFRS. The manner in which TUI AG measures net debt may not be consistent with the manner in which this measure or other measures with similar names are calculated by other companies. Accordingly, net debt as presented by TUI AG may not be comparable to this measure or other measures with similar names as presented by other companies.
(4) ‘‘Adjusted net debt’’ represents net debt adjusted for the fair value of operating leases, rental contracts and charter contracts in the amount of 43,063.2 million, 42,947.2 million, 43,208.0 million, 43,316.1 million as at December 31, 2002, 2003 and 2004 and as at September 30, 2005, respectively. We did not prepare adjusted net debt information for the interim balance sheet date as of September 30, 2004. We believe the most comparable IFRS measure is total current and non-current financial liabilities. We include adjusted net debt because we believe that some investors use this measure to assess the net financial position of a company. Nevertheless, it should be noted that adjusted net debt is not a measure of financial obligation as determined in accordance with IFRS. The manner in which TUI AG measures adjusted net debt may not be consistent with the manner in which this measure or other measures with similar names are calculated by other companies. Accordingly, adjusted net debt as presented by TUI AG may not be comparable to this measure or other measures with similar names as presented by other companies.
(5) Data relate to the Group as a whole, including discontinuing operations.
(6) TUI AG’s EBITDA is defined as earnings before interests, taxes, depreciation and amortization and write-downs of financial assets and marketable securities. EBITDA is not a measure of operating income, operating performance or liquidity under IFRS. We believe the most comparable IFRS measure is operating results. We include EBITDA because we understand it is used by some investors to determine a company’s historical ability to service indebtedness and fund ongoing capital expenditure, and because some of the covenants in TUI AG’s debt agreements are tied to similar measures. Nevertheless, this measure should not be considered in isolation or as substitute for operating income as determined by IFRS, or as an indicator of TUI AG’s operating performance, or of cash flows from operating activities as determined in accordance with IFRS. The manner in which TUI AG measures EBITDA may not be consistent with the manner in which this measure or other measures with similar names are calculated by other companies. Accordingly, EBITDA as presented by TUI AG may not be comparable to this measure or other measures with similar names as presented by other companies.
(7) Adjusted EBITDA is not a measure of operating income, operating performance or liquidity under IFRS. We believe the most comparable IFRS measure is operating results. We include adjusted EBITDA because we understand it is used by some investors to determine a company’s historical ability to service indebtedness and fund ongoing capital expenditures. Nevertheless, this measure should not be considered in isolation or as a substitute for operating income as determined by IFRS, or as an indicator of TUI AG’s operating performance, or of cash flows from operating activities as determined in accordance with IFRS. The manner in which TUI AG measures adjusted EBITDA may not be consistent with the manner in which this measure or other measures with similar names are calculated by other companies. Accordingly, adjusted EBITDA as presented by TUI AG may not be comparable to this measure or other measures with similar names as presented by other companies.
Adjusted EBITDA represents EBITDA adjusted for the following income and expense items:
Year ended Nine months ended
December 31, September 30, 2002 2003 2004 2004 2004 2005 (original) (restated) (unaudited) (millions of 5) EBITDA************************************************** 1,501.1 1,713.2 1,382.2 1,261.2 1,273.2 1,151.1 Unusual income and expenses (excluding Babcock Borsig-related
expenses)*********************************************** (487.5) (718.8) (157.3) (175.4) (175.4) (72.1) Start-up expenses******************************************* 13.7 64.9 44.0 — — — Earnings from the valuation of conversion rights***************** — — — — (28.1) (4.6) Babcock Borsig-related expenses****************************** 121.2 — — — — — Adjusted EBITDA****************************************** 1,148.5 1,059.3 1,268.9 1,085.8 1,069.7 1,074.4 (8) Excludes TUI Airlines Nederland (Arkefly).
(9) The retrospective application of revised IAS32 and IAS39 on January 1, 2005 resulted in a restatement of shareholders’ equity and minority interest as at December 31, 2004. Shareholders’ equity and minority interest decreased by 414.9 million to 42,976 million as a result of this restatement. For further information on this restatement and its financial impact, please see ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations of TUI — Application of New Accounting Standards’’.